1. [G.R. No. 74761. November 6, 1990.

NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, Petitioners, v. INTERMEDIATE

APPELLATE COURT (First Civil Cases Division) and MISSIONARIES OF OUR LADY OF LA
SALETTE, INC., Respondents.

2. CIVIL LAW; QUASI-DELICTS; ELEMENTS THEREOF. — A careful examination of the aforequoted

complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-
delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff; (b) fault
or negligence of the defendant, or some other person for whose acts he must respond; and (c) the
connection of cause and effect between the fault or negligence of the defendant and the damages incurred
by the plaintiff. (Taylor v. Manila Electric Company, 16 Phil. 8; Vergara v. Court of Appeals, G.R. No.
77679, September 30, 1987, 154 SCRA 564)

3. ID; ID; "FAULT OR NEGLIGENCE," CONSTRUED. — Article 2176 of the Civil Code imposes a civil
liability on a person for damage caused by his act or omission constituting fault or negligence, and
whenever Article 2176 refers to "fault or negligence", it covers not only acts "not punishable by law" but
also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate
civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found
guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually charged also
criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger
award of the two, assuming the awards made in the two cases vary. (Virata v. Ochoa, G.R. No. L-46179,
January 31, 1978, 81 SCRA 472)

4. ID; ID; DISTINGUISHED FROM CRIMINAL NEGLIGENCE. — According to the Report of the Code
Commission, Article 2177 of the Civil Code though at first sight startling, is not so novel or extraordinary
when we consider the exact nature of criminal and civil negligence. The former is a violation of the
criminal law, while the latter is a distinct and independent negligence, which is a "culpa aquiliana" or
quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from
criminal negligence. Such distinction between criminal negligence and "culpa extra-contractual" or "cuasi-
delito" has been sustained by decisions of the Supreme Court of Spain . . .

5. ID; ID; CIVIL ACTION, ENTIRELY INDEPENDENT OF THE CRIMINAL CASE. — In Azucena v.
Potenciano, (5 SCRA 468, 470-471), the Court declared that in quasi-delicts," (t)he civil action is entirely
independent of the criminal case according to Articles 33 and 2177 of the Civil Code. There can be no
logical conclusion than this, for to subordinate the civil action contemplated in the said articles to the result
of the criminal prosecution — whether it be conviction or acquittal — would render meaningless the
independent character of the civil action and the clear injunction in Article 31, that his action may proceed
independently of the criminal proceedings and regardless of the result of the latter."cralaw virtua1aw
library

6. ID; ID; EFFECT OF ACQUITTAL OR CONVICTION IN THE CRIMINAL CASE. — In the case of
Castillo v. Court of Appeals (176 SCRA 591), this Court held that a quasi-delict or culpa aquiliana is a
separate legal institution under the Civil Code with a substantivity all its own, and individuality that is
entirely apart and independent from a delict or crime — a distinction exists between the civil liability
arising from a crime and the responsibility for quasi-delicts or culpa extra-contractual. The same negligence
causing damages may produce civil liability arising from a crime under the Penal Code, or create an action
for quasi-delicts or culpa extra-contractual under the Civil Code. Therefore, the acquittal or conviction in
the criminal case is entirely irrelevant in the civil case, unless, of course, in the event of an acquittal where
the court has declared that the fact from which the civil action arose did not exist, in which case the
extinction of the criminal liability would carry with it the extinction of the civil liability.

7. ID; PROPERTY; USE THEREOF, NOT WITHOUT LIMITATIONS; RECIPROCAL DUTIES OF

ADJOINING LANDOWNERS. — It must be stressed that the use of one’s property is not without
limitations. Although we recognize the right of an owner to build structures on his land, such structures
must be so constructed and maintained using all reasonable care so that they cannot be dangerous to
adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause
injury or damage to an adjoining landowner or a third person, the latter can claim indemnification for the
injury or damage suffered.

FACTS: virtual 1aw library

Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in Biga (Biluso)
Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a
religious corporation.cralawnad

Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake, were
constructed, which allegedly inundated and eroded petitioners’ land, caused a young man to drown, damaged
petitioners’ crops and plants, washed away costly fences, endangered the lives of petitioners and their laborers
during rainy and stormy seasons, and exposed plants and other improvements to destruction.

In July 1982, petitioners instituted a criminal action before the Regional Trial Court of Cavite, Branch 4 (Tagaytay
City), against Efren Musngi, Orlando Sapuay and Rutillo Mallillin, officers and directors of herein respondent
corporation, for destruction by means of injunction under Article 324 of the Revised Penal Code.

Petitioners filed another action against respondent corporation, this time a civil case, for damages with prayer for the
issuance of a writ of preliminary injunction before the same court. 1 

A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177
of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the
plaintiff; (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the
connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the
plaintiff. 11 
.com.ph

"Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict is governed by the provisions of this chapter."cralaw virtua1aw library

The distinctness of quasi-delicts is shown in Article 2177 of the Civil Code, which states:jgc:chanrobles.com.ph

"Article 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from
the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for
the same act or omission of the defendant."cralaw virtua1aw library

SO ORDERED.

3. G.R. No. 171212               August 4, 2014

INDOPHIL TEXTILE MILLS, INC., Petitioner, 

vs.
ENGR. SALVADOR ADVIENTO, Respondents.

Petitioner Indophil Textile Mills, Inc. is a domestic corporation engaged in the business of manufacturing thread for
weaving.3 On August 21, 1990, petitioner hired respondent Engr. Salvador Adviento as Civil Engineer to maintain
its facilities in Lambakin, Marilao, Bulacan.4 On August 7, 2002, respondent consulted a physician due to recurring
weakness and dizziness.5 Few days later, he was diagnosed with Chronic Poly Sinusitis, and thereafter, with
moderate, severe and persistent Allergic Rhinitis.6 Accordingly, respondent was advised by his doctor to totally
avoid house dust mite and textile dust as it will transmute into health problems. 7

Distressed, respondent filed a complaint against petitioner with the National Labor Relations Commission (NLRC),
San Fernando, Pampanga, for alleged illegal dismissal and for the payment of backwages, separation pay, actual
damages and attorney’s fees. Subsequently, respondent filed another Complaint9 with the Regional Trial Court
(RTC) of Aparri, Cagayan, alleging that he contracted such occupational disease by reason of the gross negligence
of petitioner to provide him with a safe, healthy and workable environment.

He said that he recommended to management to place roof insulation to minimize, if not, eradicate the health
hazards attendant in the work place.12 However, said recommendation was turned down by management due to high
cost.13 Respondent further suggested to petitioner’s management that the engineering office be relocated because
ofits dent prone location, such that even if the door of the office is sealed, accumulated dust creeps in outside the
office.14 This was further aggravated by the installation of new filters fronting the office. 15 However, no action was
taken by management.16 

Respondent averred that, being the only breadwinner in the family, he made several attempts to apply for a new job,
but to his dismay and frustration, employers who knew ofhis present health condition discriminated against him and
turned down his application.19 By reason thereof, respondent suffered intense moral suffering, mental anguish,
serious anxiety and wounded feelings, praying for the recovery of damages.

HELD:

True, the maintenance of a safe and healthy workplace is ordinarily a subject of labor cases. More, the acts
complained of appear to constitute matters involving employee-employer relations since respondent used to be the
Civil Engineer of petitioner. However, it should be stressed that respondent’s claim for damages is specifically
grounded on petitioner’s gross negligenceto provide a safe, healthy and workable environment for its employees −a
case of quasi-delict. This is easily ascertained from a plain and cursory reading of the Complaint, 45 which
enumerates the acts and/or omissions of petitioner relative to the conditions in the workplace, to wit:
The pertinent provision of Article 2176 of the Civil Code which governs quasi-delictprovides that: Whoever by act
or omissioncauses damageto another, there being fault or negligence, is obliged to pay for the damagedone. Such
fault or negligence, if there is no pre-existing contractual relation between the parties, is called quasi-delict. 50

Thus, to sustain a claim liability under quasi-delict, the following requisites must concur: (a) damages suffered by
the plaintiff; (b) fault or negligence of the defendant, or someother person for whose acts he must respond; and (c)
the connection of causeand effect between the fault or negligence of the defendant and the damages incurred by the
plaintiff.51

In the case at bar, respondent alleges that due to the continued and prolonged exposure to textile dust seriously
inimical to his health, he suffered work-contracted disease which is now irreversible and incurable, and deprived
him of job opportunities.52 Clearly, injury and damages were allegedly suffered by respondent, an element of quasi-
delict. Secondly, the previous contract of employment between petitioner and respondent cannot be used to counter
the element of "no pre-existing contractual relation" since petitioner’s alleged gross negligence in maintaining a
hazardous work environment cannot be considered a mere breach of such contract of employment, but falls squarely
within the elements of quasi-delictunder Article 2176 of the Civil Code since the negligence is direct, substantive
and independent.53 Hence, we ruled in Yusen Air and Sea Services Phils., Inc. v. Villamor54 that:

When, as here, the cause of action is based on a quasi-delictor tort, which has no reasonable causal connection with
any of the claims provided for in Article 217, jurisdiction over the action is with the regular courts. 55

SO ORDERED.

4. NOEL CASUMPANG, RUBY SANGA-MIRANDA AND SAN JUAN DE DIOS

HOSPITAL, Petitioners, v.NELSON CORTEJO, Respondent.

[G.R. No. 171217]

DRA. RUBY SANGA-MIRANDA, Petitioner, v. NELSON CORTEJO, Respondent.

[G.R. No. 171228]

SAN JUAN DE DIOS HOSPITAL, Petitioner, v. NELSON CORTEJO, Respondent.

1. G.R. No. L-41423 February 23, 1989

LUIS JOSEPH, petitioner 
vs.
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO SIOSON, JACINTO PAGARIGAN,
ALBERTO CARDENO and LAZARO VILLANUEVA, respondents.

The generative facts of this case, as culled from the written submission of the parties, are as follows:

Respondent Patrocinio Perez is the owner of a cargo truck with Plate No. 25-2 YT Phil. '73 for conveying cargoes
and passengers for a consideration from Dagupan City to Manila. On January 12, 1973, said cargo truck driven by
defendant Domingo Villa was on its way to Valenzuela, Bulacan from Pangasinan. Petitioner, with a cargo of
livestock, boarded the cargo truck at Dagupan City after paying the sum of P 9.00 as one way fare to Valenzuela,
Bulacan. While said cargo truck was negotiating the National Highway proceeding towards Manila, defendant
Domingo Villa tried to overtake a tricycle likewise proceeding in the same direction. At about the same time, a pick-
up truck with Plate No. 45-95 B, supposedly owned by respondents Antonio Sioson and Jacinto Pagarigan, then
driven by respondent Lazaro Villanueva, tried to overtake the cargo truck which was then in the process of
overtaking the tricycle, thereby forcing the cargo truck to veer towards the shoulder of the road and to ram a mango
tree. As a result, petitioner sustained a bone fracture in one of his legs. 1

The following proceedings thereafter took place: 2

Petitioner filed a complaint for damages against respondent Patrocinio Perez, as owner of the cargo truck, based on a
breach of contract of carriage and against respondents Antonio Sioson and Lazaro Villanueva, as owner and driver,
respectively, of the pick-up truck, based on quasi-delict.

Respondent Sioson filed his answer alleging that he is not and never was an owner of the pick-up truck and neither
would he acquire ownership thereof in the future.

On September 24, 1973, petitioner, with prior leave of court, filed his amended complaint impleading respondents
Jacinto Pagarigan and a certain Rosario Vargas as additional alternative defendants. Petitioner apparently could not
ascertain who the real owner of said cargo truck was, whether respondents Patrocinio Perez or Rosario Vargas, and
who was the real owner of said pick-up truck, whether respondents Antonio Sioson or Jacinto Pagarigan.

On September 27, 1974, respondents Lazaro Villanueva, Alberto Cardeno, Antonio Sioson and Jacinto Pagarigan,
thru their insurer, Insurance Corporation of the Philippines, paid petitioner's claim for injuries sustained in the
amount of P 1,300.00. By reason thereof, petitioner executed a release of claim releasing from liability the following
parties, viz: Insurance Corporation of the Philippines, Alberto Cardeno, Lazaro Villanueva, Antonio Sioson and
Jacinto Pagarigan.
Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion dated Dec. 2, 1974 and Counter Motion"
to dismiss. The so-called counter motion to dismiss was premised on the fact that the release of claim executed by
petitioner in favor of the other respondents inured to the benefit of respondent Perez, considering that all the
respondents are solidarity liable to herein petitioner.

HELD:

We find the present recourse devoid of merit.

The singleness of a cause of action lies in the singleness of the- delict or wrong violating the rights of one person.
Nevertheless, if only one injury resulted from several wrongful acts, only one cause of action arises. 5 In the case at
bar, there is no question that the petitioner sustained a single injury on his person. That vested in him a single cause
of action, albeit with the correlative rights of action against the different respondents through the appropriate
remedies allowed by law and recovery by the petitioner under one remedy necessarily bars recovery under the other.
This, in essence, is the rationale for the proscription in our law against double recovery for the same act or omission
which, obviously, stems from the fundamental rule against unjust enrichment.

The respondents having been found to be solidarity liable to petitioner, the full payment made by some of the
solidary debtors and their subsequent release from any and all liability to petitioner inevitably resulted in the
extinguishment and release from liability of the other solidary debtors, including herein respondent Patrocinio Perez.

7. [G.R. No. L-40486. August 29, 1975.]

PAULINO PADUA and LUCENA BEBIN PADUA, Plaintiffs-Appellants, v. GREGORIO N.

ROBLES and BAY TAXI CAB, Defendants-Appellees.

Alberto R. de Joya, for Plaintiffs-Appellants.

Cardenas & Peralta Law Office for Defendants-Appellees.

SYNOPSIS

The Paduas sued the driver and the taxicab company for damages resulting from the death of their son who was run
over by a taxi operated by said company. Likewise, by information filed with the same court, the fiscal charged the
driver with homicide through reckless imprudence. In the civil case, the Court adjudged actual moral and exemplary
damages, plus attorney’s fees, against the driver, and dismissed the complaint insofar as the company was
concerned. Almost a year later, the driver was convicted and the decretal portion of the judgment on the civil
liability of the driver resulting from his criminal conviction state that "the civil liability of the accused has already
been determined and assessed" in the prior civil case. When the judgment in the civil case became final, the Paduas
sought execution thereof, but this proved futile. Hence, they instituted an action in the same court against the owner
of the taxicab company to enforce the latter’s subsidiary liability under Article 103 of the Revised Penal Code. On
motion of the owner, the court a quo dismissed the suit on the ground that the complaint stated no cause of action.

The Supreme Court held that the sufficiency and efficacy of a judgment must be tested by its substance rather than
form; that even if the decretal portion of the judgment in the criminal case were reasonably susceptible of two of
more interpretations, that which achieves moral justice should be adopted, eschewing the other interpretations which
in effect would negate moral justice; and that therefore, the Paduas’ subsequent complaint states a cause of action
against the owner whose concomitant subsidiary responsibility per judgment in the criminal case, subsists.

3. CIVIL LIABILITY; DISTINGUISHED FROM CRIMINAL RESPONSIBILITY. — Civil liability coexists will
criminal responsibility. In negligence cases, the offended party (or his heirs) has the option between an action for
enforcement of civil liability based on culpa criminal under article 100 of the Revised Penal Code and an action for
recovery of damages based on culpa aquiliana under article 2177 of the Civil Code. The action for enforcement of
civil liability based on culpa criminal section 1 of Rule 111 of the Rules of Court is deem simultaneously instituted
with the criminal action, unless expressly waived or reserved for a separate application by the offended party.
Article 2177 of the Civil Code, however, precludes recovery of damages twice for the same negligent act or
omission.

4. ID.; ID.; ACTUAL DOUBLE RECOVERY IS PRESCRIBED. — It is immaterial that the plaintiffs chose in the
first instance, an action for recovery of damages based on culpa aquiliana under articles 2176, 2177 and 2180 of the
Civil Code, which action proved ineffectual. There is no inconsistency between this action priorly availed of the
plaintiffs and their subsequent application for enforcement of civil liability arising from the offense committed by
the driver and, consequently, for exaction of the employer’s subsidiary liability. Allowance of the latter application
involves no violation of the prescription against double recovery of damages for the same negligent act or omission
where the writ of execution issued against the driver to satisfy the amount of indemnity awarded to plaintiffs in the
civil case was returned unsatisfied. What Article 2177 of the Civil Code forbids is actual double recovery of
damages for the same negligent act or omission.

4. ID.; DOUBTS IN THE RULING IN CULPA AQUILIANA SUIT DOES NOT NULLIFY SUBSIDIARY
LIABILITY OF EMPLOYER IN CRIMINAL CASE. — Doubts engendered by a previous ruling in the culpa
 aquiliana suit could not nullify what the law decrees as to the subsidiary liability of the employer in the criminal
case finding the accused guilty. The party as much responsible for the mishap, with his operation of the
transportation service should not be absolved from liability. It need not be so, but certainly for entrepreneurs more
enterprising than careful, not excessively concerned with the safety of the traveling public, it could be a green light
for less vigilance over the conduct of their drivers. The resulting injury to public safety is not hard to imagine.
Moreover, from the standpoint of the feelings of the bereaved parents, and this is just as important a policy
consideration, no avenue should be left unexplored to mitigate the harshness of fate, for there is not enough money
in the entire world to compensate the parents for the loss of their child.

BARREDO, J.: concurring:chanrob1es virtual 1aw library

1. ACTIONS; TWO INDEPENDENT LIABILITIES ARISING FROM A CRIME/CULPA CRIMINAL. — A

negligent act gives rise to at least two separate and independent kinds of liabilities, (1) the civil liability arising from
the crime or culpa criminal and (2) the liability arising from civil negligence or the so-called culpa aquiliana. These
two concepts of fault are so distinct from each other that exoneration from one does not result in exoneration from
the other. Adjectively and substantively, they can be prosecuted separately and independently of each other,
although Article 2177 of the Civil Code precludes recovery of damages twice for the same negligent act or omission,
which means that should there be varying amounts awarded in two separates cases, the plaintiff may recover, in
effect, only the bigger amount.

4. ID.; ID.; SUBSIDIARY LIABILITY OF EMPLOYER. — Where the filing of the civil action by petitioners
proceeded from the assumption that the employer has been found civilly liable for the same amounts adjudged in the
civil case, the employer is subsidiarily liable therefor in the face of employee’s insolvency.

FACTS:

In the early morning of New Year’s Day of 1969 a taxicab (bearing 1968 plate no. TX-9395 and driven by Romeo
N. Punzalan but operated by the Bay Taxi Cab owned by Gregorio N. Robles) struck ten-year old Normandy Padua
on the national road in barrio Barretto, Olongapo City. The impact hurled Normandy about forty meters away from
the point where the taxicab struck him, as a result of which he died.

Subsequently, Normandy’s parents (Paulino and Lucena Bebin Padua), by complaint filed with the Court of First
Instance of Zambales (civil case 427-0), sought damages from Punzalan and the Bay Taxi Cab; likewise, the city
Fiscal of Olongapo, by information filed with the same court (criminal case 1158-0), charged Punzalan with
homicide through reckless imprudence.

Both prospered.

After the judgment became final, the Paduas sought execution thereof. This proved futile; the corresponding court
officer returned the writ of execution unsatisfied.

Paduas instituted action in the same court against Gregorio N. Robles to enforce the latter’s subsidiary
responsibility.

Denied.

HELD:

Surely, it cannot be said that the court intended the statement in the decretal portion of the judgment in criminal case
1158-0 referring to the determination and assessment of Punzalan’s civil liability in civil case 427-0 to be pure
jargon or "gobbledygook" and to be absolutely of no meaning and effect whatsoever. The substance of such
statement, taken in the light of the situation to which it applies and the attendant circumstances, makes unmistakably
clear the intention of the court to accord affirmation to the Paduas’ right to the civil liability arising from the
judgment against Punzalan in criminal case.

We therefore hold that the Paduas’ complaint in civil case 1079-0 states a cause of action against Robles whose
concomitant subsidiary responsibility, per the judgment in criminal case 1158-0, subsists.

ACCORDINGLY, the order a quo dated October 25, 1972 dismissing the complaint in civil case 1079-0 is set aside,
and this case is hereby remanded to the court a quo for further proceedings conformably with this decision and with
law. No pronouncement as to costs.

Makalintal, C.J., Teehankee, Makasiar, Esguerra, Aquino, Concepcion, Jr. and Martin, JJ., concur.

Muñoz Palma J., did not take part.

Antonio, J., is on leave.

Separate Opinions
FERNANDO, J., concurring:chanrob1es virtual 1aw library

The clarity and lucidity with which Justice Castro spelled out the decisive issue and how to resolve it to achieve the
desirable goal of moral justice in adjudication compels concurrence. I do so. What is more, there is to my mind a
distinct advance in the juridical frontiers in the mode in which the novel question raised was settled. If the trend
manifest in the view taken by the Court would thereafter be followed, then the protective ramparts the law throws
around victims of vehicular accidents, unfortunately of rather frequent occurrence here, will be further strengthened.
That dissipates whatever doubts I may have originally felt in view of certain traditional procedural concepts about
the correctness of the decision reached. It is true this is one of those hard cases which, if an old law is to be believed,
may result in bad law. It need not be so, of course, as pointed out with great persuasiveness in the 1971 inaugural
lecture at Oxford given by Professor Ronald Dworkin, the successor in the chair of jurisprudence to one of the most
eminent men in the field H. L. A. Hart. 1 The more accurate way of viewing the matter is that whenever there is an
apparent gap in the law and settled principles of adjudication may not clearly indicate the answer, then a judge may
rely either on an argument of policy or an argument of principle, the former having kinship with the sociological
school of jurisprudence and the latter with the analytical. As I hope I may be able to indicate in this brief
concurrence, the decision reached by us is in consonance with either approach. With the natural law thinking
manifest in the opinion of the Court, witness its stress on moral justice, I am comforted by the reflection that the
procedural barrier is not insurmountable, the decision reached deriving support from the viewpoint of law as logic,
justice, or social control.

1. Dworkin identifies a matter of principle from the standpoint of a right either granted or recognized by law. As was
so clearly pointed out in the opinion of Justice Castro: "It would appear that a plain reading, on its face, of the
judgment in criminal case 1158-0, particularly its decretal portion, easily results in the same conclusion reached by
the court a quo: that the said judgment assessed no civil liability arising from the offense charged against Punzalan.
However, a careful study of the judgment in question, the situation to which it applies, and the attendant
circumstances, would yield the conclusion that the court a quo, on the contrary, recognized the enforceable right of
the Paduas to the civil liability arising from the offense committed by Punzalan and awarded the corresponding
indemnity therefor." 2 There is much to be said therefor for the view expressed therein that "it cannot reasonably be
contended that the court a quo intended, in its judgment in criminal case 1158-0, to omit recognition of the right of
the Paduas to the civil liability arising from the offense of which Punzalan was adjudged guilty and the corollary
award of the corresponding indemnity therefor. Surely, it cannot be said that the court intended the statement in the
decretal portion of the judgment in criminal case 1158-0 referring to the determination and assessment of Punzalan’s
civil liability in civil case 427-0 to be pure jargon or ‘gobbledygook’ and to be absolutely of no meaning and effect
whatsoever. The substance of such statement, taken in the light of the situation to which it applies and the attendant
circumstances, makes unmistakably clear the intention of the court to accord affirmation to the Padua’s right to the
civil liability arising from the judgment against Punzalan in criminal case 1158-0." 3 Whatever misgivings therefore
may be felt because in the civil case No. 427-0 the complaint against Bay Taxi Cab Co. is dismissed, do not suffice,
to my mind, to render nugatory the admitted subsidiary liability arising from a decision in criminal case No. 1158-0
which is necessarily attendant upon the conviction of the driver, Romeo N. Punzalan. Such a difficulty could have
been avoided had greater care been exercised by the lower court, but precisely recourse may be had to our corrective
powers to avoid a right granted in law from being rendered illusory in fact.

2. There is thus the strongest policy consideration that buttresses the conclusion reached by us. It would conduce to
less respect for the law as an agency of social control if there be recognition in the codes of the right of next kin to
damages arising from the tragic occurrence of young lives being snuffed out due to reckless driving on the part of
what had been accurately described as dealers of death on the road and then by lack of care on the part of a judge
assure that it is nothing more than a barren form of words. This is what Dean Pound referred to as law in books as
distinguished from law in action. To recall an expression from Justice Jackson, it is comparable to a munificent
bequest in a pauper’s will. It is less than a realistic to assert that anyway the guilty driver can be made to pay. The
obvious answer is: "With what?" 

This is not to deny that a previous judgment that certainly lends itself to ambiguity considering the facts disclosed
and found by the trial court does interpose juristic difficulty to the imposition of liability on the offending taxicab
company. There can be no blinking the fact though that if it did not place such vehicles on the road driven in such a
reckless and culpable manner resulting in a ten-year old boy being hurled about forty meters away from the point of
impact, this tragedy could have been avoided. To say now that doubts engendered by the previous ruling in the culpa
aquiliana suit could nullify what the law decrees as to the subsidiary liability of the employer in the criminal case
finding the accused guilty would be fraught with pernicious consequences. The party just as much responsible for
the mishap, with his operation of the transportation service, would be absolved from liability. It need not be so, but
certainly for entrepreneurs more enterprising than careful, not excessively concerned with the safety of the traveling
public, it could be a green light for less vigilance over the conduct of their drivers. The resulting injury to public
safety is not hard to imagine. Moreover, from the standpoint of the feelings of the bereaved parents, and this is just
as important a policy consideration, I feel that no avenue should be left unexplored to mitigate the harshness of fate.
To paraphrase Justice Malcolm, there is not enough money in the entire world to compensate the parents for the loss
of their child. 4

9. G.R. Nos. 114841-42. October 20, 1995.]

ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, INC., Petitioner, v. COURT OF

APPEALS, CARLITO D. CASTILLO, HEIRS OF CRISTETA CASTILLO and CORNELIO
CASTILLO, Respondents.

Arturo A. Alafriz & Associates for Petitioner.

 Melvin A. Arquillo for Private Respondents.

SYLLABUS

1. CIVIL LAW; EXTRA-CONTRACTUAL OBLIGATIONS; QUASI-DELICTS; DOUBLE RECOVERY OF

DAMAGES, NOT VIOLATED IN CASE AT BAR. — It is theorized by petitioner that our affirmance of the
judgment of the trial court, which granted damages for both the "damage proper to the land" and "rentals for the
same property," runs afoul of the proscription in Article 2177 of the Civil Code against double recovery of damages
for the same act. Private respondents, as plaintiffs in the actions filed in the court below, specifically alleged that as
a result of petitioner’s dredging operations the soil of the former’s property "became infertile, salty, unproductive
and unsuitable for agriculture." They further averred that petitioner’s heavy equipment "used to utilize (private
respondent’s) land as a depot or parking lot of these equipment(t) without paying any rent therefor." Petitioner was
guilty of two culpable transgressions on the property rights of private respondents, that is, for the ruination of the
agricultural fertility or utility of the soil of their property and, further, for the unauthorized use of said property as a
dump site or depot for petitioner’s heavy equipment and trucks. Consequently, albeit with differing amounts,
damages were correctly awarded both for the destruction of the land and for the unpaid rentals, or more correctly
denominated, for the reasonable value of its use and occupation of the premises.

The main reason why (private respondents’) properties were damaged, as found by the trial court, was due to the
dredging operations undertaken by (petitioner) on the area, which findings are supported by the testimony of Carlito
Castillo, testifying in Civil Case No. 10276, and Teodora Dimaculangan, in Civil Case No. 10696. . . . Neither has
(petitioner) asseverated against (private respondents’) submission that their properties were used by (petitioner) as a
dump site for its equipment and trucks, and proof are the photographs of their properties showing tracks left by truck
tires on their properties. (Parenthetical indication of the parties concerned are made for easy reference.)
2chanroblesvirtual|awlibrary

It is, therefore, clearly apparent that petitioner was guilty of two culpable transgressions on the property rights of
private respondents, that is, for the ruination of the agricultural fertility or utility of the soil of their property and,
further, for the unauthorized use of said property as a dump site or depot for petitioner’s heavy equipment and
trucks. Consequently, albeit with differing amounts, both courts correctly awarded damages both for the destruction
of the land and for the unpaid rentals, or more correctly denominated, for the reasonable value of its use and
occupation of the premises. There is consequently no merit in said objection of petitioner.

SO ORDERED.

9. G.R. No. 175256               August 23, 2012

LILY LIM, Petitioner, 
vs.
KOU CO PING a.k.a. CHARLIE CO, Respondent.

DEL CASTILLO, J.:

Factual Antecedents

In February 1999, FR Cement Corporation (FRCC), owner/operator of a cement manufacturing plant, issued several
withdrawal authorities9 for the account of cement dealers and traders, Fil-Cement Center and Tigerbilt. These
withdrawal authorities state the number of bags that the dealer/trader paid for and can withdraw from the plant. Each
withdrawal authority contained a provision that it is valid for six months from its date of issuance, unless revoked by
FRCC Marketing Department.

Fil-Cement Center and Tigerbilt, through their administrative manager, Gail Borja (Borja), sold the withdrawal
authorities covering 50,000 bags of cement to Co for the amount of ₱ 3.15 million or ₱ 63.00 per bag. 10 On February
15, 1999, Co sold these withdrawal authorities to Lim allegedly at the price of ₱ 64.00 per bag or a total of ₱ 3.2
million.11

Using the withdrawal authorities, Lim withdrew the cement bags from FRCC on a staggered basis. She successfully
withdrew 2,800 bags of cement, and sold back some of the withdrawal authorities, covering 10,000 bags, to Co.

Sometime in April 1999, FRCC did not allow Lim to withdraw the remaining 37,200 bags covered by the
withdrawal authorities. Lim clarified the matter with Co and Borja, who explained that the plant implemented a
price increase and would only release the goods once Lim pays for the price difference or agrees to receive a lesser
quantity of cement. Lim objected and maintained that the withdrawal authorities she bought were not subject to
price fluctuations. Lim sought legal recourse after her demands for Co to resolve the problem with the plant or for
the return of her money had failed.

The criminal case

An Information for Estafa through Misappropriation or Conversion was filed against Co before Branch 154 of the
Regional Trial Court (RTC) of Pasig City. The accusatory portion thereof reads:

On or about between the months of February and April 1999, in San Juan, Metro Manila and within the jurisdiction
of this Honorable Court, the accused, with intent to defraud Lily Lim, with grave abuse of confidence, with
unfaithfulness, received in trust from Lily Lim cash money in the amount of ₱ 2,380,800.00 as payment for the
37,200 bags of cement, under obligation to deliver the 37,200 bags of cement to said Lily Lim, but far from
complying with his obligation, misappropriated, misapplied and converted to his own personal use and benefit the
said amount of ₱ 2,300,800.00 [sic] and despite demands, the accused failed and refused to return said amount, to
the damage and prejudice of Lily Lim in the amount of ₱ 2,380,800.00.

Contrary to Law.12

The private complainant, Lily Lim, participated in the criminal proceedings to prove her damages. She prayed for
Co to return her money amounting to ₱ 2,380,800.00, foregone profits, and legal interest, and for an award of moral
and exemplary damages, as well as attorney’s fees. 13

On November 19, 2003, the RTC of Pasig City, Branch 154, rendered its Order14 acquitting Co of the estafa charge
for insufficiency of evidence. The criminal court’s Order reads:

The first and second elements of the crime of estafa [with abuse of confidence under Article 315, paragraph 1(b)] for
which the accused is being charged and prosecuted were not established by the prosecution’s evidence.

xxxx

In view of the absence of the essential requisites of the crime of estafa for which the accused is being charged and
prosecuted, as above discussed, the Court has no alternative but to dismiss the case against the accused for
insufficiency of evidence.15

WHEREFORE, in view of the foregoing, the Demurrer to Evidence is GRANTED, and the accused is

hereby ACQUITTED of the crime of estafa charged against him under the present information for insufficiency of
evidence.

Insofar as the civil liability of the accused is concerned, however, set this case for the reception of his evidence on
the matter on December 11, 2003 at 8:30 o’clock [sic] in the morning.

SO ORDERED.16

After the trial on the civil aspect of the criminal case, the Pasig City RTC also relieved Co of civil liability to Lim in
its December 1, 2004 Order.17 The dispositive portion of the Order reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered holding the accused CHARLIE COnot civilly
liable to the private complainant Lily Lim.

SO ORDERED.18

Lim sought a reconsideration of the above Order, arguing that she has presented preponderant evidence that Co
committed estafa against her.19

The trial court denied the motion in its Order20 dated February 21, 2005.

On March 14, 2005, Lim filed her notice of appeal21 on the civil aspect of the criminal case. Her appeal was
docketed as CA-G.R. CV No. 85138 and raffled to the Second Division of the CA.

The civil action for specific performance

On April 19, 2005, Lim filed a complaint for specific performance and damages before Branch 21 of the RTC of
Manila. The defendants in the civil case were Co and all other parties to the withdrawal authorities, Tigerbilt, Fil-
Cement Center, FRCC, Southeast Asia Cement, and La Farge Corporation. The complaint, docketed as Civil Case
No. 05-112396, asserted two causes of action: breach of contract and abuse of rights.

Issue

Did Lim commit forum shopping in filing the civil case for specific performance and damages during the pendency
of her appeal on the civil aspect of the criminal case for estafa?

Our Ruling

A single act or omission that causes damage to an offended party may give rise to two separate civil liabilities on the
part of the offender51 - (1) civil liability ex delicto, that is, civil liability arising from the criminal offense under
Article 100 of the Revised Penal Code,52 and (2) independent civil liability, that is, civil liability that may be pursued
independently of the criminal proceedings. The independent civil liability may be based on "an obligation not
arising from the act or omission complained of as a felony," as provided in Article 31 of the Civil Code (such as for
breach of contract or for tort53 ). It may also be based on an act or omission that may constitute felony but,
nevertheless, treated independently from the criminal action by specific provision of Article 33 of the Civil Code
("in cases of defamation, fraud and physical injuries").

The civil liability arising from the offense or ex delicto is based on the acts or omissions that constitute the criminal
offense; hence, its trial is inherently intertwined with the criminal action. For this reason, the civil liability ex delicto
is impliedly instituted with the criminal offense. 54 If the action for the civil liability ex delicto is instituted prior to or
subsequent to the filing of the criminal action, its proceedings are suspended until the final outcome of the criminal
action.55 The civil liability based on delict is extinguished when the court hearing the criminal action declares that
"the act or omission from which the civil liability may arise did not exist."56

Thus, Civil Case No. 05-112396 involves only the obligations arising from contract and from tort, whereas the
appeal in the estafa case involves only the civil obligations of Co arising from the offense charged. They present
different causes of action, which under the law, are considered "separate, distinct, and independent"62 from each
other. Both cases can proceed to their final adjudication, subject to the prohibition on double recovery under Article
2177 of the Civil Code.63

10. G.R. No. L-12191             October 14, 1918

JOSE CANGCO, plaintiff-appellant, 
vs.
MANILA RAILROAD CO., defendant-appellee.

Ramon Sotelo for appellant.

Kincaid & Hartigan for appellee.

FISHER, J.:

At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the employment of
Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He lived in the pueblo of San
Mateo, in the province of Rizal, which is located upon the line of the defendant railroad company; and in coming
daily by train to the company's office in the city of Manila where he worked, he used a pass, supplied by the
company, which entitled him to ride upon the company's trains free of charge. Upon the occasion in question,
January 20, 1915, the plaintiff arose from his seat in the second class-car where he was riding and, making, his exit
through the door, took his position upon the steps of the coach, seizing the upright guardrail with his right hand for
support.

On the side of the train where passengers alight at the San Mateo station there is a cement platform which begins to
rise with a moderate gradient some distance away from the company's office and extends along in front of said
office for a distance sufficient to cover the length of several coaches. As the train slowed down another passenger,
named Emilio Zuñiga, also an employee of the railroad company, got off the same car, alighting safely at the point
where the platform begins to rise from the level of the ground. When the train had proceeded a little farther the
plaintiff Jose Cangco stepped off also, but one or both of his feet came in contact with a sack of watermelons with
the result that his feet slipped from under him and he fell violently on the platform. His body at once rolled from the
platform and was drawn under the moving car, where his right arm was badly crushed and lacerated. It appears that
after the plaintiff alighted from the train the car moved forward possibly six meters before it came to a full stop.

The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was lighted dimly by a
single light located some distance away, objects on the platform where the accident occurred were difficult to
discern especially to a person emerging from a lighted car.

The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is found in the fact
that it was the customary season for harvesting these melons and a large lot had been brought to the station for the
shipment to the market. They were contained in numerous sacks which has been piled on the platform in a row one
upon another. The testimony shows that this row of sacks was so placed of melons and the edge of platform; and it is
clear that the fall of the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment he
stepped upon the platform. His statement that he failed to see these objects in the darkness is readily to be credited.

The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the injuries which he
had received were very serious. He was therefore brought at once to a certain hospital in the city of Manila where an
examination was made and his arm was amputated. The result of this operation was unsatisfactory, and the plaintiff
was then carried to another hospital where a second operation was performed and the member was again amputated
higher up near the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of
medical and surgical fees and for other expenses in connection with the process of his curation.
Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of Manila to recover
damages of the defendant company, founding his action upon the negligence of the servants and employees of the
defendant in placing the sacks of melons upon the platform and leaving them so placed as to be a menace to the
security of passenger alighting from the company's trains. At the hearing in the Court of First Instance, his Honor,
the trial judge, found the facts substantially as above stated, and drew therefrom his conclusion to the effect that,
although negligence was attributable to the defendant by reason of the fact that the sacks of melons were so placed
as to obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself had failed to use due
caution in alighting from the coach and was therefore precluded form recovering. Judgment was accordingly entered
in favor of the defendant company, and the plaintiff appealed.

It can not be doubted that the employees of the railroad company were guilty of negligence in piling these sacks on
the platform in the manner above stated; that their presence caused the plaintiff to fall as he alighted from the train;
and that they therefore constituted an effective legal cause of the injuries sustained by the plaintiff.

It is important to note that the foundation of the legal liability of the defendant is the contract of carriage. That is to
say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility
for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the
exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations
arising ex contractu, but only to extra-contractual obligations — or to use the technical form of expression, that
article relates only to culpa aquiliana and not to culpa contractual.

On the other hand, the liability of masters and employers for the negligent acts or omissions of their servants or
agents, when such acts or omissions cause damages which amount to the breach of a contact, is not based upon a
mere presumption of the master's negligence in their selection or control, and proof of exercise of the utmost
diligence and care in this regard does not relieve the master of his liability for the breach of his contract.

Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual obligation has its
source in the breach or omission of those mutual duties which civilized society imposes upon it members, or which
arise from these relations, other than contractual, of certain members of society to others, generally embraced in the
concept of status. The fundamental distinction between obligations of this character and those which arise from
contract, rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act or omission
itself which creates the vinculum juris, whereas in contractual relations the vinculum exists independently of the
breach of the voluntary duty assumed by the parties when entering into the contractual relation.

The position of a natural or juridical person who has undertaken by contract to render service to another, is wholly
different from that to which article 1903 relates. When the sources of the obligation upon which plaintiff's cause of
action depends is a negligent act or omission, the burden of proof rests upon plaintiff to prove the negligence — if
he does not his action fails. But when the facts averred show a contractual undertaking by defendant for the benefit
of plaintiff, and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff
to specify in his pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the
defendant, or of his servants or agents. Proof of the contract and of its nonperformance is sufficient prima facie to
warrant a recovery.

As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor should assume the
burden of proof of its existence, as the only fact upon which his action is based; while on the contrary, in a
case of negligence which presupposes the existence of a contractual obligation, if the creditor shows that it
exists and that it has been broken, it is not necessary for him to prove negligence. (Manresa, vol. 8, p. 71
[1907 ed., p. 76]).

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and to
provide safe means of entering and leaving its trains (civil code, article 1258). That duty, being contractual, was
direct and immediate, and its non-performance could not be excused by proof that the fault was morally imputable to
defendant's servants.

As pertinent to the question of contributory negligence on the part of the plaintiff in this case the following
circumstances are to be noted: The company's platform was constructed upon a level higher than that of the roadbed
and the surrounding ground. The distance from the steps of the car to the spot where the alighting passenger would
place his feet on the platform was thus reduced, thereby decreasing the risk incident to stepping off. The nature of
the platform, constructed as it was of cement material, also assured to the passenger a stable and even surface on
which to alight. Furthermore, the plaintiff was possessed of the vigor and agility of young manhood, and it was by
no means so risky for him to get off while the train was yet moving as the same act would have been in an aged or
feeble person. In determining the question of contributory negligence in performing such act — that is to say,
whether the passenger acted prudently or recklessly — the age, sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the passenger, and should be considered. Women, it has been
observed, as a general rule are less capable than men of alighting with safety under such conditions, as the nature of
their wearing apparel obstructs the free movement of the limbs. Again, it may be noted that the place was perfectly
familiar to the plaintiff as it was his daily custom to get on and of the train at this station. There could, therefore, be
no uncertainty in his mind with regard either to the length of the step which he was required to take or the character
of the platform where he was alighting. Our conclusion is that the conduct of the plaintiff in undertaking to alight
while the train was yet slightly under way was not characterized by imprudence and that therefore he was not guilty
of contributory negligence.
The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a copyist clerk, and
that the injuries he has suffered have permanently disabled him from continuing that employment. Defendant has not
shown that any other gainful occupation is open to plaintiff. His expectancy of life, according to the standard
mortality tables, is approximately thirty-three years. We are of the opinion that a fair compensation for the damage
suffered by him for his permanent disability is the sum of P2,500, and that he is also entitled to recover of defendant
the additional sum of P790.25 for medical attention, hospital services, and other incidental expenditures connected
with the treatment of his injuries.

11. G.R. No. 190601               February 7, 2011

SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-GUANIO, Petitioners, 

vs.
MAKATI SHANGRI-LA HOTEL and RESORT, INC., also doing business under the name of SHANGRI-LA
HOTEL MANILA, Respondent.

DECISION

CARPIO MORALES, J.:

For their wedding reception on July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-Guanio (petitioners)
booked at the Shangri-la Hotel Makati (the hotel).

Prior to the event, Makati Shangri-La Hotel & Resort, Inc. (respondent) scheduled an initial food tasting. Petitioners
claim that they requested the hotel to prepare for seven persons ─ the two of them, their respective parents, and the
wedding coordinator. At the scheduled food tasting, however, respondent prepared for only six.

Petitioners initially chose a set menu which included black cod, king prawns and angel hair pasta with wild
mushroom sauce for the main course which cost ₱1,000.00 per person. They were, however, given an option in
which salmon, instead of king prawns, would be in the menu at ₱950.00 per person. They in fact partook of the
salmon.

Three days before the event, a final food tasting took place. Petitioners aver that the salmon served was half the size
of what they were served during the initial food tasting; and when queried about it, the hotel quoted a much higher
price (₱1,200.00) for the size that was initially served to them. The parties eventually agreed on a final price ─
₱1,150 per person.

A day before the event or on July 27, 2001, the parties finalized and forged their contract. 1

Petitioners claim that during the reception, respondent’s representatives, Catering Director Bea Marquez and Sales
Manager Tessa Alvarez, did not show up despite their assurance that they would; their guests complained of the
delay in the service of the dinner; certain items listed in the published menu were unavailable; the hotel’s waiters
were rude and unapologetic when confronted about the delay; and despite Alvarez’s promise that there would be no
charge for the extension of the reception beyond 12:00 midnight, they were billed and paid ₱8,000 per hour for the
three-hour extension of the event up to 4:00 A.M. the next day.

Petitioners further claim that they brought wine and liquor in accordance with their open bar arrangement, but these
were not served to the guests who were forced to pay for their drinks.

Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and Resort, Inc. (respondent) and received an
apologetic reply from Krister Svensson, the hotel’s Executive Assistant Manager in charge of Food and Beverage.
They nevertheless filed a complaint for breach of contract and damages before the Regional Trial Court (RTC) of
Makati City.

The doctrine of proximate cause is applicable only in actions for quasi-delicts, not in actions involving breach of
contract. x x x The doctrine is a device for imputing liability to a person where there is no relation between him and
another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual
relation between the parties, it is the parties themselves who create the obligation, and the function of the law is
merely to regulate the relation thus created. 8 (emphasis and underscoring supplied)

What applies in the present case is Article 1170 of the Civil Code which reads:

Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who
in any manner contravene the tenor thereof, are liable for damages.

The exculpatory clause notwithstanding, the Court notes that respondent could have managed the "situation" better,
it being held in high esteem in the hotel and service industry. Given respondent’s vast experience, it is safe to
presume that this is not its first encounter with booked events exceeding the guaranteed cover. It is not audacious to
expect that certain measures have been placed in case this predicament crops up. That regardless of these measures,
respondent still received complaints as in the present case, does not amuse.1avvphil
Respondent admitted that three hotel functions coincided with petitioners’ reception. To the Court, the delay in
service might have been avoided or minimized if respondent exercised prescience in scheduling events. No less than
quality service should be delivered especially in events which possibility of repetition is close to nil. Petitioners are
not expected to get married twice in their lifetimes.

In the present petition, under considerations of equity, the Court deems it just to award the amount of ₱50,000.00 by
way of nominal damages to petitioners, for the discomfiture that they were subjected to during to the event. 15 The
Court recognizes that every person is entitled to respect of his dignity, personality, privacy and peace of
mind.16Respondent’s lack of prudence is an affront to this right.

12. G.R. No. L-21438             September 28, 1966

AIR FRANCE, petitioner, 
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March
30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued to
plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled
in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first class" seat
that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a "white man", who, the
Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat, the plaintiff, as was to
be expected, refused, and told defendant's Manager that his seat would be taken over his dead body; a commotion
ensued, and, according to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class;
when they found out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all
across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12, Hearing
of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane. 3

With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals support its
judgment.

3. Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class ticket. But
petitioner asserts that said ticket did not represent the true and complete intent and agreement of the parties; that said
respondent knew that he did not have confirmed reservations for first class on any specific flight, although he had
tourist class protection; that, accordingly, the issuance of a first class ticket was no guarantee that he would have a
first class ride, but that such would depend upon the availability of first class seats.

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a first class
passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was breached when
petitioner failed to furnish first class transportation at Bangkok; and Third, that there was bad faith when petitioner's
employee compelled Carrascoso to leave his first class accommodation berth "after he was already, seated" and to
take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations,
thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral
damages. It is true that there is no specific mention of the term bad faith in the complaint. But, the inference of bad
faith is there, it may be drawn from the facts and circumstances set forth therein. 34 The contract was averred to
establish the relation between the parties. But the stress of the action is put on wrongful expulsion.

Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed petitioner on guard
on what Carrascoso intended to prove: That while sitting in the plane in Bangkok, Carrascoso was ousted by
petitioner's manager who gave his seat to a white man; 35 and (b) evidence of bad faith in the fulfillment of the
contract was presented without objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to
whether or not there is sufficient averment in the complaint to justify an award for moral damages. Deficiency in the
complaint, if any, was cured by the evidence. An amendment thereof to conform to the evidence is not even
required. 36 On the question of bad faith, the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the
defendant Air France while at Bangkok, and was transferred to the tourist class not only without his
consent but against his will, has been sufficiently established by plaintiff in his testimony before the court,
corroborated by the corresponding entry made by the purser of the plane in his notebook which notation
reads as follows:

"First-class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of the
plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do so.
It is noteworthy that no one on behalf of defendant ever contradicted or denied this evidence for the
 plaintiff. It could have been easy for defendant to present its manager at Bangkok to testify at the trial of
the case, or yet to secure his disposition; but defendant did neither. 37

The Court of appeals further stated —

Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if the
employees of the defendant at Bangkok sold a first-class ticket to him when all the seats had already been
taken, surely the plaintiff should not have been picked out as the one to suffer the consequences and to be
subjected to the humiliation and indignity of being ejected from his seat in the presence of others. Instead
of explaining to the white man the improvidence committed by defendant's employees, the manager
adopted the more drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat.
We are strengthened in our belief that this probably was what happened there, by the testimony of
defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters "O.K."
appearing on the tickets of plaintiff, said "that the space is confirmed for first class. Likewise, Zenaida
Faustino, another witness for defendant, who was the chief of the Reservation Office of defendant, testified
as follows:

"Q How does the person in the ticket-issuing office know what reservation the passenger has
arranged with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)

In this connection, we quote with approval what the trial Judge has said on this point:

Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to
the seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not prove
"any better", nay, any right on the part of the "white man" to the "First class" seat that the plaintiff
was occupying and for which he paid and was issued a corresponding "first class" ticket.

If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant
could have easily proven it by having taken the testimony of the said Manager by deposition, but
defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if
produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is constrained
to find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat
because the said Manager wanted to accommodate, using the words of the witness Ernesto G.
Cuento, the "white man".38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the
term "bad faith". But can it be doubted that the recital of facts therein points to bad faith? The manager not
only prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his arbitrary will;
he forcibly ejected him from his seat, made him suffer the humiliation of having to go to the tourist class
compartment - just to give way to another passenger whose right thereto has not been established.
Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is
understood in law. For, "bad faith" contemplates a "state of mind affirmatively operating with furtive
design or with some motive of self-interest or will or for ulterior purpose." 39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment of the
Court of First Instance, thus:

The evidence shows that the defendant violated its contract of transportation with plaintiff in bad
faith, with the aggravating circumstances that defendant's Manager in Bangkok went to the extent
of threatening the plaintiff in the presence of many passengers to have him thrown out of the
airplane to give the "first class" seat that he was occupying to, again using the words of the
witness Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to
accommodate, and the defendant has not proven that this "white man" had any "better right" to
occupy the "first class" seat that the plaintiff was occupying, duly paid for, and for which the
corresponding "first class" ticket was issued by the defendant to him.40

5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well settled in
law. 41 For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the
Civil Code says:

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

In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article
2219 (10), Civil Code, moral damages are recoverable. 42

6. A contract to transport passengers is quite different in kind and degree from any other contractual relation. 43 And
this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore,
generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could
give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with
kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct on
the part of employees towards a passenger gives the latter an action for damages against the carrier. 44

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract and a tort,
giving a right of action for its agent in the presence of third persons to falsely notify her that the check was worthless
and demand payment under threat of ejection, though the language used was not insulting and she was not
ejected." 46 And this, because, although the relation of passenger and carrier is "contractual both in origin and
nature" nevertheless "the act that breaks the contract may be also a tort". 47 And in another case, "Where a passenger
on a railroad train, when the conductor came to collect his fare tendered him the cash fare to a point where the train
was scheduled not to stop, and told him that as soon as the train reached such point he would pay the cash fare from
that point to destination, there was nothing in the conduct of the passenger which justified the conductor in using
insulting language to him, as by calling him a lunatic," 48 and the Supreme Court of South Carolina there held the
carrier liable for the mental suffering of said passenger.1awphîl.nèt

Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have
said, is placed upon his wrongful expulsion. This is a violation of public duty by the petitioner air carrier — a case
of quasi-delict. Damages are proper.

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —

Q You mentioned about an attendant. Who is that attendant and purser?

A When we left already — that was already in the trip — I could not help it. So one of the flight attendants
approached me and requested from me my ticket and I said, What for? and she said, "We will note that you
transferred to the tourist class". I said, "Nothing of that kind. That is tantamount to accepting my transfer."
And I also said, "You are not going to note anything there because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I
stood up and I went to the pantry that was next to me and the purser was there. He told me, "I have
recorded the incident in my notebook." He read it and translated it to me — because it was recorded in
French — "First class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene."

Mr. VALTE —

I move to strike out the last part of the testimony of the witness because the best evidence would be the
notes. Your Honor.

COURT —

I will allow that as part of his testimony. 49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook reading
"First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene"
is predicated upon evidence [Carrascoso's testimony above] which is incompetent. We do not think so. The subject
of inquiry is not the entry, but the ouster incident. Testimony on the entry does not come within the proscription of
the best evidence rule. Such testimony is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the startling
occurrence was still fresh and continued to be felt. The excitement had not as yet died down. Statements then, in this
environment, are admissible as part of the res gestae. 50 For, they grow "out of the nervous excitement and mental
and physical condition of the declarant". 51 The utterance of the purser regarding his entry in the notebook was
spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has been guaranteed. 52 It
thus escapes the operation of the hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would have been an
easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really true that no such entry was
made, the deposition of the purser could have cleared up the matter.
We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary damages
— in contracts and quasi- contracts. The only condition is that defendant should have "acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner." 53 The manner of ejectment of respondent Carrascoso from his first
class seat fits into this legal precept. And this, in addition to moral damages. 54

9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar judgment for
attorneys' fees. The least that can be said is that the courts below felt that it is but just and equitable that attorneys'
fees be given. 55 We do not intend to break faith with the tradition that discretion well exercised — as it was here —
should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus:
P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as attorneys' fees. The
task of fixing these amounts is primarily with the trial court. 56 The Court of Appeals did not interfere with the same.
The dictates of good sense suggest that we give our imprimatur thereto. Because, the facts and circumstances point
to the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We accordingly
vote to affirm the same. Costs against petitioner. So ordered.

13. G.R. No. L-24837           June 27, 1968

JULIAN C. SINGSON and RAMONA DEL CASTILLO, plaintiffs, 

vs.
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO FREIXAS, in his capacity as President of the said
Bank, defendants.

Gil B. Galang for plaintiffs.

Aviado and Aranda for defendants.

CONCEPCION, C.J.:

Appeal by plaintiffs, Julian Singson and his wife, Ramona del Castillo, from a decision of the Court of First Instance
of Manila dismissing their complaint against defendants herein, the Bank of the Philippine Islands and Santiago
Freixas.

It appears that Singson, was one of the defendants in civil case No. 23906 of the Court of First Instance, Manila, in
which judgment had been rendered sentencing him and his co-defendants therein, namely, Celso Lobregat and Villa-
Abrille & Co., to pay the sum of P105,539.56 to the plaintiff therein, Philippine Milling Co. Singson and Lobregat
had seasonably appealed from said judgment, but not Villa-Abrille & Co., as against which said judgment,
accordingly, became final and executory. In due course, a writ of garnishment was subsequently served upon the
Bank of the Philippine Islands — in which the Singsons had a current account — insofar as Villa-Abrille's credits
against the Bank were concerned. What happened thereafter is set forth in the decision appealed from, from which
we quote:

Upon receipt of the said Writ of Garnishment, a clerk of the bank in charge of all matters of execution and
garnishment, upon reading the name of the plaintiff herein in the title of the Writ of Garnishment as a party
defendants, without further reading the body of the said garnishment and informing himself that said
garnishment was merely intended for the deposits of defendant Villa-Abrille & Co., Valentin Teus,
Fernando F. de Villa-Abrille and Joaquin Bona, prepared a letter for the signature of the President of the
Bank informing the plaintiff Julian C. Singson of the garnishment of his deposits by the plaintiff in that
case. Another letter was also prepared and signed by the said President of the Bank for the Special Sheriff
dated April 17, 1963.

Subsequently, two checks issued by the plaintiff Julian C. Singson, one for the amount of P383 in favor of
B. M. Glass Service dated April 16, 1963 and bearing No. C-424852, and check No. C-394996 for the
amount of P100 in favor of the Lega Corporation, and drawn against the said Bank, were deposited by the
said drawers with the said bank. Believing that the plaintiff Singson, the drawer of the check, had no more
control over the balance of his deposits in the said bank, the checks were dishonored and were refused
payment by the said bank. After the first check was returned by the bank to the B. M. Glass Service, the
latter wrote plaintiff Julian C. Singson a letter, dated April 19, 1963, advising him that his check for
P383.00 bearing No. C-424852 was not honored by the bank for the reason that his account therein had
already been garnished. The said B. M. Glass Service further stated in the said letter that they were
constrained to close his credit account with them. In view thereof, plaintiff Julian C. Singson wrote the
defendant bank a letter on April 19, 1963, claiming that his name was not included in the Writ of Execution
and Notice of Garnishment, which was served upon the bank. The defendant President Santiago Freixas of
the said bank took steps to verify this information and after having confirmed the same, apologized to the
plaintiff Julian C. Singson and wrote him a letter dated April 22, 1963, requesting him to disregard their
letter of April 17, 1963, and that the action of garnishment from his account had already been removed. A
similar letter was written by the said official of the bank on April 22, 1963 to the Special Sheriff informing
him that his letter dated April 17, 1963 to the said Special Sheriff was considered cancelled and that they
 had already removed the Notice of Garnishment from plaintiff Singson's account. Thus, the defendants lost
no time to rectify the mistake that had been inadvertently committed, resulting in the temporary freezing of
the account of the plaintiff with the said bank for a short time.

xxx     xxx     xxx

On May 8, 1963, the Singsong commenced the present action against the Bank and its president, Santiago Freixas,
for damages1 in consequence of said illegal freezing of plaintiffs' account.1äwphï1.ñët

After appropriate proceedings, the Court of First Instance of Manila rendered judgment dismissing the complaint
upon the ground that plaintiffs cannot recover from the defendants upon the basis of a quasi-delict, because the
relation between the parties is contractual in nature; because this case does not fall under Article 2219 of our Civil
Code, upon which plaintiffs rely; and because plaintiffs have not established the amount of damages allegedly
sustained by them.

The lower court held that plaintiffs' claim for damages cannot be based upon a tort or quasi-delict, their relation with
the defendants being contractual in nature. We have repeatedly held, however, that the existence of a contract
between the parties does not bar the commission of a tort by the one against the order and the consequent recovery
of damages therefor.2 Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air
France vs. Carrascoso,3 involving an airplane passenger who, despite his first-class ticket, had been illegally ousted
from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to
recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between a
passenger and a carrier is "contractual both in origin and nature ... the act that breaks the contract may also be a
tort".

In view, however, of the facts obtaining in the case at bar, and considering, particularly, the circumstance, that the
wrong done to the plaintiff was remedied as soon as the President of the bank realized the mistake he and his
subordinate employee had committed, the Court finds that an award of nominal damages — the amount of which
need not be proven4 — in the sum of P1,000, in addition to attorney's fees in the sum of P500, would suffice to
vindicate plaintiff's rights.5

WHEREFORE, the judgment appealed from is hereby reversed, and another one shall be entered sentencing the
defendant Bank of the Philippine Islands to pay to the plaintiffs said sums of P1,000, as nominal damages, and P500,
as attorney's fees, apart from the costs. It is so ordered.

14. G.R. No. 84698 February 4, 1992

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D. LIM, BENJAMIN P. PAULINO,

ANTONIO M. MAGTALAS, COL. PEDRO SACRO and LT. M. SORIANO, petitioners, 
vs.
COURT OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, in her capacity as Presiding Judge of
Branch 47, Regional Trial Court, Manila, SEGUNDA R. BAUTISTA and ARSENIA D.
BAUTISTA, respondents.

Balgos and Perez for petitioners.

Collantes, Ramirez & Associates for private respondents.

PADILLA, J.:

A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the second-floor
premises of the Philippine School of Business Administration (PSBA) prompted the parents of the deceased to file
suit in the Regional Trial Court of Manila (Branch 47) presided over by Judge (now Court of Appeals justice)
Regina Ordoñez-Benitez, for damages against the said PSBA and its corporate officers. At the time of his death,
Carlitos was enrolled in the third year commerce course at the PSBA. It was established that his assailants were not
members of the school's academic community but were elements from outside the school.

Specifically, the suit impleaded the PSBA and the following school authorities: Juan D. Lim (President), Benjamin
P. Paulino (Vice-President), Antonio M. Magtalas (Treasurer/Cashier), Col. Pedro Sacro (Chief of Security) and a
Lt. M. Soriano (Assistant Chief of Security). Substantially, the plaintiffs (now private respondents) sought to
adjudge them liable for the victim's untimely demise due to their alleged negligence, recklessness and lack of
security precautions, means and methods before, during and after the attack on the victim. During the proceedings a
quo, Lt. M. Soriano terminated his relationship with the other petitioners by resigning from his position in the
school.

Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since they are presumably sued
under Article 2180 of the Civil Code, the complaint states no cause of action against them, as jurisprudence on the
subject is to the effect that academic institutions, such as the PSBA, are beyond the ambit of the rule in the afore-
stated article.
The respondent trial court, however, overruled petitioners' contention and thru an order dated 8 December 1987,
denied their motion to dismiss. A subsequent motion for reconsideration was similarly dealt with by an order dated
25 January 1988. Petitioners then assailed the trial court's disposition before the respondent appellate court which, in
a decision * promulgated on 10 June 1988, affirmed the trial court's orders. On 22 August 1988, the respondent
appellate court resolved to deny the petitioners' motion for reconsideration. Hence, this petition.

At the outset, it is to be observed that the respondent appellate court primarily anchored its decision on the law
of quasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil Code. 1 Pertinent portions of the appellate
court's now assailed ruling state:

Article 2180 (formerly Article 1903) of the Civil Code is an adoption from the old Spanish Civil
Code. The comments of Manresa and learned authorities on its meaning should give way to
present day changes. The law is not fixed and flexible (sic); it must be dynamic. In fact, the
greatest value and significance of law as a rule of conduct in (sic) its flexibility to adopt to
changing social conditions and its capacity to meet the new challenges of progress.

Construed in the light of modern day educational system, Article 2180 cannot be construed in its
narrow concept as held in the old case of Exconde vs. Capuno  2 and Mercado vs. Court of
Appeals; 3hence, the ruling in the Palisoc  4 case that it should apply to all kinds of educational
institutions, academic or vocational.

At any rate, the law holds the teachers and heads of the school staff liable unless they relieve
themselves of such liability pursuant to the last paragraph of Article 2180 by "proving that they
observed all the diligence to prevent damage." This can only be done at a trial on the merits of the
case. 5

While we agree with the respondent appellate court that the motion to dismiss the complaint was correctly denied
and the complaint should be tried on the merits, we do not however agree with the premises of the appellate court's
ruling.

Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in loco parentis. This Court
discussed this doctrine in the afore-cited cases of Exconde, Mendoza, Palisoc and, more recently, in Amadora
vs.Court of Appeals. 6 In all such cases, it had been stressed that the law (Article 2180) plainly provides that the
damage should have been caused or inflicted by pupils or students of he educational institution sought to be held
liable for the acts of its pupils or students while in its custody. However, this material situation does not exist in the
present case for, as earlier indicated, the assailants of Carlitos were not students of the PSBA, for whose acts the
school could be made liable.

However, does the appellate court's failure to consider such material facts mean the exculpation of the petitioners
from liability? It does not necessarily follow.

When an academic institution accepts students for enrollment, there is established a contract between them,
resulting in bilateral obligations which both parties are bound to comply with. 7 For its part, the school undertakes to
provide the student with an education that would presumably suffice to equip him with the necessary tools and skills
to pursue higher education or a profession. On the other hand, the student covenants to abide by the school's
academic requirements and observe its rules and regulations.

Institutions of learning must also meet the implicit or "built-in" obligation of providing their students with an
atmosphere that promotes or assists in attaining its primary undertaking of imparting knowledge. Certainly, no
student can absorb the intricacies of physics or higher mathematics or explore the realm of the arts and other
sciences when bullets are flying or grenades exploding in the air or where there looms around the school premises a
constant threat to life and limb. Necessarily, the school must ensure that adequate steps are taken to maintain peace
and order within the campus premises and to prevent the breakdown thereof.

Because the circumstances of the present case evince a contractual relation between the PSBA and Carlitos Bautista,
the rules on quasi-delict do not really govern. 8 A perusal of Article 2176 shows that obligations arising from quasi-
delicts or tort, also known as extra-contractual obligations, arise only between parties not otherwise bound by
contract, whether express or implied. However, this impression has not prevented this Court from determining the
existence of a tort even when there obtains a contract. In Air France vs. Carrascoso (124 Phil. 722), the private
respondent was awarded damages for his unwarranted expulsion from a first-class seat aboard the petitioner airline.
It is noted, however, that the Court referred to the petitioner-airline's liability as one arising from tort, not one arising
from a contract of carriage. In effect, Air France is authority for the view that liability from tort may exist even if
there is a contract, for the act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248
Fed. 231).

This view was not all that revolutionary, for even as early as 1918, this Court was already of a similar mind.
In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:

The field of non-contractual obligation is much broader than that of contractual obligation,
comprising, as it does, the whole extent of juridical human relations. These two fields, figuratively
speaking, concentric; that is to say, the mere fact that a person is bound to another by contract
does not relieve him from extra-contractual liability to such person. When such a contractual
 relation exists the obligor may break the contract under such conditions that the same act which
constitutes a breach of the contract would have constituted the source of an extra-contractual
obligation had no contract existed between the parties.

Immediately what comes to mind is the chapter of the Civil Code on Human Relations, particularly Article 21,
which provides:

Any person who wilfully causes loss or injury to another in a manner that is contrary to morals,

good custom or public policy shall compensate the latter for the damage. (emphasis supplied).

Air France penalized the racist policy of the airline which emboldened the petitioner's employee to forcibly oust the
private respondent to cater to the comfort of a white man who allegedly "had a better right to the seat." In Austro-
American, supra, the public embarrassment caused to the passenger was the justification for the Circuit Court of
Appeals, (Second Circuit), to award damages to the latter. From the foregoing, it can be concluded that should the
act which breaches a contract be done in bad faith and be violative of Article 21, then there is a cause to view the act
as constituting a quasi-delict.

In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the contract between the
school and Bautista had been breached thru the former's negligence in providing proper security measures. This
would be for the trial court to determine. And, even if there be a finding of negligence, the same could give rise
generally to a breach of contractual obligation only. Using the test of Cangco, supra, the negligence of the school
would not be relevant absent a contract. In fact, that negligence becomes material only because of the contractual
relation between PSBA and Bautista. In other words, a contractual relation is a condition sine qua non to the
school's liability. The negligence of the school cannot exist independently of the contract, unless the negligence
occurs under the circumstances set out in Article 21 of the Civil Code.

This Court is not unmindful of the attendant difficulties posed by the obligation of schools, above-mentioned, for
conceptually a school, like a common carrier, cannot be an insurer of its students against all risks. This is specially
true in the populous student communities of the so-called "university belt" in Manila where there have been reported
several incidents ranging from gang wars to other forms of hooliganism. It would not be equitable to expect of
schools to anticipate all types of violent trespass upon their premises, for notwithstanding the security measures
installed, the same may still fail against an individual or group determined to carry out a nefarious deed inside
school premises and environs. Should this be the case, the school may still avoid liability by proving that the breach
of its contractual obligation to the students was not due to its negligence, here statutorily defined to be the omission
of that degree of diligence which is required by the nature of the obligation and corresponding to the circumstances
of persons, time and place. 9

As the proceedings a quo have yet to commence on the substance of the private respondents' complaint, the record
is bereft of all the material facts. Obviously, at this stage, only the trial court can make such a determination from
the evidence still to unfold.

WHEREFORE, the foregoing premises considered, the petition is DENIED. The court of origin (RTC, Manila, Br.
47) is hereby ordered to continue proceedings consistent with this ruling of the Court. Costs against the petitioners.

SO ORDERED.

15. ORIENT FREIGHT INTERNATIONAL, INC., PETITIONER, V. KEIHIN-EVERETT FORWARDING

COMPANY, INC., RESPONDENT.

DECISION
LEONEN, J.:
Article 2176 of the Civil Code does not apply when the party's negligence occurs in the performance of an
obligation. The negligent act would give rise to a quasi-delict only when it may be the basis for an independent
action were the parties not otherwise bound by a contract.
This resolves a Petition for Review[1] on Certiorari under Rule 45 of the Rules of Court, assailing the January 21,
2010 Decision[2] and April 21, 2010 Resolution[3] of the Court of Appeals, which affirmed the Regional Trial Court
February 27, 2008 Decision.[4] The Regional Trial Court found that petitioner Orient Freight International, Inc.'s
(Orient Freight) negligence caused the cancellation of Keihin-Everett Forwarding Company, Inc.'s (Keihin-Everett)
contract with Matsushita Communication Industrial Corporation of the Philippines (Matsushita). [5]
On October 16, 2001, Keihin-Everett entered into a Trucking Service Agreement with Matsushita. Under the
Trucking Service Agreement, Keihin-Everett would provide services for Matsushita's trucking requirements. These
services were subcontracted by Keihin-Everett to Orient Freight, through their own Trucking Service Agreement
executed on the same day.[6]
When the Trucking Service Agreement between Keihin-Everett and Matsushita expired on December 31, 2001,
Keihin-Everett executed an In-House Brokerage Service Agreement for Matsushita's Philippine Economic Zone
Authority export operations. Keihin-Everett continued to retain the services of Orient Freight, which sub-contracted
its work to Schmitz Transport and Brokerage Corporation.[7]
In April 2002, Matsushita called Keihin-Everett's Sales Manager, Salud Rizada, about a column in the April 19,
2002 issue of the tabloid newspaper Tempo. This news narrated the April 17, 2002 interception by Caloocan City
police of a stolen truck filled with shipment of video monitors and CCTV systems owned by Matsushita. [8]
When contacted by Keihin-Everett about this news, Orient Freight stated that the tabloid report had blown the
incident out of proportion. They claimed that the incident simply involved the breakdown and towing of the truck,
which was driven by Ricky Cudas (Cudas), with truck helper, Rubelito Aquino[9] (Aquino). The truck was promptly
released and did not miss the closing time of the vessel intended for the shipment. [10]
Keihin-Everett directed Orient Freight to investigate the matter. During its April 20, 2002 meeting with Keihin-
Everett and Matsushita, as well as in its April 22, 2002 letter addressed to Matsushita, Orient Freight reiterated that
the truck merely broke down and had to be towed.[11]
However, when the shipment arrived in Yokohama, Japan on May 8, 2002, it was discovered that 10 pallets of the
shipment's 218 cartons, worth US$34,226.14, were missing.[12]
Keihin-Everett independently investigated the incident. During its investigation, it obtained a police report from the
Caloocan City Police Station. The report stated, among others, that at around 2:00 p.m. on April 17, 2002,
somewhere in Plaza Dilao, Paco Street, Manila, Cudas told Aquino to report engine trouble to Orient Freight. After
Aquino made the phone call, he informed Orient Freight that the truck had gone missing. When the truck was
intercepted by the police along C3 Road near the corner of Dagat-Dagatan Avenue in Caloocan City, Cudas escaped
and became the subject of a manhunt.[13]
When confronted with Keihin-Everett's findings, Orient Freight wrote back on May 15, 2002 to admit that its
previous report was erroneous and that pilferage was apparently proven.[14]
In its June 6, 2002 letter, Matsushita terminated its In-House Brokerage Service Agreement with Keihin-Everett,
effective July 1, 2002. Matsushita cited loss of confidence for terminating the contract, stating that Keihin-Everett's
way of handling the April 17, 2002 incident and its nondisclosure of this incident's relevant facts "amounted to fraud
and signified an utter disregard of the rule of law."[15]
Keihin-Everett, by counsel, sent a letter dated September 16, 2002 to Orient Freight, demanding P2,500,000.00 as
indemnity for lost income. It argued that Orient Freight's mishandling of the situation caused the termination of
Keihin-Everett's contract with Matsushita.[16]
When Orient Freight refused to pay, Keihin-Everett filed a complaint dated October 24, 2002 for damages with
Branch 10, Regional Trial Court, Manila. The case was docketed as Civil Case No. 02-105018.[17] In its complaint,
Keihin-Everett alleged that Orient Freight's "misrepresentation, malice, negligence and fraud" caused the
termination of its In-House Brokerage Service Agreement with Matsushita. Keihin-Everett prayed for compensation
for lost income, with legal interest, exemplary damages, attorney's fees, litigation expenses, and the costs of the suit.
[18]

In its December 20, 2002 Answer, Orient Freight claimed, among others, that its initial ruling of pilferage was in
good faith as manifested by the information from its employees and the good condition and the timely shipment of
the cargo. It also alleged that the contractual termination was a prerogative of Matsushita. Further, by its own
Audited Financial Statements on file with the Securities and Exchange Commission, Keihin-Everett derived income
substantially less than what it sued for. Along with the dismissal of the complaint, Orient Freight also asserted
counterclaims for compensatory and exemplary damages, attorney's fees, litigation expenses, and the costs of the
suit.[19]
The Regional Trial Court rendered its February 27, 2008 Decision,[20] in favor of Keihin-Everett. It found that Orient
Freight was "negligent in failing to investigate properly the incident and make a factual report to Keihin[-Everett]
and Matsushita," despite having enough time to properly investigate the incident.[21]
The trial court also ruled that Orient Freight's failure to exercise due diligence in disclosing the true facts of the
incident to Keihin-Everett and Matsushita caused Keihin-Everett to suffer income losses due to Matsushita's
cancellation of their contract.[22] The trial court ordered Orient Freight "to pay [Keihin-Everett] the amount of [P]
1,666,667.00 as actual damages representing net profit loss incurred" and P50,000.00 in attorney's fees. [23]However,
it denied respondent's prayer for exemplary damages, finding that petitioner did not act with gross negligence. [24]
Orient Freight appealed the Regional Trial Court Decision to the Court of Appeals. On January 21, 2010, the Court
of Appeals issued its Decision[25] affirming the trial court's decision. It ruled that Orient Freight "not only had
knowledge of the foiled hijacking of the truck carrying the . . . shipment but, more importantly, withheld [this]
information from [Keihin-Everett]."[26]
The Court of Appeals ruled that the oral and documentary evidence has established both the damage suffered by
Keihin-Everett and Orient Freight's fault or negligence. Orient Freight was negligent in not reporting and not
thoroughly investigating the April 17, 2002 incident despite Keihin-Everett's instruction to do so. [27] It further ruled
that while Keihin-Everett sought to establish its claim for lost income of P2,500,000.00 by submitting its January
2002 to June 2002 net income statement,[28] this was refuted by Orient Freight by presenting Keihin-Everett's own
audited financial statements. The Court of Appeals held that the trial court correctly arrived at the amount of
P1,666,667.00 as the award of lost income.[29]
The Court of Appeals denied Orient Freight's Motion for Reconsideration in its April 21, 2010 Resolution. [30]
On June 9, 2010, Orient Freight filed this Petition for Review on Certiorari under Rule 45 with this Court, arguing
that the Court of Appeals incorrectly found it negligent under Article 2176 of the Civil Code.[31] As there was a
subsisting Trucking Service Agreement between Orient Freight itself and Keihin-Everett, petitioner avers that there
was a pre-existing contractual relation between them, which would preclude the application of the laws on quasi-
delicts.[32]
Applying the test in Far East Bank and Trust Company v. Court of Appeals,[33] petitioner claims that its failure to
inform respondent Keihin-Everett about the hijacking incident could not give rise to a quasi-delict since the
Trucking Service Agreement between the parties did not include this obligation. It argues that there being no
obligation under the Trucking Service Agreement to inform Keihin-Everett of the hijacking incident, its report to
Keihin-Everett was done in good faith and did not constitute negligence. Its representations regarding the hijacking
incident were a sound business judgment and not a negligent act.[34] Finally, it claims that the Court of Appeals
incorrectly upheld the award of damages, as the trial court had based its computation on, among others, Keihin-
Everett's profit and loss statement.[35]
On August 2, 2010, Keihin-Everett filed its Comment,[36] arguing that the petition does not contain the names of the
parties in violation of Rule 45, Section 4 of the Rules of Court. It contends that the issues and the arguments raised
in this petition are the same issues it raised in the Regional Trial Court and the Court of Appeals. [37] It claims that the
findings of fact and law of the Court of Appeals are in accord with this Court's decisions.[38]
On October 7, 2010, Orient Freight filed its Reply.[39] It notes that a cursory reading of the petition would readily
show the parties to the case. It claims that what is being contested and appealed is the application of the law on
negligence by lower courts and, while the findings of fact by the lower courts are entitled to great weight, the
exceptions granted by jurisprudence apply to this case. It reiterates that the pre-existing contractual relation between
the parties should bar the application of the principles of quasi-delict. Because of this, the terms and conditions of
the contract between the parties must be applied. It also claimed that the Regional Trial Court's computation of the
award included figures from respondent's Profit and Loss Statement, which the trial court had allegedly rejected. It
rendered the computation unreliable.[40]
This Court issued a Resolution[41] dated February 16, 2011, requiring petitioner to submit a certified true copy of the
Regional Trial Court February 27, 2008 Decision.
On March 31, 2011, petitioner filed its Compliance, [42] submitting a certified true copy of the Regional Trial Court
Decision.
The issues for this Court's resolution are:

First, whether the failure to state the names of the parties in this Petition for Review, in accordance with Rule 45,
Section 4 of the Rules of Court, is a fatal defect;

Second, whether the Court of Appeals, considering the existing contracts in this case, erred in applying Article 2176
of the Civil Code;

Third, whether Orient Freight, Inc. was negligent for failing to disclose the facts surrounding the hijacking incident
on April 17, 2002, which led to the termination of the Trucking Service Agreement between Keihin-Everett
Forwarding Co., Inc. and Matsushita Communication Industrial Corporation of the Philippines; and

Finally, whether the trial court erred in the computation of the awarded actual and pecuniary loss by basing it on,
among others, the Profit and Loss Statement submitted by Keihin-Everett Forwarding Co., Inc.

The petition is denied.

I
The petition does not violate Rule 45, Section 4 of the Rules of Court[43] for failing to state the names of the parties
in the body. The names of the parties are readily discernable from the caption of the petition, clearly showing the
appealing party as the petitioner and the adverse party as the respondent. The Court of Appeals had also been
erroneously impleaded in the petition. However, this Court in Aguilar v. Court of Appeals, et al.[44] ruled that
inappropriately impleading the lower court as respondent does not automatically mean the dismissal of the appeal.
This is a mere formal defect.[45]
II
Negligence may either result in culpa aquiliana or culpa contractual.[46] Culpa aquiliana is the "the wrongful or
negligent act or omission which creates a vinculum juris and gives rise to an obligation between two persons not
formally bound by any other obligation,"[47] and is governed by Article 2176 of the Civil Code:
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this Chapter.

Negligence in culpa contractual, on the other hand, is "the fault or negligence incident in the performance of an
obligation which already-existed, and which increases the liability from such already existing obligation." [48] This is
governed by Articles 1170 to 1174 of the Civil Code:[49]
Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof, are liable for damages.

Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future
fraud is void.

Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but such liability may be regulated by the courts, according to the circumstances.

Article 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by
the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place.
When negligence shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that which is expected
of a good father of a family shall be required.

Article 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when
the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which
could not be foreseen, or which, though foreseen, were inevitable.

Actions based on contractual negligence and actions based on quasi-delicts differ in terms of conditions, defenses,
and proof. They generally cannot co-exist.[50] Once a breach of contract is proved, the defendant is presumed
negligent and must prove not being at fault. In a quasi-delict, however, the complaining party has the burden of
proving the other party's negligence.[51] In Huang v. Phil. Hoteliers, Inc.:[52]
[T]his Court finds it significant to take note of the following differences between quasi-delict (culpa aquilina) and
breach of contract (culpa contractual). In quasi-delict, negligence is direct, substantive and independent, while in
breach of contract, negligence is merely incidental to the performance of the contractual obligation; there is a pre-
existing contract or obligation, In quasi-delict, the defense of "good father of a family" is a complete and proper
defense insofar as parents, guardians and employers are concerned, while in breach of contract, such is not a
complete and proper defense in the selection and supervision of employees. In  quasi-delict, there is no presumption
of negligence and it is incumbent upon the injured party to prove the negligence of the defendant, otherwise, the
former's complaint will be dismissed, while in breach of contract, negligence is presumed so long as it can be proved
that there was breach of the contract and the burden is on the defendant to prove that there was no negligence in the
carrying out of the terms of the contract; the rule of respondeat superior is followed.[53] (Emphasis in the original,
citations omitted)
In Government Service Insurance System v. Spouses Labung-Deang,[54] since the petitioner's obligation arose from a
contract, this Court applied the Civil Code provisions on contracts, instead of those of Article 2176:
The trial court and the Court of Appeals treated the obligation of GSIS as one springing from quasi-delict. We do
not agree. Article 2176 of the Civil Code defines quasi-delict as follows:
"Whoever by act or omission causes damages 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
aquasi-delict and is governed by the provisions of this Chapter (italics ours)."
Under the facts, there was a pre-existing contract between the parties. GSIS and the spouses Deang had a loan
agreement secured by a real estate mortgage. The duty to return the owner's duplicate copy of title arose as soon as
the mortgage was released. GSIS insists that it was under no obligation to return the owner's duplicate copy of the
title immediately. This insistence is not warranted. Negligence is obvious as the owners' duplicate copy could not be
returned to the owners. Thus, the more applicable provisions of the Civil Code are:

"Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those
who in any manner contravene the tenor thereof are liable for damages."

"Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable
shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties
have foreseen or could have reasonably foreseen at the time the obligation was constituted . .."

Since good faith is presumed and bad faith is a matter of fact which should be proved, we shall treat GSIS as a party
who defaulted in its obligation to return the owners' duplicate copy of the title. As an obligor in good faith, GSIS is
liable for all the "natural and probable consequences of the breach of the obligation." The inability of the spouses
Deang to secure another loan and the damages they suffered thereby has its roots in the failure of the GSIS to return
the owners' duplicate copy of the title.[55] (Citations omitted)
Similarly, in Syquia v. Court of Appeals,[56] this Court ruled that private respondent would have been held liable for a
breach of its contract with the petitioners, and not for quasi-delict, had it been found negligent:
With respect to herein petitioners' averment that private respondent has committed culpa aquiliana, the Court of
Appeals found no negligent act on the part of private respondent to justify an award of damages against it. Although
a pre-existing contractual relation between the parties does not preclude the existence of a culpa aquiliana, We find
no reason to disregard the respondent's Court finding that there was no negligence.
....

In this case, it has been established that the Syquias and the Manila Memorial Park Cemetery, Inc., entered into a
contract entitled "Deed of Sale and Certificate of Perpetual Care" on August 27, 1969. That agreement governed the
relations of the parties and defined their respective rights and obligations. Hence, had there been actual negligence
on the part of the Manila Memorial Park Cemetery, Inc., it would be held liable not for a quasi-delict or culpa
aquiliana, but for culpa contractual as provided by Article 1170 of the Civil Code[.][57]
However, there are instances when Article 2176 may apply even when there is a pre-existing contractual relation. A
party may still commit a tort or quasi-delict against another, despite the existence of a contract between them. [58]
In Cangco v. Manila Railroad,[59] this Court explained why a party may be held liable for either a breach of contract
or an extra-contractual obligation for a negligent act:
It is evident, therefore, that in its decision in the Yamada case, the court treated plaintiff's action as though founded
in tort rather than as based upon the breach of the contract of carriage, and an examination of the pleadings and of
the briefs shows that the questions of law were in fact discussed upon this theory. Viewed from the standpoint of the
defendant the practical result must have been the same in any event. The proof disclosed beyond doubt that the
defendant's servant was grossly negligent and that his negligence was the proximate cause of plaintiff's injury. It also
affirmatively appeared that defendant had been guilty of negligence in its failure to exercise proper discretion in the
direction of the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of
the duty were to be regarded as constituting culpa aquilina or culpa contractual. As Manresa points out . . . whether
negligence occurs as an incident in the course of the performance of a contractual undertaking or is itself (he
source of an extra-contractual obligation, its essential characteristics are identical. There is always an act or
omission productive of damage due to carelessness or inattention on the part of the defendant. Consequently, when
the court holds that a defendant is liable in damages for having failed to exercise due care, either directly, or in
failing to exercise proper care in the selection and direction of his servants, the practical result is identical in either
case . . ,
The true explanation of such cases is to be found by directing the attention to the relative spheres of contractual and
extra-contractual obligations. The field of non-contractual obligation is much more broader [sic] than that of
contractual obligation, comprising, as it does, the whole extent of juridical human relations. These two fields,
figuratively speaking, concentric; that is to say, the mere fact that a person is bound to another by contract does not
relieve him from extra-contractual liability to such person. When such a contractual relation exists the obligor may
break the contract under such conditions that the same act which constitutes a breach of the contract would have
constituted the source of an extra-contractual obligation had no contract existed between the parties.[60] (Emphasis
supplied, citation omitted)
If a contracting party's act that breaches the contract would have given rise to an extra-contractual liability had there
been no contract, the contract would be deemed breached by a tort,[61] and the party may be held liable under Article
2176 and its related provisions.[62]
In Singson v. Bank of the Philippine Islands,[63] this Court upheld the petitioners' claim for damages based on a
quasi-delict, despite the parties' relationship being contractual in nature:
After appropriate proceedings, the Court of First Instance of Manila rendered judgment dismissing the complaint
upon the ground that plaintiffs cannot recover from the defendants upon the basis of a quasi-delict, because the
relation between the parties is contractual in nature; because this case does not fall under Article 2219 of our Civil
Code, upon which plaintiffs rely; and because plaintiffs have not established the amount of damages allegedly
sustained by them.

The lower court held that plaintiffs' claim for damages cannot be based upon a tort or quasi-delict, their relation with
the defendants being contractual in nature. We have repeatedly held, however, that the existence of a contract
between the parties does not bar the commission of a tort by the one against the order and the consequent recovery
of damages therefor. Indeed, this view has been in effect, reiterated in a comparatively recent case. Thus, in Air
France vs. Carrascoso, involving an airplane passenger who, despite his first-class ticket, had been illegally ousted
from his first-class accommodation, and compelled to take a seat in the tourist compartment, was held entitled to
recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between a
passenger and the carrier is "contractual both in origin and nature . . . the act that breaks the contract may also be a
tort".[64] (Citations omitted)
However, if the act complained of would not give rise to a cause of action for a quasi-delict independent of the
contract, then the provisions on quasi-delict or tort would be inapplicable. [65]
In Philippine School of Business Administration v. Court of Appeals,[66] petitioner's obligation to maintain peace and
order on campus was based on a contract with its students. Without this contract, the obligation does not exist.
Therefore, the private respondents' cause of action must be founded on the breach of contract and cannot be based
on Article 2176:
Because the circumstances of the present case evince a contractual relation between the PSBA and Carlitos Bautista,
the rules on quasi-delict do not really govern. A perusal of Article 2176 shows that obligations arising from quasi-
delicts or tort, also known as extra-contractual obligations, arise only between parties not otherwise bound by
contract, whether express or implied. However, this impression has not prevented this Court from determining the
existence of a tort even when there obtains a contract. In Air France vs. Carroscoso (124 Phil. 722), the private
respondent was awarded damages for his unwarranted expulsion from a first-class seat aboard the petitioner airline.
It is noted, however, that the Court referred to the petitioner-airline's liability as one arising from tort, not one arising
from a contract of carriage. In effect, Air France is authority for the view that liability from tort may exist even if
there is a contract, for the act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248
Fed. 231).
This view was not all that revolutionary, for even as early as 1918, this Court was already of a similar mind.
In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:
"The field of non-contractual obligation is much more broader [sic] than that of contractual obligation, comprising,
as it does, the whole extent of juridical human relations. These two fields, figuratively speaking, concentric; that is
to say, the mere fact that a person is bound to another by contract does not relieve him from extra-contractual
liability to such person. When such a contractual relation exists the obligor may break the contract under such
conditions that the same act which constitutes a breach of the contract would have constituted the source of an
extra-contractual obligation had no contract existed between the parties."
Immediately what comes to mind is the chapter of the Civil Code on Human Relations, particularly Article 21,
which provides:

"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." (Italics supplied)
Air France penalized the racist policy of the airline which emboldened the petitioner's employee to forcibly oust the
private respondent to cater to the comfort of a white man who allegedly "had a better right to the seat." In Austro-
American, supra, the public embarrassment caused to the passenger was the justification for the Circuit Court of
Appeals, (Second Circuit), to award damages to the latter. From the foregoing, it can be concluded that should the
act which breaches a contract be done in bad faith and be violative of Article 21, then there is a cause to view the act
as constituting a quasi-delict.
In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the contract between the
school and Bautista had been breached thru the former's negligence in providing proper security measures. This
would be for the trial court to determine. And, even if there be a finding of negligence, the same could give rise
generally to a breach of contractual obligation only. Using the test of Cangco, supra, the negligence of the school
would not be relevant absent a contract. In fact, that negligence becomes material only because of the contractual
relation between PSBA and Bautista. In other words, a contractual relation is a condition sine qua non to the
school's liability. The negligence of the school cannot exist independently on the contract, unless the negligence
occurs under the circumstances set out in Article 21 of the Civil Code.[67] (Citations omitted)
In situations where the contractual relation is indispensable to hold a party liable, there must be a finding that the act
or omission complained of was done in bad faith and in violation of Article 21 of the Civil Code to give rise to an
action based on tort.[68]
In Far East Bank and Trust Company v. Court of Appeals,[69] as the party's claim for damages was based on a
contractual relationship, the provisions on quasi-delict generally did not apply. In this case, this Court did not award
moral damages to the private respondent because the applicable Civil Code provision was Article 2220,[70] not
Article 21, and neither fraud nor bad faith was proved:
We are not unaware of the previous rulings of this Court, such as in American Express International, Inc. vs.
Intermediate Appellate Court (167 SCRA 209) and Bank of [the] Philippine Islands vs. Intermediate Appellate
Court(206 SCRA 408), sanctioning the application of Article 21, in relation to Article 2217 and Article 2219 of the
Civil Code to a contractual breach similar to the case at bench. Article 21 states:
"Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage."

Article 21 of the Code, it should be observed, contemplates a conscious act to cause harm. Thus, even if we are to
assume that the provision could properly relate to a breach of contract, its application can be warranted only when
the defendant's disregard of his contractual obligation is so deliberate as to approximate a degree of misconduct
certainly no less worse [sic] than fraud or bad faith. Most importantly, Article 21 is a mere declaration of a general
principle in human relations that clearly must, in any case, give way to the specific provision of Article 2220 of the
Civil Code authorizing the grant of moral damages in culpa contractual solely when the breach is due to fraud or
bad faith.
....

The Court has not in the process overlooked another rule that a quasi-delict can be the cause for breaching a contract
that might thereby permit the application of applicable principles on tort even where there is a pre-existing contract
between the plaintiff and the defendant (Phil. Airlines vs. Court of Appeals, 106 SCRA 143; Singson vs. Bank of the
Phil. Islands, 23 SCRA 1117; and Air France vs. Carrascoso, 18 SCRA 155). This doctrine, unfortunately, cannot
improve private respondents' case for it can aptly govern only where the act or omission complained of would
constitute an actionable tort independently of the contract. The test (whether a quasi-delict can be deemed to
underlie the breach of a contract) can be stated thusly: Where, without a pre-existing contract between two parties,
an act or omission can nonetheless amount to an actionable tort by itself, the fact that the parties are contractually
bound is no bar to the application of quasi-delict provisions to the case. Here, private respondents' damage claim is
predicated solely on their contractual relationship; without such agreement, the act or omission complained of
cannot by itself be held to stand as a separate cause of action or as an independent actionable tort.[71] (Citations
omitted)
Here, petitioner denies that it was obliged to disclose the facts regarding the hijacking incident since this was not
among the provisions of its Trucking Service Agreement with respondent. There being no contractual obligation,
respondent had no cause of action against petitioner:

Applying said test, assuming for the sake of argument that petitioner indeed failed to inform respondent of the
incident where the truck was later found at the Caloocan Police station, would an independent action prosper based
on such omission? Assuming that there is no contractual relation between the parties herein, would petitioner's
omission of not informing respondent that the truck was impounded gives [sic] rise to a quasi-delict? Obviously not,
because the obligation, if there is any in the contract, that is to inform plaintiff of said incident, could have been
spelled out in the very contract itself duly executed by the parties herein specifically in the Trucking Service
Agreement. It is a fact that no such obligation or provision existed in the contract. Absent said terms and obligations,
applying the principles on tort as a cause for breaching a contract would therefore miserably fail as the lower Court
erroneously did in this case.[72]
The obligation to report what happened during the hijacking incident, admittedly, does not appear on the plain text
of the Trucking Service Agreement. Petitioner argues that it is nowhere in the agreement. Respondent does not
dispute this claim. Neither the Regional Trial Court nor the Court of Appeals relied on the provisions of the
Trucking Service Agreement to arrive at their respective conclusions. Breach of the Trucking Service Agreement
was neither alleged nor proved.

While petitioner and respondent were contractually bound under the Trucking Service Agreement and the events at
the crux of this controversy occurred during the performance of this contract, it is apparent that the duty to
investigate and report arose subsequent to the Trucking Service Agreement. When respondent discovered the news
report on the hijacking incident, it contacted petitioner, requesting information on the incident.[73] Respondent then
requested petitioner to investigate and report on the veracity of the news report. Pursuant to respondent's request,
petitioner met with respondent and Matsushita on April 20, 2002 and issued a letter dated April 22, 2002, addressed
to Matsushita.[74] Respondent's claim was based on petitioner's negligent conduct when it was required to investigate
and report on the incident:
The defendant claimed that it should not be held liable for damages suffered by the plaintiff considering that the
proximate cause of the damage done to plaintiff is the negligence by employees of Schmitz trucking. This argument
is untenable because the defendant is being sued in this case not for the negligence of the employees of Schmitz
trucking but based on defendant's own negligence in failing to disclose the true facts of the hijacking incident to
plaintiff Keihin and Matsushita.[75]
Both the Regional Trial Court and Court of Appeals erred in finding petitioner's negligence of its obligation to report
to be an action based on a quasi-delict Petitioner's negligence did not create the vinculum juris or legal relationship
with the respondent, which would have otherwise given rise to a quasi-delict. Petitioner's duty to respondent existed
prior to its negligent act. When respondent contacted petitioner regarding the news report and asked it to investigate
the incident, petitioner's obligation was created. Thereafter, petitioner was alleged to have performed its obligation
negligently, causing damage to respondent.
The doctrine "the act that breaks the contract may also be a tort," on which the lower courts relied, is inapplicable
here. Petitioner's negligence, arising as it does from its performance of its obligation to respondent, is dependent on
this obligation. Neither do the facts show that Article 21 of the Civil Code applies, there being no finding that
petitioner's act was a conscious one to cause harm, or be of such a degree as to approximate fraud or bad faith:

To be sure, there was inaction on the part of the defendant which caused damage to the plaintiff, but there is nothing
to show that the defendant intended to conceal the truth or to avoid liability. When the facts became apparent to
defendant, the latter readily apologized to Keihin and Matsushita for their mistake. [76]
Consequently, Articles 1170, 1172, and 1173 of the Civil Code on negligence in the performance of an obligation
should apply.

III
Under Article 1170 of the Civil Code, liability for damages arises when those in the performance of their obligations
are guilty of negligence, among others. Negligence here has been defined as "the failure to observe that degree of
care, precaution and vigilance that the circumstances just demand, whereby that other person suffers injury." [77] If the
law or contract does not provide for the degree of diligence to be exercised, then the required diligence is that of a
good father of a family.[78] The test to determine a party's negligence is if the party used "the reasonable care and
caution which an ordinarily prudent person would have used in the same situation"[79] when it performed the
negligent act. If the party did not exercise reasonable care and caution, then it is guilty of negligence.
In this case, both the Regional Trial Court and the Court of Appeals found that petitioner was negligent in failing to
adequately report the April 17, 2002 hijacking incident to respondent and not conducting a thorough investigation
despite being directed to do so. The trial court's factual findings, when affirmed by the Court of Appeals, are binding
on this Court and are generally conclusive.[80]
The Regional Trial Court found that petitioner's conduct showed its negligent handling of the investigation and its
failure to timely disclose the facts of the incident to respondent and Matsushita:

[Orient Freight] was clearly negligent in failing to investigate properly the incident and make a factual report to
Keihin and Matsushita. [Orient Freight] claimed that it was pressed for time considering that they were given only
about one hour and a half to investigate the incident before making the initial report. They claimed that their
employees had no reason to suspect that the robbery occurred considering that the seal of the van remained intact.
Moreover, the priority they had at that time was to load the cargo to the carrying vessel on time for shipment on
April 19, 200[2]. They claimed that they made arrangement with the Caloocan Police Station for the release of the
truck and the cargo and they were able to do that and the objective was achieved. This may be true but the Court
thinks that [Orient Freight] had enough time to investigate properly the incident. The hijacking incident happened on
April 17, 200[2] and the tabloid Tempo published the hijacking incident only on April 19, 200[2]. This means that
[Orient Freight] had about two (2) days to conduct a diligent inquiry about the incident. It took them until May 15,
200[2] to discover that a robbery indeed occurred resulting in the loss of ten pallets or 218 cartons valued at US
$34,226.14. They even denied that there was no police report only to find out that on May 15, 200[2] that there was
such a report. It was [Orient Freight] 's duty to inquire from the Caloocan Police Station and to find out if they
issued a police report, Yet, it was plaintiff Keihin which furnished them a copy of the police report. The failure of
[Orient Freight] to investigate properly the incident and make a timely report constitutes negligence. Evidently,
[Orient Freight] failed to exercise due diligence in disclosing the true facts of the incident to plaintiff Keihin and
Matsushita. As a result, plaintiff Keihin suffered income losses by reason of Matsushita's cancellation of their
contract which primarily was caused by the negligence of [Orient Freight].[81]
The Court of Appeals affirmed the trial court's finding of negligence:

From the foregoing account, it is evident that [Orient Freight] not only had knowledge of the foiled hijacking of the
truck carrying the subject shipment but, more importantly, withheld said information from [Keihin-Everett],
Confronted with the April 19, 2002 tabloid account thereof, [Orient Freight] appears to have further compounded its
omission by misleading [Keihin-Everett] and Matsu[s]hita into believing that the subject incident was irresponsibly
reported and merely involved a stalled vehicle which was towed to avoid obstruction of traffic. Given that the police
report subsequently obtained by [Keihin-Everett] was also dated April 17, 2002, [Orient Freight's insistence on its
good faith on the strength of the information it gathered from its employees as well as the timely shipment and
supposed good condition of the cargo clearly deserve scant consideration.[82]
Petitioner's argument that its acts were a "sound business judgment which the court cannot supplant or question nor
can it declare as a negligent act"[83] lacks merit. The Regional Trial Court found that the circumstances should have
alerted petitioner to investigate the incident in a more circumspect and careful manner:
On this score, [Orient Freight] itself presented the circumstances which should have alerted [Orient Freight] that
there was more to the incident than simply a case of mechanical breakdown or towing of the container truck to the
police station. [Orient Freight] pointed to specific facts that would naturally arouse suspicion that something was
wrong when the container was found in the premises of the Caloocan Police Station and that driver Ricky Cudas was
nowhere to be found. The police does [sic] not ordinarily impound a motor vehicle if the problem is merely a traffic
violation. More important, driver Ricky Cudas disappeared and was reported missing. When the Caloocan Police
chanced upon the container van, it was found straying at C-3 which is outside its usual route. All these
circumstances should have been enough for [Orient Freight] to inquire deeper on the real circumstances of the
incident.

....

[Orient Freight] talked to Rubelito Aquino and apparently failed to listen closely to the statement given by their
truck helper to the Caloocan Police. The truck helper recounted how the engine of the truck stalled and the driver
was able to start the engine but thereafter, he was nowhere to be seen. By this circumstance alone, it should have
become apparent to [Orient Freight] that the truck driver gypped the truck helper into calling the company and had a
different intention which was to run away with the container van. It readily shows that Ricky Cudas intended to
hijack the vehicle by feigning or giving the false appearance of an engine breakdown. Yet, [Orient Freight]
dismissed the incident as a simple case of a unit breakdown and towing of vehicle allegedly due to traffic violation.
Under the circumstances, therefore, the defendant failed to exercise the degree of care, precaution and vigilance
which the situation demands.[84]
Despite the circumstances which would have cautioned petitioner to act with care while investigating and reporting
the hijacking incident, petitioner failed to do so. Petitioner is responsible for the damages that respondent incurred
due to the former's negligent performance of its obligation.
 IV
Articles 2200 and 2201 of the Civil Code provide for the liability for damages in contractual obligations:

Article 2200. Indemnification for damages shall comprehend not only the value of the loss suffered, but also that of
the profits which the obligee failed to obtain.

Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable
shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties
have foreseen or could have reasonably foreseen at the time the obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation.

In Central Bank of the Philippines v. Court of Appeals,[85] this Court explained the principles underlying Articles
2200 and 2201:
Construing these provisions, the following is what this Court held in Cerrano vs. Tan Chuco, 38 Phil. 392:
"... Article 1106 (now 2200) of the Civil Code establishes the rule that prospective profits may be recovered as
damages, while article 1107 (now 2201) of the same Code provides that the damages recoverable for the breach of
obligations not originating in fraud (dolo) are those which were or might have been foreseen at the time the contract
was entered into. Applying these principles to the facts in this case, we think that it is unquestionable that defendant
must be deemed to have foreseen at the time he made the contract that in the event of his failure to perform it, the
plaintiff would be damaged by the loss of the profit he might reasonably have expected to derive from its use.
"When the existence of a loss is established, absolute certainty as to its amount is not required. The benefit to be
derived from a contract which one of the parties has absolutely failed to perform is of necessity to some extent, a
matter of speculation, but the injured party is not to be denied all remedy for that reason alone. He must produce the
best evidence of which his case is susceptible and if that evidence warrants the inference that he has been damaged
by the loss of profits which he might with reasonable certainty have anticipated but for the defendant's wrongful act,
he is entitled to recover. As stated in Sedgwick on Damages (Ninth Ed., par. 177):

'The general rule is, then, that a plaintiff may recover compensation for any gain which he can make it appear with
reasonable certainty the defendant's wrongful act prevented him from acquiring, . . .' (See also Algarra vs. Sandejas,
27 Phil. Rep., 284, 289; Hicks vs. Manila Hotel Co., 28 Phil, Rep., 325.)" (At pp. 398-399.)[86]
The lower courts established that petitioner's negligence resulted in Matsushita's cancellation of its contract with
respondent. The Regional Trial Court found:

In the letter dated June 6, 2002, Matsushita pre-terminated its In-House Brokerage Service Agreement with plaintiff
Keihin for violation of the terms of said contract. Its President, KenGo Toda, stated that because of the incident that
happened on April 17, 2002 involving properties which the plaintiff failed to inform them, Matsushita has lost
confidence in plaintiff's capability to handle its brokerage and forwarding requirements. There was clearly a breach
of trust as manifested by plaintiff's failure to disclose facts when it had the duty to reveal them and it constitutes
fraud. Moreover, the negligence of plaintiff personnel cannot be tolerated as Matsushita is bound to protect the
integrity of the company.[87]
It could be reasonably foreseen that the failure to disclose the true facts of an incident, especially when it turned out
that a crime might have been committed, would lead to a loss of trust and confidence in the party which was bound
to disclose these facts. Petitioner caused the loss of trust and confidence when it misled respondent and Matsushita
into believing that the incident had been irresponsibly reported and merely involved a stalled truck. [88] Thus,
petitioner is liable to respondent for the loss of profit sustained due to Matsushita's termination of the In-House
Brokerage Service Agreement.
As regards the amount of damages, this Court cannot rule on whether the Regional Trial Court erred in using the
Profit and Loss Statement submitted by respondent for its computation. The amount of the award of damages is a
factual matter generally not reviewable in a Rule 45 petition,[89] The damages awarded by the Regional Trial Court,
as affirmed by the Court of Appeals, were supported by documentary evidence such as respondent's audited
financial statement. The trial court clearly explained how it reduced the respondent's claimed loss of profit and
arrived at the damages to be awarded:
The difference between the total gross revenue of plaintiff for 2002 as reported in the monthly profit and loss
statement of [P]14,801,744.00 and the audited profit and loss statement of the amount of [P]10,434,144.00
represents 1/3 of the total gross revenues of the plaintiff for the six months period. Accordingly, the net profit loss of
[P]2.5 million pesos as reported in the monthly profit and loss statement of the plaintiff should be reduced by 1/3 or
the amount of [P]833,333.33. Therefore, the net profit loss of the plaintiff for the remaining period of six months
should only be the amount of [P] 1,666,667.70 and not [P]2.5 million as claimed.[90]
Petitioner has not sufficiently shown why the computation made by the trial court should be disturbed.

WHEREFORE, the petition is DENIED. The January 21, 2010 Decision and April 21, 2010 Resolution of the
Court of Appeals in CA-G.R. CV No. 91889 are AFFIRMED.
SO ORDERED.

16. MR. & MRS. ENGRACIO FABRE, JR. * and PORFIRIO CABIL, Petitioners, v. COURT OF APPEALS,
THE WORD FOR THE WORLD CHRISTIAN FELLOWSHIP, INC., AMYLINE ANTONIO, JOHN
RICHARDS, GONZALO GONZALES, VICENTE V. QUE, JR., ICLI CORDOVA, ARLENE GOJOCO,
ALBERTO ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA, YOLANDA CORDOVA,
NOEL ROQUE, EDWARD TAN, ERNESTO NARCISO, ENRIQUETA LOCSIN, FRANCIS NORMAN O.
 LOPEZ, JULIUS CAESAR GARCIA, ROSARIO MA. V. ORTIZ, MARIETTA C. CLAVO, ELVIE
SENIEL, ROSARIO MARAMARA, TERESITA REGALA, MELINDA TORRES, MARELLA MIJARES,
JOSEFA CABATINGAN, MARA NADOC, DIANE MAYO, TESS PLATA, MAYETTE JOCSON, ARLENE
Y. MORTIZ, LIZA MAYO, CARLOS RANARIO, ROSAMARIA T. RADOC and BERNADETTE
FERRER, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals 1 in CA-GR No. 28245, dated
September 30, 1992, which affirmed with modification the decision of the Regional Trial Court of Makati, Branch
58, ordering petitioners jointly and severally to pay damages to private respondent Amyline Antonio, and its
resolution which denied petitioners’ motion for reconsideration for lack of merit.

Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus
principally in connection with a bus service for school children which they operated in Manila. The couple had a
driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for two weeks. His job was to take school
children to and from the St. Scholastica’s College in Malate, Manila.

On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with
petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in
consideration of which private respondent paid petitioners the amount of P3,000.00.

The group was scheduled to leave on November 2, 1984, at 5:00 o’clock in the afternoon. However, as several
members of the party were late, the bus did not leave the Tropical Hut at the corner of Ortigas Avenue and EDSA
until 8:00 o’clock in the evening. Petitioner Porfirio Cabil drove the minibus.

The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under
repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to
take a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a
sharp curve on the highway, running on a south to east direction, which he described as "siete." The road was
slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to
the left road shoulder. The bus hit the left traffic steel brace and sign along the road and rammed the fence of one
Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The
bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion.

Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned
down by a wooden seat which came off after being unscrewed. It took three persons to safely remove her from this
position. She was in great pain and could not move.

The driver, petitioner Cabil, claimed he did not see the curve until it was too late. He said he was not familiar with
the area and he could not have seen the curve despite the care he took in driving the bus, because it was dark and
there was no sign on the road. He said that he saw the curve when he was already within 15 to 30 meters of it. He
allegedly slowed down to 30 kilometers per hour, but it was too late.

The Lingayen police investigated the incident the next day, November 3, 1984. On the basis of their finding they
filed a criminal complaint against the driver, Porfirio Cabil. The case was later filed with the Lingayen Regional
Trial Court. Petitioners Fabre paid Jesus Escano P1,500.00 for the damage to the latter’s fence. On the basis of
Escano’s affidavit of desistance the case against petitioners Fabre was dismissed.

Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Metro Manila. As a result of
the accident, she is now suffering from paraplegia and is permanently paralyzed from the waist down. During the
trial she described the operations she underwent and adduced evidence regarding the cost of her treatment and
therapy. Immediately after the accident, she was taken to the Nazareth Hospital in Ba-ay, Lingayen. As this hospital
was not adequately equipped, she was transferred to the Sto. Niño Hospital, also in the town of Ba-ay, where she
was given sedatives. An x-ray was taken and the damage to her spine was determined to be too severe to be treated
there. She was therefore brought to Manila, first to the Philippine General Hospital and later to the Makati Medical
Center where she underwent an operation to correct the dislocation of her spine.

In its decision dated April 17, 1989, the trial court found that:chanrob1es virtual 1aw library

No convincing evidence was shown that the minibus was properly checked for travel to a long distance trip and that
the driver was properly screened and tested before being admitted for employment. Indeed, all the evidence
presented have shown the negligent act of the defendants which ultimately resulted to the accident subject of this
case.

Accordingly, it gave judgment for private respondents holding:chanrob1es virtual 1aw library

Considering that plaintiffs Word for the World Christian Fellowship, Inc. and Ms. Amyline Antonio were the only
ones who adduced evidence in support of their claim for damages, the Court is therefore not in a position to award
damages to the other plaintiffs.

WHEREFORE, premises considered, the Court hereby renders judgment against defendants Mr. & Mrs. Engracio
Fabre, Jr. and Porfirio Cabil y Jamil pursuant to articles 2176 and 2180 of the Civil Code of the Philippines and said
defendants are ordered to pay jointly and severally to the plaintiffs the following amount:chanrob1es virtual 1aw
library

1) P93,657.11 as compensatory and actual damages;

2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;

3) P20,000.00 as moral damages;

4) P20,000.00 as exemplary damages; and

5) 25% of the recoverable amount as attorney’s fees;

6) Costs of suit.

SO ORDERED.

The Court of Appeals affirmed the decision of the trial court with respect to Amyline Antonio but dismissed it with
respect to the other plaintiffs on the ground that they failed to prove their respective claims. The Court of Appeals
modified damages as follows:chanrob1es virtual 1aw library

1) P93,657.11 as actual damages;

2) P600,000.00 as compensatory damages;

3) P50,000.00 as moral damages;

4) P20,000.00 as exemplary damages;

5) P10,000.00 as attorney’s fees; and

6) Costs of suit.

The Court of Appeals sustained the trial court’s finding that petitioner Cabil failed to exercise due care and
precaution in the operation of his vehicle considering the time and the place of the accident. The Court of Appeals
held that the Fabres were themselves presumptively negligent. Hence, this petition. Petitioners raise the following
issues:chanrob1es virtual 1aw library

I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.

II. WHETHER OR NOT PETITIONERS WERE LIABLE FOR THE INJURIES SUFFERED BY PRIVATE
RESPONDENTS.

III. WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE POSITIVE, UP TO WHAT EXTENT.

Petitioners challenge the propriety of the award of compensatory damages in the amount of P600,000.00. It is
insisted that, on the assumption that petitioners are liable, an award of P600,000.00 is unconscionable and highly
speculative. Amyline Antonio testified that she was a casual employee of a company called "Suaco," earning
P1,650.00 a month, and a dealer of Avon products, earning an average of P1,000.00 monthly. Petitioners contend
that as casual employees do not have security of tenure, the award of P600,000.00, considering Amyline Antonio’s
earnings, is without factual basis as there is no assurance that she would be regularly earning these amounts.

With the exception of the award of damages, the petition is devoid of merit.

First, it is unnecessary for our purpose to determine whether to decide this case on the theory that petitioners are
liable for breach of contract of carriage or culpa contractual or on the theory of quasi delict or culpa aquiliana as
both the Regional Trial Court and the Court of Appeals held, for although the relation of passenger and carrier is
"contractual both in origin and nature," nevertheless "the act that breaks the contract may be also a tort." 2 In either
case, the question is whether the bus driver, petitioner Porfirio Cabil, was negligent.

The finding that Cabil drove his bus negligently, while his employer, the Fabres, who owned the bus, failed to
exercise the diligence of a good father of the family in the selection and supervision of their employee is fully
supported by the evidence on record. These factual findings of the two courts we regard as final and conclusive,
supported as they are by the evidence. Indeed, it was admitted by Cabil that on the night in question, it was raining,
and, as a consequence, the road was slippery, and it was dark. He averred these facts to justify his failure to see that
there lay a sharp curve ahead. However, it is undisputed that Cabil drove his bus at the speed of 50 kilometers per
hour and only slowed down when he noticed the curve some 15 to 30 meters ahead. 3 By then it was too late for him
to avoid falling off the road. Given the conditions of the road and considering that the trip was Cabil’s first one
outside of Manila, Cabil should have driven his vehicle at a moderate speed. There is testimony 4 that the vehicles
passing on that portion of the road should only be running 20 kilometers per hour, so that at 50 kilometers per hour,
Cabil was running at a very high speed.

Considering the foregoing — the fact that it was raining and the road was slippery, that it was dark, that he drove his
bus at 50 kilometers an hour when even on a good day the normal speed was only 20 kilometers an hour, and that he
was unfamiliar with the terrain, Cabil was grossly negligent and should be held liable for the injuries suffered by
private respondent Amyline Antonio.

Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his employers,
the Fabres, were themselves negligent in the selection and supervision of their employee.

Due diligence in selection of employees is not satisfied by finding that the applicant possessed a professional
driver’s license. The employer should also examine the applicant for his qualifications, experience and record of
service. 5 Due diligence in supervision, on the other hand, requires the formulation of rules and regulations for the
guidance of employees and the issuance of proper instructions as well as actual implementation and monitoring of
consistent compliance with the rules. 6 

In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider the fact that
Cabil had been driving for school children only, from their homes to the St. Scholastica’s College in Metro Manila.
7 They had hired him only after a two-week apprenticeship. They had tested him for certain matters, such as whether
he could remember the names of the children he would be taking to school, which were irrelevant to his
qualification to drive on a long distance travel, especially considering that the trip to La Union was his first. The
existence of hiring procedures and supervisory policies cannot be casually invoked to overturn the presumption of
negligence on the part of an employer. 8 

Petitioners argue that they are not liable because (1) an earlier departure (made impossible by the congregation’s
delayed meeting) could have averted the mishap and (2) under the contract, the WWCF was directly responsible for
the conduct of the trip. Neither of these contentions hold water. The hour of departure had not been fixed. Even if it
had been, the delay did not bear directly on the cause of the accident. With respect to the second contention, it was
held in an early case that:chanrob1es virtual 1aw library

[A] person who hires a public automobile and gives the driver directions as to the place to which he wishes to be
conveyed, but exercises no other control over the conduct of the driver, is not responsible for acts of negligence of
the latter or prevented from recovering for injuries suffered from a collision between the automobile and a train,
caused by the negligence either of the locomotive engineer or the automobile driver. 9 

As already stated, this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be
engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to
them. As this Court has held: 10 

Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the
public.

The above article makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as "a sideline"). Article
1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither
does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general
community or population, and one who offers services or solicits business only from a narrow segment of the
general population. We think that Article 1732 deliberately refrained from making such distinctions.

As common carriers, the Fabres were bound to exercise "extraordinary diligence" for the safe transportation of the
passengers to their destination. This duty of care is not excused by proof that they exercised the diligence of a good
father of the family in the selection and supervision of their employee. As Art. 1759 of the Code
provides:chanrob1es virtual 1aw library

Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the
former’s employees, although such employees may have acted beyond the scope of their authority or in violation of
the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father
of a family in the selection and supervision of their employees.

The same circumstances detailed above, supporting the finding of the trial court and of the appellate court that
petitioners are liable under Arts. 2176 and 2180 for quasi delict, fully justify finding them guilty of breach of
contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.

Secondly, we sustain the award of damages in favor of Amyline Antonio. However, we think the Court of Appeals
erred in increasing the amount of compensatory damages because private respondents did not question this award as
inadequate. 11 To the contrary, the award of P500,000.00 for compensatory damages which the Regional Trial
Court made is reasonable considering the contingent nature of her income as a casual employee of a company and as
distributor of beauty products and the fact that the possibility that she might be able to work again has not been
foreclosed. In fact she testified that one of her previous employers had expressed willingness to employ her again.
With respect to the other awards, while the decisions of the trial court and the Court of Appeals do not sufficiently
indicate the factual and legal basis for them, we find that they are nevertheless supported by evidence in the records
of this case. Viewed as an action for quasi delict, this case falls squarely within the purview of Art. 2219(2)
providing for the payment of moral damages in cases of quasi delict. On the theory that petitioners are liable for
breach of contract of carriage, the award of moral damages is authorized by Art. 1764, in relation to Art. 2220, since
Cabil’s gross negligence amounted to bad faith. 12 Amyline Antonio’s testimony as well as the testimonies of her
father and co-passengers, fully establish the physical suffering and mental anguish she endured as a result of the
injuries caused by petitioners’ negligence.

The award of exemplary damages and attorney’s fees was also properly made. However, for the same reason that it
was error for the appellate court to increase the award of compensatory damages, we hold that it was also error for it
to increase the award of moral damages and reduce the award of attorney’s fees, inasmuch as private respondents, in
whose favor the awards were made, have not appealed. 13 

As above stated, the decision of the Court of Appeals can be sustained either on the theory of quasi delict or on that
of breach of contract. The question is whether, as the two courts below held, Petitioners, who are the owners and
driver of the bus, may be made to respond jointly and severally to private Respondent. We hold that they may be. In
Dangwa Trans. Co. Inc. v. Court of Appeals, 14 on facts similar to those in this case, this Court held the bus
company and the driver jointly and severally liable for damages for injuries suffered by a passenger. Again, in
Bachelor Express, Inc. v. Court of Appeals 15 a driver found negligent in failing to stop the bus in order to let off
passengers when a fellow passenger ran amuck, as a result of which the passengers jumped out of the speeding bus
and suffered injuries, was held also jointly and severally liable with the bus company to the injured passengers.

The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff
was riding concurred with the negligence of a third party who was the driver of another vehicle, thus causing an
accident. In Anuran v. Buño, 16 Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court, 17 and Metro
Manila Transit Corporation v. Court of Appeals, 18 the bus company, its driver, the operator of the other vehicle and
the driver of the vehicle were jointly and severally held liable to the injured passenger or the latter’s heirs. The basis
of this allocation of liability was explained in Viluan v. Court of Appeals, 19 thus:chanrob1es virtual 1aw library

Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of
respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already ruled in
Gutierrez v. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence of the driver of the
bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles
are jointly and severally liable for damages. Some members of the Court, though, are of the view that under the
circumstances they are liable on quasi-delict. 20 

It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals 21 this Court exonerated the jeepney driver
from liability to the injured passengers and their families while holding the owners of the jeepney jointly and
severally liable, but that is because that case was expressly tried and decided exclusively on the theory of culpa
contractual. As this Court there explained:chanrob1es virtual 1aw library

The trial court was therefore right in finding that Manalo [the driver] and spouses Mangune and Carreon [the
jeepney owners] were negligent. However, its ruling that spouses Mangune and Carreon are jointly and severally
liable with Manalo is erroneous. The driver cannot be held jointly and severally liable with the carrier in case of
breach of the contract of carriage. The rationale behind this is readily discernible. Firstly, the contract of carriage is
between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible
therefore to the passenger, even if such breach be due to the negligence of his driver (see Viluan v. The Court of
Appeals, Et Al., G.R. Nos. L-21477-81, April 29, 1966, 16 SCRA 742) . . . 22 

As in the case of BLTB, private respondents in this case and her co-plaintiffs did not stake out their claim against
the carrier and the driver exclusively on one theory, much less on that of breach of contract alone. After all, it was
permitted for them to allege alternative causes of action and join as many parties as may be liable on such causes of
action 23 so long as private respondent and her co-plaintiffs do not recover twice for the same injury. What is clear
from the cases the plaintiff there to recover from both the carrier and the driver, thus justifying the holding that the
carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce
the same injury.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with MODIFICATION as to the award of
damages. Petitioners are ORDERED to PAY jointly and severally the private respondent Amyline Antonio the
following amounts:chanrob1es virtual 1aw library

1) P93, 657.11 as actual damages;

2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;

3) P20,000.00 as moral damages;

4) P20,000.00 as exemplary damages;

5) 25% of the recoverable amount as attorney’s fees; and

6) costs of suit.
SO ORDERED.

17. G.R. No. 145804             February 6, 2003

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, 

vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY
AGENCY, respondents.

DECISION

VITUG, J.:

The case before the Court is an appeal from the decision and resolution of the Court of Appeals, promulgated on 27
April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720, entitled "Marjorie Navidad and Heirs of
the Late Nicanor Navidad vs. Rodolfo Roman, et. al.," which has modified the decision of 11 August 1998 of the
Regional Trial Court, Branch 266, Pasig City, exonerating Prudent Security Agency (Prudent) from liability and
finding Light Rail Transit Authority (LRTA) and Rodolfo Roman liable for damages on account of the death of
Nicanor Navidad.

On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then drunk, entered the
EDSA LRT station after purchasing a "token" (representing payment of the fare). While Navidad was standing on
the platform near the LRT tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A
misunderstanding or an altercation between the two apparently ensued that led to a fist fight. No evidence, however,
was adduced to indicate how the fight started or who, between the two, delivered the first blow or how Navidad later
fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman,
was coming in. Navidad was struck by the moving train, and he was killed instantaneously.

On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with her children, filed a
complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc.
(Metro Transit), and Prudent for the death of her husband. LRTA and Roman filed a counterclaim against Navidad
and a cross-claim against Escartin and Prudent. Prudent, in its answer, denied liability and averred that it had
exercised due diligence in the selection and supervision of its security guards.

The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting evidence, filed a
demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned task. On 11 August
1998, the trial court rendered its decision; it adjudged:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants Prudent Security
and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs the following:

"a) 1) Actual damages of P44,830.00;

2) Compensatory damages of P443,520.00;

3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;

"b) Moral damages of P50,000.00;

"c) Attorney’s fees of P20,000;

"d) Costs of suit.

"The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.

"The compulsory counterclaim of LRTA and Roman are likewise dismissed."1

Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated its now assailed
decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead, holding the LRTA
and Roman jointly and severally liable thusly:

"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants from any liability for
the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail Transit Authority (LRTA)
are held liable for his death and are hereby directed to pay jointly and severally to the plaintiffs-appellees, the
following amounts:

a) P44,830.00 as actual damages;

 b) P50,000.00 as nominal damages;

c) P50,000.00 as moral damages;

d) P50,000.00 as indemnity for the death of the deceased; and

e) P20,000.00 as and for attorney’s fees."2

The appellate court ratiocinated that while the deceased might not have then as yet boarded the train, a contract of
carriage theretofore had already existed when the victim entered the place where passengers were supposed to be
after paying the fare and getting the corresponding token therefor. In exempting Prudent from liability, the court
stressed that there was nothing to link the security agency to the death of Navidad. It said that Navidad failed to
show that Escartin inflicted fist blows upon the victim and the evidence merely established the fact of death of
Navidad by reason of his having been hit by the train owned and managed by the LRTA and operated at the time by
Roman. The appellate court faulted petitioners for their failure to present expert evidence to establish the fact that
the application of emergency brakes could not have stopped the train.

The appellate court denied petitioners’ motion for reconsideration in its resolution of 10 October 2000.

In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz:

"I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS OF

FACTS BY THE TRIAL COURT

"II.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS ARE
LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.

"III.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO ROMAN IS
AN EMPLOYEE OF LRTA."3

Petitioners would contend that the appellate court ignored the evidence and the factual findings of the trial court by
holding them liable on the basis of a sweeping conclusion that the presumption of negligence on the part of a
common carrier was not overcome. Petitioners would insist that Escartin’s assault upon Navidad, which caused the
latter to fall on the tracks, was an act of a stranger that could not have been foreseen or prevented. The LRTA would
add that the appellate court’s conclusion on the existence of an employer-employee relationship between Roman and
LRTA lacked basis because Roman himself had testified being an employee of Metro Transit and not of the LRTA.

Respondents, supporting the decision of the appellate court, contended that a contract of carriage was deemed
created from the moment Navidad paid the fare at the LRT station and entered the premises of the latter, entitling
Navidad to all the rights and protection under a contractual relation, and that the appellate court had correctly held
LRTA and Roman liable for the death of Navidad in failing to exercise extraordinary diligence imposed upon a
common carrier.

Law and jurisprudence dictate that a common carrier, both from the nature of its business and for reasons of public
policy, is burdened with the duty of exercising utmost diligence in ensuring the safety of passengers. 4 The Civil
Code, governing the liability of a common carrier for death of or injury to its passengers, provides:

"Article 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

"Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733
and 1755."

"Article 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willful
acts of the former’s employees, although such employees may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.

"This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father
of a family in the selection and supervision of their employees."

"Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act or omission."
The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons
with due regard for all circumstances.5 Such duty of a common carrier to provide safety to its passengers so obligates
it not only during the course of the trip but for so long as the passengers are within its premises and where they
ought to be in pursuance to the contract of carriage. 6 The statutory provisions render a common carrier liable for
death of or injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful
acts or negligence of other passengers or of strangers if the common carrier’s employees through the exercise of due
diligence could have prevented or stopped the act or omission.7 In case of such death or injury, a carrier is presumed
to have been at fault or been negligent, and8 by simple proof of injury, the passenger is relieved of the duty to still
establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that
the injury is due to an unforeseen event or to force majeure. 9 In the absence of satisfactory explanation by the carrier
on how the accident occurred, which petitioners, according to the appellate court, have failed to show, the
presumption would be that it has been at fault,10 an exception from the general rule that negligence must be proved.11

The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim arises from
the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. In
the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees
or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common
carrier is not relieved of its responsibilities under the contract of carriage.

Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions of Article
217612 and related provisions, in conjunction with Article 2180,13 of the Civil Code. The premise, however, for the
employer’s liability is negligence or fault on the part of the employee. Once such fault is established, the employer
can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise
diligentissimi patris families in the selection and supervision of its employees. The liability is primary and can only
be negated by showing due diligence in the selection and supervision of the employee, a factual matter that has not
been shown. Absent such a showing, one might ask further, how then must the liability of the common carrier, on
the one hand, and an independent contractor, on the other hand, be described? It would be solidary. A contractual
obligation can be breached by tort and when the same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article 219414 of the Civil Code can well apply.15 In fine, a liability for
tort may arise even under a contract, where tort is that which breaches the contract. 16 Stated differently, when an act
which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no
contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the
rules on tort to apply.17

Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this Court is
concluded by the factual finding of the Court of Appeals that "there is nothing to link (Prudent) to the death of
Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not been duly proven x x x."
This finding of the appellate court is not without substantial justification in our own review of the records of the
case.

There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act or omission,
he must also be absolved from liability. Needless to say, the contractual tie between the LRT and Navidad is not
itself a juridical relation between the latter and Roman; thus, Roman can be made liable only for his own fault or
negligence.

The award of nominal damages in addition to actual damages is untenable. Nominal damages are adjudicated in
order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.18 It is an established
rule that nominal damages cannot co-exist with compensatory damages. 19

WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only in that
(a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No
costs.

SO ORDERED.

18. G.R. No. L-48006             July 8, 1942

FAUSTO BARREDO, petitioner, 
vs.
SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.

Celedonio P. Gloria and Antonio Barredo for petitioner.

Jose G. Advincula for respondents.

BOCOBO, J.:

This case comes up from the Court of Appeals which held the petitioner herein, Fausto Barredo, liable in damages
for the death of Faustino Garcia caused by the negligence of Pedro Fontanilla, a taxi driver employed by said Fausto
Barredo.
At about half past one in the morning of May 3, 1936, on the road between Malabon and Navotas, Province of Rizal,
there was a head-on collision between a taxi of the Malate Taxicab driven by Pedro Fontanilla and a carretela guided
by Pedro Dimapalis. The carretela was overturned, and one of its passengers, 16-year-old boy Faustino Garcia,
suffered injuries from which he died two days later. A criminal action was filed against Fontanilla in the Court of
First Instance of Rizal, and he was convicted and sentenced to an indeterminate sentence of one year and one day to
two years of prision correccional. The court in the criminal case granted the petition that the right to bring a
separate civil action be reserved. The Court of Appeals affirmed the sentence of the lower court in the criminal case.
Severino Garcia and Timotea Almario, parents of the deceased on March 7, 1939, brought an action in the Court of
First Instance of Manila against Fausto Barredo as the sole proprietor of the Malate Taxicab and employer of Pedro
Fontanilla. On July 8, 1939, the Court of First Instance of Manila awarded damages in favor of the plaintiffs for
P2,000 plus legal interest from the date of the complaint. This decision was modified by the Court of Appeals by
reducing the damages to P1,000 with legal interest from the time the action was instituted. It is undisputed that
Fontanilla 's negligence was the cause of the mishap, as he was driving on the wrong side of the road, and at high
speed. As to Barredo's responsibility, the Court of Appeals found:

... It is admitted that defendant is Fontanilla's employer. There is proof that he exercised the diligence of a
good father of a family to prevent damage. (See p. 22, appellant's brief.) In fact it is shown he was careless
in employing Fontanilla who had been caught several times for violation of the Automobile Law and
speeding (Exhibit A) — violation which appeared in the records of the Bureau of Public Works available to
be public and to himself. Therefore, he must indemnify plaintiffs under the provisions of article 1903 of the
Civil Code.

The main theory of the defense is that the liability of Fausto Barredo is governed by the Revised Penal Code; hence,
his liability is only subsidiary, and as there has been no civil action against Pedro Fontanilla, the person criminally
liable, Barredo cannot be held responsible in the case. The petitioner's brief states on page 10:

... The Court of Appeals holds that the petitioner is being sued for his failure to exercise all the diligence of
a good father of a family in the selection and supervision of Pedro Fontanilla to prevent damages suffered
by the respondents. In other words, The Court of Appeals insists on applying in the case article 1903 of the
Civil Code. Article 1903 of the Civil Code is found in Chapter II, Title 16, Book IV of the Civil Code. This
fact makes said article to a civil liability arising from a crime as in the case at bar simply because Chapter II
of Title 16 of Book IV of the Civil Code, in the precise words of article 1903 of the Civil Code itself, is
applicable only to "those (obligations) arising from wrongful or negligent acts or commission
not punishable by law.

The gist of the decision of the Court of Appeals is expressed thus:

... We cannot agree to the defendant's contention. The liability sought to be imposed upon him in this action
is not a civil obligation arising from a felony or a misdemeanor (the crime of Pedro Fontanilla,), but an
obligation imposed in article 1903 of the Civil Code by reason of his negligence in the selection or
supervision of his servant or employee.

The pivotal question in this case is whether the plaintiffs may bring this separate civil action against Fausto Barredo,
thus making him primarily and directly, responsible under article 1903 of the Civil Code as an employer of Pedro
Fontanilla. The defendant maintains that Fontanilla's negligence being punishable by the Penal Code, his
(defendant's) liability as an employer is only subsidiary, according to said Penal code, but Fontanilla has not been
sued in a civil action and his property has not been exhausted. To decide the main issue, we must cut through the
tangle that has, in the minds of many confused and jumbled together delitos and cuasi delitos, or crimes under the
Penal Code and fault or negligence under articles 1902-1910 of the Civil Code. This should be done, because justice
may be lost in a labyrinth, unless principles and remedies are distinctly envisaged. Fortunately, we are aided in our
inquiry by the luminous presentation of the perplexing subject by renown jurists and we are likewise guided by the
decisions of this Court in previous cases as well as by the solemn clarity of the consideration in several sentences of
the Supreme Tribunal of Spain.

Authorities support the proposition that a quasi-delict or "culpa aquiliana " is a separate legal institution under the
Civil Code with a substantivity all its own, and individuality that is entirely apart and independent from delict or
crime. Upon this principle and on the wording and spirit article 1903 of the Civil Code, the primary and direct
responsibility of employers may be safely anchored.

The pertinent provisions of the Civil Code and Revised Penal Code are as follows:

CIVIL CODE

ART. 1089 Obligations arise from law, from contracts and quasi-contracts, and from acts and omissions
which are unlawful or in which any kind of fault or negligence intervenes.

xxx     xxx     xxx

ART. 1092. Civil obligations arising from felonies or misdemeanors shall be governed by the provisions of
the Penal Code.
 ART. 1093. Those which are derived from acts or omissions in which fault or negligence, not punishable
by law, intervenes shall be subject to the provisions of Chapter II, Title XVI of this book.

xxx     xxx     xxx

ART 1902. Any person who by an act or omission causes damage to another by his fault or negligence
shall be liable for the damage so done.

ART. 1903. The obligation imposed by the next preceding article is enforcible, not only for personal acts
and omissions, but also for those of persons for whom another is responsible.

The father and in, case of his death or incapacity, the mother, are liable for any damages caused by the
minor children who live with them.

Guardians are liable for damages done by minors or incapacitated persons subject to their authority and
living with them.

Owners or directors of an establishment or business are equally liable for any damages caused by their
employees while engaged in the branch of the service in which employed, or on occasion of the
performance of their duties.

The State is subject to the same liability when it acts through a special agent, but not if the damage shall
have been caused by the official upon whom properly devolved the duty of doing the act performed, in
which case the provisions of the next preceding article shall be applicable.

Finally, teachers or directors of arts trades are liable for any damages caused by their pupils or apprentices
while they are under their custody.

The liability imposed by this article shall cease in case the persons mentioned therein prove that they are
exercised all the diligence of a good father of a family to prevent the damage.

ART. 1904. Any person who pays for damage caused by his employees may recover from the latter what
he may have paid.

REVISED PENAL CODE

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

ART. 101. Rules regarding civil liability in certain cases. — The exemption from criminal liability
established in subdivisions 1, 2, 3, 5, and 6 of article 12 and in subdivision 4 of article 11 of this Code does
not include exemption from civil liability, which shall be enforced to the following rules:

First. In cases of subdivision, 1, 2 and 3 of article 12 the civil liability for acts committed by any imbecile
or insane person, and by a person under nine years of age, or by one over nine but under fifteen years of
age, who has acted without discernment shall devolve upon those having such person under their legal
authority or control, unless it appears that there was no fault or negligence on their part.

Should there be no person having such insane, imbecile or minor under his authority, legal guardianship, or
control, or if such person be insolvent, said insane, imbecile, or minor shall respond with their own
property, excepting property exempt from execution, in accordance with the civil law.

Second. In cases falling within subdivision 4 of article 11, the person for whose benefit the harm has been
prevented shall be civilly liable in proportion to the benefit which they may have received.

The courts shall determine, in their sound discretion, the proportionate amount for which each one shall be liable.

When the respective shares can not be equitably determined, even approximately, or when the liability also attaches
to the Government, or to the majority of the inhabitants of the town, and, in all events, whenever the damage has
been caused with the consent of the authorities or their agents, indemnification shall be made in the manner
prescribed by special laws or regulations.

Third. In cases falling within subdivisions 5 and 6 of article 12, the persons using violence or causing the fear shall
be primarily liable and secondarily, or, if there be no such persons, those doing the act shall be liable, saving always
to the latter that part of their property exempt from execution.

ART. 102. Subsidiary civil liability of innkeepers, tavern keepers and proprietors of establishment. — In
default of persons criminally liable, innkeepers, tavern keepers, and any other persons or corporation shall
be civilly liable for crimes committed in their establishments, in all cases where a violation of municipal
 ordinances or some general or special police regulation shall have been committed by them or their
employees.

Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their
houses lodging therein, or the person, or for the payment of the value thereof, provided that such guests
shall have notified in advance the innkeeper himself, or the person representing him, of the deposit of such
goods within the inn; and shall furthermore have followed the directions which such innkeeper or his
representative may have given them with respect to the care of and vigilance over such goods. No liability
shall attach in case of robbery with violence against or intimidation against or intimidation of persons
unless committed by the innkeeper's employees.

ART. 103. Subsidiary civil liability of other persons. — The subsidiary liability established in the next
preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of
industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the
discharge of their duties.

xxx     xxx     xxx

ART. 365. Imprudence and negligence. — Any person who, by reckless imprudence, shall commit any act
which, had it been intentional, would constitute a grave felony, shall suffer the penalty of arresto mayor in
its maximum period to prision correccional in its minimum period; if it would have constituted a less grave
felony, the penalty of arresto mayor in its minimum and medium periods shall be imposed.

Any person who, by simple imprudence or negligence, shall commit an act which would otherwise
constitute a grave felony, shall suffer the penalty of arresto mayor in its medium and maximum periods; if
it would have constituted a less serious felony, the penalty of arresto mayor in its minimum period shall be
imposed."

It will thus be seen that while the terms of articles 1902 of the Civil Code seem to be broad enough to cover the
driver's negligence in the instant case, nevertheless article 1093 limits cuasi-delitos to acts or omissions "not
punishable by law." But inasmuch as article 365 of the Revised Penal Code punishes not only reckless but even
simple imprudence or negligence, the fault or negligence under article 1902 of the Civil Code has apparently been
crowded out. It is this overlapping that makes the "confusion worse confounded." However, a closer study shows
that such a concurrence of scope in regard to negligent acts does not destroy the distinction between the civil
liability arising from a crime and the responsibility for cuasi-delitos or culpa extra-contractual. The same negligent
act causing damages may produce civil liability arising from a crime under article 100 of the Revised Penal Code, or
create an action for cuasi-delito or culpa extra-contractual under articles 1902-1910 of the Civil Code.

The individuality of cuasi-delito or culpa extra-contractual looms clear and unmistakable. This legal institution is of
ancient lineage, one of its early ancestors being the Lex Aquilia in the Roman Law. In fact, in Spanish legal
terminology, this responsibility is often referred to as culpa aquiliana. The Partidas also contributed to the genealogy
of the present fault or negligence under the Civil Code; for instance, Law 6, Title 15, of Partida 7, says: "Tenudo es
de fazer emienda, porque, como quier que el non fizo a sabiendas en daño al otro, pero acaescio por su culpa."

The distinctive nature of cuasi-delitos survives in the Civil Code. According to article 1089, one of the five sources
of obligations is this legal institution of cuasi-delito or culpa extra-contractual: "los actos . . . en que intervenga
cualquier genero de culpa o negligencia." Then article 1093 provides that this kind of obligation shall be governed
by Chapter II of Title XVI of Book IV, meaning articles 1902-0910. This portion of the Civil Code is exclusively
devoted to the legal institution of culpa aquiliana.

Some of the differences between crimes under the Penal Code and the culpa aquiliana or cuasi-delito under the
Civil Code are:

1. That crimes affect the public interest, while cuasi-delitos are only of private concern.

2. That, consequently, the Penal Code punishes or corrects the criminal act, while the Civil Code, by means of
indemnification, merely repairs the damage.

3. That delicts are not as broad as quasi-delicts, because the former are punished only if there is a penal law clearly
covering them, while the latter, cuasi-delitos, include all acts in which "any king of fault or negligence intervenes."
However, it should be noted that not all violations of the penal law produce civil responsibility, such as begging in
contravention of ordinances, violation of the game laws, infraction of the rules of traffic when nobody is hurt. (See
Colin and Capitant, "Curso Elemental de Derecho Civil," Vol. 3, p. 728.)

Let us now ascertain what some jurists say on the separate existence of quasi-delicts and the employer's primary and
direct liability under article 1903 of the Civil Code.

Dorado Montero in his essay on "Responsibilidad" in the "Enciclopedia Juridica Española" (Vol. XXVII, p. 414)
says:
 El concepto juridico de la responsabilidad civil abarca diversos aspectos y comprende a diferentes
personas. Asi, existe una responsabilidad civil propiamente dicha, que en ningun casl lleva aparejada
responsabilidad criminal alguna, y otra que es consecuencia indeclinable de la penal que nace de todo delito
o falta."

The juridical concept of civil responsibility has various aspects and comprises different persons. Thus,
there is a civil responsibility, properly speaking, which in no case carries with it any criminal responsibility,
and another which is a necessary consequence of the penal liability as a result of every felony or
misdemeanor."

Maura, an outstanding authority, was consulted on the following case: There had been a collision between two trains
belonging respectively to the Ferrocarril Cantabrico and the Ferrocarril del Norte. An employee of the latter had
been prosecuted in a criminal case, in which the company had been made a party as subsidiarily responsible in civil
damages. The employee had been acquitted in the criminal case, and the employer, the Ferrocarril del Norte, had
also been exonerated. The question asked was whether the Ferrocarril Cantabrico could still bring a civil action for
damages against the Ferrocarril del Norte. Maura's opinion was in the affirmative, stating in part
(Maura, Dictamenes, Vol. 6, pp. 511-513):

Quedando las cosas asi, a proposito de la realidad pura y neta de los hechos, todavia menos parece
sostenible que exista cosa juzgada acerca de la obligacion civil de indemnizar los quebrantos y menoscabos
inferidos por el choque de los trenes. El titulo en que se funda la accion para demandar el resarcimiento, no
puede confundirse con las responsabilidades civiles nacidas de delito, siquiera exista en este, sea el cual
sea, una culpa rodeada de notas agravatorias que motivan sanciones penales, mas o menos severas. La
lesion causada por delito o falta en los derechos civiles, requiere restituciones, reparaciones o
indemnizaciones, que cual la pena misma atañen al orden publico; por tal motivo vienen encomendadas, de
ordinario, al Ministerio Fiscal; y claro es que si por esta via se enmiendan los quebrantos y menoscabos, el
agraviado excusa procurar el ya conseguido desagravio; pero esta eventual coincidencia de los efectos, no
borra la diversidad originaria de las acciones civiles para pedir indemnizacion.

Estas, para el caso actual (prescindiendo de culpas contractuales, que no vendrian a cuento y que tiene otro
regimen), dimanan, segun el articulo 1902 del Codigo Civil, de toda accion u omision, causante de daños o
perjuicios, en que intervenga culpa o negligencia. Es trivial que acciones semejantes son ejercitadas ante
los Tribunales de lo civil cotidianamente, sin que la Justicia punitiva tenga que mezclarse en los asuntos.
Los articulos 18 al 21 y 121 al 128 del Codigo Penal, atentos al espiritu y a los fines sociales y politicos del
mismo, desenvuelven y ordenan la materia de responsabilidades civiles nacidas de delito, en terminos
separados del regimen por ley comun de la culpa que se denomina aquiliana, por alusion a precedentes
legislativos del Corpus Juris. Seria intempestivo un paralelo entre aquellas ordenaciones, y la de la
obligacion de indemnizar a titulo de culpa civil; pero viene al caso y es necesaria una de las
diferenciaciones que en el tal paralelo se notarian.

Los articulos 20 y 21 del Codigo Penal, despues de distribuir a su modo las responsabilidades civiles, entre
los que sean por diversos conceptos culpables del delito o falta, las hacen extensivas a las empresas y los
establecimientos al servicio de los cuales estan los delincuentes; pero con caracter subsidiario, o sea, segun
el texto literal, en defecto de los que sean responsables criminalmente. No coincide en ello el Codigo Civil,
cuyo articulo 1903, dice; La obligacion que impone el articulo anterior es exigible, no solo por los actos y
omisiones propios, sino por los de aquellas personas de quienes se debe responder; personas en la
enumeracion de las cuales figuran los dependientes y empleados de los establecimientos o empresas, sea
por actos del servicio, sea con ocasion de sus funciones. Por esto acontece, y se observa en la
jurisprudencia, que las empresas, despues de intervenir en las causas criminales con el caracter subsidiario
de su responsabilidad civil por razon del delito, son demandadas y condenadas directa y aisladamente,
cuando se trata de la obligacion, ante los tribunales civiles.

Siendo como se ve, diverso el titulo de esta obligacion, y formando verdadero postulado de nuestro
regimen judicial la separacion entre justicia punitiva y tribunales de lo civil, de suerte que tienen unos y
otros normas de fondo en distintos cuerpos legales, y diferentes modos de proceder, habiendose, por
añadidura, abstenido de asistir al juicio criminal la Compañia del Ferrocarril Cantabrico, que se reservo
ejercitar sus acciones, parece innegable que la de indemnizacion por los daños y perjuicios que le irrogo el
choque, no estuvo sub judice ante el Tribunal del Jurado, ni fue sentenciada, sino que permanecio intacta, al
pronunciarse el fallo de 21 de marzo. Aun cuando el veredicto no hubiese sido de inculpabilidad, mostrose
mas arriba, que tal accion quedaba legitimamente reservada para despues del proceso; pero al declararse
que no existio delito, ni responsabilidad dimanada de delito, materia unica sobre que tenian jurisdiccion
aquellos juzgadores, se redobla el motivo para la obligacion civil ex lege, y se patentiza mas y mas que la
accion para pedir su cumplimiento permanece incolume, extraña a la cosa juzgada.

As things are, apropos of the reality pure and simple of the facts, it seems less tenable that there should
be res judicata with regard to the civil obligation for damages on account of the losses caused by the
collision of the trains. The title upon which the action for reparation is based cannot be confused with the
civil responsibilities born of a crime, because there exists in the latter, whatever each nature,
a culpa surrounded with aggravating aspects which give rise to penal measures that are more or less severe.
The injury caused by a felony or misdemeanor upon civil rights requires restitutions, reparations, or
indemnifications which, like the penalty itself, affect public order; for this reason, they are ordinarily
entrusted to the office of the prosecuting attorney; and it is clear that if by this means the losses and
 damages are repaired, the injured party no longer desires to seek another relief; but this coincidence of
effects does not eliminate the peculiar nature of civil actions to ask for indemnity.

Such civil actions in the present case (without referring to contractual faults which are not pertinent and
belong to another scope) are derived, according to article 1902 of the Civil Code, from every act or
omission causing losses and damages in which culpa or negligence intervenes. It is unimportant that such
actions are every day filed before the civil courts without the criminal courts interfering therewith. Articles
18 to 21 and 121 to 128 of the Penal Code, bearing in mind the spirit and the social and political purposes
of that Code, develop and regulate the matter of civil responsibilities arising from a crime, separately from
the regime under common law, of culpa which is known as aquiliana, in accordance with legislative
precedent of the Corpus Juris. It would be unwarranted to make a detailed comparison between the former
provisions and that regarding the obligation to indemnify on account of civil culpa; but it is pertinent and
necessary to point out to one of such differences.

Articles 20 and 21 of the Penal Code, after distriburing in their own way the civil responsibilities among
those who, for different reasons, are guilty of felony or misdemeanor, make such civil responsibilities
applicable to enterprises and establishments for which the guilty parties render service, but with subsidiary
character, that is to say, according to the wording of the Penal Code, in default of those who are criminally
responsible. In this regard, the Civil Code does not coincide because article 1903 says: "The obligation
imposed by the next preceding article is demandable, not only for personal acts and omissions, but also for
those of persons for whom another is responsible." Among the persons enumerated are the subordinates and
employees of establishments or enterprises, either for acts during their service or on the occasion of their
functions. It is for this reason that it happens, and it is so observed in judicial decisions, that the companies
or enterprises, after taking part in the criminal cases because of their subsidiary civil responsibility by
reason of the crime, are sued and sentenced directly and separately with regard to the obligation, before the
civil courts.

Seeing that the title of this obligation is different, and the separation between punitive justice and the civil
courts being a true postulate of our judicial system, so that they have different fundamental norms in
different codes, as well as different modes of procedure, and inasmuch as the Compaña del Ferrocarril
Cantabrico has abstained from taking part in the criminal case and has reserved the right to exercise its
actions, it seems undeniable that the action for indemnification for the losses and damages caused to it by
the collision was not sub judice before the Tribunal del Jurado, nor was it the subject of a sentence, but it
remained intact when the decision of March 21 was rendered. Even if the verdict had not been that of
acquittal, it has already been shown that such action had been legitimately reserved till after the criminal
prosecution; but because of the declaration of the non-existence of the felony and the non-existence of the
responsibility arising from the crime, which was the sole subject matter upon which the Tribunal del
Jurado had jurisdiction, there is greater reason for the civil obligation ex lege, and it becomes clearer that
the action for its enforcement remain intact and is not res judicata.

Laurent, a jurist who has written a monumental work on the French Civil Code, on which the Spanish Civil Code is
largely based and whose provisions on cuasi-delito or culpa extra-contractual are similar to those of the Spanish
Civil Code, says, referring to article 1384 of the French Civil Code which corresponds to article 1903, Spanish Civil
Code:

The action can be brought directly against the person responsible (for another), without including the
author of the act. The action against the principal is accessory in the sense that it implies the existence of a
prejudicial act committed by the employee, but it is not subsidiary in the sense that it can not be instituted
till after the judgment against the author of the act or at least, that it is subsidiary to the principal action; the
action for responsibility (of the employer) is in itself a principal action. (Laurent, Principles of French Civil
Law, Spanish translation, Vol. 20, pp. 734-735.)

Amandi, in his "Cuestionario del Codigo Civil Reformado" (Vol. 4, pp. 429, 430), declares that the responsibility of
the employer is principal and not subsidiary. He writes:

Cuestion 1. La responsabilidad declarada en el articulo 1903 por las acciones u omisiones de aquellas
personas por las que se debe responder, es subsidiaria? es principal? Para contestar a esta pregunta es
necesario saber, en primer lugar, en que se funda el precepto legal. Es que realmente se impone una
responsabilidad por una falta ajena? Asi parece a primera vista; pero semejante afirmacion seria contraria a
la justicia y a la maxima universal, segun la que las faltas son personales, y cada uno responde de aquellas
que le son imputables. La responsabilidad de que tratamos se impone con ocasion de un delito o culpa, pero
no por causa de ellos, sino por causa del causi delito, esto es, de la imprudencia o de la negligencia del
padre, del tutor, del dueño o director del establecimiento, del maestro, etc. Cuando cualquiera de las
personas que enumera el articulo citado (menores de edad, incapacitados, dependientes, aprendices) causan
un daño, la ley presume que el padre, el tutor, el maestro, etc., han cometido una falta de negligencia para
prevenir o evitar el daño. Esta falta es la que la ley castiga. No hay, pues, responsabilidad por un hecho
ajeno, sino en la apariencia; en realidad la responsabilidad se exige por un hecho propio. La idea de que esa
responsabilidad sea subsidiaria es, por lo tanto, completamente inadmisible.

Question No. 1. Is the responsibility declared in article 1903 for the acts or omissions of those persons for
who one is responsible, subsidiary or principal? In order to answer this question it is necessary to know, in
the first place, on what the legal provision is based. Is it true that there is a responsibility for the fault of
another person? It seems so at first sight; but such assertion would be contrary to justice and to the
 universal maxim that all faults are personal, and that everyone is liable for those faults that can be imputed
to him. The responsibility in question is imposed on the occasion of a crime or fault, but not because of the
same, but because of the cuasi-delito, that is to say, the imprudence or negligence of the father, guardian,
proprietor or manager of the establishment, of the teacher, etc. Whenever anyone of the persons
enumerated in the article referred to (minors, incapacitated persons, employees, apprentices) causes any
damage, the law presumes that the father, guardian, teacher, etc. have committed an act of negligence in not
preventing or avoiding the damage. It is this fault that is condemned by the law. It is, therefore, only
apparent that there is a responsibility for the act of another; in reality the responsibility exacted is for one's
own act. The idea that such responsibility is subsidiary is, therefore, completely inadmissible.

Oyuelos, in his "Digesto: Principios, Doctrina y Jurisprudencia, Referentes al Codigo Civil Español," says in Vol.
VII, p. 743:

Es decir, no responde de hechos ajenos, porque se responde solo de su propia culpa, doctrina del articulo
1902; mas por excepcion, se responde de la ajena respecto de aquellas personas con las que media algun
nexo o vinculo, que motiva o razona la responsabilidad. Esta responsabilidad, es directa o es subsidiaria?
En el orden penal, el Codigo de esta clase distingue entre menores e incapacitados y los demas, declarando
directa la primera (articulo 19) y subsidiaria la segunda (articulos 20 y 21); pero en el orden civil, en el caso
del articulo 1903, ha de entenderse directa, por el tenor del articulo que impone la responsabilidad
precisamente "por los actos de aquellas personas de quienes se deba responder."

That is to say, one is not responsible for the acts of others, because one is liable only for his own faults, this
being the doctrine of article 1902; but, by exception, one is liable for the acts of those persons with whom
there is a bond or tie which gives rise to the responsibility. Is this responsibility direct or subsidiary? In the
order of the penal law, the Penal Code distinguishes between minors and incapacitated persons on the one
hand, and other persons on the other, declaring that the responsibility for the former is direct (article 19),
and for the latter, subsidiary (articles 20 and 21); but in the scheme of the civil law, in the case of article
1903, the responsibility should be understood as direct, according to the tenor of that articles, for precisely
it imposes responsibility "for the acts of those persons for whom one should be responsible."

Coming now to the sentences of the Supreme Tribunal of Spain, that court has upheld the principles above set forth:
that a quasi-delict or culpa extra-contractual is a separate and distinct legal institution, independent from the civil
responsibility arising from criminal liability, and that an employer is, under article 1903 of the Civil Code, primarily
and directly responsible for the negligent acts of his employee.

One of the most important of those Spanish decisions is that of October 21, 1910. In that case, Ramon Lafuente died
as the result of having been run over by a street car owned by the "compañia Electric Madrileña de Traccion." The
conductor was prosecuted in a criminal case but he was acquitted. Thereupon, the widow filed a civil action against
the street car company, paying for damages in the amount of 15,000 pesetas. The lower court awarded damages; so
the company appealed to the Supreme Tribunal, alleging violation of articles 1902 and 1903 of the Civil Code
because by final judgment the non-existence of fault or negligence had been declared. The Supreme Court of Spain
dismissed the appeal, saying:

Considerando que el primer motivo del recurso se funda en el equivocado supuesto de que el Tribunal a
quo, al condonar a la compañia Electrica Madrileña al pago del daño causado con la muerte de Ramon La
fuente Izquierdo, desconoce el valor y efectos juridicos de la sentencia absolutoria deictada en la causa
criminal que se siguio por el mismo hecho, cuando es lo cierto que de este han conocido las dos
jurisdicciones bajo diferentes as pectos, y como la de lo criminal declrao dentro de los limites de su
competencia que el hecho de que se trata no era constitutivo de delito por no haber mediado descuido o
negligencia graves, lo que no excluye, siendo este el unico fundamento del fallo absolutorio, el concurso de
la culpa o negligencia no califacadas, fuente de obligaciones civiles segun el articulo 1902 del Codigo, y
que alcanzan, segun el 1903, netre otras perosnas, a los Directores de establecimientos o empresas por los
daños causados por sus dependientes en determinadas condiciones, es manifesto que la de lo civil, al
conocer del mismo hehco baho este ultimo aspecto y al condenar a la compañia recurrente a la
indemnizacion del daño causado por uno de sus empleados, lejos de infringer los mencionados textos, en
relacion con el articulo 116 de la Ley de Enjuciamiento Criminal, se ha atenido estrictamente a ellos, sin
invadir atribuciones ajenas a su jurisdiccion propia, ni contrariar en lo mas minimo el fallo recaido en la
causa.

Considering that the first ground of the appeal is based on the mistaken supposition that the trial court, in
sentencing the Compañia Madrileña to the payment of the damage caused by the death of Ramon Lafuente
Izquierdo, disregards the value and juridical effects of the sentence of acquittal rendered in the criminal
case instituted on account of the same act, when it is a fact that the two jurisdictions had taken cognizance
of the same act in its different aspects, and as the criminal jurisdiction declared within the limits of its
authority that the act in question did not constitute a felony because there was no grave carelessness or
negligence, and this being the only basis of acquittal, it does no exclude the co-existence of fault or
negligence which is not qualified, and is a source of civil obligations according to article 1902 of the Civil
Code, affecting, in accordance with article 1903, among other persons, the managers of establishments or
enterprises by reason of the damages caused by employees under certain conditions, it is manifest that the
civil jurisdiccion in taking cognizance of the same act in this latter aspect and in ordering the company,
appellant herein, to pay an indemnity for the damage caused by one of its employees, far from violating
said legal provisions, in relation with article 116 of the Law of Criminal Procedure, strictly followed the
 same, without invading attributes which are beyond its own jurisdiction, and without in any way
contradicting the decision in that cause. (Emphasis supplied.)

It will be noted, as to the case just cited:

First. That the conductor was not sued in a civil case, either separately or with the street car company. This is
precisely what happens in the present case: the driver, Fontanilla, has not been sued in a civil action, either alone or
with his employer.

Second. That the conductor had been acquitted of grave criminal negligence, but the Supreme Tribunal of Spain said
that this did not exclude the co-existence of fault or negligence, which is not qualified, on the part of the conductor,
under article 1902 of the Civil Code. In the present case, the taxi driver was found guilty of criminal negligence, so
that if he had even sued for his civil responsibility arising from the crime, he would have been held primarily liable
for civil damages, and Barredo would have been held subsidiarily liable for the same. But the plaintiffs are directly
suing Barredo, on his primary responsibility because of his own presumed negligence — which he did not overcome
— under article 1903. Thus, there were two liabilities of Barredo: first, the subsidiary one because of the civil
liability of the taxi driver arising from the latter's criminal negligence; and, second, Barredo's primary liability as an
employer under article 1903. The plaintiffs were free to choose which course to take, and they preferred the second
remedy. In so doing, they were acting within their rights. It might be observed in passing, that the plaintiff choose
the more expeditious and effective method of relief, because Fontanilla was either in prison, or had just been
released, and besides, he was probably without property which might be seized in enforcing any judgment against
him for damages.

Third. That inasmuch as in the above sentence of October 21, 1910, the employer was held liable civilly,
notwithstanding the acquittal of the employee (the conductor) in a previous criminal case, with greater reason should
Barredo, the employer in the case at bar, be held liable for damages in a civil suit filed against him because his taxi
driver had been convicted. The degree of negligence of the conductor in the Spanish case cited was less than that of
the taxi driver, Fontanilla, because the former was acquitted in the previous criminal case while the latter was found
guilty of criminal negligence and was sentenced to an indeterminate sentence of one year and one day to two years
of prision correccional.

(See also Sentence of February 19, 1902, which is similar to the one above quoted.)

In the Sentence of the Supreme Court of Spain, dated February 14, 1919, an action was brought against a railroad
company for damages because the station agent, employed by the company, had unjustly and fraudulently, refused
to deliver certain articles consigned to the plaintiff. The Supreme Court of Spain held that this action was properly
under article 1902 of the Civil Code, the court saying:

Considerando que la sentencia discutida reconoce, en virtud de los hechos que consigna con relacion a las
pruebas del pleito: 1.º, que las expediciones facturadas por la compañia ferroviaria a la consignacion del
actor de las vasijas vacias que en su demanda relacionan tenian como fin el que este las devolviera a sus
remitentes con vinos y alcoholes; 2.º, que llegadas a su destino tales mercanias no se quisieron entregar a
dicho consignatario por el jefe de la estacion sin motivo justificado y con intencion dolosa, y 3.º, que la
falta de entrega de estas expediciones al tiempo de reclamarlas el demandante le originaron daños y
perjuicios en cantidad de bastante importancia como expendedor al por mayor que era de vinos y alcoholes
por las ganancias que dejo de obtener al verse privado de servir los pedidos que se le habian hecho por los
remitentes en los envases:

Considerando que sobre esta base hay necesidad de estimar los cuatro motivos que integran este recurso,
porque la demanda inicial del pleito a que se contrae no contiene accion que nazca del incumplimiento del
contrato de transporte, toda vez que no se funda en el retraso de la llegada de las mercancias ni de ningun
otro vinculo contractual entre las partes contendientes, careciendo, por tanto, de aplicacion el articulo 371
del Codigo de Comercio, en que principalmente descansa el fallo recurrido, sino que se limita a pedir la
reparaction de los daños y perjuicios producidos en el patrimonio del actor por la injustificada y dolosa
negativa del porteador a la entrega de las mercancias a su nombre consignadas, segun lo reconoce la
sentencia, y cuya responsabilidad esta claramente sancionada en el articulo 1902 del Codigo Civil, que
obliga por el siguiente a la Compañia demandada como ligada con el causante de aquellos por relaciones de
caracter economico y de jurarquia administrativa.

Considering that the sentence, in question recognizes, in virtue of the facts which it declares, in relation to
the evidence in the case: (1) that the invoice issued by the railroad company in favor of the plaintiff
contemplated that the empty receptacles referred to in the complaint should be returned to the consignors
with wines and liquors; (2) that when the said merchandise reached their destination, their delivery to the
consignee was refused by the station agent without justification and with fraudulent intent, and (3) that the
lack of delivery of these goods when they were demanded by the plaintiff caused him losses and damages
of considerable importance, as he was a wholesale vendor of wines and liquors and he failed to realize the
profits when he was unable to fill the orders sent to him by the consignors of the receptacles:

Considering that upon this basis there is need of upholding the four assignments of error, as the original
complaint did not contain any cause of action arising from non-fulfillment of a contract of transportation,
because the action was not based on the delay of the goods nor on any contractual relation between the
parties litigant and, therefore, article 371 of the Code of Commerce, on which the decision appealed from is
 based, is not applicable; but it limits to asking for reparation for losses and damages produced on the
patrimony of the plaintiff on account of the unjustified and fraudulent refusal of the carrier to deliver the
goods consigned to the plaintiff as stated by the sentence, and the carrier's responsibility is clearly laid
down in article 1902 of the Civil Code which binds, in virtue of the next article, the defendant company,
because the latter is connected with the person who caused the damage by relations of economic character
and by administrative hierarchy. (Emphasis supplied.)

The above case is pertinent because it shows that the same act may come under both the Penal Code and the Civil
Code. In that case, the action of the agent was unjustified and fraudulent and therefore could have been the subject
of a criminal action. And yet, it was held to be also a proper subject of a civil action under article 1902 of the Civil
Code. It is also to be noted that it was the employer and not the employee who was being sued.

Let us now examine the cases previously decided by this Court.

In the leading case of Rakes vs. Atlantic Gulf and Pacific Co. (7 Phil., 359, 362-365 [year 1907]), the trial court
awarded damages to the plaintiff, a laborer of the defendant, because the latter had negligently failed to repair a
tramway in consequence of which the rails slid off while iron was being transported, and caught the plaintiff whose
leg was broken. This Court held:

It is contended by the defendant, as its first defense to the action that the necessary conclusion from these
collated laws is that the remedy for injuries through negligence lies only in a criminal action in which the
official criminally responsible must be made primarily liable and his employer held only subsidiarily to
him. According to this theory the plaintiff should have procured the arrest of the representative of the
company accountable for not repairing the track, and on his prosecution a suitable fine should have been
imposed, payable primarily by him and secondarily by his employer.

This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093 of the Civil
Code makes obligations arising from faults or negligence not punished by the law, subject to the provisions
of Chapter II of Title XVI. Section 1902 of that chapter reads:

"A person who by an act or omission causes damage to another when there is fault or negligence
shall be obliged to repair the damage so done.

"SEC. 1903. The obligation imposed by the preceeding article is demandable, not only for
personal acts and omissions, but also for those of the persons for whom they should be
responsible.

"The father, and on his death or incapacity, the mother, is liable for the damages caused by the
minors who live with them.

xxx     xxx     xxx

"Owners or directors of an establishment or enterprise are equally liable for the damages caused
by their employees in the service of the branches in which the latter may be employed or in the
performance of their duties.

xxx     xxx     xxx

"The liability referred to in this article shall cease when the persons mentioned therein prove that
they employed all the diligence of a good father of a family to avoid the damage."

As an answer to the argument urged in this particular action it may be sufficient to point out that nowhere
in our general statutes is the employer penalized for failure to provide or maintain safe appliances for his
workmen. His obligation therefore is one 'not punished by the laws' and falls under civil rather than
criminal jurisprudence. But the answer may be a broader one. We should be reluctant, under any
conditions, to adopt a forced construction of these scientific codes, such as is proposed by the defendant,
that would rob some of these articles of effect, would shut out litigants against their will from the civil
courts, would make the assertion of their rights dependent upon the selection for prosecution of the proper
criminal offender, and render recovery doubtful by reason of the strict rules of proof prevailing in criminal
actions. Even if these articles had always stood alone, such a construction would be unnecessary, but clear
light is thrown upon their meaning by the provisions of the Law of Criminal Procedure of Spain (Ley de
Enjuiciamiento Criminal), which, though never in actual force in these Islands, was formerly given a
suppletory or explanatory effect. Under article 111 of this law, both classes of action, civil and criminal,
might be prosecuted jointly or separately, but while the penal action was pending the civil was suspended.
According to article 112, the penal action once started, the civil remedy should be sought therewith, unless
it had been waived by the party injured or been expressly reserved by him for civil proceedings for the
future. If the civil action alone was prosecuted, arising out of a crime that could be enforced only on private
complaint, the penal action thereunder should be extinguished. These provisions are in harmony with those
of articles 23 and 133 of our Penal Code on the same subject.
 An examination of this topic might be carried much further, but the citation of these articles suffices to
show that the civil liability was not intended to be merged in the criminal nor even to be suspended thereby,
except as expressly provided in the law. Where an individual is civilly liable for a negligent act or
omission, it is not required that the injured party should seek out a third person criminally liable whose
prosecution must be a condition precedent to the enforcement of the civil right.

Under article 20 of the Penal Code the responsibility of an employer may be regarded as subsidiary in
respect of criminal actions against his employees only while they are in process of prosecution, or in so far
as they determine the existence of the criminal act from which liability arises, and his obligation under the
civil law and its enforcement in the civil courts is not barred thereby unless by the election of the injured
person. Inasmuch as no criminal proceeding had been instituted, growing our of the accident in question,
the provisions of the Penal Code can not affect this action. This construction renders it unnecessary to
finally determine here whether this subsidiary civil liability in penal actions has survived the laws that fully
regulated it or has been abrogated by the American civil and criminal procedure now in force in the
Philippines.

The difficulty in construing the articles of the code above cited in this case appears from the briefs before
us to have arisen from the interpretation of the words of article 1093, "fault or negligence not punished by
law," as applied to the comprehensive definition of offenses in articles 568 and 590 of the Penal Code. It
has been shown that the liability of an employer arising out of his relation to his employee who is the
offender is not to be regarded as derived from negligence punished by the law, within the meaning of
articles 1902 and 1093. More than this, however, it cannot be said to fall within the class of acts
unpunished by the law, the consequence of which are regulated by articles 1902 and 1903 of the Civil
Code. The acts to which these articles are applicable are understood to be those not growing out of pre-
existing duties of the parties to one another. But where relations already formed give rise to duties, whether
springing from contract or quasi contract, then breaches of those duties are subject to articles 1101, 1103,
and 1104 of the same code. A typical application of this distinction may be found in the consequences of a
railway accident due to defective machinery supplied by the employer. His liability to his employee would
arise out of the contract of employment, that to the passengers out of the contract for passage, while that to
the injured bystander would originate in the negligent act itself.

In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the mother of the 8 of 9-year-old child Salvador Bona brought
a civil action against Moreta to recover damages resulting from the death of the child, who had been run over by an
automobile driven and managed by the defendant. The trial court rendered judgment requiring the defendant to pay
the plaintiff the sum of P1,000 as indemnity: This Court in affirming the judgment, said in part:

If it were true that the defendant, in coming from the southern part of Solana Street, had to stop his auto
before crossing Real Street, because he had met vehicles which were going along the latter street or were
coming from the opposite direction along Solana Street, it is to be believed that, when he again started to
run his auto across said Real Street and to continue its way along Solana Street northward, he should have
adjusted the speed of the auto which he was operating until he had fully crossed Real Street and had
completely reached a clear way on Solana Street. But, as the child was run over by the auto precisely at the
entrance of Solana Street, this accident could not have occurred if the auto had been running at a slow
speed, aside from the fact that the defendant, at the moment of crossing Real Street and entering Solana
Street, in a northward direction, could have seen the child in the act of crossing the latter street from the
sidewalk on the right to that on the left, and if the accident had occurred in such a way that after the
automobile had run over the body of the child, and the child's body had already been stretched out on the
ground, the automobile still moved along a distance of about 2 meters, this circumstance shows the fact that
the automobile entered Solana Street from Real Street, at a high speed without the defendant having blown
the horn. If these precautions had been taken by the defendant, the deplorable accident which caused the
death of the child would not have occurred.

It will be noticed that the defendant in the above case could have been prosecuted in a criminal case because his
negligence causing the death of the child was punishable by the Penal Code. Here is therefore a clear instance of the
same act of negligence being a proper subject-matter either of a criminal action with its consequent civil liability
arising from a crime or of an entirely separate and independent civil action for fault or negligence under article 1902
of the Civil Code. Thus, in this jurisdiction, the separate individually of a cuasi-delito or culpa aquiliana under the
Civil Code has been fully and clearly recognized, even with regard to a negligent act for which the wrongdoer could
have been prosecuted and convicted in a criminal case and for which, after such a conviction, he could have been
sued for this civil liability arising from his crime.

Years later (in 1930) this Court had another occasion to apply the same doctrine. In Bernal and Enverso vs. House
and Tacloban Electric & Ice Plant, Ltd., 54 Phil., 327, the parents of the five-year-old child, Purificacion Bernal,
brought a civil action to recover damages for the child's death as a result of burns caused by the fault and negligence
of the defendants. On the evening of April 10, 1925, the Good Friday procession was held in Tacloban, Leyte.
Fortunata Enverso with her daughter Purificacion Bernal had come from another municipality to attend the same.
After the procession the mother and the daughter with two others were passing along Gran Capitan Street in front of
the offices of the Tacloban Electric & Ice Plant, Ltd., owned by defendants J. V. House, when an automobile
appeared from the opposite direction. The little girl, who was slightly ahead of the rest, was so frightened by the
automobile that she turned to run, but unfortunately she fell into the street gutter where hot water from the electric
plant was flowing. The child died that same night from the burns. The trial courts dismissed the action because of
the contributory negligence of the plaintiffs. But this Court held, on appeal, that there was no contributory
negligence, and allowed the parents P1,000 in damages from J. V. House who at the time of the tragic occurrence
was the holder of the franchise for the electric plant. This Court said in part:

Although the trial judge made the findings of fact hereinbefore outlined, he nevertheless was led to order
the dismissal of the action because of the contributory negligence of the plaintiffs. It is from this point that
a majority of the court depart from the stand taken by the trial judge. The mother and her child had a
perfect right to be on the principal street of Tacloban, Leyte, on the evening when the religious procession
was held. There was nothing abnormal in allowing the child to run along a few paces in advance of the
mother. No one could foresee the coincidence of an automobile appearing and of a frightened child running
and falling into a ditch filled with hot water. The doctrine announced in the much debated case of Rakes vs.
Atlantic Gulf and Pacific Co. ([1907]), 7 Phil., 359), still rule. Article 1902 of the Civil Code must again be
enforced. The contributory negligence of the child and her mother, if any, does not operate as a bar to
recovery, but in its strictest sense could only result in reduction of the damages.

It is most significant that in the case just cited, this Court specifically applied article 1902 of the Civil Code. It is
thus that although J. V. House could have been criminally prosecuted for reckless or simple negligence and not only
punished but also made civilly liable because of his criminal negligence, nevertheless this Court awarded damages
in an independent civil action for fault or negligence under article 1902 of the Civil Code.

In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915), the action was for damages for the death of the
plaintiff's daughter alleged to have been caused by the negligence of the servant in driving an automobile over the
child. It appeared that the cause of the mishap was a defect in the steering gear. The defendant Leynes had rented the
automobile from the International Garage of Manila, to be used by him in carrying passengers during the fiesta of
Tuy, Batangas. Leynes was ordered by the lower court to pay P1,000 as damages to the plaintiff. On appeal this
Court reversed the judgment as to Leynes on the ground that he had shown that the exercised the care of a good
father of a family, thus overcoming the presumption of negligence under article 1903. This Court said:

As to selection, the defendant has clearly shown that he exercised the care and diligence of a good father of
a family. He obtained the machine from a reputable garage and it was, so far as appeared, in good
condition. The workmen were likewise selected from a standard garage, were duly licensed by the
Government in their particular calling, and apparently thoroughly competent. The machine had been used
but a few hours when the accident occurred and it is clear from the evidence that the defendant had no
notice, either actual or constructive, of the defective condition of the steering gear.

The legal aspect of the case was discussed by this Court thus:

Article 1903 of the Civil Code not only establishes liability in cases of negligence, but also provides when
the liability shall cease. It says:

"The liability referred to in this article shall cease when the persons mentioned therein prove that
they employed all the diligence of a good father of a family to avoid the damage."

From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant
or employee there instantly arises a presumption of law that there was negligence on the part of the matter
or employer either in the selection of the servant or employee, or in supervision over him after the
selection, or both; and (2) that presumption is juris tantum and not juris et de jure, and consequently, may
be rebutted. It follows necessarily that if the employer shows to the satisfaction of the court that in selection
and supervision he has exercised the care and diligence of a good father of a family, the presumption is
overcome and he is relieve from liability.

This theory bases the responsibility of the master ultimately on his own negligence and not on that of his
servant.

The doctrine of the case just cited was followed by this Court in Cerf vs. Medel (33 Phil., 37 [year 1915]). In the
latter case, the complaint alleged that the defendant's servant had so negligently driven an automobile, which was
operated by defendant as a public vehicle, that said automobile struck and damaged the plaintiff's motorcycle. This
Court, applying article 1903 and following the rule in Bahia vs. Litonjua and Leynes, said in part (p. 41) that:

The master is liable for the negligent acts of his servant where he is the owner or director of a business or
enterprise and the negligent acts are committed while the servant is engaged in his master's employment as
such owner.

Another case which followed the decision in Bahia vs. Litonjua and Leynes was Cuison vs. Norton & Harrison Co.,
55 Phil., 18 (year 1930). The latter case was an action for damages brought by Cuison for the death of his seven-
year-old son Moises. The little boy was on his way to school with his sister Marciana. Some large pieces of lumber
fell from a truck and pinned the boy underneath, instantly killing him. Two youths, Telesforo Binoya and Francisco
Bautista, who were working for Ora, an employee of defendant Norton & Harrison Co., pleaded guilty to the crime
of homicide through reckless negligence and were sentenced accordingly. This Court, applying articles 1902 and
1903, held:

The basis of civil law liability is not respondent superior but the relationship of pater familias. This theory
bases the liability of the master ultimately on his own negligence and not on that of his servant.
 (Bahia vs.Litonjua and Leynes [1915], 30 Phil., 624; Cangco vs. Manila Railroad Co. [1918], 38 Phil.,
768.)

In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517 (year 1930) the plaintiff brought an
action for damages for the demolition of its wharf, which had been struck by the steamer Helen C belonging to the
defendant. This Court held (p. 526):

The evidence shows that Captain Lasa at the time the plaintiff's wharf collapsed was a duly licensed
captain, authorized to navigate and direct a vessel of any tonnage, and that the appellee contracted his
services because of his reputation as a captain, according to F. C. Cadwallader. This being so, we are of the
opinion that the presumption of liability against the defendant has been overcome by the exercise of the
care and diligence of a good father of a family in selecting Captain Lasa, in accordance with the doctrines
laid down by this court in the cases cited above, and the defendant is therefore absolved from all liability.

It is, therefore, seen that the defendant's theory about his secondary liability is negatived by the six cases above set
forth. He is, on the authority of these cases, primarily and directly responsible in damages under article 1903, in
relation to article 1902, of the Civil Code.

Let us now take up the Philippine decisions relied upon by the defendant. We study first, City of Manila vs. Manila
Electric Co., 52 Phil., 586 (year 1928). A collision between a truck of the City of Manila and a street car of the
Manila Electric Co. took place on June 8, 1925. The truck was damaged in the amount of P1,788.27. Sixto
Eustaquio, the motorman, was prosecuted for the crime of damage to property and slight injuries through reckless
imprudence. He was found guilty and sentenced to pay a fine of P900, to indemnify the City of Manila for
P1,788.27, with subsidiary imprisonment in case of insolvency. Unable to collect the indemnity from Eustaquio, the
City of Manila filed an action against the Manila Electric Company to obtain payment, claiming that the defendant
was subsidiarily liable. The main defense was that the defendant had exercised the diligence of a good father of a
family to prevent the damage. The lower court rendered judgment in favor of the plaintiff. This Court held, in part,
that this case was governed by the Penal Code, saying:

With this preliminary point out of the way, there is no escaping the conclusion that the provisions of the
Penal Code govern. The Penal Code in easily understandable language authorizes the determination of
subsidiary liability. The Civil Code negatives its application by providing that civil obligations arising from
crimes or misdemeanors shall be governed by the provisions of the Penal Code. The conviction of the
motorman was a misdemeanor falling under article 604 of the Penal Code. The act of the motorman was
not a wrongful or negligent act or omission not punishable by law. Accordingly, the civil obligation
connected up with the Penal Code and not with article 1903 of the Civil Code. In other words, the Penal
Code affirms its jurisdiction while the Civil Code negatives its jurisdiction. This is a case of criminal
negligence out of which civil liability arises and not a case of civil negligence.

xxx     xxx     xxx

Our deduction, therefore, is that the case relates to the Penal Code and not to the Civil Code. Indeed, as
pointed out by the trial judge, any different ruling would permit the master to escape scot-free by simply
alleging and proving that the master had exercised all diligence in the selection and training of its servants
to prevent the damage. That would be a good defense to a strictly civil action, but might or might not be to
a civil action either as a part of or predicated on conviction for a crime or misdemeanor. (By way of
parenthesis, it may be said further that the statements here made are offered to meet the argument advanced
during our deliberations to the effect that article 0902 of the Civil Code should be disregarded and codal
articles 1093 and 1903 applied.)

It is not clear how the above case could support the defendant's proposition, because the Court of Appeals based its
decision in the present case on the defendant's primary responsibility under article 1903 of the Civil Code and not on
his subsidiary liability arising from Fontanilla's criminal negligence. In other words, the case of City of Manila vs.
Manila Electric Co., supra, is predicated on an entirely different theory, which is the subsidiary liability of an
employer arising from a criminal act of his employee, whereas the foundation of the decision of the Court of
Appeals in the present case is the employer's primary liability under article 1903 of the Civil Code. We have already
seen that this is a proper and independent remedy.

Arambulo vs. Manila Electric Co. (55 Phil., 75), is another case invoked by the defendant. A motorman in the
employ of the Manila Electric Company had been convicted o homicide by simple negligence and sentenced, among
other things, to pay the heirs of the deceased the sum of P1,000. An action was then brought to enforce the
subsidiary liability of the defendant as employer under the Penal Code. The defendant attempted to show that it had
exercised the diligence of a good father of a family in selecting the motorman, and therefore claimed exemption
from civil liability. But this Court held:

In view of the foregoing considerations, we are of opinion and so hold, (1) that the exemption from civil
liability established in article 1903 of the Civil Code for all who have acted with the diligence of a good
father of a family, is not applicable to the subsidiary civil liability provided in article 20 of the Penal Code.

The above case is also extraneous to the theory of the defendant in the instant case, because the action there had for
its purpose the enforcement of the defendant's subsidiary liability under the Penal Code, while in the case at bar, the
plaintiff's cause of action is based on the defendant's primary and direct responsibility under article 1903 of the Civil
Code. In fact, the above case destroys the defendant's contention because that decision illustrates the principle that
the employer's primary responsibility under article 1903 of the Civil Code is different in character from his
subsidiary liability under the Penal Code.

In trying to apply the two cases just referred to, counsel for the defendant has failed to recognize the distinction
between civil liability arising from a crime, which is governed by the Penal Code, and the responsibility for cuasi-
delito or culpa aquiliana under the Civil Code, and has likewise failed to give the importance to the latter type of
civil action.

The defendant-petitioner also cites Francisco vs. Onrubia (46 Phil., 327). That case need not be set forth. Suffice it
to say that the question involved was also civil liability arising from a crime. Hence, it is as inapplicable as the two
cases above discussed.

The foregoing authorities clearly demonstrate the separate individuality of cuasi-delitos or culpa aquiliana under the
Civil Code. Specifically they show that there is a distinction between civil liability arising from criminal negligence
(governed by the Penal Code) and responsibility for fault or negligence under articles 1902 to 1910 of the Civil
Code, and that the same negligent act may produce either a civil liability arising from a crime under the Penal Code,
or a separate responsibility for fault or negligence under articles 1902 to 1910 of the Civil Code. Still more
concretely, the authorities above cited render it inescapable to conclude that the employer — in this case the
defendant-petitioner — is primarily and directly liable under article 1903 of the Civil Code.

The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose of this case. But
inasmuch as we are announcing doctrines that have been little understood in the past, it might not be inappropriate to
indicate their foundations.

Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple negligence. If we were to
hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, according to
the literal import of article 1093 of the Civil Code, the legal institution of culpa aquiliana would have very little
scope and application in actual life. Death or injury to persons and damage to property through any degree of
negligence — even the slightest — would have to be indemnified only through the principle of civil liability arising
from a crime. In such a state of affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We are loath
to impute to the lawmaker any intention to bring about a situation so absurd and anomalous. Nor are we, in the
interpretation of the laws, disposed to uphold the letter that killeth rather than the spirit that giveth life. We will not
use the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and such
full-grown development as culpa aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902
to 1910 of the Spanish Civil Code.

Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a
civil case, preponderance of evidence is sufficient to make the defendant pay in damages. There are numerous cases
of criminal negligence which can not be shown beyond reasonable doubt, but can be proved by a preponderance of
evidence. In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to
1910 of the Civil Code. Otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi
remedium.

Thirdly, to hold that there is only one way to make defendant's liability effective, and that is, to sue the driver and
exhaust his (the latter's) property first, would be tantamount to compelling the plaintiff to follow a devious and
cumbersome method of obtaining relief. True, there is such a remedy under our laws, but there is also a more
expeditious way, which is based on the primary and direct responsibility of the defendant under article 1903 of the
Civil Code. Our view of the law is more likely to facilitate remedy for civil wrongs, because the procedure indicated
by the defendant is wasteful and productive of delay, it being a matter of common knowledge that professional
drivers of taxis and similar public conveyance usually do not have sufficient means with which to pay damages.
Why, then, should the plaintiff be required in all cases to go through this roundabout, unnecessary, and probably
useless procedure? In construing the laws, courts have endeavored to shorten and facilitate the pathways of right and
justice.

At this juncture, it should be said that the primary and direct responsibility of employers and their presumed
negligence are principles calculated to protect society. Workmen and employees should be carefully chosen and
supervised in order to avoid injury to the public. It is the masters or employers who principally reap the profits
resulting from the services of these servants and employees. It is but right that they should guarantee the latter's
careful conduct for the personnel and patrimonial safety of others. As Theilhard has said, "they should reproach
themselves, at least, some for their weakness, others for their poor selection and all for their negligence." And
according to Manresa, "It is much more equitable and just that such responsibility should fall upon the principal or
director who could have chosen a careful and prudent employee, and not upon the injured person who could not
exercise such selection and who used such employee because of his confidence in the principal or director." (Vol.
12, p. 622, 2nd Ed.) Many jurists also base this primary responsibility of the employer on the principle of
representation of the principal by the agent. Thus, Oyuelos says in the work already cited (Vol. 7, p. 747) that before
third persons the employer and employee "vienen a ser como una sola personalidad, por refundicion de la del
dependiente en la de quien le emplea y utiliza." ("become as one personality by the merging of the person of the
employee in that of him who employs and utilizes him.") All these observations acquire a peculiar force and
significance when it comes to motor accidents, and there is need of stressing and accentuating the responsibility of
owners of motor vehicles.
Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on this subject,
which has given rise to the overlapping or concurrence of spheres already discussed, and for lack of understanding
of the character and efficacy of the action for culpa aquiliana, there has grown up a common practice to seek
damages only by virtue of the civil responsibility arising from a crime, forgetting that there is another remedy,
which is by invoking articles 1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it
has nevertheless rendered practically useless and nugatory the more expeditious and effective remedy based
on culpa aquiliana or culpa extra-contractual. In the present case, we are asked to help perpetuate this usual course.
But we believe it is high time we pointed out to the harm done by such practice and to restore the principle of
responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is high time we
caused the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no
longer be diverted into that of a crime under the Penal Code. This will, it is believed, make for the better
safeguarding of private rights because it re-establishes an ancient and additional remedy, and for the further reason
that an independent civil action, not depending on the issues, limitations and results of a criminal prosecution, and
entirely directed by the party wronged or his counsel, is more likely to secure adequate and efficacious redress.

In view of the foregoing, the judgment of the Court of Appeals should be and is hereby affirmed, with costs against
the defendant-petitioner.

Yulo, C.J., Moran, Ozaeta and Paras, JJ., concur.

19. G.R. No. L-24803 May 26, 1977

PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito Elcano,
deceased, plaintiffs-appellants, 
vs.
REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of said minor, defendants-
appellees.

Cruz & Avecilla for appellants.

Marvin R. Hill & Associates for appellees.

BARREDO, J.:

Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in Civil Case No. Q-
8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to dismiss of defendants, the complaint of
plaintiffs for recovery of damages from defendant Reginald Hill, a minor, married at the time of the occurrence, and
his father, the defendant Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald
of the son of the plaintiffs, named Agapito Elcano, of which, when criminally prosecuted, the said accused was
acquitted on the ground that his act was not criminal, because of "lack of intent to kill, coupled with mistake."

Actually, the motion to dismiss based on the following grounds:

1. The present action is not only against but a violation of section 1, Rule 107, which is now Rule
III, of the Revised Rules of Court;

2. The action is barred by a prior judgment which is now final and or in res-adjudicata;

3. The complaint had no cause of action against defendant Marvin Hill, because he was relieved as
guardian of the other defendant through emancipation by marriage.

(P. 23, Record [p. 4, Record on Appeal.])

was first denied by the trial court. It was only upon motion for reconsideration of the defendants of such denial,
reiterating the above grounds that the following order was issued:

Considering the motion for reconsideration filed by the defendants on January 14, 1965 and after
thoroughly examining the arguments therein contained, the Court finds the same to be meritorious
and well-founded.

WHEREFORE, the Order of this Court on December 8, 1964 is hereby reconsidered by ordering
the dismissal of the above entitled case.

SO ORDERED.

Quezon City, Philippines, January 29, 1965. (p. 40, Record [p. 21, Record on Appeal.)
Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our resolution the following
assignment of errors:

THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING THE CLAIM
OF DEFENDANTS THAT -

THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION OF SECTION
1, RULE 107, NOW RULE 111, OF THE REVISED RULES OF COURT, AND THAT
SECTION 3(c) OF RULE 111, RULES OF COURT IS APPLICABLE;

II

THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINAL OR RES-

ADJUDICTA;

III

THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE CIVIL CODE,

ARE INAPPLICABLE IN THE INSTANT CASE; and

IV

THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST DEFENDANT

MARVIN HILL BECAUSE HE WAS RELIEVED AS GUARDIAN OF THE OTHER
DEFENDANT THROUGH EMANCIPATION BY MARRIAGE. (page 4, Record.)

It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant- appellee Reginald Hill was
prosecuted criminally in Criminal Case No. 5102 of the Court of First Instance of Quezon City. After due trial, he
was acquitted on the ground that his act was not criminal because of "lack of intent to kill, coupled with mistake."
Parenthetically, none of the parties has favored Us with a copy of the decision of acquittal, presumably because
appellants do not dispute that such indeed was the basis stated in the court's decision. And so, when appellants filed
their complaint against appellees Reginald and his father, Atty. Marvin Hill, on account of the death of their son, the
appellees filed the motion to dismiss above-referred to.

As We view the foregoing background of this case, the two decisive issues presented for Our resolution are:

1. Is the present civil action for damages barred by the acquittal of Reginald in the criminal case wherein the action
for civil liability, was not reversed?

2. May Article 2180 (2nd and last paragraphs) of the Civil Code he applied against Atty. Hill, notwithstanding the
undisputed fact that at the time of the occurrence complained of. Reginald, though a minor, living with and getting
subsistenee from his father, was already legally married?

The first issue presents no more problem than the need for a reiteration and further clarification of the dual
character, criminal and civil, of fault or negligence as a source of obligation which was firmly established in this
jurisdiction in Barredo vs. Garcia, 73 Phil. 607. In that case, this Court postulated, on the basis of a scholarly
dissertation by Justice Bocobo on the nature of culpa aquiliana in relation to culpa criminal or delito and
mere culpa or fault, with pertinent citation of decisions of the Supreme Court of Spain, the works of recognized
civilians, and earlier jurisprudence of our own, that the same given act can result in civil liability not only under the
Penal Code but also under the Civil Code. Thus, the opinion holds:

The, above case is pertinent because it shows that the same act machinist. come under both the
Penal Code and the Civil Code. In that case, the action of the agent killeth unjustified and
fraudulent and therefore could have been the subject of a criminal action. And yet, it was held to
be also a proper subject of a civil action under article 1902 of the Civil Code. It is also to be noted
that it was the employer and not the employee who was being sued. (pp. 615-616, 73 Phil.). 1

It will be noticed that the defendant in the above case could have been prosecuted in a criminal
case because his negligence causing the death of the child was punishable by the Penal Code. Here
is therefore a clear instance of the same act of negligence being a proper subject matter either of a
criminal action with its consequent civil liability arising from a crime or of an entirely separate
and independent civil action for fault or negligence under article 1902 of the Civil Code. Thus, in
this jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana, under the Civil
Code has been fully and clearly recognized, even with regard to a negligent act for which the
wrongdoer could have been prosecuted and convicted in a criminal case and for which, after such
a conviction, he could have been sued for this civil liability arising from his crime. (p. 617, 73
Phil.) 2
 It is most significant that in the case just cited, this Court specifically applied article 1902 of the
Civil Code. It is thus that although J. V. House could have been criminally prosecuted for reckless
or simple negligence and not only punished but also made civilly liable because of his criminal
negligence, nevertheless this Court awarded damages in an independent civil action for fault or
negligence under article 1902 of the Civil Code. (p. 618, 73 Phil.) 3

The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose
of this case. But inasmuch as we are announcing doctrines that have been little understood, in the
past, it might not he inappropriate to indicate their foundations.

Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also simple
negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or
negligence not punished by law, accordingly to the literal import of article 1093 of the Civil Code,
the legal institution of culpa aquiliana would have very little scope and application in actual life.
Death or injury to persons and damage to property- through any degree of negligence - even the
slightest - would have to be Idemnified only through the principle of civil liability arising from a
crime. In such a state of affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We
are loath to impute to the lawmaker any intention to bring about a situation so absurd and
anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the letter that killeth
rather than the spirit that giveth life. We will not use the literal meaning of the law to smother and
render almost lifeless a principle of such ancient origin and such full-grown development as culpa
aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the
Spanish Civil Code.

Secondary, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is
required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay
in damages. There are numerous cases of criminal negligence which can not be shown beyond
reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the defendant
can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code.
Otherwise. there would be many instances of unvindicated civil wrongs. "Ubi jus Idemnified
remedium." (p. 620,73 Phil.)

Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code
on this subject, which has given rise to the overlapping or concurrence of spheres already
discussed, and for lack of understanding of the character and efficacy of the action for culpa
aquiliana, there has grown up a common practice to seek damages only by virtue of the civil
responsibility arising from a crime, forgetting that there is another remedy, which is by invoking
articles 1902-1910 of the Civil Code. Although this habitual method is allowed by, our laws, it has
nevertheless rendered practically useless and nugatory the more expeditious and effective remedy
based on culpa aquiliana or culpa extra-contractual. In the present case, we are asked to help
perpetuate this usual course. But we believe it is high time we pointed out to the harms done by
such practice and to restore the principle of responsibility for fault or negligence under articles
1902 et seq. of the Civil Code to its full rigor. It is high time we caused the stream of quasi-delict
or culpa aquiliana to flow on its own natural channel, so that its waters may no longer be diverted
into that of a crime under the Penal Code. This will, it is believed, make for the better
safeguarding or private rights because it realtor, an ancient and additional remedy, and for the
further reason that an independent civil action, not depending on the issues, limitations and results
of a criminal prosecution, and entirely directed by the party wronged or his counsel, is more likely
to secure adequate and efficacious redress. (p. 621, 73 Phil.)

Contrary to an immediate impression one might get upon a reading of the foregoing excerpts from the opinion in
Garcia that the concurrence of the Penal Code and the Civil Code therein referred to contemplate only acts of
negligence and not intentional voluntary acts - deeper reflection would reveal that the thrust of the pronouncements
therein is not so limited, but that in fact it actually extends to fault or culpa. This can be seen in the reference made
therein to the Sentence of the Supreme Court of Spain of February 14, 1919, supra, which involved a case of fraud
or estafa, not a negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force here at the time of Garcia,
provided textually that obligations "which are derived from acts or omissions in which fault or negligence, not
punishable by law, intervene shall be the subject of Chapter II, Title XV of this book (which refers to quasi-delicts.)"
And it is precisely the underline qualification, "not punishable by law", that Justice Bocobo emphasized could lead
to an ultimo construction or interpretation of the letter of the law that "killeth, rather than the spirit that giveth lift-
hence, the ruling that "(W)e will not use the literal meaning of the law to smother and render almost lifeless a
principle of such ancient origin and such full-grown development as culpa aquiliana or quasi-delito, which is
conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code." And so, because Justice Bacobo
was Chairman of the Code Commission that drafted the original text of the new Civil Code, it is to be noted that the
said Code, which was enacted after the Garcia doctrine, no longer uses the term, 11 not punishable by law," thereby
making it clear that the concept of culpa aquiliana includes acts which are criminal in character or in violation of
the penal law, whether voluntary or matter. Thus, the corresponding provisions to said Article 1093 in the new code,
which is Article 1162, simply says, "Obligations derived from quasi-delicto shall be governed by the provisions of
Chapter 2, Title XVII of this Book, (on quasi-delicts) and by special laws." More precisely, a new provision, Article
2177 of the new code provides:
 ART. 2177. Responsibility for fault or negligence under the preceding article is entirely separate
and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff
cannot recover damages twice for the same act or omission of the defendant.

According to the Code Commission: "The foregoing provision (Article 2177) through at first sight startling, is not so
novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation
of the criminal law, while the latter is a "culpa aquiliana" or quasi-delict, of ancient origin, having always had its
own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence
and "culpa extracontractual" or "cuasi-delito" has been sustained by decision of the Supreme Court of Spain and
maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the
proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not,
shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for
damages due to a quasi-delict or 'culpa aquiliana'. But said article forestalls a double recovery.", (Report of the
Code) Commission, p. 162.)

Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of
Justice Bacobo about construction that upholds "the spirit that giveth lift- rather than that which is literal that killeth
the intent of the lawmaker should be observed in applying the same. And considering that the preliminary chapter on
human relations of the new Civil Code definitely establishes the separability and independence of liability in a civil
action for acts criminal in character (under Articles 29 to 32) from the civil responsibility arising from crime fixed
by Article 100 of the Revised Penal Code, and, in a sense, the Rules of Court, under Sections 2 and 3 (c), Rule 111,
contemplate also the same separability, it is "more congruent with the spirit of law, equity and justice, and more in
harmony with modern progress"- to borrow the felicitous relevant language in Rakes vs. Atlantic. Gulf and Pacific
Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where it refers to "fault or negligencia covers not only
acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent.
Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally
prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged
also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger
award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability
referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the
Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a crime
is not estinguished 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.4

It results, therefore, that the acquittal of Reginal Hill in the criminal case has not extinguished his liability for quasi-
delict, hence that acquittal is not a bar to the instant action against him.

Coming now to the second issue about the effect of Reginald's emancipation by marriage on the possible civil
liability of Atty. Hill, his father, it is also Our considered opinion that the conclusion of appellees that Atty. Hill is
already free from responsibility cannot be upheld.

While it is true that parental authority is terminated upon emancipation of the child (Article 327, Civil Code), and
under Article 397, emancipation takes place "by the marriage of the minor (child)", it is, however, also clear that
pursuant to Article 399, emancipation by marriage of the minor is not really full or absolute. Thus "(E)mancipation
by marriage or by voluntary concession shall terminate parental authority over the child's person. It shall enable the
minor to administer his property as though he were of age, but he cannot borrow money or alienate or encumber real
property without the consent of his father or mother, or guardian. He can sue and be sued in court only with the
assistance of his father, mother or guardian."

Now under Article 2180, "(T)he 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. The father and, in case of his death or
incapacity, the mother, are responsible. The father and, in case of his death or incapacity, the mother, are responsible
for the damages caused by the minor children who live in their company." In the instant case, it is not controverted
that Reginald, although married, was living with his father and getting subsistence from him at the time of the
occurrence in question. Factually, therefore, Reginald was still subservient to and dependent on his father, a
situation which is not unusual.

It must be borne in mind that, according to Manresa, the reason behind the joint and solidary liability of presuncion
with their offending child under Article 2180 is that is the obligation of the parent to supervise their minor children
in order to prevent them from causing damage to third persons. 5 On the other hand, the clear implication of Article
399, in providing that a minor emancipated by marriage may not, nevertheless, sue or be sued without the assistance
of the parents, is that such emancipation does not carry with it freedom to enter into transactions or do any act that
can give rise to judicial litigation. (See Manresa, Id., Vol. II, pp. 766-767, 776.) And surely, killing someone else
invites judicial action. Otherwise stated, the marriage of a minor child does not relieve the parents of the duty to see
to it that the child, while still a minor, does not give answerable for the borrowings of money and alienation or
encumbering of real property which cannot be done by their minor married child without their consent. (Art. 399;
Manresa, supra.)

Accordingly, in Our considered view, Article 2180 applies to Atty. Hill notwithstanding the emancipation by
marriage of Reginald. However, inasmuch as it is evident that Reginald is now of age, as a matter of equity, the
liability of Atty. Hill has become milling, subsidiary to that of his son.
WHEREFORE, the order appealed from is reversed and the trial court is ordered to proceed in accordance with the
foregoing opinion. Costs against appellees.

20. G.R. No. L-16439             July 20, 1961

ANTONIO GELUZ, petitioner, 
vs.
THE HON. COURT OF APPEALS and OSCAR LAZO, respondents.

Mariano H. de Joya for petitioner.

A.P. Salvador for respondents.

REYES, J.B.L., J.:

This petition for certiorari brings up for review question whether the husband of a woman, who voluntarily
procured her abortion, could recover damages from physician who caused the same.

The litigation was commenced in the Court of First Instance of Manila by respondent Oscar Lazo, the of Nita
Villanueva, against petitioner Antonio Geluz, a physician. Convinced of the merits of the complaint upon the
evidence adduced, the trial court rendered judgment favor of plaintiff Lazo and against defendant Geluz, ordering
the latter to pay P3,000.00 as damages, P700.00 attorney's fees and the costs of the suit. On appeal, Court of
Appeals, in a special division of five, sustained the award by a majority vote of three justices as against two, who
rendered a separate dissenting opinion.

The facts are set forth in the majority opinion as follows:

Nita Villanueva came to know the defendant (Antonio Geluz) for the first time in 1948 — through her aunt
Paula Yambot. In 1950 she became pregnant by her present husband before they were legally married.
Desiring to conceal her pregnancy from her parent, and acting on the advice of her aunt, she had herself
aborted by the defendant. After her marriage with the plaintiff, she again became pregnant. As she was then
employed in the Commission on Elections and her pregnancy proved to be inconvenient, she had herself
aborted again by the defendant in October 1953. Less than two years later, she again became pregnant. On
February 21, 1955, accompanied by her sister Purificacion and the latter's daughter Lucida, she again
repaired to the defendant's clinic on Carriedo and P. Gomez streets in Manila, where the three met the
defendant and his wife. Nita was again aborted, of a two-month old foetus, in consideration of the sum of
fifty pesos, Philippine currency. The plaintiff was at this time in the province of Cagayan, campaigning for
his election to the provincial board; he did not know of, nor gave his consent, to the abortion.

It is the third and last abortion that constitutes plaintiff's basis in filing this action and award of damages. Upon
application of the defendant Geluz we granted certiorari.

The Court of Appeals and the trial court predicated the award of damages in the sum of P3,000.06 upon the
provisions of the initial paragraph of Article 2206 of the Civil Code of the Philippines. This we believe to be error,
for the said article, in fixing a minimum award of P3,000.00 for the death of a person, does not cover the case of an
unborn foetus that is not endowed with personality. Under the system of our Civil Code, "la criatura abortiva no
alcanza la categoria de persona natural y en consscuencia es un ser no nacido a la vida del Derecho" (Casso-Cervera,
"Diccionario de Derecho Privado", Vol. 1, p. 49), being incapable of having rights and obligations.

Since an action for pecuniary damages on account of personal injury or death pertains primarily to the one injured, it
is easy to see that if no action for such damages could be instituted on behalf of the unborn child on account of the
injuries it received, no such right of action could derivatively accrue to its parents or heirs. In fact, even if a cause of
action did accrue on behalf of the unborn child, the same was extinguished by its pre-natal death, since no
transmission to anyone can take place from on that lacked juridical personality (or juridical capacity as distinguished
from capacity to act). It is no answer to invoke the provisional personality of a conceived child (conceptus pro nato
habetur) under Article 40 of the Civil Code, because that same article expressly limits such provisional personality
by imposing the condition that the child should be subsequently born alive: "provided it be born later with the
condition specified in the following article". In the present case, there is no dispute that the child was dead when
separated from its mother's womb.

The prevailing American jurisprudence is to the same effect; and it is generally held that recovery can not had for
the death of an unborn child (Stafford vs. Roadway Transit Co., 70 F. Supp. 555; Dietrich vs. Northampton, 52 Am.
Rep. 242; and numerous cases collated in the editorial note, 10 ALR, (2d) 639).

This is not to say that the parents are not entitled to collect any damages at all. But such damages must be those
inflicted directly upon them, as distinguished from the injury or violation of the rights of the deceased, his right to
life and physical integrity. Because the parents can not expect either help, support or services from an unborn child,
they would normally be limited to moral damages for the illegal arrest of the normal development of the spes
hominis that was the foetus, i.e., on account of distress and anguish attendant to its loss, and the disappointment of
their parental expectations (Civ. Code Art. 2217), as well as to exemplary damages, if the circumstances should
warrant them (Art. 2230). But in the case before us, both the trial court and the Court of Appeals have not found any
basis for an award of moral damages, evidently because the appellee's indifference to the previous abortions of his
wife, also caused by the appellant herein, clearly indicates that he was unconcerned with the frustration of his
parental hopes and affections. The lower court expressly found, and the majority opinion of the Court of Appeals did
not contradict it, that the appellee was aware of the second abortion; and the probabilities are that he was likewise
aware of the first. Yet despite the suspicious repetition of the event, he appeared to have taken no steps to investigate
or pinpoint the causes thereof, and secure the punishment of the responsible practitioner. Even after learning of the
third abortion, the appellee does not seem to have taken interest in the administrative and criminal cases against the
appellant. His only concern appears to have been directed at obtaining from the doctor a large money payment, since
he sued for P50,000.00 damages and P3,000.00 attorney's fees, an "indemnity" claim that, under the circumstances
of record, was clearly exaggerated.

The dissenting Justices of the Court of Appeals have aptly remarked that:

It seems to us that the normal reaction of a husband who righteously feels outraged by the abortion which
his wife has deliberately sought at the hands of a physician would be highminded rather than mercenary;
and that his primary concern would be to see to it that the medical profession was purged of an unworthy
member rather than turn his wife's indiscretion to personal profit, and with that idea in mind to press either
the administrative or the criminal cases he had filed, or both, instead of abandoning them in favor of a civil
action for damages of which not only he, but also his wife, would be the beneficiaries.

It is unquestionable that the appellant's act in provoking the abortion of appellee's wife, without medical necessity to
warrant it, was a criminal and morally reprehensible act, that can not be too severely condemned; and the consent of
the woman or that of her husband does not excuse it. But the immorality or illegality of the act does not justify an
award of damage that, under the circumstances on record, have no factual or legal basis.

The decision appealed from is reversed, and the complaint ordered dismissed. Without costs.

Let a copy of this decision be furnished to the Department of Justice and the Board of Medical Examiners for their
information and such investigation and action against the appellee Antonio Geluz as the facts may warrant.

21. G.R. No. 159270. August 22, 2005

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, Petitioners, 

vs.
HON. COURT OF APPEALS, RODRIGO ARNAIZ, REGINA LATAGAN, RICARDO GENERALAO and
PAMPANGA SUGAR DEVELOPMENT COMPANY, INC., CORPORATION, Respondent.

DECISION

CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 47699
affirming, with modification, the decision of the Regional Trial Court (RTC) of Manila in Civil Case No. 93-64803.

The Antecedents

Pampanga Sugar Development Company, Inc. (PASUDECO) transports sugarcane from Mabalacat and Magalang,
Pampanga. When the Mount Pinatubo eruption of 1991 heavily damaged the national bridges along Abacan-Angeles
and Sapang Maragul via Magalang, Pampanga, it requested permission from the Toll Regulatory Board (TRB) for
its trucks to enter and pass through the North Luzon Expressway (NLEX) via Dau-Sta. Ines from Mabalacat,
and via Angeles from Magalang, and exit at San Fernando going to its milling factory. 2 The TRB furnished the
Philippine National Construction Corporation (PNCC) (the franchisee that operates and maintains the toll facilities
in the North and South Luzon Toll Expressways) with a copy of the said request for it to comment thereon. 3

On November 5, 1991, TRB and PASUDECO entered into a Memorandum of Agreement 4 (MOA), where the latter
was allowed to enter and pass through the NLEX on the following terms and conditions:

1. PASUDECO trucks should move in convoy;

2. Said trucks will stay on the right lane;

3. A vehicle with blinking lights should be assigned at the rear end of the convoy with a sign which should read as
follows: Caution: CONVOY AHEAD!!!;

4. Tollway safety measures should be properly observed;

5. Accidents or damages to the toll facilities arising out of any activity related to this approval shall be the
responsibility of PASUDECO;

6. PASUDECO shall be responsible in towing their stalled trucks immediately to avoid any inconvenience to the
other motorists;
7. This request will be in force only while the national bridges along Abacan-Angeles and Sapang
Maragul viaMagalang remain impassable.

PASUDECO furnished the PNCC with a copy of the MOA.5 In a Letter6 dated October 22, 1992, the PNCC
informed PASUDECO that it interposed no objection to the MOA.

At around 2:30 a.m. on January 23, 1993, Alex Sendin, the PNCC security supervisor, and his co-employees
Eduardo Ducusin and Vicente Pascual were patrolling Km. 72 going north of the NLEX. They saw a pile of
sugarcane in the middle portion of the north and southbound lanes of the road.7 They placed lit cans with diesel oil in
the north and southbound lanes, including lane dividers with reflectorized markings, to warn motorists of the
obstruction. Sendin, Ducusin and Pascual proceeded to the PASUDECO office, believing that the pile of sugarcane
belonged to it since it was the only milling company in the area. They requested for a payloader or grader to clear
the area. However, Engineer Oscar Mallari, PASUDECO’s equipment supervisor and transportation superintendent,
told them that no equipment operator was available as it was still very early.8 Nonetheless, Mallari told them that he
would send someone to clear the affected area. Thereafter, Sendin and company went back to Km. 72 and manned
the traffic. At around 4:00 a.m., five (5) PASUDECO men arrived, and started clearing the highway of the
sugarcane. They stacked the sugarcane at the side of the road. The men left the area at around 5:40 a.m., leaving a
few flattened sugarcanes scattered on the road. As the bulk of the sugarcanes had been piled and transferred along
the roadside, Sendin thought there was no longer a need to man the traffic. As dawn was already approaching,
Sendin and company removed the lighted cans and lane dividers.9 Sendin went to his office in Sta. Rita, Guiguinto,
Bulacan, and made the necessary report.10

At about 6:30 a.m., Rodrigo S. Arnaiz, a certified mechanic and marketing manager of JETTY Marketing,
Inc.,11 was driving his two-door Toyota Corolla with plate number FAG 961 along the NLEX at about 65 kilometers
per hour.12He was with his sister Regina Latagan, and his friend Ricardo Generalao; they were on their way to
Baguio to attend their grandmother’s first death anniversary. 13 As the vehicle ran over the scattered sugarcane, it
flew out of control and turned turtle several times. The accident threw the car about fifteen paces away from the
scattered sugarcane.

Police Investigator Demetrio Arcilla investigated the matter and saw black and white sugarcanes on the road, on
both lanes, which appeared to be flattened.14

On March 4, 1993, Arnaiz, Latagan and Generalao filed a complaint15 for damages against PASUDECO and PNCC
in the RTC of Manila, Branch 16. The case was docketed as Civil Case No. 93-64803. They alleged, inter alia, that
through its negligence, PNCC failed to keep and maintain the NLEX safe for motorists when it allowed
PASUDECO trucks with uncovered and unsecured sugarcane to pass through it; that PASUDECO negligently
spilled sugarcanes on the NLEX, and PNCC failed to put up emergency devices to sufficiently warn approaching
motorists of the existence of such spillage; and that the combined gross negligence of PASUDECO and PNCC was
the direct and proximate cause of the injuries sustained by Latagan and the damage to Arnaiz’s car. They prayed,
thus:

WHEREFORE, it is respectfully prayed that, after due hearing, judgment be rendered for the plaintiffs, ordering the
defendants jointly and severally:

(a) To pay unto plaintiff Rodrigo Arnaiz the sum of ₱100,000.00 representing the value of his car which was totally
wrecked;

(b) to pay unto plaintiff Regina Latagan the sum of ₱100,000.00 by way of reimbursement for medical expenses, the
sum of ₱50,000.00 by way of moral damages, and the sum of ₱30,000.00 by way of exemplary damages;

(c) To pay unto plaintiffs Rodrigo Arnaiz and Ricardo Generalao the sum of ₱5,000.00 by way of reimbursement for
medical expenses; and

(d) To pay unto the plaintiffs the sum of ₱30,000.00 by way of attorney’s fees; plus the costs of suit.

Plaintiffs pray for other reliefs which the Honorable Court may find due them in the premises.16

In its Answer,17 PNCC admitted that it was under contract to manage the North Luzon Expressway, to keep it safe
for motorists. It averred that the mishap was due to the "unreasonable speed" at which Arnaiz’s car was running,
causing it to turn turtle when it passed over some pieces of flattened sugarcane. It claimed that the proximate cause
of the mishap was PASUDECO’s gross negligence in spilling the sugarcane, and its failure to clear and mop up the
area completely. It also alleged that Arnaiz was guilty of contributory negligence in driving his car at such speed.

The PNCC interposed a compulsory counterclaim18 against the plaintiffs and cross-claim19 against its co-defendant
PASUDECO.

PASUDECO adduced evidence that aside from it, there were other sugarcane mills in the area, like the ARCAM
Sugar Central (formerly known as Pampanga Sugar Mills) and the Central Azucarrera de Tarlac; 20 it was only
through the expressway that a vehicle could access these three (3) sugar centrals;21 and PASUDECO was obligated
to clear spillages whether the planters’ truck which caused the spillage was bound for PASUDECO, ARCAM or
Central Azucarera.22
On rebuttal, PNCC adduced evidence that only planters’ trucks with "PSD" markings were allowed to use the
tollway;23 that all such trucks would surely enter the PASUDECO compound. Thus, the truck which spilled
sugarcane in January 1993 in Km. 72 was on its way to the PASUDECO compound.24

On November 11, 1994, the RTC rendered its decision25 in favor of Latagan, dismissing that of Arnaiz and
Generalao for insufficiency of evidence. The case as against the PNCC was, likewise, dismissed. The decretal
portion of the decision reads:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:

I. ORDERING defendant PASUDECO:

1. To pay plaintiff Regina Latagan:

a. ₱25,000 = for actual damages

b. ₱15,000 = for moral damages

c. ₱10,000 = for attorney’s fees

₱50,000

2. To pay costs of suit.

II. The case is DISMISSED as to defendant PNCC. No pronouncement as to costs. Its counterclaim is, likewise,
DISMISSED.

III. The claims for damages of plaintiffs Rodrigo Arnaiz and Ricardo Generalao are hereby DISMISSED for
insufficiency of evidence.

SO ORDERED.26

Both the plaintiffs Arnaiz, Latagan and Generalao and defendant PASUDECO appealed the decision to the CA.
Since the plaintiffs failed to file their brief, the CA dismissed their appeal. 27

Resolving PASUDECO’s appeal, the CA rendered judgment on April 29, 2003, affirming the RTC decision with
modification. The appellate court ruled that Arnaiz was negligent in driving his car, but that such negligence was
merely contributory to the cause of the mishap, i.e., PASUDECO’s failure to properly supervise its men in clearing
the affected area. Its supervisor, Mallari, admitted that he was at his house while their men were clearing Km. 72.
Thus, the appellate court held both PASUDECO and PNCC, jointly and severally, liable to Latagan. The decretal
portion of the decision reads:

WHEREFORE, premises considered, the assailed DECISION is hereby MODIFIED and judgment is hereby
rendered declaring PASUDECO and PNCC, jointly and solidarily, liable:

1. To pay plaintiff Regina Latagan:

a. ₱25,000 = for actual damages

b. ₱15,000 = for moral damages

c. ₱10,000 = for attorney’s fees

2. To pay costs of suit.

SO ORDERED. 28

The PNCC, now the petitioner, filed a petition for review on certiorari under Rule 45 of the Revised Rules of Court,
alleging that:

THE HONORABLE COURT OF APPEALS ERRED IN MODIFYING THE DECISION OF THE TRIAL COURT
AND MAKING PETITIONER PNCC, JOINTLY AND [SOLIDARILY], LIABLE WITH PRIVATE
RESPONDENT PASUDECO.29

The petitioner asserts that the trial court was correct when it held that PASUDECO should be held liable for the
mishap, since it had assumed such responsibility based on the MOA between it and the TRB. The petitioner relies on
the trial court’s finding that only PASUDECO was given a permit to pass through the route.
The petitioner insists that the respondents failed to prove that it was negligent in the operation and maintenance of
the NLEX. It maintains that it had done its part in clearing the expressway of sugarcane piles, and that there were no
more piles of sugarcane along the road when its men left Km. 72; only a few scattered sugarcanes flattened by the
passing motorists were left. Any liability arising from any mishap related to the spilled sugarcanes should be borne
by PASUDECO, in accordance with the MOA which provides that "accidents or damages to the toll facilities
arising out of any activity related to this approval shall be the responsibility of PASUDECO."

The petitioner also argues that the respondents should bear the consequences of their own fault or negligence, and
that the proximate and immediate cause of the mishap in question was respondent Arnaiz’s reckless imprudence or
gross negligence.

The Court notes that the issues raised in the petition are factual in nature. Under Rule 45 of the Rules of Court, only
questions of law may be raised in this Court, and while there are exceptions to the rule, no such exception is present
in this case. On this ground alone, the petition is destined to fail. The Court, however, has reviewed the records of
the case, and finds that the petition is bereft of merit.

The petitioner is the grantee of a franchise, giving it the right, privilege and authority to construct, operate and
maintain toll facilities covering the expressways, collectively known as the NLEX. 30 Concomitant thereto is its right
to collect toll fees for the use of the said expressways and its obligation to keep it safe for motorists.

There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or negligence of the
defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between
the fault or negligence of the defendant and the damages incurred by the plaintiff.31 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.

Negligence is the omission to do something which a reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and
reasonable man would do.32 It also refers to the conduct which creates undue risk of harm to another, the failure to
observe that degree of care, precaution and vigilance that the circumstance justly demand, whereby that other person
suffers injury.33 The Court declared the test by which to determine the existence of negligence in Picart v.
Smith,34 viz:

The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the
defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person
would have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts the
standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by reference to the personal judgment of the actor in the
situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.

The test for determining whether a person is negligent in doing an act whereby injury or damage results to the
person or property of another is this: could a prudent man, in the position of the person to whom negligence is
attributed, foresee harm to the person injured as a reasonable consequence of the course actually pursued? If so, the
law imposes a duty on the actor to refrain from that course or to take precautions to guard against its mischievous
results, and the failure to do so constitutes negligence. Reasonable foresight of harm, followed by the ignoring of the
admonition born of this provision, is always necessary before negligence can be held to exist.35

In the case at bar, it is clear that the petitioner failed to exercise the requisite diligence in maintaining the NLEX safe
for motorists. The lighted cans and lane dividers on the highway were removed even as flattened sugarcanes lay
scattered on the ground.36 The highway was still wet from the juice and sap of the flattened sugarcanes. 37 The
petitioner should have foreseen that the wet condition of the highway would endanger motorists passing by at night
or in the wee hours of the morning.

The petitioner cannot escape liability under the MOA between PASUDECO and TRB, since respondent Latagan
was not a party thereto. We agree with the following ruling of the CA:

Both defendants, appellant PASUDECO and appellee PNCC, should be held liable. PNCC, in charge of the
maintenance of the expressway, has been negligent in the performance of its duties. The obligation of PNCC should
not be relegated to, by virtue of a private agreement, to other parties.

PNCC declared the area free from obstruction since there were no piles of sugarcane, but evidence shows there were
still pieces of sugarcane stalks left flattened by motorists. There must be an observance of that degree of care,
precaution, and vigilance which the situation demands. There should have been sufficient warning devices
considering that there were scattered sugarcane stalks still left along the tollway.

The records show, and as admitted by the parties, that Arnaiz’s car ran over scattered sugarcanes spilled from a
hauler truck.38
Moreover, the MOA refers to accidents or damages to the toll facilities. It does not cover damages to property or
injuries caused to motorists on the NLEX who are not privies to the MOA.

PASUDECO’s negligence in transporting sugarcanes without proper harness/straps, and that of PNCC in removing
the emergency warning devices, were two successive negligent acts which were the direct and proximate cause of
Latagan’s injuries. As such, PASUDECO and PNCC are jointly and severally liable. As the Court held in the
vintage case of Sabido v. Custodio:39

According to the great weight of authority, where the concurrent or successive negligent acts or omission of two or
more persons, although acting independently of each other, are, in combination, the direct and proximate cause of a
single injury to a third person and it is impossible to determine in what proportion each contributed to the injury,
either is responsible for the whole injury, even though his act alone might not have caused the entire injury, or the
same damage might have resulted from the acts of the other tort-feasor. ...

In Far Eastern Shipping Company v. Court of Appeals,40 the Court declared that the liability of joint tortfeasors is
joint and solidary, to wit:

It may be said, as a general rule, that negligence in order to render a person liable need not be the sole cause of an
injury. It is sufficient that his negligence, concurring with one or more efficient causes other than plaintiff's, is the
proximate cause of the injury. Accordingly, where several causes combine to produce injuries, a person is not
relieved from liability because he is responsible for only one of them, it being sufficient that the negligence of the
person charged with injury is an efficient cause without which the injury would not have resulted to as great an
extent, and that such cause is not attributable to the person injured. It is no defense to one of the concurrent
tortfeasors that the injury would not have resulted from his negligence alone, without the negligence or wrongful
acts of the other concurrent tortfeasors. Where several causes producing an injury are concurrent and each is an
efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the
causes and recovery may be had against any or all of the responsible persons although under the circumstances of
the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person
was not the same. No actor's negligence ceases to be a proximate cause merely because it does not exceed the
negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as though his acts were
the sole cause of the injury.

There is no contribution between joint tortfeasors whose liability is solidary since both of them are liable for the
total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although
acting independently, are in combination with the direct and proximate cause of a single injury to a third person, it is
impossible to determine in what proportion each contributed to the injury and either of them is responsible for the
whole injury. Where their concurring negligence resulted in injury or damage to a third party, they become joint
tortfeasors and are solidarily liable for the resulting damage under Article 2194 of the Civil Code.

Thus, with PASUDECO’s and the petitioner’s successive negligent acts, they are joint tortfeasors who are solidarily
liable for the resulting damage under Article 2194 of the New Civil Code.41

Anent respondent Arnaiz’s negligence in driving his car, both the trial court and the CA agreed that it was only
contributory, and considered the same in mitigating the award of damages in his favor as provided under Article
217942 of the New Civil Code. Contributory negligence is conduct on the part of the injured party, contributing as a
legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his
own protection.43 Even the petitioner itself described Arnaiz’s negligence as contributory. In its Answer to the
complaint filed with the trial court, the petitioner asserted that "the direct and proximate cause of the accident was
the gross negligence of PASUDECO personnel which resulted in the spillage of sugarcane and the apparent failure
of the PASUDECO workers to clear and mop up the area completely, coupled with the contributory negligence of
Arnaiz in driving his car at an unreasonable speed."44 However, the petitioner changed its theory in the present
recourse, and now claims that the proximate and immediate cause of the mishap in question was the reckless
imprudence or gross negligence of respondent Arnaiz.45 Such a change of theory cannot be allowed. When a party
adopts a certain theory in the trial court, he will not be permitted to change his theory on appeal, for to permit him to
do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice
and due process.46

IN LIGHT OF ALL THE FOREGOING, the present petition is hereby DENIED for lack of merit. The Decision
of the Court of Appeals in CA-G.R. CV No. 47699, dated April 29, 2003, is AFFIRMED. Costs against the
petitioner.

SO ORDERED.

22. [G.R. No. 107356. March 31, 1995.]

SINGAPORE AIRLINES LIMITED, Petitioner, v. THE COURT OF APPEALS and PHILIPPINE

AIRLINES, Respondents.
 DECISION

ROMERO, J.:

Sancho Rayos was an overseas contract worker who had a renewed contract with the Arabian American Oil
Company (Aramco) for the period covering April 16, 1980, to April 15, 1981. As part of Aramco's policy, its
employees returning to Dhahran, Saudi Arabia from Manila are allowed to claim reimbursement for amounts paid
for excess baggage of up to 50 kilograms, as long as it is properly supported by receipt. On April 13, 1980, Rayos
took a Singapore Airlines (SIA) flight to report for his new assignment, with a 50-kilogram excess baggage for
which he paid P4,147.50. Aramco reimbursed said amount upon presentation of the excess baggage
ticket. nadchanroblesvirtuallawlibrary

In December 1980, Rayos learned that he was one of several employees being investigated by Aramco for
fraudulent claims. He immediately asked his wife Beatriz in Manila to seek a written confirmation from SIA that he
indeed paid for an excess baggage of 50 kilograms. On December 10, 1980, SIA's manager, Johnny Khoo, notified
Beatriz of their inability to issue the certification requested because their records showed that only three kilograms
were entered as excess and accordingly charged. SIA issued the certification requested by the spouses Rayos only on
April 8, 1981, after its investigation of the anomaly and after Beatriz, assisted by a lawyer, threatened it with a
lawsuit. On April 14, 1981, Aramco gave Rayos his travel documents without a return visa. His employment
contract was not renewed.

On August, 5, 1981, the spouses Rayos, convinced that SIA was responsible for the non-renewal of Rayos'
employment contract with Aramco, sued it for damages. SIA claimed that it was not liable to the Rayoses because
the tampering was committed by its handling agent, Philippine Airlines (PAL). It then filed a third-party complaint
against PAL. PAL, in turn, countered that its personnel did not collect any charges for excess baggage; that it had no
participation in the tampering of any excess baggage ticket; and that if any tampering was made, it was done by
SIA's personnel.

Judge Jesus O. Ibay of the Regional Trial Court of Manila, Branch 30, rendered judgment on September 9, 1988, in
favor of the plaintiffs, the dispositive portion of which reads thus:nadchanroblesvirtualawlibrary

"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant Singapore Airlines
Limited, sentencing the latter to pay the former the following:nadchanroblesvirtualawlibrary

1. The sum of Four Hundred Thirty Thousand Nine Hundred Pesos and Eighty Centavos (P430,900.80) as actual
damages, with interest at the legal rate from the date of the filing of the complaint until fully paid.

2. The sum of Four Thousand One Hundred Forty-Seven Pesos and Fifty Centavos (P4,147.50) as reimbursement
for the amount deducted from Mr. Rayos' salary, also with legal rate of interest from the filing of the complaint until
paid in full;

3. The sum of Fifty Thousand Pesos (P50,000.00) as moral damages; 

4. The sum equivalent to ten Per Cent (10%) of the total amount due as and for attorney's fees; and 

5. The cost of suit.

The defendant's counterclaim is hereby dismissed.

ON THE THIRD PARTY COMPLAINT, the third-party defendant PAL is ordered to pay defendant and third-party
plaintiff SIA whatever the latter has paid the plaintiffs.

SO ORDERED."

In so ruling, the court a quo concluded that the excess baggage ticket of Rayos was tampered with by the employees
of PAL and that the fraud was the direct and proximate cause of the non-renewal of Rayos' contract with Aramco.

All parties appealed to the Court of Appeals. SIA's appeal was dismissed for non-payment of docket fees, which
dismissal was eventually sustained by this Court. The Rayos spouses withdrew their appeal when SIA satisfied the
judgment totalling P802,435.34.

In its appeal, PAL claimed that the spouses Rayos had no valid claim against SIA because it was the inefficiency of
Rayos which led to the non-renewal of his contract with Aramco, and not the alleged tampering of his excess
baggage ticket. On the other hand, SIA argued that the only issue in the said appeal is whether or not it was entitled
to reimbursement from PAL, citing the case of Firestone Tire and Rubber Company of the Philippines v.
Tempongko. 1 

The appellate court disagreed with SIA's contention that PAL could no longer raise the issuer of SIA's liability to the
Rayoses and opined "that SIA's answer to the complaint should inure to the benefit of PAL, and the latter may
challenge the lower court's findings against SIA in favor of plaintiffs-appellees (the Rayos Spouses) for the purpose
of defeating SIA's claim against it, and not for the purpose of altering in any way the executed judgment against
SIA." In its answer to the main complaint, SIA set up the defense that the excess baggage ticket was indeed
tampered with but it was committed by PAL's personnel. On September 21, 1992, the appellate court granted PAL's
appeal and absolved it from any liability to SIA.

In this petition for review, SIA argues that PAL cannot validly assail for the first time on appeal the trial court's
decision sustaining the validity of plaintiff's complaint against SIA if PAL did not raise this issue in the lower court.
It added that the appellate court should have restricted its ruling on the right of SIA to seek reimbursement from
PAL, as this was the only issue raised by SIA in its third-party complaint against PAL.

The instant appeal is impressed with merit.

The petitioner correctly pointed out that the case of Firestone squarely applies to the case at bench. In said case, the
Court expounded on the nature of a third-party complaint and the effect of a judgment in favor of the plaintiff
against the defendant and in favor of such defendant and in favor of such as third-party plaintiff against, ultimately,
the third-party defendant. Speaking through then Justice and later Chief Justice Claudio Teehankee, the Court
stated: 

"The third-party complaint is, therefore, a procedural device whereby a "third party" who is neither a party nor privy
to the act or deed complained of by the plaintiff, may be brought into the case with leave of court, by the defendant,
who acts as third-party plaintiff to enforce against such third-party defendant a right for contribution, indemnity,
subrogation or any other relief, in respect of the plaintiff's claim. The third-party complaint is actually independent
of and separate and distinct from the plaintiff's complaint. . . . When leave to file the third-party complaint is
properly granted, the Court renders in effect two judgments in the same case, one on the plaintiff's complaint and the
other on the third-party complaint. When he finds favorably on both complaints, as in this case, he renders judgment
on the principal complaint in favor of plaintiff against defendant and renders another judgment on the third-party
complaint in favor of defendant as third-party plaintiff, ordering the third-party defendant to reimburse the defendant
whatever amount said defendant is ordered to pay plaintiff in the case. Failure of any of said parties in such a case to
appeal the judgment as against him makes such judgment final and executory. By the same token, an appeal by one
party from such judgment does not inure to the benefit of the other party who has not appealed nor can it be deemed
to be an appeal of such other party from the judgment against him."

It must be noted that in the proceedings below, PAL disclaimed any liability to the Rayoses and imputed the alleged
tampering to SIA's personnel. On appeal, however, PAL changed its theory and averred that the spouses Rayos had
no valid claim against SIA on the ground that the non-renewal of Sancho's contract with Aramco was his
unsatisfactory performance rather than the alleged tampering of his excess baggage ticket. In response to PAL's
appeal, SIA argued that it was improper for PAL to question SIA's liability to the plaintiff, since this was no longer
an issue on account of the finality and, in fact, satisfaction of the judgment.

Surprisingly, the appellate court ignored the Court's pronouncements in Firestone and
declared:nadchanroblesvirtualawlibrary

"[T]here is nothing in the citation which would suggest that the appellant cannot avail of the defenses which would
have been available to the non-appealing party against the prevailing party which would be beneficial to the
appellant. After all, PAL's liability here is premised on the liability of SIA to plaintiffs-appellees. In its own defense,
it should have the right to avail of defenses of SIA against plaintiffs-appellees which would redound to its benefit.
This is especially true here where SIA lost the capability to defend itself on the technicality of failure to pay docket
fee, rather than on the merits of its appeal. To hold otherwise would be to open the door to a possible collusion
between the plaintiff and defendant which would leave the third-party defendant holding the bag. "

There is no question that a third-party defendant is allowed to set up in his answer the defenses which the third-party
plaintiff (original defendant) has or may have to the plaintiff's claim. There are, however, special circumstances
present in this case which preclude third-party defendant PAL from benefiting from the said principle.

One of the defenses available to SIA was that the plaintiffs had no cause of action, that is, it had no valid claim
against SIA. SIA investigated the matter and discovered that tampering was, indeed, committed, not by its personnel
but by PAL's. This became its defense as well as its main cause of action in the third-party complaint it filed against
PAL. For its part, PAL could have used the defense that the plaintiffs had no valid claim against it or against SIA.
This could be done indirectly by adopting such a defense in its answer to the third-party complaint if only SIA had
raised the same in its answer to the main complaint, or directly by so stating in unequivocal terms in its answer to
SIA's complaint that SIA and PAL were both blameless. Yet, PAL opted to deny any liability which it imputed to
SIA's personnel. It was only on appeal — in a complete turnaround of theory — that PAL raised the issue of no
valid claim by the plaintiff against SIA. This simply cannot be allowed. nadchanroblesvirtuallawlibrary

While the third-party defendant would benefit from a victory by the third-party plaintiff against the plaintiff, this is
true only when the third-party plaintiff and third-party defendant have non-contradictory defenses. Here, the
defendant and third-party defendant had no common defense against the plaintiffs' complaint, and they were even
blaming each other for the fiasco.

Fear of collusion between the third-party plaintiff and the plaintiffs aired by the appellate court is misplaced if not
totally unfounded. The stand of SIA as against the plaintiffs' claim was transparent from the beginning. PAL was
aware of SIA's defense, and if it was convinced that SIA should have raised the defense of no valid claim by the
plaintiffs, it should have so stated in its answer as one of its defenses, instead of waiting for an adverse judgment and
raising it for the first time on appeal.

The judgment, therefore, as far as the Rayoses and SIA are concerned, has already gained finality. What remains to
be resolved, as correctly pointed out by petitioner, is whether it is entitled to reimbursement from PAL, considering
that PAL appealed that part of the decision to the appellate court. This is where the rule laid down in Firestone
becomes applicable.

The trial court's decision, although adverse to SIA as defendant, made PAL ultimately answerable for the judgment
by ordering the latter to reimburse the former for the entire monetary award. On appeal, PAL tried to exonerate itself
by arguing that the Rayoses had no valid claim against SIA. From PAL's viewpoint, this seemed to be the only way
to extricate itself from a mess which the court a quo ascribed to it. This cannot, however, be allowed because it was
neither raised by SIA in its answer to the main complaint nor by PAL in its answer to the third-party complaint. The
prudent thing that PAL should have done was to state in its answer to the third-party complaint filed by SIA against
it everything that it may conceivably interpose by way of its defense, including specific denials of allegations in the
main complaint which implicated it along with SIA.

The appellate court was in error when it opined that SIA's answer inured to the benefit of PAL for the simple reason
that the complaint and the third-party complaint are actually two separate cases involving the same set of facts
which is allowed by the court to be resolved in a single proceeding only to avoid a multiplicity of actions. Such a
proceeding obviates the need of trying two cases, receiving the same or similar evidence for both, and enforcing
separate judgments therefor. This situation is not, as claimed by the appellate court, analogous to a case where there
are several defendants against whom a complaint is filed stating a common cause of action, where the answer of
some of the defendants inures to the benefit of those who did not file an answer. While such a complaint speaks of a
single suit, a third-party complaint involves an action separate and distinct from, although related to, the main
complaint. A third-party defendant who feels aggrieved by some allegations in the main complaint should, aside
from answering the third-party complaint, also answer the main complaint.

We do not, however, agree with the petitioner that PAL is solely liable for the satisfaction of the judgment. While
the trial court found, and this has not been adequately rebutted by PAL, that the proximate cause of the non-renewal
of Rayos' employment contract with Aramco was the tampering of his excess baggage ticket by PAL's personnel, it
failed to consider that the immediate cause of such non-renewal was SIA's delayed transmittal of the certification
needed by Rayos to prove his innocence to his employer. nadchanroblesvirtuallawlibrary

SIA was informed of the anomaly in December 1980 but only issued the certification four months later or, more
specifically, on April 8, 1981, a few days before the expiration of Rayos' contract. Surely, the investigation
conducted by SIA could not have lasted for four months as the information needed by the Rayoses could easily be
verified by comparing the duplicate excess baggage tickets which they and their handling agent, PAL, kept for
record purposes. The fact that the Rayos spouses had to be assisted by counsel who threatened to file a damage suit
against SIA if the certification they urgently needed was not immediately issued only strengthens the suspicion that
SIA was not dealing with them in utmost good faith. The effect of SIA's mishandling of Beatriz Rayos' request
became instantly apparent when her husband's contract was not renewed in spite of his performance which was
constantly "highly regarded" by the manager of Aramco's equipment services department.

Former Chief Justice and noted remedial law expert Manuel V. Moran opined that "in an action upon a tort, the
defendant may file a third-party complaint against a joint tort-feasor for contribution." 2 

The non-renewal of Rayos' employment contract was the natural and probable consequence of the separate tortious
acts of SIA and PAL. Under mandate of Article 2176 of the Civil Code, Rayos is entitled to be compensated for
such damages. Inasmuch as the responsibility of two or more persons, or tort-feasors, liable for a quasi-delict is joint
and several, 3 and the sharing as between such solidary debtors is pro-rata, 4 it is but logical, fair, and equitable to
require PAL to contribute to the amount awarded to the Rayos spouses and already paid by SIA, instead of totally
indemnifying the latter.

WHEREFORE, the decision of the respondent Court of Appeals in CA-G.R. CV No. 20488 dated September 21,
1992, is hereby REVERSED and a new one is entered ordering private respondent Philippine Airlines to pay, by
way of contribution, petitioner Singapore Airlines one-half (

JOHN KAM BIAK Y. CHAN, JR.,   G.R. No. 160283

P e t i t i o n e r,  

  Present:

   

  PUNO,

  Chairman,

  AUSTRIA-MARTINEZ,
 - versus - CALLEJO, SR.,

  TINGA, and

  CHICO-NAZARIO, JJ .

   

   

  Promulgated:

23. IGLESIA NI CRISTO, INC.,

 

R e s p o n d e n t.
October 14, 2005

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J .:

Before Us is a petition for review on certiorari [1] assailing the Decision [2] of the Court of Appeals in CA-G.R.
CV No. 65976, dated 25 September 2003. Said Decision denied the petitioner's appeal from the decision of the
Regional Trial Court (RTC), La Union, Branch 31, in Civil Case No. A-1646.

THE FACTS

The antecedents of the instant case are quite simple.

The Aringay Shell Gasoline Station is owned by the petitioner. It is located in Sta. Rita East, Aringay, La Union, and
bounded on the south by a chapel of the respondent.

The gasoline station supposedly needed additional sewerage and septic tanks for its washrooms. In view of this, the
services of Dioscoro 'Ely Yoro (Yoro), a retired general of the Armed Forces of the Philippines, was procured by
petitioner, as the former was allegedly a construction contractor in the locality.
 

Petitioner and Yoro executed a Memorandum of Agreement[3] (MOA) on 28 February 1995 which is reproduced
hereunder:

MEMORANDUM OF AGREEMENT
 

KNOW ALL MEN BY THESE PRESENTS:

This MEMORANDUM OF AGREEMENT, executed this 28thday of February, 1995, by and

between:

JOHN Y. CHAN, of legal age, single, and a resident of Aringay, La Union, now and hereinafter
called the FIRST PARTY;

GEN. ELY E. YORO, Jr., of legal age, married, and a resident of Damortis, Sto. Tomas, La
Union, hereinafter referred to as the SECOND PARTY:

WITNESSETH that:

WHEREAS, the FIRST PARTY is the owner of a parcel of land located at Sta. Rita, Aringay, La
Union.

WHEREAS, the FIRST PARTY, desires to dig a septic tank for its perusal in the property
bordering Iglesia ni Cristo.

WHEREAS, the SECOND PARTY is willing to contract the intended digging of septic tank for
the first party.

WHEREAS, the FIRST PARTY and SECOND PARTY has (sic) agreed verbally as to the
compensation of the said digging of septic tank.

WHEREFORE, for and in consideration of the terms and covenants hereinbelow set forth, the
FIRST PARTY hereby AGREES and ALLOWS the SECOND PARTY to undertake the digging
of the parcel of land for the exclusive purpose of having a septic tank.

TERMS AND COVENANTS

1. The SECOND PARTY shall contract the said digging;

2. The FIRST PARTY shall have complete control over the number of personnel who will be
entering the property for said contract;

3. The digging shall be allowed for a period of three (3) weeks only, commencing on March 28,
1995, unless extended by agreement of the parties;

 
 4. Any damage within or outside the property of the FIRST PARTY incurred during the digging
shall be borne by the SECOND PARTY;

5. In the event that valuable objects are found on the property, the same shall be divided among
the parties as follows:

FIRST PARTY - 60%

SECOND PARTY - 40%

6. In the event that valuable objects are found outside the property line during the said digging, the
same shall be divided among the parties as follows:

FIRST PARTY - 35%

SECOND PARTY - 65%

7. In case government or military interference or outside intervention is imminent, the FIRST

PARTY hereby reserves the option to stop the digging at any stage thereof.

IN WITNESS WHEREOF, We have hereunto set our hands on the day and year first above-
written at Aringay, La Union. [4]

Diggings thereafter commenced. After some time, petitioner was informed by the members of the respondent that
the digging traversed and penetrated a portion of the land belonging to the latter. The foundation of the chapel was
affected as a tunnel was dug directly under it to the damage and prejudice of the respondent.

On 18 April 1995, a Complaint [5] against petitioner and a certain Teofilo Oller, petitioner's engineer, was filed by
the respondent before the RTC, La Union, Branch 31, docketed therein as Civil Case No. A-1646. Petitioner and
Oller filed an Answer with Third-Party Complaint [6] impleading Yoro as third-party defendant.

Yoro filed an Answer to the Third-Party Complaint [7] dated 13 July 1995. An Amended and Supplemental
Complaint [8]dated 30 August 1995 was later filed by the respondent already naming Yoro as a party-defendant, to
which the petitioner and Oller filed an Answer. [9] Yoro filed his own Answer. [10]

After four years of hearing the case, the trial court promulgated its Decision [11] holding that the diggings were not
intended for the construction of sewerage and septic tanks but were made to construct tunnels to find hidden
treasure. [12] The trial court adjudged the petitioner and Yoro solidarily liable to the respondent on a 35%-65%
basis (the petitioner liable for the 35%), and absolving Oller from any liability, viz:

 
 WHEREFORE, this Court renders judgment in favor of plaintiff IGLESIA NI CRISTO and
against defendants JOHN KAMBIAK CHAN and DIOSCORO 'ELY YORO, JR. who are
respectively solidarily liable to PLAINTIFF on a 35%-65% basis, with JOHN CHAN taking the
35% tab, Ordering the two (2) aforesaid DEFENDANTS to pay PLAINTIFF the following
amounts:

1. SIX HUNDRED THIRTY-THREE THOUSAND FIVE HUNDRED NINETY-FIVE PESOS

AND FIFTY CENTAVOS (P633,595.50); representing ACTUAL DAMAGES;

2. FIVE HUNDRED THOUSAND PESOS (P500,000.00) representing MORAL DAMAGES;

3. TEN MILLION PESOS (P10,000,000.00) as EXEMPLARY DAMAGES;

4. FIFTY THOUSAND PESOS (P50,000.00) as plaintiff's attorney's fees; and

5. TWENTY THOUSAND PESOS (P20,000.00) as litigation expenses.

Defendant TEOFILO OLLER is absolved of any civil liability.

Any counterclaim filed against PLAINTIFF IGLESIA NI CRISTO is dismissed. [13]

Petitioner filed a Notice of Appeal [14] dated 18 August 1999. Yoro filed his own Notice of Appeal [15] dated 20
August 1999.

In a Resolution [16] dated 19 November 1999, the trial court disallowed Yoro's appeal for failure to pay the
appellate court docket and other lawful fees within the reglementary period for taking an appeal. [17] In view of
Yoro's failure to appropriately file an appeal, an order was issued for the issuance of a Writ of Execution as against
him only, the dispositive portion of which reads:

WHEREFORE, premises considered, this Court GRANTS the motion of plaintiff Iglesia ni Cristo
for the issuance of a Writ of Execution as against Dioscoro 'Ely Yoro, Jr. only.[18]

The petitioner's appeal to the Court of Appeals, on the other hand, was given due course. [19] On 25 September
2003, the Court of Appeals rendered its Decision denying the appeal. It affirmed the trial court but with
modifications. The decretal portion of the decision states:

WHEREFORE, the appeal is hereby DENIED. The assailed decision in Civil Case No. A-1646 is
hereby AFFIRMED with MODIFICATIONS as follows:
  

(a) The award of moral damages in the amount of P500,000.00 is hereby deleted.

(b) The award of exemplary damages is hereby reduced to P50,000.00.

(c) The award of attorney's fees and litigation expenses is hereby reduced to P30,000.00. [20]

Undeterred, petitioner instituted the instant case before this Court. On 15 December 2004, the instant petition was
given due course. [21]

ASSIGNMENT OF ERRORS

Petitioner assigns as errors the following:

THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE REGIONAL

TRIAL COURT (BRANCH 31, AGOO, LA UNION) PARTICULARLY IN SAYING THAT
THE BASIS OF THE SOLIDARY OBLIGATION OF PETITIONER AND YORO VIS--
VIS PLAINTIFF IS BASED NOT ON THE MOA BUT ON TORT

II

THE COURT OF APPEALS ERRED IN NOT GIVING EFFECT TO THE MOA WHICH
SHOULD EXONERATE THE PETITIONER FROM ALL LIABILITIES TO THE PRIVATE
RESPONDENT

III

THE COURT OF APPEALS ERRED IN NOT APPRECIATING THE THIRD-PARTY

COMPLAINT AS CROSS-CLAIM OF THE PETITIONER AGAINST YORO. [22]

ISSUE

 
Drawn from the above assignment of errors, the solitary issue that needs to be resolved is:

WHETHER OR NOT THE MEMORANDUM OF AGREEMENT ENTERED INTO BY THE

PETITIONER AND YORO HAS THE EFFECT OF MAKING THE
LATTER SOLELY RESPONSIBLE FOR DAMAGES TO THE RESPONDENT.

THE RULINGS OF THE COURT

Petitioner avers that no liability should attach to him by laying the blame solely on Yoro. He argues that the MOA
executed between him and Yoro is the law between them and must be given weight by the courts. Since nothing in
the MOA goes against the law, morals, good customs and public policy, it must govern to absolve him from any
liability. [23] Petitioner relies heavily in Paragraph 4 of the MOA, which is again reproduced hereunder:

4. Any damage within or outside the property of the FIRST PARTY incurred during the digging
shall be borne by the SECOND PARTY.

In answer to this, the respondent asserts that the MOA should not absolve petitioner from any liability. This written
contract, according to the respondent, clearly shows that the intention of the parties therein was to search for hidden
treasure. The alleged digging for a septic tank was just a cover-up of their real intention. [24] The aim of the
petitioner and Yoro to intrude and surreptitiously hunt for hidden treasure in the respondent's premises should make
both parties liable. [25]

At this juncture, it is vital to underscore the findings of the trial court and the Court of Appeals as to what was the
real intention of the petitioner and Yoro in undertaking the excavations. The findings of the trial court and the Court
of Appeals on this point are in complete unison. Petitioner and Yoro were in quest for hidden treasure [26] and,
undoubtedly, they were partners in this endeavor.

The Court of Appeals, in its Decision, held in part:

The basis of their solidarity is not the Memorandum of Agreement but the fact that they have
become joint tortfeasors. There is solidary liability only when the obligation expressly so states, or
when the law or the nature of the obligation requires solidarity. [27]

 
  

We find no compelling reason to disturb this particular conclusion reached by the Court of Appeals. The issue,
therefore, must be ruled in the negative.

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.

Based on this provision of law, the requisites of quasi-delict are the following:

(a) there must be an act or omission;

(b) such act or omission causes damage to another;

(c) such act or commission is caused by fault or negligence; and

(d) there is no pre-existing contractual relation between the parties.

All the requisites are attendant in the instant case. The tortious act was the excavation which caused damage to the
respondent because it was done surreptitiously within its premises and it may have affected the foundation of the
chapel. The excavation on respondent's premises was caused by fault. Finally, there was no pre-existing contractual
relation between the petitioner and Yoro on the one hand, and the respondent on the other.

For the damage caused to respondent, petitioner and Yoro are jointly liable as they are joint tortfeasors. Verily, the
responsibility of two or more persons who are liable for a quasi-delict is solidary. [28]

The heavy reliance of petitioner in paragraph 4 of the MOA cited earlier cannot steer him clear of any liability.

 
As a general rule, joint tortfeasors are all the persons who command, instigate, promote, encourage, advise,
countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their
benefit. [29]

Indubitably, petitioner and Yoro cooperated in committing the tort. They even had provisions in their MOA as to
how they would divide the treasure if any is found within or outside petitioner's property line. Thus, the MOA,
instead of exculpating petitioner from liability, is the very noose that insures that he be so declared as liable.

Besides, petitioner cannot claim that he did not know that the excavation traversed the respondent's property. In fact,
he had two (2) of his employees actually observe the diggings, his security guard and his engineer Teofilo Oller.[30]

Coming now to the matter on damages, the respondent questions the drastic reduction of the exemplary damages
awarded to it. It may be recalled that the trial court awarded exemplary damages in the amount of P10,000,000.00
but same was reduced by the Court of Appeals to P50,000.00.

Exemplary or corrective damages are imposed by way of example or correction for the public good. [31] In quasi-
delicts, exemplary damages may be granted if the defendant acted with gross negligence. [32] By gross negligence is
meant such entire want of care as to raise a presumption that the person in fault is conscious of the probable
consequences of carelessness, and is indifferent, or worse, to the danger of injury to person or property of
others. [33]

Surreptitiously digging under the respondent's chapel which may weaken the foundation thereof, thereby
endangering the lives and limbs of the people in worship, unquestionably amounts to gross negligence. Not to
mention the damage that may be caused to the structure itself. The respondent may indeed be awarded exemplary
damages.

For such tortious act done with gross negligence, the Court feels that the amount awarded by the Court of Appeals is
inadequate. The exemplary damages must correspondingly be increased to P100,000.00.

The modification made by this Court to the judgment of the Court of Appeals must operate as against Yoro, for as
fittingly held by the court a quo:

While it is settled that a party who did not appeal from the decision cannot seek any relief other
than what is provided in the judgment appealed from, nevertheless, when the rights and liability of
the defendants are so interwoven and dependent as to be inseparable, in which case, the
modification of the appealed judgment in favor of appellant operates as a modification to Gen.
 Yoro who did not appeal. In this case, the liabilities of Gen. Yoro and appellant being solidary, the
above exception applies.[34]

WHEREFORE, the Decision of the Court of Appeals dated 25 September 2003 is AFFIRMED with
MODIFICATION as to the award of exemplary damages, which is hereby increased to P100,000.00. Costs against
petitioner.

SO ORDERED.

24. G.R. No. 157917               August 29, 2012

SPOUSES TEODORO1 and NANETTE PERENA, Petitioners, 

vs.
SPOUSES TERESITA PHILIPPINE NICOLAS and L. ZARATE, NATIONAL RAILWAYS, and the
COURT OF APPEALS Respondents.

DECISION

BERSAMIN, J.:

The operator of a. school bus service is a common carrier in the eyes of the law. He is bound to observe
extraordinary diligence in the conduct of his business. He is presumed to be negligent when death occurs to a
passenger. His liability may include indemnity for loss of earning capacity even if the deceased passenger may only
be an unemployed high school student at the time of the accident.

The Case

By petition for review on certiorari, Spouses Teodoro and Nanette Perefia (Perefias) appeal the adverse decision
promulgated on November 13, 2002, by which the Court of Appeals (CA) affirmed with modification the decision
rendered on December 3, 1999 by the Regional Trial Court (RTC), Branch 260, in Parañaque City that had decreed
them jointly and severally liable with Philippine National Railways (PNR), their co-defendant, to Spouses Nicolas
and Teresita Zarate (Zarates) for the death of their 15-year old son, Aaron John L. Zarate (Aaron), then a high school
student of Don Bosco Technical Institute (Don Bosco).

Antecedents

The Pereñas were engaged in the business of transporting students from their respective residences in Parañaque
City to Don Bosco in Pasong Tamo, Makati City, and back. In their business, the Pereñas used a KIA Ceres Van
(van) with Plate No. PYA 896, which had the capacity to transport 14 students at a time, two of whom would be
seated in the front beside the driver, and the others in the rear, with six students on either side. They employed
Clemente Alfaro (Alfaro) as driver of the van.

In June 1996, the Zarates contracted the Pereñas to transport Aaron to and from Don Bosco. On August 22, 1996, as
on previous school days, the van picked Aaron up around 6:00 a.m. from the Zarates’ residence. Aaron took his
place on the left side of the van near the rear door. The van, with its air-conditioning unit turned on and the stereo
playing loudly, ultimately carried all the 14 student riders on their way to Don Bosco. Considering that the students
were due at Don Bosco by 7:15 a.m., and that they were already running late because of the heavy vehicular traffic
on the South Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by traversing the narrow
path underneath the Magallanes Interchange that was then commonly used by Makati-bound vehicles as a short cut
into Makati. At the time, the narrow path was marked by piles of construction materials and parked passenger
jeepneys, and the railroad crossing in the narrow path had no railroad warning signs, or watchmen, or other
responsible persons manning the crossing. In fact, the bamboo barandilla was up, leaving the railroad crossing open
to traversing motorists.

At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train), operated by Jhonny
Alano (Alano), was in the vicinity of the Magallanes Interchange travelling northbound. As the train neared the
railroad crossing, Alfaro drove the van eastward across the railroad tracks, closely tailing a large passenger bus. His
view of the oncoming train was blocked because he overtook the passenger bus on its left side. The train blew its
horn to warn motorists of its approach. When the train was about 50 meters away from the passenger bus and the
van, Alano applied the ordinary brakes of the train. He applied the emergency brakes only when he saw that a
collision was imminent. The passenger bus successfully crossed the railroad tracks, but the van driven by Alfaro did
not. The train hit the rear end of the van, and the impact threw nine of the 12 students in the rear, including Aaron,
out of the van. Aaron landed in the path of the train, which dragged his body and severed his head, instantaneously
killing him. Alano fled the scene on board the train, and did not wait for the police investigator to arrive.

Devastated by the early and unexpected death of Aaron, the Zarates commenced this action for damages against
Alfaro, the Pereñas, PNR and Alano. The Pereñas and PNR filed their respective answers, with cross-claims against
each other, but Alfaro could not be served with summons.

At the pre-trial, the parties stipulated on the facts and issues, viz:

A. FACTS:

(1) That spouses Zarate were the legitimate parents of Aaron John L. Zarate;

(2) Spouses Zarate engaged the services of spouses Pereña for the adequate and safe transportation
carriage of the former spouses' son from their residence in Parañaque to his school at the Don Bosco
Technical Institute in Makati City;

(3) During the effectivity of the contract of carriage and in the implementation thereof, Aaron, the minor
son of spouses Zarate died in connection with a vehicular/train collision which occurred while Aaron was
riding the contracted carrier Kia Ceres van of spouses Pereña, then driven and operated by the latter's
employee/authorized driver Clemente Alfaro, which van collided with the train of PNR, at around 6:45
A.M. of August 22, 1996, within the vicinity of the Magallanes Interchange in Makati City, Metro Manila,
Philippines;

(4) At the time of the vehicular/train collision, the subject site of the vehicular/train collision was a
railroad crossing used by motorists for crossing the railroad tracks;

(5) During the said time of the vehicular/train collision, there were no appropriate and safety warning signs
and railings at the site commonly used for railroad crossing;

(6) At the material time, countless number of Makati bound public utility and private vehicles used on a
daily basis the site of the collision as an alternative route and short-cut to Makati;

(7) The train driver or operator left the scene of the incident on board the commuter train involved without
waiting for the police investigator;

(8) The site commonly used for railroad crossing by motorists was not in fact intended by the railroad
operator for railroad crossing at the time of the vehicular collision;

(9) PNR received the demand letter of the spouses Zarate;

(10) PNR refused to acknowledge any liability for the vehicular/train collision;

(11) The eventual closure of the railroad crossing alleged by PNR was an internal arrangement between
the former and its project contractor; and

(12) The site of the vehicular/train collision was within the vicinity or less than 100 meters from the
Magallanes station of PNR.

B. ISSUES

(1) Whether or not defendant-driver of the van is, in the performance of his functions, liable for negligence
constituting the proximate cause of the vehicular collision, which resulted in the death of plaintiff spouses'
son;

(2) Whether or not the defendant spouses Pereña being the employer of defendant Alfaro are liable for any
negligence which may be attributed to defendant Alfaro;

(3) Whether or not defendant Philippine National Railways being the operator of the railroad system is
liable for negligence in failing to provide adequate safety warning signs and railings in the area commonly
used by motorists for railroad crossings, constituting the proximate cause of the vehicular collision which
resulted in the death of the plaintiff spouses' son;

(4) Whether or not defendant spouses Pereña are liable for breach of the contract of carriage with plaintiff-
spouses in failing to provide adequate and safe transportation for the latter's son;

(5) Whether or not defendants spouses are liable for actual, moral damages, exemplary damages, and
attorney's fees;
 (6) Whether or not defendants spouses Teodorico and Nanette Pereña observed the diligence of employers
and school bus operators;

(7) Whether or not defendant-spouses are civilly liable for the accidental death of Aaron John Zarate;

(8) Whether or not defendant PNR was grossly negligent in operating the commuter train involved in the
accident, in allowing or tolerating the motoring public to cross, and its failure to install safety devices or
equipment at the site of the accident for the protection of the public;

(9) Whether or not defendant PNR should be made to reimburse defendant spouses for any and whatever
amount the latter may be held answerable or which they may be ordered to pay in favor of plaintiffs by
reason of the action;

(10) Whether or not defendant PNR should pay plaintiffs directly and fully on the amounts claimed by the
latter in their Complaint by reason of its gross negligence;

(11) Whether or not defendant PNR is liable to defendants spouses for actual, moral and exemplary
damages and attorney's fees.2

The Zarates’ claim against the Pereñas was upon breach of the contract of carriage for the safe transport of Aaron;
but that against PNR was based on quasi-delict under Article 2176, Civil Code.

In their defense, the Pereñas adduced evidence to show that they had exercised the diligence of a good father of the
family in the selection and supervision of Alfaro, by making sure that Alfaro had been issued a driver’s license and
had not been involved in any vehicular accident prior to the collision; that their own son had taken the van daily; and
that Teodoro Pereña had sometimes accompanied Alfaro in the van’s trips transporting the students to school.

For its part, PNR tended to show that the proximate cause of the collision had been the reckless crossing of the van
whose driver had not first stopped, looked and listened; and that the narrow path traversed by the van had not been
intended to be a railroad crossing for motorists.

Ruling of the RTC

On December 3, 1999, the RTC rendered its decision,3 disposing:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the
defendants ordering them to jointly and severally pay the plaintiffs as follows:

(1) (for) the death of Aaron- Php50,000.00;

(2) Actual damages in the amount of Php100,000.00;

(3) For the loss of earning capacity- Php2,109,071.00;

(4) Moral damages in the amount of Php4,000,000.00;

(5) Exemplary damages in the amount of Php1,000,000.00;

(6) Attorney’s fees in the amount of Php200,000.00; and

(7) Cost of suit.

SO ORDERED.

On June 29, 2000, the RTC denied the Pereñas’ motion for reconsideration,4 reiterating that the cooperative gross
negligence of the Pereñas and PNR had caused the collision that led to the death of Aaron; and that the damages
awarded to the Zarates were not excessive, but based on the established circumstances.

The CA’s Ruling

Both the Pereñas and PNR appealed (C.A.-G.R. CV No. 68916).

PNR assigned the following errors, to wit:5

The Court a quo erred in:

1. In finding the defendant-appellant Philippine National Railways jointly and severally liable together with
defendant-appellants spouses Teodorico and Nanette Pereña and defendant-appellant Clemente Alfaro to
pay plaintiffs-appellees for the death of Aaron Zarate and damages.
 2. In giving full faith and merit to the oral testimonies of plaintiffs-appellees witnesses despite
overwhelming documentary evidence on record, supporting the case of defendants-appellants Philippine
National Railways.

The Pereñas ascribed the following errors to the RTC, namely:

The trial court erred in finding defendants-appellants jointly and severally liable for actual, moral and exemplary
damages and attorney’s fees with the other defendants.

The trial court erred in dismissing the cross-claim of the appellants Pereñas against the Philippine National Railways
and in not holding the latter and its train driver primarily responsible for the incident.

The trial court erred in awarding excessive damages and attorney’s fees.

The trial court erred in awarding damages in the form of deceased’s loss of earning capacity in the absence of
sufficient basis for such an award.

On November 13, 2002, the CA promulgated its decision, affirming the findings of the RTC, but limited the moral
damages to ₱ 2,500,000.00; and deleted the attorney’s fees because the RTC did not state the factual and legal bases,
to wit:6

WHEREFORE, premises considered, the assailed Decision of the Regional Trial Court, Branch 260 of Parañaque
City is AFFIRMED with the modification that the award of Actual Damages is reduced to ₱ 59,502.76; Moral
Damages is reduced to ₱ 2,500,000.00; and the award for Attorney’s Fees is Deleted.

SO ORDERED.

The CA upheld the award for the loss of Aaron’s earning capacity, taking cognizance of the ruling in Cariaga v.
Laguna Tayabas Bus Company and Manila Railroad Company,7 wherein the Court gave the heirs of Cariaga a sum
representing the loss of the deceased’s earning capacity despite Cariaga being only a medical student at the time of
the fatal incident. Applying the formula adopted in the American Expectancy Table of Mortality:–

2/3 x (80 - age at the time of death) = life expectancy

the CA determined the life expectancy of Aaron to be 39.3 years upon reckoning his life expectancy from age of 21
(the age when he would have graduated from college and started working for his own livelihood) instead of 15 years
(his age when he died). Considering that the nature of his work and his salary at the time of Aaron’s death were
unknown, it used the prevailing minimum wage of ₱ 280.00/day to compute Aaron’s gross annual salary to be ₱
110,716.65, inclusive of the thirteenth month pay. Multiplying this annual salary by Aaron’s life expectancy of 39.3
years, his gross income would aggregate to ₱ 4,351,164.30, from which his estimated expenses in the sum of ₱
2,189,664.30 was deducted to finally arrive at P 2,161,500.00 as net income. Due to Aaron’s computed net income
turning out to be higher than the amount claimed by the Zarates, only ₱ 2,109,071.00, the amount expressly prayed
for by them, was granted.

On April 4, 2003, the CA denied the Pereñas’ motion for reconsideration.8

Issues

In this appeal, the Pereñas list the following as the errors committed by the CA, to wit:

I. The lower court erred when it upheld the trial court’s decision holding the petitioners jointly and severally liable
to pay damages with Philippine National Railways and dismissing their cross-claim against the latter.

II. The lower court erred in affirming the trial court’s decision awarding damages for loss of earning capacity of a
minor who was only a high school student at the time of his death in the absence of sufficient basis for such an
award.

III. The lower court erred in not reducing further the amount of damages awarded, assuming petitioners are liable at
all.

Ruling

The petition has no merit.

1.
Were the Pereñas and PNR jointly
and severally liable for damages?

The Zarates brought this action for recovery of damages against both the Pereñas and the PNR, basing their claim
against the Pereñas on breach of contract of carriage and against the PNR on quasi-delict.
The RTC found the Pereñas and the PNR negligent. The CA affirmed the findings.

We concur with the CA.

To start with, the Pereñas’ defense was that they exercised the diligence of a good father of the family in the
selection and supervision of Alfaro, the van driver, by seeing to it that Alfaro had a driver’s license and that he had
not been involved in any vehicular accident prior to the fatal collision with the train; that they even had their own
son travel to and from school on a daily basis; and that Teodoro Pereña himself sometimes accompanied Alfaro in
transporting the passengers to and from school. The RTC gave scant consideration to such defense by regarding
such defense as inappropriate in an action for breach of contract of carriage.

We find no adequate cause to differ from the conclusions of the lower courts that the Pereñas operated as a common
carrier; and that their standard of care was extraordinary diligence, not the ordinary diligence of a good father of a
family.

Although in this jurisdiction the operator of a school bus service has been usually regarded as a private
carrier,9primarily because he only caters to some specific or privileged individuals, and his operation is neither open
to the indefinite public nor for public use, the exact nature of the operation of a school bus service has not been
finally settled. This is the occasion to lay the matter to rest.

A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to
another, gratuitously or for hire. The carrier is classified either as a private/special carrier or as a common/public
carrier.10 A private carrier is one who, without making the activity a vocation, or without holding himself or itself out
to the public as ready to act for all who may desire his or its services, undertakes, by special agreement in a
particular instance only, to transport goods or persons from one place to another either gratuitously or for hire. 11 The
provisions on ordinary contracts of the Civil Code govern the contract of private carriage.The diligence required of a
private carrier is only ordinary, that is, the diligence of a good father of the family. In contrast, a common carrier is a
person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or
both, by land, water, or air, for compensation, offering such services to the public. 12 Contracts of common carriage
are governed by the provisions on common carriers of the Civil Code, the Public Service Act, 13 and other special
laws relating to transportation. A common carrier is required to observe extraordinary diligence, and is presumed to
be at fault or to have acted negligently in case of the loss of the effects of passengers, or the death or injuries to
passengers.14

In relation to common carriers, the Court defined public use in the following terms in United States v. Tan
Piaco,15viz:

"Public use" is the same as "use by the public". The essential feature of the public use is not confined to privileged
individuals, but is open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public
character. In determining whether a use is public, we must look not only to the character of the business to be done,
but also to the proposed mode of doing it. If the use is merely optional with the owners, or the public benefit is
merely incidental, it is not a public use, authorizing the exercise of the jurisdiction of the public utility commission.
There must be, in general, a right which the law compels the owner to give to the general public. It is not enough
that the general prosperity of the public is promoted. Public use is not synonymous with public interest. The true
criterion by which to judge the character of the use is whether the public may enjoy it by right or only by
permission.

In De Guzman v. Court of Appeals,16 the Court noted that Article 1732 of the Civil Code avoided any distinction
between a person or an enterprise offering transportation on a regular or an isolated basis; and has not distinguished
a carrier offering his services to the general public, that is, the general community or population, from one offering
his services only to a narrow segment of the general population.

Nonetheless, the concept of a common carrier embodied in Article 1732 of the Civil Code coincides neatly with the
notion of public service under the Public Service Act, which supplements the law on common carriers found in the
Civil Code. Public service, according to Section 13, paragraph (b) of the Public Service Act, includes:

x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientèle, whether permanent or occasional, and done for the general business
purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or
passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of
any class, express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both, shipyard, marine repair shop, ice-refrigeration plant, canal, irrigation
system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless
communications systems, wire or wireless broadcasting stations and other similar public services. x x x. 17

Given the breadth of the aforequoted characterization of a common carrier, the Court has considered as common
carriers pipeline operators,18 custom brokers and warehousemen,19 and barge operators20 even if they had limited
clientèle.

As all the foregoing indicate, the true test for a common carrier is not the quantity or extent of the business actually
transacted, or the number and character of the conveyances used in the activity, but whether the undertaking is a part
of the activity engaged in by the carrier that he has held out to the general public as his business or occupation. If the
undertaking is a single transaction, not a part of the general business or occupation engaged in, as advertised and
held out to the general public, the individual or the entity rendering such service is a private, not a common, carrier.
The question must be determined by the character of the business actually carried on by the carrier, not by any secret
intention or mental reservation it may entertain or assert when charged with the duties and obligations that the law
imposes.21

Applying these considerations to the case before us, there is no question that the Pereñas as the operators of a school
bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b)
undertaking to carry passengers over established roads by the method by which the business was conducted; and (c)
transporting students for a fee. Despite catering to a limited clientèle, the Pereñas operated as a common carrier
because they held themselves out as a ready transportation indiscriminately to the students of a particular school
living within or near where they operated the service and for a fee.

The common carrier’s standard of care and vigilance as to the safety of the passengers is defined by law. Given the
nature of the business and for reasons of public policy, the common carrier is bound "to observe extraordinary
diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all
the circumstances of each case."22 Article 1755 of the Civil Code specifies that the common carrier should "carry the
passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances." To successfully fend off liability in an action upon the death or
injury to a passenger, the common carrier must prove his or its observance of that extraordinary diligence;
otherwise, the legal presumption that he or it was at fault or acted negligently would stand.23 No device, whether by
stipulation, posting of notices, statements on tickets, or otherwise, may dispense with or lessen the responsibility of
the common carrier as defined under Article 1755 of the Civil Code. 24

And, secondly, the Pereñas have not presented any compelling defense or reason by which the Court might now
reverse the CA’s findings on their liability. On the contrary, an examination of the records shows that the evidence
fully supported the findings of the CA.

As earlier stated, the Pereñas, acting as a common carrier, were already presumed to be negligent at the time of the
accident because death had occurred to their passenger.25 The presumption of negligence, being a presumption of
law, laid the burden of evidence on their shoulders to establish that they had not been negligent.26 It was the law no
less that required them to prove their observance of extraordinary diligence in seeing to the safe and secure carriage
of the passengers to their destination. Until they did so in a credible manner, they stood to be held legally
responsible for the death of Aaron and thus to be held liable for all the natural consequences of such death.

There is no question that the Pereñas did not overturn the presumption of their negligence by credible evidence.
Their defense of having observed the diligence of a good father of a family in the selection and supervision of their
driver was not legally sufficient. According to Article 1759 of the Civil Code, their liability as a common carrier did
not cease upon proof that they exercised all the diligence of a good father of a family in the selection and
supervision of their employee. This was the reason why the RTC treated this defense of the Pereñas as inappropriate
in this action for breach of contract of carriage.

The Pereñas were liable for the death of Aaron despite the fact that their driver might have acted beyond the scope
of his authority or even in violation of the orders of the common carrier. 27 In this connection, the records showed
their driver’s actual negligence. There was a showing, to begin with, that their driver traversed the railroad tracks at
a point at which the PNR did not permit motorists going into the Makati area to cross the railroad tracks. Although
that point had been used by motorists as a shortcut into the Makati area, that fact alone did not excuse their driver
into taking that route. On the other hand, with his familiarity with that shortcut, their driver was fully aware of the
risks to his passengers but he still disregarded the risks. Compounding his lack of care was that loud music was
playing inside the air-conditioned van at the time of the accident. The loudness most probably reduced his ability to
hear the warning horns of the oncoming train to allow him to correctly appreciate the lurking dangers on the railroad
tracks. Also, he sought to overtake a passenger bus on the left side as both vehicles traversed the railroad tracks. In
so doing, he lost his view of the train that was then coming from the opposite side of the passenger bus, leading him
to miscalculate his chances of beating the bus in their race, and of getting clear of the train. As a result, the bus
avoided a collision with the train but the van got slammed at its rear, causing the fatality. Lastly, he did not slow
down or go to a full stop before traversing the railroad tracks despite knowing that his slackening of speed and going
to a full stop were in observance of the right of way at railroad tracks as defined by the traffic laws and
regulations.28He thereby violated a specific traffic regulation on right of way, by virtue of which he was immediately
presumed to be negligent.29

The omissions of care on the part of the van driver constituted negligence, 30 which, according to Layugan v.
Intermediate Appellate Court,31 is "the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would not do,32 or as Judge Cooley defines it, ‘(t)he failure to observe for the protection
of the interests of another person, that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury.’"33

The test by which to determine the existence of negligence in a particular case has been aptly stated in the leading
case of Picart v. Smith,34 thuswise:

The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the
defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person
would have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts the
standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by reference to the personal judgment of the actor in the
situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given situation must of course be always
determined in the light of human experience and in view of the facts involved in the particular case. Abstract
speculation cannot here be of much value but this much can be profitably said: Reasonable men govern their
conduct by the circumstances which are before them or known to them. They are not, and are not supposed to be,
omniscient of the future. Hence they can be expected to take care only when there is something before them to
suggest or warn of danger. Could a prudent man, in the case under consideration, foresee harm as a result of the
course actually pursued? If so, it was the duty of the actor to take precautions to guard against that harm. Reasonable
foresight of harm, followed by the ignoring of the suggestion born of this prevision, is always necessary before
negligence can be held to exist. Stated in these terms, the proper criterion for determining the existence of
negligence in a given case is this: Conduct is said to be negligent when a prudent man in the position of the
tortfeasor would have foreseen that an effect harmful to another was sufficiently probable to warrant his foregoing
the conduct or guarding against its consequences. (Emphasis supplied)

Pursuant to the Picart v. Smith test of negligence, the Pereñas’ driver was entirely negligent when he traversed the
railroad tracks at a point not allowed for a motorist’s crossing despite being fully aware of the grave harm to be
thereby caused to his passengers; and when he disregarded the foresight of harm to his passengers by overtaking the
bus on the left side as to leave himself blind to the approach of the oncoming train that he knew was on the opposite
side of the bus.

Unrelenting, the Pereñas cite Phil. National Railways v. Intermediate Appellate Court,35 where the Court held the
PNR solely liable for the damages caused to a passenger bus and its passengers when its train hit the rear end of the
bus that was then traversing the railroad crossing. But the circumstances of that case and this one share no
similarities. In Philippine National Railways v. Intermediate Appellate Court, no evidence of contributory
negligence was adduced against the owner of the bus. Instead, it was the owner of the bus who proved the exercise
of extraordinary diligence by preponderant evidence. Also, the records are replete with the showing of negligence on
the part of both the Pereñas and the PNR. Another distinction is that the passenger bus in Philippine National
Railways v. Intermediate Appellate Court was traversing the dedicated railroad crossing when it was hit by the train,
but the Pereñas’ school van traversed the railroad tracks at a point not intended for that purpose.

At any rate, the lower courts correctly held both the Pereñas and the PNR "jointly and severally" liable for damages
arising from the death of Aaron. They had been impleaded in the same complaint as defendants against whom the
Zarates had the right to relief, whether jointly, severally, or in the alternative, in respect to or arising out of the
accident, and questions of fact and of law were common as to the Zarates.36 Although the basis of the right to relief
of the Zarates (i.e., breach of contract of carriage) against the Pereñas was distinct from the basis of the Zarates’
right to relief against the PNR (i.e., quasi-delict under Article 2176, Civil Code), they nonetheless could be held
jointly and severally liable by virtue of their respective negligence combining to cause the death of Aaron. As to the
PNR, the RTC rightly found the PNR also guilty of negligence despite the school van of the Pereñas traversing the
railroad tracks at a point not dedicated by the PNR as a railroad crossing for pedestrians and motorists, because the
PNR did not ensure the safety of others through the placing of crossbars, signal lights, warning signs, and other
permanent safety barriers to prevent vehicles or pedestrians from crossing there. The RTC observed that the fact that
a crossing guard had been assigned to man that point from 7 a.m. to 5 p.m. was a good indicium that the PNR was
aware of the risks to others as well as the need to control the vehicular and other traffic there. Verily, the Pereñas
and the PNR were joint tortfeasors.

2.
Was the indemnity for loss of
Aaron’s earning capacity proper?

The RTC awarded indemnity for loss of Aaron’s earning capacity. Although agreeing with the RTC on the liability,
the CA modified the amount. Both lower courts took into consideration that Aaron, while only a high school student,
had been enrolled in one of the reputable schools in the Philippines and that he had been a normal and able-bodied
child prior to his death. The basis for the computation of Aaron’s earning capacity was not what he would have
become or what he would have wanted to be if not for his untimely death, but the minimum wage in effect at the
time of his death. Moreover, the RTC’s computation of Aaron’s life expectancy rate was not reckoned from his age
of 15 years at the time of his death, but on 21 years, his age when he would have graduated from college.

We find the considerations taken into account by the lower courts to be reasonable and fully warranted.

Yet, the Pereñas submit that the indemnity for loss of earning capacity was speculative and
unfounded.1âwphi1 They cited People v. Teehankee, Jr.,37 where the Court deleted the indemnity for victim Jussi
Leino’s loss of earning capacity as a pilot for being speculative due to his having graduated from high school at the
International School in Manila only two years before the shooting, and was at the time of the shooting only enrolled
in the first semester at the Manila Aero Club to pursue his ambition to become a professional pilot. That meant,
according to the Court, that he was for all intents and purposes only a high school graduate.

We reject the Pereñas’ submission.

First of all, a careful perusal of the Teehankee, Jr. case shows that the situation there of Jussi Leino was not akin to
that of Aaron here. The CA and the RTC were not speculating that Aaron would be some highly-paid professional,
like a pilot (or, for that matter, an engineer, a physician, or a lawyer). Instead, the computation of Aaron’s earning
capacity was premised on him being a lowly minimum wage earner despite his being then enrolled at a prestigious
high school like Don Bosco in Makati, a fact that would have likely ensured his success in his later years in life and
at work.

And, secondly, the fact that Aaron was then without a history of earnings should not be taken against his parents and
in favor of the defendants whose negligence not only cost Aaron his life and his right to work and earn money, but
also deprived his parents of their right to his presence and his services as well. Our law itself states that the loss of
the earning capacity of the deceased shall be the liability of the guilty party in favor of the heirs of the deceased, and
shall in every case be assessed and awarded by the court "unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death." 38 Accordingly, we
emphatically hold in favor of the indemnification for Aaron’s loss of earning capacity despite him having been
unemployed, because compensation of this nature is awarded not for loss of time or earnings but for loss of the
deceased’s power or ability to earn money.39

This favorable treatment of the Zarates’ claim is not unprecedented. In Cariaga v. Laguna Tayabas Bus Company
and Manila Railroad Company,40 fourth-year medical student Edgardo Carriaga’s earning capacity, although he
survived the accident but his injuries rendered him permanently incapacitated, was computed to be that of the
physician that he dreamed to become. The Court considered his scholastic record sufficient to justify the assumption
that he could have finished the medical course and would have passed the medical board examinations in due time,
and that he could have possibly earned a modest income as a medical practitioner. Also, in People v. Sanchez, 41 the
Court opined that murder and rape victim Eileen Sarmienta and murder victim Allan Gomez could have easily
landed good-paying jobs had they graduated in due time, and that their jobs would probably pay them high monthly
salaries from ₱ 10,000.00 to ₱ 15,000.00 upon their graduation. Their earning capacities were computed at rates
higher than the minimum wage at the time of their deaths due to their being already senior agriculture students of the
University of the Philippines in Los Baños, the country’s leading educational institution in agriculture.

3.
Were the amounts of damages excessive?

The Pereñas plead for the reduction of the moral and exemplary damages awarded to the Zarates in the respective
amounts of ₱ 2,500,000.00 and ₱ 1,000,000.00 on the ground that such amounts were excessive.

The plea is unwarranted.

The moral damages of ₱ 2,500,000.00 were really just and reasonable under the established circumstances of this
case because they were intended by the law to assuage the Zarates’ deep mental anguish over their son’s unexpected
and violent death, and their moral shock over the senseless accident. That amount would not be too much,
considering that it would help the Zarates obtain the means, diversions or amusements that would alleviate their
suffering for the loss of their child. At any rate, reducing the amount as excessive might prove to be an injustice,
given the passage of a long time from when their mental anguish was inflicted on them on August 22, 1996.

Anent the ₱ 1,000,000.00 allowed as exemplary damages, we should not reduce the amount if only to render
effective the desired example for the public good. As a common carrier, the Pereñas needed to be vigorously
reminded to observe their duty to exercise extraordinary diligence to prevent a similarly senseless accident from
happening again. Only by an award of exemplary damages in that amount would suffice to instill in them and others
similarly situated like them the ever-present need for greater and constant vigilance in the conduct of a business
imbued with public interest.

WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision promulgated on November

13, 2002; and ORDER the petitioners to pay the costs of suit.

25. [G.R. No. 60506. August 6, 1992.]

FIGURACION VDA. DE MAGLANA, EDITHA M. CRUZ, ERLINDA M. MASESAR, LEONILA M.

MALLARI, GILDA ANTONIO and the minors LEAH, LOPE, JR., and ELVIRA, all surnamed MAGLANA,
herein represented by their mother, FIGURACION VDA. DE MAGLANA, Petitioners, v. HONORABLE
FRANCISCO Z. CONSOLACION, Presiding Judge of Davao City, Branch II, and AFISCO INSURANCE
CORPORATION, Respondents.

Jose B. Guyo, for Petitioners.

Angel E. Fernandez for Private Respondents.

SYLLABUS

1. COMMERCIAL LAW; INSURANCE; COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE;

THIRD PARTY LIABILITY; INSURER DIRECTLY LIABLE TO THE INJURED. —" [W]here an insurance
policy insures directly against liability, the insurer’s liability accrues immediately upon the occurrence of the injury
or event upon which the liability depends, and does not depend on the recovery of judgment by the injured party
against the insured. The underlying reason behind the third party liability (TPL) of the Compulsory Motor Vehicle
Liability Insurance is "to protect injured persons against the insolvency of the insured who causes such injury, and to
give such injured person a certain beneficial interest in the proceeds of the policy. . . ." (Shafer v. Judge, RTC of
Olongapo City, Br. 75, G.R. No. 78848, Nov. 14, 1988, 167 SCRA 386, 391)

2. ID.; ID.; ID.; ID.; LIABILITY OF INSURER DISTINCT FROM LIABILITY OF THE INSURED AGAINST
THIRD PARTIES. — We cannot agree that AFISCO is likewise solidarily liable with Destrajo. In Malayan
Insurance Co. v. Court of Appeals, (L-36413, September 26, 1988, 165 SCRA 536, 544), this Court had the
opportunity to resolve the issue as to the nature of the liability of the insurer and the insured vis-a-vis the third party
injured in an accident. We categorically ruled thus: "While it is true that where the insurance contract provides for
indemnity against liability to third persons, such third persons can directly sue the insurer, however, the direct
liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be
held solidarily liable with the insured and/or the other parties found at fault. The liability of the insurer is based on
contract; that of the insured is based on tort. . . . For if petitioner-insurer were solidarily liable with said two (2)
respondents by reason of the indemnity contract against third party liability — under which an insurer can be
directly sued by a third party — this will result in a violation of the principles underlying solidary obligation and
insurance contracts."cralaw virtua1aw library

3. ID.; ID.; INSURANCE CONTRACTS DISTINGUISHED FROM ORDINARY CONTRACTS. — The Court
distinguish the extent of the liability and manner of enforcing the same in ordinary contracts from that of insurance
contracts. While in solidary obligations, the creditor may enforce the entire obligation against one of the solidary
debtors, in an insurance contract, the insurer undertakes for a consideration to indemnify the insured against loss,
damage or liability arising from an unknown or contingent event. Thus, petitioner therein, which, under the
insurance contract is liable only up to P20,000.00, can not be made solidarily liable with the insured for the entire
obligation of P29,013.00 otherwise there would result "an evident breach of the concept of solidary obligation."

DECISION

ROMERO, J.:

The nature of the liability of an insurer sued together with the insured/operator-owner of a common carrier which
figured in an accident causing the death of a third person is sought to be defined in this petition for certiorari.

The facts as found by the trial court are as follows:jgc:chanrobles.com.ph

". . . . Lope Maglana was an employee of the Bureau of Customs whose work station was at Lasa, here in Davao
City. On December 20, 1978, early morning, Lope Maglana was on his way to his work station, driving a
motorcycle owned by the Bureau of Customs. At Km. 7, Lanang, he met an accident that resulted in his death. He
died on the spot. The PUJ jeep that bumped the deceased was driven by Pepito Into, operated and owned by
defendant Destrajo. From the investigation conducted by the traffic investigator, the PUJ jeep was overtaking
another passenger jeep that was going towards the city poblacion. While overtaking, the PUJ jeep of defendant
Destrajo running abreast with the overtaken jeep, bumped the motorcycle driven by the deceased who was going
towards the direction of Lasa, Davao City. The point of impact was on the lane of the motorcycle and the deceased
was thrown from the road and met his untimely death." 1 

Consequently, the heirs of Lope Maglana, Sr., here petitioners, filed an action for damages and attorney’s fees
against operator Patricio Destrajo and the Afisco Insurance Corporation (AFISCO for brevity) before the then Court
of First Instance of Davao, Branch II. An information for homicide thru reckless imprudence was also filed against
Pepito Into.chanrobles.com : virtual law library

During the pendency of the civil case, Into was sentenced to suffer an indeterminate penalty of one (1) year, eight
(8) months and one (1) day of prision correccional, as minimum, to four (4) years, nine (9) months and eleven (11)
days of prision correcional, as maximum, with all the accessory penalties provided by law, and to indemnify the
heirs of Lope Maglana, Sr. in the amount of twelve thousand pesos (P12,000.00) with subsidiary imprisonment in
case of insolvency, plus five thousand pesos (P5,000.00) in the concept of moral and exemplary damages with costs.
No appeal was interposed by the accused who later applied for probation. 2 

On December 14, 1981, the lower court rendered a decision finding that Destrajo had not exercised sufficient
diligence as the operator of the jeepney. The dispositive portion of the decision reads:jgc:chanrobles.com.ph

"WHEREFORE, the Court finds judgment in favor of the plaintiffs against defendant Destrajo, ordering him to pay
plaintiffs the sum of P28,000.00 for loss of income; to pay plaintiffs the sum of P12,000.00 which amount shall be
deducted in the event judgment in Criminal Case No. 3527-D against the driver, Accused Into, shall have been
enforced; to pay plaintiffs the sum of P5,901.70 representing funeral and burial expenses of the deceased; to pay
plaintiffs the sum of P5,000.00 as moral damages which shall be deducted in the event judgment (sic) in Criminal
Case No. 3527-D against the driver, Accused Into; to pay plaintiffs the sum of P3,000.00 as attorney’s fees and to
pay the costs of suit.

The defendant insurance company is ordered to reimburse defendant Destrajo whatever amounts the latter shall have
paid only up to the extent of its insurance coverage.

SO ORDERED." 3 

Petitioners filed a motion for the reconsideration of the second paragraph of the dispositive portion of the decision
contending that AFISCO should not merely be held secondarily liable because the Insurance Code provides that the
insurer’s liability is "direct and primary and/or jointly and severally with the operator of the vehicle, although only
up to the extent of the insurance coverage." 4 Hence, they argued that the P20,000.00 coverage of the insurance
policy issued by AFISCO, should have been awarded in their favor.

In its comment on the motion for reconsideration, AFISCO argued that since the Insurance Code does not expressly
provide for a solidary obligation, the presumption is that the obligation is joint.

In its Order of February 9, 1982, the lower court denied the motion for reconsideration ruling that since the
insurance contract "is in the nature of suretyship, then the liability of the insurer is secondary only up to the extent of
the insurance coverage." 5 

Petitioners filed a second motion for reconsideration reiterating that the liability of the insurer is direct, primary and
solidary with the jeepney operator because the petitioners became direct beneficiaries under the provision of the
policy which, in effect, is a stipulation pour autrui. 6 This motion was likewise denied for lack of merit.chanrobles
virtual lawlibrary

Hence, petitioners filed the instant petition for certiorari which, although it does not seek the reversal of the lower
court’s decision in its entirety, prays for the setting aside or modification of the second paragraph of the dispositive
portion of said decision. Petitioners reassert their position that the insurance company is directly and solidarily liable
with the negligent operator up to the extent of its insurance coverage.

We grant the petition.

The particular provision of the insurance policy on which petitioners base their claim is as
follows:jgc:chanrobles.com.ph

"SECTION 1 — LIABILITY TO THE PUBLIC

1. The Company will, subject to the Limits of Liability, pay all sums necessary to discharge liability of the insured
in respect of.

(a) death of or bodily injury to any THIRD PARTY

(b) . . . .

2. . . . .

3. In the event of the death of any person entitled to indemnity under this Policy, the Company will, in respect of the
liability incurred to such person indemnify his personal representatives in terms of, and subject to the terms and
conditions hereof." 7 

The above-quoted provision leads to no other conclusion but that AFISCO can be held directly liable by petitioners.
As this Court ruled in Shafer v. Judge, RTC of Olongapo City, Br. 75," [w]here an insurance policy insures directly
against liability, the insurer’s liability accrues immediately upon the occurrence of the injury or event upon which
the liability depends, and does not depend on the recovery of judgment by the injured party against the insured." 8
The underlying reason behind the third party liability (TPL) of the Compulsory Motor Vehicle Liability Insurance is
"to protect injured persons against the insolvency of the insured who causes such injury, and to give such injured
person a certain beneficial interest in the proceeds of the policy . . . ." 9 Since petitioners had received from AFISCO
the sum of P5,000.00 under the no-fault clause, AFISCO’s liability is now limited to P15,000.00.

However, we cannot agree that AFISCO is likewise solidarily liable with Destrajo. In Malayan Insurance Co., Inc. v.
Court of Appeals, 10 this Court had the opportunity to resolve the issue as to the nature of the liability of the insurer
and the insured vis-a-vis the third party injured in an accident. We categorically ruled thus:jgc:chanrobles.com.ph

"While it is true that where the insurance contract provides for indemnity against liability to third persons, such third
persons can directly sue the insurer, however, the direct liability of the insurer under indemnity contracts against
third party liability does not mean that the insurer can be held solidarily liable with the insured and/or the other
parties found at fault. The liability of the insurer is based on contract; that of the insured is based on tort.

In the case at bar, petitioner as insurer of Sio Choy, is liable to respondent Vallejos (the injured third party), but it
cannot, as incorrectly held by the trial court, be made `solidarily’ liable with the two principal tortfeasors, namely
respondents Sio Choy and San Leon Rice Mill, Inc. For if petitioner-insurer were solidarily liable with said two (2)
respondents by reason of the indemnity contract against third party liability — under which an insurer can be
directly sued by a third party — this will result in a violation of the principles underlying solidary obligation and
insurance contracts" (Emphasis supplied).chanrobles lawlibrary : rednad

The Court then proceeded to distinguish the extent of the liability and manner of enforcing the same in ordinary
contracts from that of insurance contracts. While in solidary obligations, the creditor may enforce the entire
obligation against one of the solidary debtors, in an insurance contract, the insurer undertakes for a consideration to
indemnify the insured against loss, damage or liability arising from an unknown or contingent event. 11 Thus,
petitioner therein, which, under the insurance contract is liable only up to P20,000.00, can not be made solidarily
liable with the insured for the entire obligation of P29,013.00 otherwise there would result "an evident breach of the
concept of solidary obligation."cralaw virtua1aw library

Similarly, petitioners herein cannot validly claim that AFISCO, whose liability under the insurance policy is also
P20,000.00, can be held solidarily liable with Destrajo for the total amount of P53,901.70 in accordance with the
decision of the lower court. Since under both the law and the insurance policy, AFISCO’s liability is only up to
P20,000.00, the second paragraph of the dispositive portion of the decision in question may have unwittingly sown
confusion among the petitioners and their counsel. What should have been clearly stressed as to leave no room for
doubt was the liability of AFISCO under the explicit terms of the insurance contract.

In fine, we conclude that the liability of AFISCO based on the insurance contract is direct, but not solidary with that
of Destrajo which is based on Article 2180 of the Civil Code. 12 As such, petitioners have the option either to claim
the P15,000 from AFISCO and the balance from Destrajo or enforce the entire judgment from Destrajo subject to
reimbursement from AFISCO to the extent of the insurance coverage.

While the petition seeks a definitive ruling only on the nature of AFISCO’s liability, we noticed that the lower court
erred in the computation of the probable loss of income. Using the formula: 2/3 of (80-56) x P12,000.00, it awarded
P28,000.00. 13 Upon recomputation, the correct amount is P192,000.00. Being a "plain error," we opt to correct the
same. 14 Furthermore, in accordance with prevailing jurisprudence, the death indemnity is hereby increased to
P50,000.00. 15 

WHEREFORE, premises considered, the present petition is hereby GRANTED. The award of P28,800.00
representing loss of income is INCREASED to P192,000.00 and the death indemnity of P12,000.00 to P50,000.00.

SO ORDERED.

26. G.R. No. 141538             March 23, 2004

HERMANA R. CEREZO, petitioner, 
vs.
DAVID TUAZON, respondent.

DECISION

CARPIO, J.:

The Case

This is a petition for review on certiorari1 to annul the Resolution2 dated 21 October 1999 of the Court of Appeals in
CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying the motion for reconsideration. The
Court of Appeals denied the petition for annulment of the Decision3 dated 30 May 1995 rendered by the Regional
Trial Court of Angeles City, Branch 56 ("trial court"), in Civil Case No. 7415. The trial court ordered petitioner
Hermana R. Cerezo ("Mrs. Cerezo") to pay respondent David Tuazon ("Tuazon") actual damages, loss of earnings,
moral damages, and costs of suit.

Antecedent Facts

Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number NYA 241 collided with a
tricycle bearing plate number TC RV 126 along Captain M. Palo Street, Sta. Ines, Mabalacat, Pampanga. On 1
October 1993, tricycle driver Tuazon filed a complaint for damages against Mrs. Cerezo, as owner of the bus line,
her husband Attorney Juan Cerezo ("Atty. Cerezo"), and bus driver Danilo A. Foronda ("Foronda"). The complaint
alleged that:

7. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-named defendant
[Foronda], being then the driver and person in charge of the Country Bus with plate number NYA 241, did
then and there willfully, unlawfully, and feloniously operate the said motor vehicle in a negligent, careless,
and imprudent manner without due regard to traffic rules and regulations, there being a "Slow Down" sign
near the scene of the incident, and without taking the necessary precaution to prevent loss of lives or
injuries, his negligence, carelessness and imprudence resulted to severe damage to the tricycle and serious
physical injuries to plaintiff thus making him unable to walk and becoming disabled, with his thumb and
middle finger on the left hand being cut[.]4
On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial court issued summons
against Atty. Cerezo and Mrs. Cerezo ("the Cerezo spouses") at the Makati address stated in the complaint.
However, the summons was returned unserved on 10 November 1993 as the Cerezo spouses no longer held office
nor resided in Makati. On 18 April 1994, the trial court issued alias summons against the Cerezo spouses at their
address in Barangay Sta. Maria, Camiling, Tarlac. The alias summons and a copy of the complaint were finally
served on 20 April 1994 at the office of Atty. Cerezo, who was then working as Tarlac Provincial Prosecutor. Atty.
Cerezo reacted angrily on learning of the service of summons upon his person. Atty. Cerezo allegedly told Sheriff
William Canlas: "Punyeta, ano ang gusto mong mangyari? Gusto mong hindi ka makalabas ng buhay dito?
Teritoryo ko ito. Wala ka sa teritoryo mo."5

The records show that the Cerezo spouses participated in the proceedings before the trial court. The Cerezo spouses
filed a comment with motion for bill of particulars dated 29 April 1994 and a reply to opposition to comment with
motion dated 13 June 1994.6 On 1 August 1994, the trial court issued an order directing the Cerezo spouses to file a
comment to the opposition to the bill of particulars. Atty. Elpidio B. Valera ("Atty. Valera") of Valera and Valera
Law Offices appeared on behalf of the Cerezo spouses. On 29 August 1994, Atty. Valera filed an urgent ex-parte
motion praying for the resolution of Tuazon’s motion to litigate as a pauper and for the issuance of new summons on
the Cerezo spouses to satisfy proper service in accordance with the Rules of Court.7

On 30 August 1994, the trial court issued an order resolving Tuazon’s motion to litigate as a pauper and the Cerezo
spouses’ urgent ex-parte motion. The order reads:

At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently jobless; that at the
time of the filing of this case, his son who is working in Malaysia helps him and sends him once in a while
P300.00 a month, and that he does not have any real property. Attached to the Motion to Litigate as Pauper
are his Affidavit that he is unemployed; a Certification by the Barangay Captain of his poblacion that his
income is not enough for his family’s subsistence; and a Certification by the Office of the Municipal
Assessor that he has no landholding in the Municipality of Mabalacat, Province of Pampanga.

The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled to prosecute his
complaint in this case as a pauper under existing rules.

On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-Parte Motion requiring
new summons to be served to the defendants. The Court is of the opinion that any infirmity in the service of
the summons to the defendant before plaintiff was allowed to prosecute his complaint in this case as a
pauper has been cured by this Order.

If within 15 days from receipt of this Order, the defendants do not question on appeal this Order of this
Court, the Court shall proceed to resolve the Motion for Bill of Particulars. 8

On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for reconsideration. The trial court
denied the motion for reconsideration.

On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file their answer within fifteen
days from receipt of the order. The Cerezo spouses did not file an answer. On 27 January 1995, Tuazon filed a
motion to declare the Cerezo spouses in default. On 6 February 1995, the trial court issued an order declaring the
Cerezo spouses in default and authorizing Tuazon to present his evidence. 9

On 30 May 1995, after considering Tuazon’s testimonial and documentary evidence, the trial court ruled in
Tuazon’s favor. The trial court made no pronouncement on Foronda’s liability because there was no service of
summons on him. The trial court did not hold Atty. Cerezo liable as Tuazon failed to show that Mrs. Cerezo’s
business benefited the family, pursuant to Article 121(3) of the Family Code. The trial court held Mrs. Cerezo solely
liable for the damages sustained by Tuazon arising from the negligence of Mrs. Cerezo’s employee, pursuant to
Article 2180 of the Civil Code. The dispositive portion of the trial court’s decision reads:

WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo to pay the plaintiff:

a) For Actual Damages - P69,485.35

1) Expenses for operation and medical Treatment
2) Cost of repair of the tricycle
b) For loss of earnings - 39,921.00
c) For moral damages - 43,300.00
d) And to pay the cost of the suit. - 20,000.00

The docket fees and other expenses in the filing of this suit shall be lien on whatever judgment may be
rendered in favor of the plaintiff.

SO ORDERED.10
Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs. Cerezo filed before the trial
court a petition for relief from judgment on the grounds of "fraud, mistake or excusable negligence." Testifying
before the trial court, both Mrs. Cerezo and Atty. Valera denied receipt of notices of hearings and of orders of the
court. Atty. Valera added that he received no notice before or during the 8 May 1995 elections, "when he was a
senatorial candidate for the KBL Party, and very busy, using his office and residence as Party National
Headquarters." Atty. Valera claimed that he was able to read the decision of the trial court only after Mrs. Cerezo
sent him a copy.11

Tuazon did not testify but presented documentary evidence to prove the participation of the Cerezo spouses in the
case. Tuazon presented the following exhibits:

Exhibit 1 - Sheriff’s return and summons;

Exhibit 1-A - Alias summons dated April 20, 1994;
Exhibit 2 - Comment with Motion;
Exhibit 3 - Minutes of the hearing held on August 1, 1994;
Exhibit 3-A - Signature of defendant’s counsel;
Exhibit 4 - Minutes of the hearing held on August 30, 1994;
Exhibit 4-A - Signature of the defendant’s counsel;
Exhibit 5 - Appearance and Urgent Ex-Parte Motion;
Exhibit 6 - Order dated November 14, 1994;
Exhibit 6-A - Postal certification dated January 13, 1995;
Exhibit 7 - Order dated February [illegible];
Exhibit 7-A - Court’s return slip addressed to Atty. Elpidio Valera;
Exhibit 7-B - Court’s return slip addressed to Spouses Juan and Hermana Cerezo;
Exhibit 8 - Decision dated May [30], 1995
Exhibit 8-A - Court’s return slip addressed to defendant Hermana Cerezo;
Exhibit 8-B - Court’s return slip addressed to defendant’s counsel, Atty. Elpidio Valera;
Exhibit 9 - Order dated September 21, 1995;
Exhibit 9-A - Second Page of Exhibit 9;
Exhibit 9-B - Third page of Exhibit 9;
Exhibit 9-C - Fourth page of Exhibit 9;
Exhibit 9-D - Court’s return slip addressed to Atty. Elpidio Valera;
and
Exhibit 9-E - Court’s return slip addressed to plaintiff’s counsel, Atty. Norman Dick de
Guzman.12

On 4 March 1998, the trial court issued an order13 denying the petition for relief from judgment. The trial court stated
that having received the decision on 25 June 1995, the Cerezo spouses should have filed a notice of appeal instead of
resorting to a petition for relief from judgment. The trial court refused to grant relief from judgment because the
Cerezo spouses could have availed of the remedy of appeal. Moreover, the Cerezo spouses not only failed to prove
fraud, accident, mistake or excusable negligence by conclusive evidence, they also failed to prove that they had a
good and substantial defense. The trial court noted that the Cerezo spouses failed to appeal because they relied on an
expected settlement of the case.

The Cerezo spouses subsequently filed before the Court of Appeals a petition for certiorari under Section 1 of Rule
65. The petition was docketed as CA-G.R. SP No. 48132.14 The petition questioned whether the trial court acquired
jurisdiction over the case considering there was no service of summons on Foronda, whom the Cerezo spouses
claimed was an indispensable party. In a resolution15 dated 21 January 1999, the Court of Appeals denied the petition
for certiorari and affirmed the trial court’s order denying the petition for relief from judgment. The Court of
Appeals declared that the Cerezo spouses’ failure to file an answer was due to their own negligence, considering that
they continued to participate in the proceedings without filing an answer. There was also nothing in the records to
show that the Cerezo spouses actually offered a reasonable settlement to Tuazon. The Court of Appeals also denied
Cerezo spouses’ motion for reconsideration for lack of merit.

The Cerezo spouses filed before this Court a petition for review on certiorari under Rule 45. Atty. Cerezo himself
signed the petition, docketed as G.R. No. 137593. On 13 April 1999, this Court rendered a resolution denying the
petition for review on certiorari for failure to attach an affidavit of service of copies of the petition to the Court of
Appeals and to the adverse parties. Even if the petition complied with this requirement, the Court would still have
denied the petition as the Cerezo spouses failed to show that the Court of Appeals committed a reversible error. The
Court’s resolution was entered in the Book of Entries and Judgments when it became final and executory on 28 June
1999.16

Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition for annulment of
judgment under Rule 47 with prayer for restraining order. Atty. Valera and Atty. Dionisio S. Daga ("Atty. Daga")
represented Mrs. Cerezo in the petition, docketed as CA-G.R. SP No. 53572.17 The petition prayed for the annulment
of the 30 May 1995 decision of the trial court and for the issuance of a writ of preliminary injunction enjoining
execution of the trial court’s decision pending resolution of the petition.
The Court of Appeals denied the petition for annulment of judgment in a resolution dated 21 October 1999. The
resolution reads in part:

In this case, records show that the petitioner previously filed with the lower court a Petition for Relief from
Judgment on the ground that they were wrongfully declared in default while waiting for an amicable
settlement of the complaint for damages. The court a quo correctly ruled that such petition is without merit.
The defendant spouses admit that during the initial hearing they appeared before the court and even
mentioned the need for an amicable settlement. Thus, the lower court acquired jurisdiction over the
defendant spouses.

Therefore, petitioner having availed of a petition for relief, the remedy of an annulment of judgment is no
longer available. The proper action for the petitioner is to appeal the order of the lower court denying the
petition for relief.

Wherefore, the instant petition could not be given due course and should accordingly be dismissed.

SO ORDERED.18

On 20 January 2000, the Court of Appeals denied the Cerezo spouses’ motion for reconsideration. 19 The Court of
Appeals stated:

A distinction should be made between a court’s jurisdiction over a person and its jurisdiction over the
subject matter of a case. The former is acquired by the proper service of summons or by the parties’
voluntary appearance; while the latter is conferred by law.

Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas] P[ambansa] 129
provides that Regional Trial Courts shall exercise exclusive original jurisdiction in all civil actions in which
the subject of the litigation is incapable of pecuniary estimation. Thus it was proper for the lower court to
decide the instant case for damages.

Unlike jurisdiction over the subject matter of a case which is absolute and conferred by law; any defects
[sic] in the acquisition of jurisdiction over a person (i.e., improper filing of civil complaint or improper
service of summons) may be waived by the voluntary appearance of parties.

The lower court admits the fact that no summons was served on defendant Foronda. Thus, jurisdiction over
the person of defendant Foronda was not acquired, for which reason he was not held liable in this case.
However, it has been proven that jurisdiction over the other defendants was validly acquired by the court a
quo.

The defendant spouses admit to having appeared in the initial hearings and in the hearing for plaintiff’s
motion to litigate as a pauper. They even mentioned conferences where attempts were made to reach an
amicable settlement with plaintiff. However, the possibility of amicable settlement is not a good and
substantial defense which will warrant the granting of said petition.

xxx

Assuming arguendo that private respondent failed to reserve his right to institute a separate action for
damages in the criminal action, the petitioner cannot now raise such issue and question the lower court’s
jurisdiction because petitioner and her husband have waived such right by voluntarily appearing in the civil
case for damages. Therefore, the findings and the decision of the lower court may bind them.

Records show that the petitioner previously filed with the lower court a Petition for Relief from Judgment
on the ground that they were wrongfully declared in default while waiting for an amicable settlement of the
complaint for damages. The court a quo correctly ruled that such petition is without merit, jurisdiction
having been acquired by the voluntary appearance of defendant spouses.

Once again, it bears stressing that having availed of a petition for relief, the remedy of annulment of
judgment is no longer available.

Based on the foregoing, the motion for reconsideration could not be given due course and is hereby
DENIED.

SO ORDERED.20

The Issues

On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone representing her, filed the present petition for
review on certiorari before this Court. Mrs. Cerezo claims that:
 1. In dismissing the Petition for Annulment of Judgment, the Court of Appeals assumes that the issues
raised in the petition for annulment is based on extrinsic fraud related to the denied petition for relief
notwithstanding that the grounds relied upon involves questions of lack of jurisdiction.

2. In dismissing the Petition for Annulment, the Court of Appeals disregarded the allegation that the lower
court[’s] findings of negligence against defendant-driver Danilo Foronda [whom] the lower court did not
summon is null and void for want of due process and consequently, such findings of negligence which is
[sic] null and void cannot become the basis of the lower court to adjudge petitioner-employer liable for
civil damages.

3. In dismissing the Petition for Annulment, the Court of Appeals ignored the allegation that defendant-
driver Danilo A. Foronda whose negligence is the main issue is an indispensable party whose presence is
compulsory but [whom] the lower court did not summon.

4. In dismissing the Petition for Annulment, the Court of Appeals ruled that assuming arguendo that private
respondent failed to reserve his right to institute a separate action for damages in the criminal action, the
petitioner cannot now raise such issue and question the lower court’s jurisdiction because petitioner [has]
waived such right by voluntarily appearing in the civil case for damages notwithstanding that lack of
jurisdiction cannot be waived.21

The Court’s Ruling

The petition has no merit. As the issues are interrelated, we shall discuss them jointly.

Remedies Available to a Party Declared in Default

An examination of the records of the entire proceedings shows that three lawyers filed and signed pleadings on
behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty. Cerezo. Despite their number, Mrs. Cerezo’s
counsels failed to avail of the proper remedies. It is either by sheer ignorance or by malicious manipulation of legal
technicalities that they have managed to delay the disposition of the present case, to the detriment of pauper litigant
Tuazon.

Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo spouses in default. Mrs. Cerezo
asserts that she only came to know of the default order on 25 June 1995, when she received a copy of the decision.
On 10 July 1995, Mrs. Cerezo filed before the trial court a petition for relief from judgment under Rule 38, alleging
"fraud, mistake, or excusable negligence" as grounds. On 4 March 1998, the trial court denied Mrs. Cerezo’s
petition for relief from judgment. The trial court stated that Mrs. Cerezo could have availed of appeal as a remedy
and that she failed to prove that the judgment was entered through fraud, accident, mistake, or excusable negligence.
Mrs. Cerezo then filed before the Court of Appeals a petition for certiorari under Section 1 of Rule 65 assailing the
denial of the petition for relief from judgment. On 21 January 1999, the Court of Appeals dismissed Mrs. Cerezo’s
petition. On 24 February 1999, the appellate court denied Mrs. Cerezo’s motion for reconsideration. On 11 March
1999, Mrs. Cerezo filed before this Court a petition for review on certiorari under Rule 45, questioning the denial of
the petition for relief from judgment. We denied the petition and our resolution became final and executory on 28
June 1999.

On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs. Cerezo filed before the
Court of Appeals a petition for annulment of the judgment of the trial court under Rule 47. Meanwhile, on 25
August 1999, the trial court issued over the objection of Mrs. Cerezo an order of execution of the judgment in Civil
Case No. 7415. On 21 October 1999, the Court of Appeals dismissed the petition for annulment of judgment. On 20
January 2000, the Court of Appeals denied Mrs. Cerezo’s motion for reconsideration. On 7 February 2000, Mrs.
Cerezo filed the present petition for review on certiorari under Rule 45 challenging the dismissal of her petition for
annulment of judgment.

Lina v. Court of Appeals22 enumerates the remedies available to a party declared in default:

a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion
under oath to set aside the order of default on the ground that his failure to answer was due to fraud,
accident, mistake or excusable negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec.
3(b), Rule 9]);

b) If the judgment has already been rendered when the defendant discovered the default, but before the
same has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule 37;

c) If the defendant discovered the default after the judgment has become final and executory, he may file
a petition for relief under Section 2 [now Section 1] of Rule 38; and

d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law,
even if no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41). (Emphasis
added)
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also available if the trial court
improperly declared a party in default, or even if the trial court properly declared a party in default, if grave abuse of
discretion attended such declaration.23

Mrs. Cerezo admitted that she received a copy of the trial court’s decision on 25 June 1995. Based on this
admission, Mrs. Cerezo had at least three remedies at her disposal: an appeal, a motion for new trial, or a petition
for certiorari.

Mrs. Cerezo could have appealed under Rule 4124 from the default judgment within 15 days from notice of the
judgment. She could have availed of the power of the Court of Appeals to try cases and conduct hearings, receive
evidence, and perform all acts necessary to resolve factual issues raised in cases falling within its appellate
jurisdiction.25

Mrs. Cerezo also had the option to file under Rule 3726 a motion for new trial within the period for taking an appeal.
If the trial court grants a new trial, the original judgment is vacated, and the action will stand for trial de novo. The
recorded evidence taken in the former trial, as far as the same is material and competent to establish the issues, shall
be used at the new trial without retaking the same.27

Mrs. Cerezo also had the alternative of filing under Rule 6528 a petition for certiorari assailing the order of default
within 60 days from notice of the judgment. An order of default is interlocutory, and an aggrieved party may file an
appropriate special civil action under Rule 65.29 In a petition for certiorari, the appellate court may declare void both
the order of default and the judgment of default.

Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the reglementary periods provided
under the Rules of Court. However, Mrs. Cerezo opted to file a petition for relief from judgment, which is
available only in exceptional cases. A petition for relief from judgment should be filed within the reglementary
period of 60 days from knowledge of judgment and six months from entry of judgment, pursuant to

Rule 38 of the Rules of Civil Procedure.30 Tuason v. Court of Appeals31 explained the nature of a petition for relief
from judgment:

When a party has another remedy available to him, which may either be a motion for new trial or appeal
from an adverse decision of the trial court, and he was not prevented by fraud, accident, mistake or
excusable negligence from filing such motion or taking such appeal, he cannot avail himself of this
petition. Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment
when the loss of the remedy at law was due to his own negligence; otherwise the petition for relief can be
used to revive the right to appeal which has been lost thru inexcusable negligence.

Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented Mrs. Cerezo from filing an
appeal, a motion for new trial or a petition for certiorari. It was error for her to avail of a petition for relief from
judgment.

After our resolution denying Mrs. Cerezo’s petition for relief became final and executory, Mrs. Cerezo, in her last
ditch attempt to evade liability, filed before the Court of Appeals a petition for annulment of the judgment of the
trial court. Annulment is available only on the grounds of extrinsic fraud and lack of jurisdiction. If based on
extrinsic fraud, a party must file the petition within four years from its discovery, and if based on lack of
jurisdiction, before laches or estoppel bars the petition. Extrinsic fraud is not a valid ground if such fraud was used
as a ground, or could have been used as a ground, in a motion for new trial or petition for relief from judgment.32

Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing the petition for annulment
of judgment. However, a party may avail of the remedy of annulment of judgment under Rule 47 only if the
ordinary remedies of new trial, appeal, petition for relief from judgment, or other appropriate remedies are no longer
available through no fault of the party.33 Mrs. Cerezo could have availed of a new trial or appeal but through her own
fault she erroneously availed of the remedy of a petition for relief, which was denied with finality. Thus, Mrs.
Cerezo may no longer avail of the remedy of annulment.

In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezo’s person. Mrs. Cerezo actively
participated in the proceedings before the trial court, submitting herself to the jurisdiction of the trial court. The
defense of lack of jurisdiction fails in light of her active participation in the trial court proceedings. Estoppel or
laches may also bar lack of jurisdiction as a ground for nullity especially if raised for the first time on appeal by a
party who participated in the proceedings before the trial court, as what happened in this case. 34

For these reasons, the present petition should be dismissed for utter lack of merit. The extraordinary action to annul
a final judgment is restricted to the grounds specified in the rules. The reason for the restriction is to prevent this
extraordinary action from being used by a losing party to make a complete farce of a duly promulgated decision that
has long become final and executory. There would be no end to litigation if parties who have unsuccessfully availed
of any of the appropriate remedies or lost them through their fault could still bring an action for annulment of
judgment.35 Nevertheless, we shall discuss the issues raised in the present petition to clear any doubt about the
correctness of the decision of the trial court.

Mrs. Cerezo’s Liability and the Trial Court’s Acquisition of Jurisdiction

Mrs. Cerezo contends that the basis of the present petition for annulment is lack of jurisdiction. Mrs. Cerezo asserts
that the trial court could not validly render judgment since it failed to acquire jurisdiction over Foronda. Mrs. Cerezo
points out that there was no service of summons on Foronda. Moreover, Tuazon failed to reserve his right to institute
a separate civil action for damages in the criminal action. Such contention betrays a faulty foundation. Mrs. Cerezo’s
contention proceeds from the point of view of criminal law and not of civil law, while the basis of the present action
of Tuazon is quasi-delict under the Civil Code, not delict under the Revised Penal Code.

The same negligent act may produce civil liability arising from a delict under Article 103 of the Revised Penal
Code, or may give rise to an action for a quasi-delict under Article 2180 of the Civil Code. An aggrieved party may
choose between the two remedies. An action based on a quasi-delict may proceed independently from the criminal
action.36There is, however, a distinction between civil liability arising from a delict and civil liability arising from a
quasi-delict. The choice of remedy, whether to sue for a delict or a quasi-delict, affects the procedural and
jurisdictional issues of the action.37

Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon alleged that Mrs.
Cerezo, "without exercising due care and diligence in the supervision and management of her employees and buses,"
hired Foronda as her driver. Tuazon became disabled because of Foronda’s "recklessness, gross negligence and
imprudence," aggravated by Mrs. Cerezo’s "lack of due care and diligence in the selection and supervision of her
employees, particularly Foronda."38

The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article 2180 states in part:

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

Contrary to Mrs. Cerezo’s assertion, Foronda is not an indispensable party to the case. An indispensable party is one
whose interest is affected by the court’s action in the litigation, and without whom no final resolution of the case is
possible.39 However, Mrs. Cerezo’s liability as an employer in an action for a quasi-delict is not only solidary, it is
also primary and direct. Foronda is not an indispensable party to the final resolution of Tuazon’s action for damages
against Mrs. Cerezo.

The responsibility of two or more persons who are liable for a quasi-delict is solidary. 40 Where there is a solidary
obligation on the part of debtors, as in this case, each debtor is liable for the entire obligation. Hence, each debtor is
liable to pay for the entire obligation in full. There is no merger or renunciation of rights, but only mutual
representation.41 Where the obligation of the parties is solidary, either of the parties is indispensable, and the other is
not even a necessary party because complete relief is available from either.42 Therefore, jurisdiction over Foronda is
not even necessary as Tuazon may collect damages from Mrs. Cerezo alone.

Moreover, an employer’s liability based on a quasi-delict is primary and direct, while the employer’s liability based
on a delict is merely subsidiary.43 The words "primary and direct," as contrasted with "subsidiary," refer to the
remedy provided by law for enforcing the obligation rather than to the character and limits of the
obligation.44 Although liability under Article 2180 originates from the negligent act of the employee, the aggrieved
party may sue the employer directly. When an employee causes damage, the law presumes that the employer has
himself committed an act of negligence in not preventing or avoiding the damage. This is the fault that the law
condemns. While the employer is civilly liable in a subsidiary capacity for the employee’s criminal negligence, the
employer is also civilly liable directly and separately for his own civil negligence in failing to exercise due diligence
in selecting and supervising his employee. The idea that the employer’s liability is solely subsidiary is wrong. 45

The action can be brought directly against the person responsible (for another), without including the
author of the act. The action against the principal is accessory in the sense that it implies the existence of a
prejudicial act committed by the employee, but it is not subsidiary in the sense that it can not be instituted
till after the judgment against the author of the act or at least, that it is subsidiary to the principal action; the
action for responsibility (of the employer) is in itself a principal action.46

Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda. The trial court’s acquisition
of jurisdiction over Mrs. Cerezo is sufficient to dispose of the present case on the merits.

In contrast, an action based on a delict seeks to enforce the subsidiary liability of the employer for the criminal
negligence of the employee as provided in Article 103 of the Revised Penal Code. To hold the employer liable in a
subsidiary capacity under a delict, the aggrieved party must initiate a criminal action where the employee’s delict
and corresponding primary liability are established.47 If the present action proceeds from a delict, then the trial
court’s jurisdiction over Foronda is necessary. However, the present action is clearly for the quasi-delict of Mrs.
Cerezo and not for the delict of Foronda.

The Cerezo spouses’ contention that summons be served anew on them is untenable in light of their participation in
the trial court proceedings. To uphold the Cerezo spouses’ contention would make a fetish of a
technicality.48Moreover, any irregularity in the service of summons that might have vitiated the trial court’s
jurisdiction over the persons of the Cerezo spouses was deemed waived when the Cerezo spouses filed a petition for
relief from judgment.49

We hold that the trial court had jurisdiction and was competent to decide the case in favor of Tuazon and against
Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs. Cerezo’s contention, Foronda is not an indispensable
party to the present case. It is not even necessary for Tuazon to reserve the filing of a separate civil action because
he opted to file a civil action for damages against Mrs. Cerezo who is primarily and directly liable for her own civil
negligence. The words of Justice Jorge Bocobo in Barredo v. Garcia still hold true today as much as it did in 1942:

x x x [T]o hold that there is only one way to make defendant’s liability effective, and that is, to sue the
driver and exhaust his (the latter’s) property first, would be tantamount to compelling the plaintiff to follow
a devious and cumbersome method of obtaining relief. True, there is such a remedy under our laws, but
there is also a more expeditious way, which is based on the primary and direct responsibility of the
defendant under article [2180] of the Civil Code. Our view of the law is more likely to facilitate remedy for
civil wrongs, because the procedure indicated by the defendant is wasteful and productive of delay, it being
a matter of common knowledge that professional drivers of taxis and other similar public conveyances do
not have sufficient means with which to pay damages. Why, then, should the plaintiff be required in all
cases to go through this roundabout, unnecessary, and probably useless procedure? In construing the laws,
courts have endeavored to shorten and facilitate the pathways of right and justice.50

Interest at the rate of 6% per annum is due on the amount of damages adjudged by the trial court.51 The 6% per
annum interest shall commence from 30 May 1995, the date of the decision of the trial court. Upon finality of this
decision, interest at 12% per annum, in lieu of 6% per annum, is due on the amount of damages adjudged by the trial
court until full payment.

WHEREFORE, we DENY the instant petition for review. The Resolution dated 21 October 1999 of the Court of
Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying the motion for
reconsideration, is AFFIRMED with the MODIFICATION that the amount due shall earn legal interest at 6% per
annum computed from 30 May 1995, the date of the trial court’s decision. Upon finality of this decision, the amount
due shall earn interest at 12% per annum, in lieu of 6% per annum, until full payment.

SO ORDERED.

27. G.R. No. 83589             March 13, 1991

RAMON FAROLAN as ACTING COMMISSIONER OF CUSTOMS, and GUILLERMO PARAYNO, as

CHIEF OF CUSTOM INTELLIGENCE and INVESTIGATION DIVISION, petitioners, 
vs.
SOLMAC MARKETING CORPORATION and COURT OF APPEALS, respondents.

Dakila F. Castro & Associates for private respondent.

SARMIENTO, J.:

This petition for review on certiorari, instituted by the Solicitor General on behalf of the public officers-petitioners,
seek the nullification and setting aside of the Resolution1 dated May 25, 1988 of the Court of Appeals in CA-G.R.
No. SP-10509, entitled "Solmac Marketing Corporation vs. Ramon Farolan, Acting Commissioner of Customs, and
Guillermo Parayno, Chief of Customs Intelligence and Investigation Division," which adjudged these public officers
to pay solidarily and in their private personal capacities respondent Solmac Marketing Corporation temperate
damages in the sum of P100,000.00, exemplary damages in the sum of P50,000.00, and P25,000.00, as attorney's
fees and expenses of litigation. This challenged resolution of the respondent court modified its decision 2 of July 27,
1987 by reducing into halves the original awards of P100,000.00 and P50,000.00 for exemplary damages and
attorney's fees and litigation expenses, respectively, keeping intact the original grant of P100,000.00 in the concept
of temperate damages. (Strangely, the first name of petitioner Farolan stated in the assailed resolution, as well as in
the decision, of the respondent court is "Damian" when it should be "Ramon", his correct given name. Strictly
speaking, petitioner Ramon Farolan could not be held liable under these decision and resolution for he is not the one
adjudged to pay the huge damages but a different person. Nonetheless, that is of no moment now considering the
disposition of this ponencia.)

The relevant facts, as culled from the records, are as follows:

At the time of the commission of the acts complained of by the private respondent, which was the subject of the
latter's petition for mandamus and injunction filed with the Regional Trial Court (RTC) of Manila in Civil Case No.
84-23537, petitioner Ramon Farolan was then the Acting Commissioner of Customs while petitioner Guillermo
Parayno was then the Acting Chief, Customs Intelligence and Investigation Division. They were thus sued in their
official capacities as officers in the government as clearly indicated in the title of the case in the lower courts and
even here in this Court. Nevertheless, they were both held personally liable for the awarded damages "(s)ince the
detention of the goods by the defendants (petitioners herein) was irregular and devoid of legal basis, hence, not done
in the regular performance of official duty . . . ."3

However, as adverted to at the outset, in the dispositive portion of the challenged resolution, the one held personally
liable is a "Damian Farolan" and not the petitioner, Ramon Farolan. Also as earlier mentioned, we will ignore that
gross error.

Private respondent Solmac Marketing Corporation is a corporation organized and existing under the laws of the
Philippines. It was the assignee, transferee, and owner of an importation of Clojus Recycling Plastic Products of
202,204 kilograms of what is technically known as polypropylene film, valued at US$69,250.05.
Polypropylene is a substance resembling polyethelyne which is one of a group of partially crystalline lightweight
thermoplastics used chiefly in making fibers, films, and molded and extruded products.4

Without defect, polypropylene film is sold at a much higher price as prime quality film. Once rejected as defective
due to blemishes, discoloration, defective winding, holes, etc., polypropylene film is sold at a relatively cheap price
without guarantee or return, and the buyer takes the risk as to whether he can recover an average 30% to 50% usable
matter.5 This latter kind of polypropylene is known as OPP film waste/scrap and this is what respondent SOLMAC
claimed the Clojus shipment to be.

The subject importation, consisting of seventeen (17) containers, arrived in December, 1981. Upon application for
entry, the Bureau of Customs asked respondent SOLMAC for its authority from any government agency to import
the goods described in the bill of lading. Respondent SOLMAC presented a Board of Investment (BOI) authority for
polypropylene film scrap. However, upon examination of the shipment by the National Institute of Science and
Technology (NIST), it turned out that the fibers of the importation were oriented in such a way that the materials
were stronger than OPP film scrap.6 In other words, the Clojus shipment was not OPP film scrap, as declared by the
assignee respondent SOLMAC to the Bureau of Customs and BOI Governor Lilia R. Bautista, but oriented
polypropylene the importation of which is restricted, if not prohibited, under Letter of Instructions (LOI) No. 658-B.
Specifically, Sections 1 and 2 of LOI No. 658-B provide that:

x x x           x x x          x x x

1. The importation of cellophane shall be allowed only for quantities and types of cellophane that cannot be
produced by Philippine Cellophane Film Corporation. The Board of Investments shall issue guidelines
regulating such importations.

2. The Collector of Customs shall see to the apprehension of all illegal importations of cellophane and
oriented polypropylene (OPP) and the dumping of imported stock lots of cellophane and OPP.

x x x           x x x          x x x

Considering that the shipment was different from what had been authorized by the BOI and by law, petitioners
Parayno and Farolan withheld the release of the subject importation.

On June 7, 1982, petitioner Parayno, then Chief of Customs Intelligence and Investigation Division, wrote the BOI
asking for the latter's advice on whether or no t the subject importation may be released 7 A series of exchange of
correspondence between the BOI and the Bureau of Customs, on one hand, and between the late Dakila Castro,
counsel for the private respondent, and the BOI and the Bureau of Customs, on the other, ensued, to wit:

x x x           x x x          x x x

4. In a letter dated August 17, 1982, the BOI agreed that the subject imports may be released but that holes
may be drilled on them by the Bureau of Customs prior to their release.

5. On January 20, 1983, (the late) Atty. Dakila Castro, (then) counsel of private respondent wrote to
petitioner Commissioner Farolan of Customs asking for the release of the importation. The importation was
not released, however, on the ground that holes had to be drilled on them first.

6. Atty. Dakila Castro then wrote a letter dated October 6, 1983, to BOI Governor Hermenigildo Zayco
stressing the reasons why the subject importation should be released without drilling of holes.

7. On November 8, 1983, BOI Governor H. Zayco wrote a letter to the Bureau of Customs stating that the
subject goods may be released without drilling of holes inasmuch as the goods arrived prior to the
endorsement on August 17, 1982 to the drilling of holes on all importations of waste/scrap films.

8. On February 1, 1984, petitioner Commissioner Farolan wrote the BOI requesting for definite guidelines
regarding the disposition of importations of Oriented Polypropylene (OPP) and Polypropylene (PP) then
being held at the Bureau of Customs.

9. On March 12, 1984, Minister Roberto Ongpin of Trade, the BOI Chairman, wrote his reply to petitioner
Farolan . . . .8 (This reply of Minister Ongpin is copied in full infra.)

On March 26, 1984, respondent Solmac filed the action for mandamus and injunction with the RTC as above
mentioned. It prayed for the unconditional release of the subject importation. It also prayed for actual damages,
exemplary damages, and attorney's fees. As prayed for, the trial court issued a writ of preliminary injunction.

After hearing on the merits, the RTC rendered a decision on February 5, 1985, the dispositive portion of which reads
as follows:

Premises considered, judgment is hereby rendered ordering defendants to release the subject importation
immediately without drilling of holes, subject only to the normal requirements of the customs processing
 for such release to be done with utmost dispatch as time is of the essence; and the preliminary injunction
hereto issued is hereby made permanent until actual physical release of the merchandise and without
pronouncement as to costs.

SO ORDERED.9

From the decision of the trial court, Solmac, the plaintiff below and the private respondent herein, appealed to the
Court of Appeals only insofar as to the denial of the award of damages is concerned. On the other hand, the
petitioners did not appeal from this decision. They did not see any need to appeal because as far as they were
concerned, they had already complied with their duty. They had already ordered the release of the importation
"without drilling of holes," as in fact it was so released, in compliance with the advice to effect such immediate
release contained in a letter of BOI dated October 9, 1984, to Commissioner Farolan. Thus, to stress, even before the
RTC rendered its decision on February 5, 1984, the Clojus shipment of OPP was released 10 to the private respondent
in its capacity as assignee of the same. Be that it may, the private respondent filed its appeal demanding that the
petitioners be held, in their personal and private capacities, liable for damages despite the finding of lack of bad faith
on the part of the public officers.

After due proceeding, the Court of Appeals rendered a decision11 on July 27, 1987, the dispositive portion which
reads as follows:

WHEREFORE, the appealed judgment is modified by ordering the defendants Ramon Farolan and
Guillermo Parayno solidarity, in their personal capacity, to pay the plaintiff temperate damages in the sum
of P100,000, exemplary damages in the sum of P100,000 and P50,000 as attorney's fees and expenses of
litigation. Costs against the defendants.

SO ORDERED.

On August 14, 1987, the petitioners filed a motion for reconsideration of the decision of the Court of Appeals.

On May 25, 1988, the Court of Appeals issued its resolution modifying the award of damages, to wit: temperate
damages in the sum of P100,000,00, exemplary damages in the sum of P50,000.00, and P25,000.00 as attorney's
fees and expenses of litigation. The respondent court explained the reduction of the awards for exemplary damages
and attorney's fees and expenses of litigation in this wise:

3. In our decision of July 27, 1987, We awarded to plaintiff-appellant Pl00,000 as temperate damages,
Pl00,000.00 as exemplary damages, and P50,000.00 as attorney's fees and expenses of litigation. Under
Art. 2233 of the Civil Code, recovery of exemplary damages is not a matter of right but depends upon the
discretion of the court. Under Article 2208 of the Civil Code, attorney's fees and expenses of litigation must
always be reasonable. In view of these provisions of the law, and since the award of temperate damages is
only P100,000.00, the amount of exemplary damages may not be at par as temperate damages. An award of
P50,000.00, as exemplary damages may already serve the purpose, i.e., as an example for the public good.
Likewise, the attorney's fees and expenses of litigation have to be reduced to 25% of the amount of
temperate damages, or P25,000.00, if the same have to be reasonable. The reduction in the amount of
exemplary damages, and attorney's fees and expenses of litigation would be in accord with justice and
fairness.12

The petitioners now come to this Court, again by the Solicitor General, assigning the following errors allegedly
committed by the respondent court:

The Court of Appeals erred in disregarding the finding of the trial court that the defense of good faith of
petitioners (defendants) cannot be discredited.

II

The Court of Appeals erred in adjudging petitioners liable to pay temperate damages, exemplary damages,
attorney's fees and expenses of litigation.13

These two issues boil down to a single question, i.e., whether or not the petitioners acted in good faith in not
immediately releasing the questioned importation, or, simply, can they be held liable, in their personal and private
capacities, for damages to the private respondent.

We rule for the petitioners.

The respondent court committed a reversible error in overruling the trial court's finding that:

. . . with reference to the claim of plaintiff to damages, actual and exemplary, and attorney's fees, the Court
finds it difficult to discredit or disregard totally the defendants' defense of good faith premised on the
excuse that they were all the time awaiting clarification of the Board of Investments on the matter. 14
We hold that this finding of the trial court is correct for good faith is always presumed and it is upon him who
alleges the contrary that the burden of proof lies.15 In Abando v. Lozada,16 we defined good faith as "refer[ring] to a
state of the mind which is manifested by the acts of the individual concerned. It consists of the honest intention to
abstain from taking an unconscionable and unscrupulous advantage of another. It is the opposite of fraud, and its
absence should be established by convincing evidence."

We had reviewed the evidence on record carefully and we did not see any clear and convincing proof showing the
alleged bad faith of the petitioners. On the contrary, the record is replete with evidence bolstering the petitioners'
claim of good faith. First, there was the report of the National Institute of Science and Technology (NIST) dated
January 25, 1982 that, contrary to what the respondent claimed, the subject importation was not OPP film scraps but
oriented polypropylene, a plastic product of stronger material, whose importation to the Philippines was restricted, if
not prohibited, under LOI
658-B.17 It was on the strength of this finding that the petitioners withheld the release of the subject importation for
being contrary to law. Second, the petitioners testified that, on many occasions, the Bureau of Customs sought the
advice of the BOI on whether the subject importation might be released. 18 Third, petitioner Parayno also testified
during the trial that up to that time (of the trial) there was no clear-cut policy on the part of the BOI regarding the
entry into the Philippines of oriented polypropylene (OPP), as the letters of BOI Governors Tordesillas and Zayco of
November 8, 1983 and September 24, 1982, respectively, ordering the release of the subject importation did not
clarify the BOI policy on the matter. He then testified on the letter of the BOI Chairman Roberto Ongpin dated
March 12, 1984, which states in full:

Thank you for your letter of 1 February 1984, on the subject of various importations of Oriented
Polypropylene (OPP) and Polypropylene (PP) withheld by Customs and the confusion over the disposition
of such imports.

I have discussed the matter with Vice-Chairman Tordesillas and Governor Zayco of the Board of
Investments and the following is their explanation:

1. On 22 June 1982, the BOI ruled that importation of OPP/PP film scraps intended for recycling or
repelletizing did not fall within the purview of LOI 658-B.

2. On 17 August l982, the BOI agreed that holes could be drilled on subject film imports to prevent their
use for other purposes.

3. For importations authorized prior to 22 June 1982, the drilling of holes should depend on purpose for
which the importations was approved by the BOI that is, for direct packaging use or for
recycling/repelletizing into raw material. The exemption from drilling of holes on Solmac Marketing's
importation under Certificates of Authority issued on 1 April 1982 and 5 May 1982 and on Clojus'
importation authorized in 1982 were endorsed by the BOI on the premise that these were not intended for
recycling/repelletizing.

Should your office have any doubts as to the authorized intended use of any imported lots of OPP/PP film
scraps that you have confiscated, we have no objection to the drilling of holes to ensure that these are
indeed recycled.

I have requested Governor Zayco to contact your office in order to offer any further assistance which you
may require.19

It can be seen from all the foregoing that even the highest officers (Chairman Ongpin, Vice-Chairman Tordesillas,
and Governor Zayco) of the BOI themselves were not in agreement as to what proper course to take on the subject
of the various importations of Oriented Polypropylene (OPP) and Polypropylene (PP) withheld by the Bureau of
Customs. The conflicting recommendations of the BOI on this score prompted the petitioners to seek final
clarification from the former with regard to its policy on these importations. This resulted in the inevitable delay in
the release of the Clojus shipment, one of the several of such importations. The confusion over the disposition of this
particular importation obviates bad faith. Thus the trial court's finding that the petitioners acted in good faith in not
immediately releasing the Clojus shipment pending a definitive policy of the BOI on this matter is correct. It is
supported by substantial evidence on record, independent of the presumption of good faith, which as stated earlier,
was not successfully rebutted.

When a public officer takes his oath of office, he binds himself to perform the duties of his office faithfully and to
use reasonable skill and diligence, and to act primarily for the benefit of the public. Thus, in the discharge of his
duties, he is to use that prudence, caution, and attention which careful men use in the management of their affairs. In
the case at bar, prudence dictated that petitioners first obtain from the BOI the latter's definite guidelines regarding
the disposition of the various importations of oriented polypropylene (OPP) and polypropylene (PP) then being
withheld at the Bureau of Customs. These cellophane/film products were competing with locally manufactured
polypropylene and oriented polypropylene as raw materials which were then already sufficient to meet local
demands, hence, their importation was restricted, if not prohibited under LOI 658-B. Consequently, the petitioners
can not be said to have acted in bad faith in not immediately releasing the import goods without first obtaining the
necessary clarificatory guidelines from the BOI. As public officers, the petitioners had the duty to see to it that the
law they were tasked to implement, i.e., LOI 658-B, was faithfully complied with.
But even granting that the petitioners committed a mistake in withholding the release of the subject importation
because indeed it was composed of OPP film scraps,20 contrary to the evidence submitted by the National Institute of
Science and Technology that the same was pure oriented OPP, nonetheless, it is the duty of the Court to see to it that
public officers are not hampered in the performance of their duties or in making decisions for fear of personal
liability for damages due to honest mistake.1âwphi1 Whatever damage they may have caused as a result of such an
erroneous interpretation, if any at all, is in the nature of a damnum absque injuria. Mistakes concededly committed
by public officers are not actionable absent any clear showing that they were motivated by malice or gross
negligence amounting to bad faith.21 After all, "even under the law of public officers, the acts of the petitioners are
protected by the presumption of good faith.22

In the same vein, the presumption, disputable though it may be, that an official duty has been regularly
performed23applies in favor of the petitioners. Omnia praesumuntur rite et solemniter esse acta. (All things are
presumed to be correctly and solemnly done.) It was private respondent's burden to overcome this juris
tantum presumption. We are not persuaded that it has been able to do so.

WHEREFORE, the petition is hereby GRANTED, the assailed Resolution of the respondent court, in CA-G.R. SP
No. 10509, dated May 25, 1988, is SET ASIDE and ANNULLED. No costs.

SO ORDERED.

28. [G.R. No. 116100. February 9, 1996.]

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and MARIA CRISTINA
SANTOS, Petitioners, v. COURT OF APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL
TRIAL COURT OF PASIG, METRO MANILA, BRANCH 181, Respondents.

Maria T . M. Leviste, for Petitioners.

Roberto B. Arca for Private Respondents.

SYLLABUS

1. REMEDIAL LAW; ACTIONS; APPEALS; PARTY WHO DID NOT APPEAL FROM THE DECISION OF
THE COURT A QUO GRANTING PRIVATE RESPONDENT THE RIGHT OF WAY, BARRED FROM
RAISING THE SAME. — With respect to the first issue, herein petitioners are already barred from raising the
same. Petitioners did not appeal from the decision of the court a quo granting private respondents the right of way,
hence they are presumed to be satisfied with the adjudication therein. With the finality of the judgment of the trial
court as to petitioners, the issue of propriety of the grant of right of way has already been laid to rest. For failure to
appeal the decision of the trial court to the Court of Appeals, petitioners cannot obtain any affirmative relief other
than those granted in the decision of the trial court. That decision of the court below has become final as against
them and can no longer be reviewed, much less reversed, by this Court. The rule in this jurisdiction is that whenever
an appeal is taken in a civil case, an appellee who has not himself appealed may not obtain from the appellate court
any affirmative relief other than what was granted in the decision of the lower court. The appellee can only advance
an argument that he may deem necessary to defeat the appellant’s claim or to uphold the decision that is being
disputed, and he can assign errors in his brief if such is required to strengthen the views expressed by the court a
quo. These assigned errors, in turn, may be considered by the appellate court solely to maintain the appealed
decision on other grounds, but not for the purpose of reversing or modifying the judgment in the appellee’s favor
and giving him other affirmative reliefs.

2. CIVIL LAW DAMAGES; RECOVERY OF DAMAGES; REQUISITES. — The mere fact that the plaintiff
suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be
both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom.
Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely
part of the remedy allowed for the injury caused by a breach or wrong. In order that a plaintiff may maintain an
action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty
which the defendant owned to the plaintiff — a concurrence of injury to the plaintiff and legal responsibility by the
person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in
contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that
breach before damages may be awarded, it is not sufficient to state that there should be tort liability merely because
the plaintiff suffered some pain and suffering. In other words, in order that the law will give redress for an act
causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria. If, as may
happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without
sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded
as damnum absque injuria.

3. ID.; ID.; DAMAGES DISTINGUISHED FROM INJURY. — There is a material distinction between damages
and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the
injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be
damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty.
These situations are often called damnum absque injuries.
4. ID.; ID.; DAMAGE OR LOSS WHICH VIOLATE NO LEGAL DUTY TO OTHER PERSON, BORNE BY
THE INJURED PERSON. — Many accidents occur and many injuries are inflicted by acts or omissions which
cause damage or loss to another but which violate no legal duty to such other person, and consequently create no
cause of action in his favor. In such cases, the consequences must be borne by the injured person alone. The law
affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong.

5. ID.; PRINCIPLE OF ABUSE OF RIGHTS; REQUISITES. — Contrary to the claim of private respondents,
petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse of
right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites concur: (1)
The defendant should have acted in a manner that is contrary to morals, good customs or public policy, (2) The acts
should be willful; and (3) There was damage or injury to the plaintiff.

6. ID.; ID.; RIGHT NOT VIOLATED WHERE OWNERS ENCLOSE AND FENCE THEIR PROPERTY. — The
act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not
contrary to morals, good customs or public policy. The law recognizes in the owner the right to enjoy and dispose of
a thing, without other limitations than those established by law. It is within the right of petitioners, as owners, to
enclose and fence their property. Article 430 of the Civil Code provides that" (e)very owner may enclose or fence
his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to
servitudes constituted thereon."cralaw virtua1aw library

7. REMEDIAL LAW; ACTIONS; NO CAUSE OF ACTION FOR LAWFUL ACTS DONE BY PERSON ON HIS
PROPERTY. — At the time by of the construction of the fence, the lot was not subject to any servitudes. It was only
that decision which gave private respondents the right to use the said passageway after payment of the compensation
and imposed a corresponding duty on petitioners not to interfere in the exercise of said right. Hence, prior to said
decision, petitioners had an absolute right over their property and their act of fencing and enclosing the same was an
act which they may lawfully perform in the employment and exercise of said right. To repeat, whatever injury or
damage may have been sustained by private respondents by reason of the rightful use of the said land by petitioners
is damnum absque injuria. A person has a right to the natural use and enjoyment of his own property, according to
his pleasure, for all the purposes to which such property is usually applied. As a general rule, therefore, there is no
cause of action for acts done by one person upon his own property in a lawful and proper manner, although such acts
incidentally cause damage or an unavoidable loss to another, as such damage or loss is damnum absque injuria.
When the owner of property makes use thereof in the general and ordinary manner in which the property is used,
such as fencing or enclosing the same as in this case, nobody can complain of having been injured, because the
inconvenience arising from said use can be considered as a mere consequence of community life. The proper
exercise of a lawful right cannot constitute a legal wrong for which an action will lie, although the act may result in
damage to another, for no legal right has been invaded. One may use any lawful means to accomplish a lawful
purpose and though the means adopted may cause damage to another, no cause of action arises in the latter’s favor.
Any injury or damage occasioned thereby is damnum absque injuria. The courts can give no redress for hardship to
an individual resulting from action reasonably calculated to achieve a lawful end by lawful means.

DECISION

REGALADO, J.:

This petition for review on certiorari assails the decision of respondent Court of Appeals in CA-G.R. CV No.
29115, promulgated on November 10, 1993, which affirmed with modification the decision of the trial court, as well
as its resolution dated July 8, 1994 denying petitioner’s motion for reconsideration. 1

On August 26, 1982, Civil Case No. 47466 for the grant of an easement of right of way was filed by Pacifico
Mabasa against Cristino Custodio, Brigida R. Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina C.
Santos before the Regional Trial Court of Pasig and assigned to Branch 22 thereof. 2 

The generative facts of the case, as synthesized by the trial court and adopted by the Court of Appeals, are as
follows:chanrob1es virtual 1aw library

Perusing the record, this Court finds that the original plaintiff Pacifico Mabasa died during the pendency of this case
and was substituted by Ofelia Mabasa, his surviving spouse [and children].

The plaintiff owns a parcel of land with a two-door apartment erected thereon situated at Interior P. Burgos St.,
Palingon, Tipas, Tagig, Metro Manila. The plaintiff was able to acquire said property through a contract of sale with
spouses Mamerto Rayos and Teodora Quintero as vendors last September 1981. Said property may be described to
be surrounded by other immovables pertaining to defendants herein. Taking P. Burgos Street as the point of
reference, on the left side, going to plaintiff’s property, the row of houses will be as follows: That of defendants
Cristino and Brigido Custodio, then that of Lito and Maria Cristina Santos and then that of Ofelia Mabasa. On the
right side (is) that of defendant Rosalina Morato and then a Septic Tank (Exhibit "D"). As an access to P. Burgos
Street from plaintiff’s property, there are two possible passageways. The first passageway is approximately one
meter wide and is about 20 meters distan(t) from Mabasa’s residence to P. Burgos Street. Such path is passing in
between the previously mentioned row of houses. The second passageway is about 3 meters in width and length
from plaintiff Mabasa’s residence to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less
than a meter wide path through the septic tank and with 5-6 meters in length has to be traversed.
When said property was purchased by Mabasa, there were tenants occupying the premises and who were
acknowledged by plaintiff Mabasa as tenants. However, sometime in February, 1982. one of said tenants vacated the
apartment and when plaintiff Mabasa went to see the premises. he saw that there had been built an adobe fence in
the first passageway making it narrower in width. Said adobe fence was first constructed by defendants Santoses
along their property which is also along the first passageway. Defendant Morato constructed her adobe fence and
even extended said fence in such a way that the entire passageway was enclosed (Exhibit "I-Santoses and Custodios,
Exh. "D" for plaintiff, Exhs. "1-C", "1-D" and "1-E") And it was then that the remaining tenants of said apartment
vacated the area. Defendant Ma. Cristina Santos testified that she constructed said fence because there was an
incident when her daughter was dragged by a bicycle pedalled by a son of one of the tenants in said apartment along
the first passageway. She also mentioned some other inconveniences of having (at) the front of her house a pathway
such as when some of the tenants were drunk and would bang their doors and windows. Some of their footwear
were even lost. . . . 3 (Underscoring in original text; corrections in parentheses supplied)

On February 27, 1990, a decision was rendered by the trial court, with this dispositive part:chanrob1es virtual 1aw
library

Accordingly, judgment is hereby rendered as follows:chanrob1es virtual 1aw library

1) Ordering defendants Custodios and Santoses to give plaintiff permanent access — ingress and egress, to the
public street;

2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight Thousand Pesos (P8,000) as
indemnity for the permanent use of the passageway.

The parties to shoulder their respective litigation expenses. 4 

Not satisfied therewith, therein plaintiff represented by his heirs, herein private respondents, went to the Court of
Appeals raising the sole issue of whether or not the lower court erred in not awarding damages in their favor. On
November 10, 1993, as earlier stated, the Court of Appeals rendered its decision affirming the judgment of the trial
court with modification, the decretal portion of which disposes as follows:chanrob1es virtual 1aw library

WHEREFORE, the appealed decision of the lower court is hereby AFFIRMED WITH MODIFICATION only
insofar as the herein grant of damages to plaintiffs-appellants. The Court hereby orders defendants-appellees to pay
plaintiffs-appellants the sum of Sixty Five Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand
(P30,000) Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary Damages. The rest of the
appealed decision is affirmed to all respects. 5 

On July 8, 1994, the Court of Appeals denied petitioner’s motion for reconsideration. 6 Petitioners then took the
present recourse to us, raising two issues, namely, whether or not the grant of right of way to herein private
respondents is proper, and whether or not the award of damages is in order.

With respect to the first issue, herein petitioners are already barred from raising the same. Petitioners did not appeal
from the decision of the court a quo granting private respondents the right of way, hence they are presumed to be
satisfied with the adjudication therein. With the finality of the judgment of the trial court as to petitioners, the issue
of propriety of the grant of right of way has already been laid to rest.

For failure to appeal the decision of the trial court to the Court of Appeals, petitioners cannot obtain any affirmative
relief other than those granted in the decision of the trial court. That decision of the court below has become final as
against them and can no longer be reviewed, much less reversed, by this Court. The rule in this jurisdiction is that
whenever an appeal is taken in a civil case, an appellee who has not himself appealed may not obtain from the
appellate court any affirmative relief other than what was granted in the decision of the lower court. The appellee
can only advance any argument that he may deem necessary to defeat the appellant’s claim or to uphold the decision
that is being disputed, and he can assign errors in his brief if such is required to strengthen the views expressed by
the court a quo. These assigned errors, in turn, may be considered by the appellate court solely to maintain the
appealed decision on other grounds, but not for the purpose of reversing or modifying the judgment in the appellee’s
favor and giving him other affirmative reliefs. 7 

However, with respect to the second issue, we agree with petitioners that the Court of Appeals erred in awarding
damages in favor of private respondents. The award of damages has no substantial legal basis. A reading of the
decision of the Court of Appeals will show that the award of damages was based solely on the fact that the original
plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when the tenants vacated the leased
premises by reason of the closure of the passageway.

However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant
the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and
damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a
cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong. 8 

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is
the loss, hurt, or harm which results from the injury, and damages are the recompense or compensation awarded for
the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not
the result of a violation of a legal duty. These situations are often called damnum absque injuria. 9 

In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such
injuries resulted from a breach of duty which the defendant owed to the plaintiff — a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. 10 The underlying basis for the award of tort damages is
the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty
and the imposition of liability for that breach before damages may be awarded, it is not sufficient to state that there
should be tort liability merely because the plaintiff suffered some pain and suffering. 11 

Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another
but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In such
cases, the consequences must be borne by the injured person alone. The law affords. no remedy for damages
resulting from an act which does not amount to a legal injury or wrong. 12 

In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful,
but wrongful. There must be damnum et injuria. 13 If, as may happen in many cases, a person sustains actual
damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission
which the law does not deem an injury, the damage is regarded as damnum absque injuria. 14 

In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private
respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the principle
of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites
concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy,
(2) The acts should be willful; and (3) There was damage or injury to the plaintiff. 15 The act of petitioners in
constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals, good
customs or public policy. The law recognizes in the owner the right to enjoy and dispose of a thing, without other
limitations than those established by law. 16 It is within the right of petitioners, as owners, to enclose and fence their
property. Article 430 of the Civil Code provides that" (e)very owner may enclose or fence his land or tenements by
means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted
thereon."cralaw virtua1aw library

At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of way
existing in favor of private respondents, either by law or by contract. The fact that private respondents had no
existing right over the said passageway is confirmed by the very decision of the trial court granting a compulsory
right of way in their favor after payment of just compensation. It was only that decision which gave private
respondents the right to use the said passageway after payment of the compensation and imposed a corresponding
duty on petitioners not to interfere in the exercise of said right.

Hence, prior to said decision, petitioners had an absolute right over their property and their act of fencing and
enclosing the same was an act which they may lawfully perform in the employment and exercise of said right. To
repeat, whatever injury or damage may have been sustained by private respondents by reason of the rightful use of
the said land by petitioners is damnum absque injuria. 17 

A person has a right to the natural use and enjoyment of his own property, according to his pleasure, for all the
purposes to which such property is usually applied. As a general rule, therefore, there is no cause of action for acts
done by one person upon his own property in a lawful and proper manner, although such acts incidentally cause
damage or an unavoidable loss to another, as such damage or loss is damnum absque injuria. 18 When the owner of
property makes use thereof in the general and ordinary manner in which the property is used, such as fencing or
enclosing the same as in this case, nobody can complain of having been injured, because the inconvenience arising
from said use can be considered as a mere consequence of community life. 19 

The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie, 20 although the act
may result in damage to another, for no legal right has been invaded. 21 One may use any lawful means to
accomplish a lawful purpose and though the means adopted may cause damage to another, no cause of action arises
in the latter’s favor. Any injury or damage occasioned thereby is damnum absque Injuria. The courts can give no
redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful end by lawful
means. 22 

WHEREFORE, under the compulsion of the foregoing premises, the appealed decision of respondent Court of
Appeals is hereby REVERSED and SET ASIDE and the judgment of the trial court is correspondingly
REINSTATED.

SO ORDERED.