Doctrine of Comparative Negligence

It is the legal principle under which the contribution of concerned parties to the damage or injury
resulting from an accident is computed on the basis of their individual degree of negligence. If two parties are
equally negligent, no compensation is paid. Also called comparative negligence doctrine.

Doctrine of Assumption Risk

Assumption of risk is a defense in the law of torts, which bars or reduces a plaintiff's right to recovery
against a negligent tortfeasor if the defendant can demonstrate that the plaintiff voluntarily and knowingly
assumed the risks at issue inherent to the dangerous activity in which he was participating at the time of his
or her injury.
The assumption of risk doctrine states that in instances where a person knows of the risk of an activity, that
person accepts the risk when voluntarily engaging in the pursuit. Therefore, that person cannot sue for
damages based upon injuries which arise from the given activity. In other words, if you know that doing
something poses a risk of harm and then you sustain an injury while engaging in it, you may not later sue for
damages as a result of your injuries.

Example: Imagine that you are hired as a shark handler. Part of your job involves submerging into large
aquariums and retrieving sharks. One day, while retrieving a tiger shark, you are bit in the leg and experience
significant injury. Thereafter, you file a case against your employer based on negligence, or their failure to
ensure your safety in a reasonable manner. However, the employer claims you were aware of the risk of a
shark bite. The employer further argues that these risks are generally associated with the position, and it is
not fair for you to sue. The employer's argument is an example of the assumption of risk doctrine.

Doctrine of Res Ipsa Loquitur

Latin for "the thing speaks for itself," a doctrine of law that one is presumed to be negligent if he/she/it had
exclusive control of whatever caused the injury even though there is no specific evidence of an act of
negligence, and without negligence the accident would not have happened. Lawyers often shorten the doctrine
to "res ips," and find it a handy shorthand for a complex doctrine.

Examples:

a) a load of bricks on the roof of a building being constructed by Highrise Construction Co. falls and injures
Paul Pedestrian below, and Highrise is liable for Pedestrian's injury even though no one saw the load fall.

b) While under anesthetic, Isabel Patient's nerve in her arm is damaged although it was not part of the
surgical procedure, and she is unaware of which of a dozen medical people in the room caused the damage.
Under res ipsa loquitur all those connected with the operation are liable for negligence.

Doctrine of Last Clear Chance

Under the last clear chance doctrine, a defendant may still be liable for the plaintiff’s injuries if they had a
chance to avoid injuring the plaintiff. The doctrine is also called a defense to a defense.

Doctrine of damnum absque injuria

In law, damnum absque injuria (Latin for "loss without injury") is a phrase expressing the principle of tort law
in which some person (natural or legal) causes damage or loss to another, but does not injure them. For
example, opening a burger stand near someone else's may cause them to lose customers, but this in itself
does not give rise to a cause of action for the original burger stand owner.

1
ROBERTO C. SICAM and AGENCIA de R.C.
SICAM, INC. vs. SPOUSES JORGE
G.R. No. 159617, August 8, 2007
FACTS: On different dates, Lulu Jorge pawned
several pieces of jewelry with Agencia de R. C.
Sicam located in Parañaque to secure a loan.
On October 19, 1987, two armed men entered the
pawnshop and took away whatever cash and
jewelry were found inside the pawnshop vault.
On the same date, Sicam sent Lulu a letter
informing her of the loss of her jewelry due to the
robbery incident in the pawnshop. Respondent
Lulu then wroteback expressing disbelief, then
requested Sicam to prepare the pawned jewelry for
withdrawal on November 6, but Sicam failed to
return the jewelry.
Lulu, joined by her husband Cesar, filed a
complaint against Sicam with the RTC of Makati
seeking indemnification for the loss of pawned
jewelry and payment of AD, MD and ED as well as
AF.
The RTC rendered its Decision dismissing
respondents’ complaint as well as petitioners’
counterclaim. Respondents appealed the RTC
Decision to the CA which reversed the RTC,
ordering the appellees to pay appellants the actual
value of the lost jewelry and AF. Petitioners MR
denied, hence the instant petition for review on
Certiorari.
ISSUE: are the petitioners liable for the loss of the
pawned articles in their possession? (Petitioners
insist that they are not liable since robbery is a
fortuitous event and they are not negligent at all.)
HELD: The Decision of the CA is AFFIRMED.
YES
Article 1174 of the Civil Code provides:
Art. 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.
2
Fortuitous events by definition are extraordinary
events not foreseeable or avoidable. It is therefore,
not enough that the event should not have been
foreseen or anticipated, as is commonly believed
but it must be one impossible to foresee or to
avoid. The mere difficulty to foresee the happening
is not impossibility to foresee the same.
To constitute a fortuitous event, the following
elements must concur:
(a) the cause of the unforeseen and unexpected
occurrence or of the failure of the debtor to comply
with obligations must be independent of human
will;
(b) it must be impossible to foresee the event that
constitutes the caso fortuito or, if it can be
foreseen, it must be impossible to avoid;
(c) the occurrence must be such as to render it
impossible for the debtor to fulfill obligations in a
normal manner; and,
(d) the obligor must be free from any participation
in the aggravation of the injury or loss.
The burden of proving that the loss was due to a
fortuitous event rests on him who invokes it. And,
in order for a fortuitous event to exempt one from
liability, it is necessary that one has committed no
negligence or misconduct that may have
occasioned the loss.
Sicam had testified that there was a security guard
in their pawnshop at the time of the robbery. He
likewise testified that when he started the
pawnshop business in 1983, he thought of opening
a vault with the nearby bank for the purpose of
safekeeping the valuables but was discouraged by
the Central Bank since pawned articles should
only be stored in a vault inside the pawnshop. The
very measures which petitioners had allegedly
adopted show that to them the possibility of
robbery was not only foreseeable, but actually
foreseen and anticipated. Sicam’s testimony, in
effect, contradicts petitioners’ defense of fortuitous
event.
Moreover, petitioners failed to show that they were
free from any negligence by which the loss of the
pawned jewelry may have been occasioned.
Robbery per se, just like carnapping, is not a
fortuitous event. It does not foreclose the
possibility of negligence on the part of herein
petitioners.
Petitioners merely presented the police report of
the Parañaque Police Station on the robbery
committed based on the report of petitioners’
employees which is not sufficient to establish
robbery. Such report also does not prove that
petitioners were not at fault. On the contrary, by
the very evidence of petitioners, the CA did not err
in finding that petitioners are guilty of concurrent
or contributory negligence as provided in Article
1170 of the Civil Code, to wit:
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.
**
Article 2123 of the Civil Code provides that with
regard to pawnshops and other establishments
which are engaged in making loans secured by
pledges, the special laws and regulations
concerning them shall be observed, and
subsidiarily, the provisions on pledge, mortgage
and antichresis.
The provision on pledge, particularly Article 2099
of the Civil Code, provides that the creditor shall
take care of the thing pledged with the diligence of
a good father of a family. This means that
petitioners must take care of the pawns the way a
prudent person would as to his own property.
In this connection, Article 1173 of the Civil Code
further provides:
Art. 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 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.
We expounded in Cruz v. Gangan that 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
3
a prudent and reasonable man would not do. It is
want of care required by the circumstances.
A review of the records clearly shows that
petitioners failed to exercise reasonable care and
caution that an ordinarily prudent person would
have used in the same situation. Petitioners were
guilty of negligence in the operation of their
pawnshop business. Sicam’s testimony revealed
that there were no security measures adopted by
petitioners in the operation of the pawnshop.
Evidently, no sufficient precaution and vigilance
were adopted by petitioners to protect the
pawnshop from unlawful intrusion. There was no
clear showing that there was any security guard at
all. Or if there was one, that he had sufficient
training in securing a pawnshop. Further, there is
no showing that the alleged security guard
exercised all that was necessary to prevent any
untoward incident or to ensure that no suspicious
individuals were allowed to enter the premises. In
fact, it is even doubtful that there was a security
guard, since it is quite impossible that he would
not have noticed that the robbers were armed with
caliber .45 pistols each, which were allegedly
poked at the employees. Significantly, the alleged
security guard was not presented at all to
corroborate petitioner Sicam’s claim; not one of
petitioners’ employees who were present during the
robbery incident testified in court.
Furthermore, petitioner Sicam’s admission that the
vault was open at the time of robbery is clearly a
proof of petitioners’ failure to observe the care,
precaution and vigilance that the circumstances
justly demanded.
The robbery in this case happened in petitioners’
pawnshop and they were negligent in not
exercising the precautions justly demanded of a
pawnshop.
NOTES:
We, however, do not agree with the CA when it
found petitioners negligent for not taking steps to
insure themselves against loss of the pawned
jewelries.
Under Section 17 of Central Bank Circular No.
374, Rules and Regulations for Pawnshops, which
took effect on July 13, 1973, and which was issued
pursuant to Presidential Decree No. 114,
Pawnshop Regulation Act, it is provided that
pawns pledged must be insured, to wit:
Sec. 17. Insurance of Office Building and Pawns-
The place of business of a pawnshop and the
pawns pledged to it must be insured against fire
and against burglary as well as for the latter(sic),
by an insurance company accredited by the
Insurance Commissioner.
However, this Section was subsequently amended
by CB Circular No. 764 which took effect on
October 1, 1980, to wit:
Sec. 17 Insurance of Office Building and Pawns –
The office building/premises and pawns of a
pawnshop must be insured against fire. (emphasis
[G.R. No. 113003. October 17, 1997]
ALBERTA YOBIDO and CRESENCIO
YOBIDO, petitioners, vs. COURT OF APPEALS,
LENY TUMBOY, ARDEE TUMBOY and JASMIN
TUMBOY, respondents.
DECISION
ROMERO, J.:
In this petition for review on certiorari of the
decision of the Court of Appeals, the issue is
whether or not the explosion of a newly installed
tire of a passenger vehicle is a fortuitous event that
exempts the carrier from liability for the death of a
passenger.
On April 26, 1988, spouses Tito and Leny Tumboy
and their minor children named Ardee and Jasmin,
boarded at Mangagoy, Surigao del Sur, a Yobido
Liner bus bound for Davao City. Along Picop Road
in Km. 17, Sta. Maria, Agusan del Sur, the left
front tire of the bus exploded. The bus fell into a
ravine around three (3) feet from the road and
struck a tree. The incident resulted in the death of
28-year-old Tito Tumboy and physical injuries to
other passengers.
On November 21, 1988, a complaint for breach of
contract of carriage, damages and attorneys fees
was filed by Leny and her children against Alberta
Yobido, the owner of the bus, and Cresencio
Yobido, its driver, before the Regional Trial Court of
Davao City. When the defendants therein filed their
4
supplied).
where the requirement that insurance against
burglary was deleted. Obviously, the Central Bank
considered it not feasible to require insurance of
pawned articles against burglary.
The robbery in the pawnshop happened in 1987,
and considering the above-quoted amendment,
there is no statutory duty imposed on petitioners
to insure the pawned jewelry in which case it was
error for the CA to consider it as a factor in
concluding that petitioners were negligent.
Nevertheless, the preponderance of evidence shows
that petitioners failed to exercise the diligence
required of them under the Civil Code.
answer to the complaint, they raised the
affirmative defense of caso fortuito. They also filed a
third-party complaint against Philippine Phoenix
Surety and Insurance, Inc. This third-party
defendant filed an answer with compulsory
counterclaim. At the pre-trial conference, the
parties agreed to a stipulation of facts.[1]
Upon a finding that the third party defendant was
not liable under the insurance contract, the lower
court dismissed the third party complaint. No
amicable settlement having been arrived at by the
parties, trial on the merits ensued.
The plaintiffs asserted that violation of the contract
of carriage between them and the defendants was
brought about by the drivers failure to exercise the
diligence required of the carrier in transporting
passengers safely to their place of
destination. According to Leny Tumboy, the bus
left Mangagoy at 3:00 oclock in the afternoon. The
winding road it traversed was not cemented and
was wet due to the rain; it was rough with crushed
rocks. The bus which was full of passengers had
cargoes on top. Since it was running fast, she
cautioned the driver to slow down but he merely
stared at her through the mirror. At around 3:30
p.m., in Trento, she heard something explode and
immediately, the bus fell into a ravine.
For their part, the defendants tried to establish
that the accident was due to a fortuitous event.
Abundio Salce, who was the bus conductor when
the incident happened, testified that the 42-seater
bus was not full as there were only 32 passengers,
such that he himself managed to get a seat. He
added that the bus was running at a speed of 60 to
50 and that it was going slow because of the zigzag
road. He affirmed that the left front tire that
exploded was a brand new tire that he mounted on
the bus on April 21, 1988 or only five (5) days
before the incident. The Yobido Liner secretary,
Minerva Fernando, bought the new Goodyear tire
from Davao Toyo Parts on April 20, 1988 and she
was present when it was mounted on the bus by
Salce. She stated that all driver applicants in
Yobido Liner underwent actual driving tests before
they were employed. Defendant Cresencio Yobido
underwent such test and submitted his
professional drivers license and clearances from
the barangay, the fiscal and the police.
On August 29, 1991, the lower court rendered a
decision[2] dismissing the action for lack of merit.
On the issue of whether or not the tire blowout was
a caso fortuito, it found that the falling of the bus
to the cliff was a result of no other outside factor
than the tire blow-out. It held that the ruling in
the La Mallorca and Pampanga Bus Co. v. De
Jesus[3] that a tire blowout is a mechanical defect
of the conveyance or a fault in its equipment which
was easily discoverable if the bus had been
subjected to a more thorough or rigid check-up
before it took to the road that morning is
inapplicable to this case. It reasoned out that in
said case, it was found that the blowout was
caused by the established fact that the inner tube
of the left front tire was pressed between the inner
circle of the left wheel and the rim which had
slipped out of the wheel. In this case, however, the
cause of the explosion remains a mystery until at
present. As such, the court added, the tire blowout
was a caso fortuito which is completely an
extraordinary circumstance independent of the will
of the defendants who should be relieved of
whatever liability the plaintiffs may have suffered
by reason of the explosion pursuant to Article
1174[4] of the Civil Code.
Dissatisfied, the plaintiffs appealed to the Court of
Appeals. They ascribed to the lower court the
following errors: (a) finding that the tire blowout
was a caso fortuito; (b) failing to hold that the
defendants did not exercise utmost and/or
extraordinary diligence required of carriers under
5
Article 1755 of the Civil Code, and (c) deciding the
case contrary to the ruling in Juntilla v.
Fontanar,[5] and Necesito v. Paras.[6]
On August 23, 1993, the Court of Appeals
rendered the Decision[7] reversing that of the lower
court. It held that:
To Our mind, the explosion of the tire is not in
itself a fortuitous event. The cause of the blow-out,
if due to a factory defect, improper mounting,
excessive tire pressure, is not an unavoidable
event. On the other hand, there may have been
adverse conditions on the road that were
unforeseeable and/or inevitable, which could make
the blow-out a caso fortuito. The fact that the
cause of the blow-out was not known does not
relieve the carrier of liability. Owing to the
statutory presumption of negligence against the
carrier and its obligation to exercise the utmost
diligence of very cautious persons to carry the
passenger safely as far as human care and
foresight can provide, it is the burden of the
defendants to prove that the cause of the blow-out
was a fortuitous event. It is not incumbent upon
the plaintiff to prove that the cause of the blow-out
is not caso-fortuito.
Proving that the tire that exploded is a new
Goodyear tire is not sufficient to discharge
defendants burden. As enunciated in Necesito vs.
Paras, the passenger has neither choice nor control
over the carrier in the selection and use of its
equipment, and the good repute of the
manufacturer will not necessarily relieve the
carrier from liability.
Moreover, there is evidence that the bus was
moving fast, and the road was wet and rough. The
driver could have explained that the blow-out that
precipitated the accident that caused the death of
Toto Tumboy could not have been prevented even if
he had exercised due care to avoid the same, but
he was not presented as witness.
The Court of Appeals thus disposed of the appeal
as follows:
WHEREFORE, the judgment of the court a quo is
set aside and another one entered ordering
defendants to pay plaintiffs the sum of P50,000.00
for the death of Tito Tumboy, P30,000.00 in moral
damages, and P7,000.00 for funeral and burial
expenses.
SO ORDERED.
The defendants filed a motion for reconsideration
of said decision which was denied on November 4,
1993 by the Court of Appeals. Hence, the instant
petition asserting the position that the tire blowout
that caused the death of Tito Tumboy was a caso
fortuito. Petitioners claim further that the Court of
Appeals, in ruling contrary to that of the lower
court, misapprehended facts and, therefore, its
findings of fact cannot be considered final which
shall bind this Court. Hence, they pray that this
Court review the facts of the case.
The Court did re-examine the facts and evidence in
this case because of the inapplicability of the
established principle that the factual findings of
the Court of Appeals are final and may not be
reviewed on appeal by this Court. This general
principle is subject to exceptions such as the one
present in this case, namely, that the lower court
and the Court of Appeals arrived at diverse factual
findings.[8] However, upon such re-examination, we
found no reason to overturn the findings and
conclusions of the Court of Appeals.
As a rule, when a passenger boards a common
carrier, he takes the risks incidental to the mode of
travel he has taken. After all, a carrier is not an
insurer of the safety of its passengers and is not
bound absolutely and at all events to carry them
safely and without injury.[9] However, when a
passenger is injured or dies while travelling, the
law presumes that the common carrier is
negligent. Thus, the Civil Code provides:
Art. 1756. In case of death 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 1755 provides that (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. Accordingly,
in culpa contractual, once a passenger dies or is
injured, the carrier is presumed to have been at
fault or to have acted negligently. This disputable
6
presumption may only be overcome by evidence
that the carrier had observed extraordinary
diligence as prescribed by Articles 1733,[10] 1755
and 1756 of the Civil Code or that the death or
injury of the passenger was due to a fortuitous
event.[11] Consequently, the court need not make
an express finding of fault or negligence on the
part of the carrier to hold it responsible for
damages sought by the passenger.[12]
In view of the foregoing, petitioners contention that
they should be exempt from liability because the
tire blowout was no more than a fortuitous event
that could not have been foreseen, must fail. A
fortuitous event is possessed of the following
characteristics: (a) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor
to comply with his obligations, must be
independent of human will; (b) it must be
impossible to foresee the event which constitutes
the caso fortuito, or if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be
such as to render it impossible for the debtor to
fulfill his obligation in a normal manner; and (d)
the obligor must be free from any participation in
the aggravation of the injury resulting to the
creditor.[13] As Article 1174 provides, no person
shall be responsible for a fortuitous event which
could not be foreseen, or which, though foreseen,
was inevitable. In other words, there must be an
entire exclusion of human agency from the cause
of injury or loss.[14]
Under the circumstances of this case, the
explosion of the new tire may not be considered a
fortuitous event. There are human factors involved
in the situation. The fact that the tire was new did
not imply that it was entirely free from
manufacturing defects or that it was properly
mounted on the vehicle. Neither may the fact that
the tire bought and used in the vehicle is of a
brand name noted for quality, resulting in the
conclusion that it could not explode within five
days use. Be that as it may, it is settled that an
accident caused either by defects in the automobile
or through the negligence of its driver is not a caso
fortuito that would exempt the carrier from liability
for damages.[15]
Moreover, a common carrier may not be absolved
from liability in case of force majeure or fortuitous
event alone. The common carrier must still prove
that it was not negligent in causing the death or
injury resulting from an accident.[16] This Court
has had occasion to state:
While it may be true that the tire that blew-up was
still good because the grooves of the tire were still
visible, this fact alone does not make the explosion
of the tire a fortuitous event. No evidence was
presented to show that the accident was due to
adverse road conditions or that precautions were
taken by the jeepney driver to compensate for any
conditions liable to cause accidents. The sudden
blowing-up, therefore, could have been caused by
too much air pressure injected into the tire coupled
by the fact that the jeepney was overloaded and
speeding at the time of the accident.[17]
It is interesting to note that petitioners proved
through the bus conductor, Salce, that the bus
was running at 60-50 kilometers per hour only or
within the prescribed lawful speed limit. However,
they failed to rebut the testimony of Leny Tumboy
that the bus was running so fast that she
cautioned the driver to slow down. These
contradictory facts must, therefore, be resolved in
favor of liability in view of the presumption of
negligence of the carrier in the law. Coupled with
this is the established condition of the road rough,
winding and wet due to the rain. It was incumbent
upon the defense to establish that it took
precautionary measures considering partially
dangerous condition of the road. As stated above,
proof that the tire was new and of good quality is
not sufficient proof that it
was not negligent. Petitioners should have shown
that it undertook extraordinary diligence in the
care of its carrier, such as conducting daily
routinary check-ups of the vehicles parts. As the
late Justice J.B.L. Reyes said:
It may be impracticable, as appellee argues, to
require of carriers to test the strength of each and
every part of its vehicles before each trip; but we
are of the opinion that a due regard for the carriers
obligations toward the traveling public demands
adequate periodical tests to determine the
condition and strength of those vehicle portions
the failure of which may endanger the safety of the
passengers.[18]
Having failed to discharge its duty to overthrow the
presumption of negligence with clear and
7
convincing evidence, petitioners are hereby held
liable for damages. Article 1764[19] in relation to
Article 2206[20] of the Civil Code prescribes the
amount of at least three thousand pesos as
damages for the death of a passenger. Under
prevailing jurisprudence, the award of damages
under Article 2206 has been increased to fifty
thousand pesos (P50,000.00).[21]
Moral damages are generally not recoverable
in culpa contractual except when bad faith had
been proven. However, the same damages may be
recovered when breach of contract of carriage
results in the death of a passenger,[22] as in this
case. Exemplary damages, awarded by way of
example or correction for the public good when
moral damages are awarded,[23]may likewise be
recovered in contractual obligations if the
defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner.[24] Because
petitioners failed to exercise the extraordinary
diligence required of a common carrier, which
resulted in the death of Tito Tumboy, it is deemed
to have acted recklessly.[25] As such, private
respondents shall be entitled to exemplary
damages.
WHEREFORE, the Decision of the Court of
Appeals is hereby AFFIRMED subject to the
modification that petitioners shall, in addition to
the monetary awards therein, be liable for the
award of exemplary damages in the amount
of P20,000.00. Costs against petitioners.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo,
Francisco, and Panganiban, JJ., concur.
G.R. No. L-20089 December 26, 1964
BEATRIZ P. WASSMER, plaintiff-appellee,
vs.
FRANCISCO X. VELEZ, defendant-appellant.
Jalandoni & Jamir for defendant-appellant.
Samson S. Alcantara for plaintiff-appellee.
BENGZON, J.P., J.:
The facts that culminated in this case started with
dreams and hopes, followed by appropriate
planning and serious endeavors, but terminated in
frustration and, what is worse, complete public
humiliation.
Francisco X. Velez and Beatriz P. Wassmer,
following their mutual promise of love, decided to
get married and set September 4, 1954 as the big
day. On September 2, 1954 Velez left this note for
his bride-to-be:
Dear Bet —
Will have to postpone wedding — My mother
opposes it. Am leaving on the Convair today.
Please do not ask too many people about the
reason why — That would only create a scandal.
Paquing
But the next day, September 3, he sent her the
following telegram:
NOTHING CHANGED REST ASSURED
RETURNING VERY SOON APOLOGIZE MAMA
PAPA LOVE .
PAKING
Thereafter Velez did not appear nor was he heard
from again.
Sued by Beatriz for damages, Velez filed no answer
and was declared in default. Plaintiff adduced
evidence before the clerk of court as commissioner,
and on April 29, 1955, judgment was rendered
ordering defendant to pay plaintiff P2,000.00 as
actual damages; P25,000.00 as moral and
exemplary damages; P2,500.00 as attorney's fees;
and the costs.
On June 21, 1955 defendant filed a "petition for
relief from orders, judgment and proceedings and
motion for new trial and reconsideration." Plaintiff
moved to strike it cut. But the court, on August 2,
1955, ordered the parties and their attorneys to
appear before it on August 23, 1955 "to explore at
this stage of the proceedings the possibility of
arriving at an amicable settlement." It added that
should any of them fail to appear "the petition for
relief and the opposition thereto will be deemed
submitted for resolution."
8
On August 23, 1955 defendant failed to appear
before court. Instead, on the following day his
counsel filed a motion to defer for two weeks the
resolution on defendants petition for relief. The
counsel stated that he would confer with defendant
in Cagayan de Oro City — the latter's residence —
on the possibility of an amicable element. The
court granted two weeks counted from August 25,
1955.
Plaintiff manifested on June 15, 1956 that the two
weeks given by the court had expired on
September 8, 1955 but that defendant and his
counsel had failed to appear.
Another chance for amicable settlement was given
by the court in its order of July 6, 1956 calling the
parties and their attorneys to appear on July 13,
1956. This time. however, defendant's counsel
informed the court that chances of settling the
case amicably were nil.
On July 20, 1956 the court issued an order
denying defendant's aforesaid petition. Defendant
has appealed to this Court. In his petition of June
21, 1955 in the court a quo defendant alleged
excusable negligence as ground to set aside the
judgment by default. Specifically, it was stated that
defendant filed no answer in the belief that an
amicable settlement was being negotiated.
A petition for relief from judgment on grounds of
fraud, accident, mistake or excusable negligence,
must be duly supported by an affidavit of merits
stating facts constituting a valid defense. (Sec. 3,
Rule 38, Rules of Court.) Defendant's affidavit of
merits attached to his petition of June 21, 1955
stated: "That he has a good and valid defense
against plaintiff's cause of action, his failure to
marry the plaintiff as scheduled having been due
to fortuitous event and/or circumstances beyond
his control." An affidavit of merits like this stating
mere conclusions or opinions instead of facts is not
valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10,
1951; Vaswani vs. P. Tarrachand Bros., L-15800,
December 29, 1960.)
Defendant, however, would contend that the
affidavit of merits was in fact unnecessary, or a
mere surplusage, because the judgment sought to
be set aside was null and void, it having been
based on evidence adduced before the clerk of
court. In Province of Pangasinan vs. Palisoc, L-
16519, October 30, 1962, this Court pointed out
that the procedure of designating the clerk of court
as commissioner to receive evidence is sanctioned
by Rule 34 (now Rule 33) of the Rules of Court.
Now as to defendant's consent to said procedure,
the same did not have to be obtained for he was
declared in default and thus had no standing in
court (Velez vs. Ramas, 40 Phil. 787; Alano vs.
Court of First Instance, L-14557, October 30,
1959).
In support of his "motion for new trial and
reconsideration," defendant asserts that the
judgment is contrary to law. The reason given is
that "there is no provision of the Civil Code
authorizing" an action for breach of promise to
marry. Indeed, our ruling in Hermosisima vs. Court
of Appeals (L-14628, Sept. 30, 1960), as reiterated
in Estopa vs. Biansay (L-14733, Sept. 30, 1960), is
that "mere breach of a promise to marry" is not an
actionable wrong. We pointed out that Congress
deliberately eliminated from the draft of the new
Civil Code the provisions that would have it so.
It must not be overlooked, however, that the extent
to which acts not contrary to law may be
perpetrated with impunity, is not limitless for
Article 21 of said Code provides that "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."
The record reveals that on August 23, 1954
plaintiff and defendant applied for a license to
contract marriage, which was subsequently issued
(Exhs. A, A-1). Their wedding was set for
September 4, 1954. Invitations were printed and
distributed to relatives, friends and acquaintances
(Tsn., 5; Exh. C). The bride-to-be's trousseau,
party drsrses and other apparel for the important
occasion were purchased (Tsn., 7-8). Dresses for
the maid of honor and the flower girl were
prepared. A matrimonial bed, with accessories, was
bought. Bridal showers were given and gifts
received (Tsn., 6; Exh. E). And then, with but two
days before the wedding, defendant, who was then
28 years old,: simply left a note for plaintiff stating:
"Will have to postpone wedding — My mother
opposes it ... " He enplaned to his home city in
Mindanao, and the next day, the day before the
9
wedding, he wired plaintiff: "Nothing changed rest
assured returning soon." But he never returned
and was never heard from again.
Surely this is not a case of mere breach of promise
to marry. As stated, mere breach of promise to
marry is not an actionable wrong. But to formally
set a wedding and go through all the above-
described preparation and publicity, only to walk
out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and
unjustifiably contrary to good customs for which
defendant must be held answerable in damages in
accordance with Article 21 aforesaid.
Defendant urges in his afore-stated petition that
the damages awarded were excessive. No question
is raised as to the award of actual damages. What
defendant would really assert hereunder is that the
award of moral and exemplary damages, in the
amount of P25,000.00, should be totally
eliminated.
Per express provision of Article 2219 (10) of the
New Civil Code, moral damages are recoverable in
the cases mentioned in Article 21 of said Code. As
to exemplary damages, defendant contends that
the same could not be adjudged against him
because under Article 2232 of the New Civil Code
the condition precedent is that "the defendant
acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner." The argument
is devoid of merit as under the above-narrated
circumstances of this case defendant clearly acted
in a "wanton ... , reckless [and] oppressive
manner." This Court's opinion, however, is that
considering the particular circumstances of this
case, P15,000.00 as moral and exemplary damages
is deemed to be a reasonable award.
PREMISES CONSIDERED, with the above-
indicated modification, the lower court's judgment
is hereby affirmed, with costs.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L.,
Barrera, Paredes, Dizon, Regala, Makalintal, and
Zaldivar, JJ.,concur.
G.R. No. 97336 February 19, 1993
GASHEM SHOOKAT BAKSH, petitioner,
vs.
HON. COURT OF APPEALS and MARILOU T.
GONZALES, respondents.
Public Attorney's Office for petitioner.
Corleto R. Castro for private respondent.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the
Rules of Court seeking to review and set aside the
Decision1 of the respondent Court of Appeals in
CA-G.R. CV No. 24256 which affirmed in toto the
16 October 1939 Decision of Branch 38 (Lingayen)
of the Regional Trial Court (RTC) of Pangasinan in
Civil Case No. 16503. Presented is the issue of
whether or not damages may be recovered for a
breach of promise to marry on the basis of Article
21 of the Civil Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without
the assistance of counsel, filed with the aforesaid
trial court a complaint2 for damages against the
petitioner for the alleged violation of their
agreement to get married. She alleges in said
complaint that: she is twenty-two (22) years old,
single, Filipino and a pretty lass of good moral
character and reputation duly respected in her
community; petitioner, on the other hand, is an
Iranian citizen residing at the Lozano Apartments,
Guilig, Dagupan City, and is an exchange student
taking a medical course at the Lyceum
Northwestern Colleges in Dagupan City; before 20
August 1987, the latter courted and proposed to
marry her; she accepted his love on the condition
that they would get married; they therefore agreed
to get married after the end of the school semester,
which was in October of that year; petitioner then
visited the private respondent's parents in Bañaga,
Bugallon, Pangasinan to secure their approval to
the marriage; sometime in 20 August 1987, the
petitioner forced her to live with him in the Lozano
Apartments; she was a virgin before she began
living with him; a week before the filing of the
complaint, petitioner's attitude towards her started
10
to change; he maltreated and threatened to kill
her; as a result of such maltreatment, she
sustained injuries; during a confrontation with a
representative of the barangay captain of Guilig a
day before the filing of the complaint, petitioner
repudiated their marriage agreement and asked
her not to live with him anymore and; the
petitioner is already married to someone living in
Bacolod City. Private respondent then prayed for
judgment ordering the petitioner to pay her
damages in the amount of not less than
P45,000.00, reimbursement for actual expenses
amounting to P600.00, attorney's fees and costs,
and granting her such other relief and remedies as
may be just and equitable. The complaint was
docketed as Civil Case No. 16503.
In his Answer with Counterclaim,3 petitioner
admitted only the personal circumstances of the
parties as averred in the complaint and denied the
rest of the allegations either for lack of knowledge
or information sufficient to form a belief as to the
truth thereof or because the true facts are those
alleged as his Special and Affirmative Defenses. He
thus claimed that he never proposed marriage to or
agreed to be married with the private respondent;
he neither sought the consent and approval of her
parents nor forced her to live in his apartment; he
did not maltreat her, but only told her to stop
coming to his place because he discovered that she
had deceived him by stealing his money and
passport; and finally, no confrontation took place
with a representative of the barangay captain.
Insisting, in his Counterclaim, that the complaint
is baseless and unfounded and that as a result
thereof, he was unnecessarily dragged into court
and compelled to incur expenses, and has suffered
mental anxiety and a besmirched reputation, he
prayed for an award of P5,000.00 for
miscellaneous expenses and P25,000.00 as moral
damages.
After conducting a pre-trial on 25 January 1988,
the trial court issued a Pre-Trial Order4 embodying
the stipulated facts which the parties had agreed
upon, to wit:
1. That the plaintiff is single and resident (sic) of
Bañaga, Bugallon, Pangasinan, while the
defendant is single, Iranian citizen and resident
(sic) of Lozano Apartment, Guilig, Dagupan City
since September 1, 1987 up to the present;
2. That the defendant is presently studying at
Lyceum Northwestern, Dagupan City, College of
Medicine, second year medicine proper;
3. That the plaintiff is (sic) an employee at
Mabuhay Luncheonette , Fernandez Avenue,
Dagupan City since July, 1986 up to the present
and a (sic) high school graduate;
4. That the parties happened to know each other
when the manager of the Mabuhay Luncheonette,
Johhny Rabino introduced the defendant to the
plaintiff on August 3, 1986.
After trial on the merits, the lower court, applying
Article 21 of the Civil Code, rendered on 16
October 1989 a decision5 favoring the private
respondent. The petitioner was thus ordered to pay
the latter damages and attorney's fees; the
dispositive portion of the decision reads:
IN THE LIGHT of the foregoing consideration,
judgment is hereby rendered in favor of the
plaintiff and against the defendant.
1. Condemning (sic) the defendant to pay the
plaintiff the sum of twenty thousand (P20,000.00)
pesos as moral damages.
2. Condemning further the defendant to play the
plaintiff the sum of three thousand (P3,000.00)
pesos as atty's fees and two thousand (P2,000.00)
pesos at (sic) litigation expenses and to pay the
costs.
3. All other claims are denied.6
The decision is anchored on the trial court's
findings and conclusions that (a) petitioner and
private respondent were lovers, (b) private
respondent is not a woman of loose morals or
questionable virtue who readily submits to sexual
advances, (c) petitioner, through machinations,
deceit and false pretenses, promised to marry
private respondent, d) because of his persuasive
promise to marry her, she allowed herself to be
deflowered by him, (e) by reason of that deceitful
promise, private respondent and her parents — in
accordance with Filipino customs and traditions —
made some preparations for the wedding that was
to be held at the end of October 1987 by looking
for pigs and chickens, inviting friends and relatives
and contracting sponsors, (f) petitioner did not
11
fulfill his promise to marry her and (g) such acts of
the petitioner, who is a foreigner and who has
abused Philippine hospitality, have offended our
sense of morality, good customs, culture and
traditions. The trial court gave full credit to the
private respondent's testimony because, inter alia,
she would not have had the temerity and courage
to come to court and expose her honor and
reputation to public scrutiny and ridicule if her
claim was false.7
The above findings and conclusions were culled
from the detailed summary of the evidence for the
private respondent in the foregoing decision,
digested by the respondent Court as follows:
According to plaintiff, who claimed that she was a
virgin at the time and that she never had a
boyfriend before, defendant started courting her
just a few days after they first met. He later
proposed marriage to her several times and she
accepted his love as well as his proposal of
marriage on August 20, 1987, on which same day
he went with her to her hometown of Bañaga,
Bugallon, Pangasinan, as he wanted to meet her
parents and inform them of their relationship and
their intention to get married. The photographs
Exhs. "A" to "E" (and their submarkings) of
defendant with members of plaintiff's family or
with plaintiff, were taken that day. Also on that
occasion, defendant told plaintiffs parents and
brothers and sisters that he intended to marry her
during the semestral break in October, 1987, and
because plaintiff's parents thought he was good
and trusted him, they agreed to his proposal for
him to marry their daughter, and they likewise
allowed him to stay in their house and sleep with
plaintiff during the few days that they were in
Bugallon. When plaintiff and defendant later
returned to Dagupan City, they continued to live
together in defendant's apartment. However, in the
early days of October, 1987, defendant would tie
plaintiff's hands and feet while he went to school,
and he even gave her medicine at 4 o'clock in the
morning that made her sleep the whole day and
night until the following day. As a result of this
live-in relationship, plaintiff became pregnant, but
defendant gave her some medicine to abort the
fetus. Still plaintiff continued to live with defendant
and kept reminding him of his promise to marry
her until he told her that he could not do so
because he was already married to a girl in
Bacolod City. That was the time plaintiff left
defendant, went home to her parents, and
thereafter consulted a lawyer who accompanied
her to the barangay captain in Dagupan City.
Plaintiff, her lawyer, her godmother, and a
barangay tanod sent by the barangay captain went
to talk to defendant to still convince him to marry
plaintiff, but defendant insisted that he could not
do so because he was already married to a girl in
Bacolod City, although the truth, as stipulated by
the parties at the pre-trial, is that defendant is still
single.
Plaintiff's father, a tricycle driver, also claimed that
after defendant had informed them of his desire to
marry Marilou, he already looked for sponsors for
the wedding, started preparing for the reception by
looking for pigs and chickens, and even already
invited many relatives and friends to the
forthcoming wedding. 8
Petitioner appealed the trial court's decision to the
respondent Court of Appeals which docketed the
case as CA-G.R. CV No. 24256. In his Brief,9 he
contended that the trial court erred (a) in not
dismissing the case for lack of factual and legal
basis and (b) in ordering him to pay moral
damages, attorney's fees, litigation expenses and
costs.
On 18 February 1991, respondent Court
promulgated the challenged decision 10 affirming in
toto the trial court's ruling of 16 October 1989. In
sustaining the trial court's findings of fact,
respondent Court made the following analysis:
First of all, plaintiff, then only 21 years old when
she met defendant who was already 29 years old at
the time, does not appear to be a girl of loose
morals. It is uncontradicted that she was a virgin
prior to her unfortunate experience with defendant
and never had boyfriend. She is, as described by
the lower court, a barrio lass "not used and
accustomed to trend of modern urban life", and
certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there
was no persuasive promise made by the defendant
to marry her." In fact, we agree with the lower
court that plaintiff and defendant must have been
sweethearts or so the plaintiff must have thought
because of the deception of defendant, for
12
otherwise, she would not have allowed herself to be
photographed with defendant in public in so (sic)
loving and tender poses as those depicted in the
pictures Exhs. "D" and "E". We cannot believe,
therefore, defendant's pretense that plaintiff was a
nobody to him except a waitress at the restaurant
where he usually ate. Defendant in fact admitted
that he went to plaintiff's hometown of Bañaga,
Bugallon, Pangasinan, at least thrice; at (sic) the
town fiesta on February 27, 1987 (p. 54, tsn May
18, 1988), at (sic) a beach party together with the
manager and employees of the Mabuhay
Luncheonette on March 3, 1987 (p. 50, tsn id.),
and on April 1, 1987 when he allegedly talked to
plaintiff's mother who told him to marry her
daughter (pp. 55-56, tsn id.). Would defendant
have left Dagupan City where he was involved in
the serious study of medicine to go to plaintiff's
hometown in Bañaga, Bugallon, unless there was
(sic) some kind of special relationship between
them? And this special relationship must indeed
have led to defendant's insincere proposal of
marriage to plaintiff, communicated not only to her
but also to her parents, and (sic) Marites Rabino,
the owner of the restaurant where plaintiff was
working and where defendant first proposed
marriage to her, also knew of this love affair and
defendant's proposal of marriage to plaintiff, which
she declared was the reason why plaintiff resigned
from her job at the restaurant after she had
accepted defendant's proposal (pp. 6-7, tsn March
7, 1988).
Upon the other hand, appellant does not appear to
be a man of good moral character and must think
so low and have so little respect and regard for
Filipino women that he openly admitted that when
he studied in Bacolod City for several years where
he finished his B.S. Biology before he came to
Dagupan City to study medicine, he had a
common-law wife in Bacolod City. In other words,
he also lived with another woman in Bacolod City
but did not marry that woman, just like what he
did to plaintiff. It is not surprising, then, that he
felt so little compunction or remorse in pretending
to love and promising to marry plaintiff, a young,
innocent, trustful country girl, in order to satisfy
his lust on her. 11
and then concluded:
In sum, we are strongly convinced and so hold that
it was defendant-appellant's fraudulent and
deceptive protestations of love for and promise to
marry plaintiff that made her surrender her virtue
and womanhood to him and to live with him on the
honest and sincere belief that he would keep said
promise, and it was likewise these (sic) fraud and
deception on appellant's part that made plaintiff's
parents agree to their daughter's living-in with him
preparatory to their supposed marriage. And as
these acts of appellant are palpably and
undoubtedly against morals, good customs, and
public policy, and are even gravely and deeply
derogatory and insulting to our women, coming as
they do from a foreigner who has been enjoying the
hospitality of our people and taking advantage of
the opportunity to study in one of our institutions
of learning, defendant-appellant should indeed be
made, under Art. 21 of the Civil Code of the
Philippines, to compensate for the moral damages
and injury that he had caused plaintiff, as the
lower court ordered him to do in its decision in this
case. 12
Unfazed by his second defeat, petitioner filed the
instant petition on 26 March 1991; he raises
therein the single issue of whether or not Article 21
of the Civil Code applies to the case at bar. 13
It is petitioner's thesis that said Article 21 is not
applicable because he had not committed any
moral wrong or injury or violated any good custom
or public policy; he has not professed love or
proposed marriage to the private respondent; and
he has never maltreated her. He criticizes the trial
court for liberally invoking Filipino customs,
traditions and culture, and ignoring the fact that
since he is a foreigner, he is not conversant with
such Filipino customs, traditions and culture. As
an Iranian Moslem, he is not familiar with Catholic
and Christian ways. He stresses that even if he had
made a promise to marry, the subsequent failure
to fulfill the same is excusable or tolerable because
of his Moslem upbringing; he then alludes to the
Muslim Code which purportedly allows a Muslim to
take four (4) wives and concludes that on the basis
thereof, the trial court erred in ruling that he does
not posses good moral character. Moreover, his
controversial "common law life" is now his legal
wife as their marriage had been solemnized in civil
ceremonies in the Iranian Embassy. As to his
13
unlawful cohabitation with the private respondent,
petitioner claims that even if responsibility could
be pinned on him for the live-in relationship, the
private respondent should also be faulted for
consenting to an illicit arrangement. Finally,
petitioner asseverates that even if it was to be
assumed arguendo that he had professed his love
to the private respondent and had also promised to
marry her, such acts would not be actionable in
view of the special circumstances of the case. The
mere breach of promise is not actionable. 14
On 26 August 1991, after the private respondent
had filed her Comment to the petition and the
petitioner had filed his Reply thereto, this Court
gave due course to the petition and required the
parties to submit their respective Memoranda,
which they subsequently complied with.
As may be gleaned from the foregoing summation
of the petitioner's arguments in support of his
thesis, it is clear that questions of fact, which boil
down to the issue of the credibility of witnesses,
are also raised. It is the rule in this jurisdiction
that appellate courts will not disturb the trial
court's findings as to the credibility of witnesses,
the latter court having heard the witnesses and
having had the opportunity to observe closely their
deportment and manner of testifying, unless the
trial court had plainly overlooked facts of
substance or value which, if considered, might
affect the result of the case. 15
Petitioner has miserably failed to convince Us that
both the appellate and trial courts had overlooked
any fact of substance or values which could alter
the result of the case.
Equally settled is the rule that only questions of
law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court. It
is not the function of this Court to analyze or weigh
all over again the evidence introduced by the
parties before the lower court. There are, however,
recognized exceptions to this rule. Thus, in Medina
vs.Asistio, Jr., 16 this Court took the time, again, to
enumerate these exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded
entirely on speculation, surmises or conjectures
(Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When
the inference made is manifestly mistaken, absurb
or impossible (Luna v. Linatok, 74 Phil. 15 [1942]);
(3) Where there is a grave abuse of discretion
(Buyco v. People, 95 Phil. 453 [1955]); (4) When the
judgment is based on a misapprehension of facts
(Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of
fact are conflicting (Casica v. Villaseca, L-9590 Ap.
30, 1957; unrep.) (6) When the Court of Appeals, in
making its findings, went beyond the issues of the
case and the same is contrary to the admissions of
both appellate and appellee (Evangelista v. Alto
Surety and Insurance Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are
contrary to those of the trial court (Garcia v. Court
of Appeals, 33 SCRA 622 [1970]; Sacay v.
Sandiganbayan, 142 SCRA 593 [1986]); (8) When
the findings of fact are conclusions without citation
of specific evidence on which they are based
(Ibid.,); (9) When the facts set forth in the petition
as well as in the petitioners main and reply briefs
are not disputed by the respondents (Ibid.,); and
(10) The finding of fact of the Court of Appeals is
premised on the supposed absence of evidence and
is contradicted by the evidence on record (Salazar
v. Gutierrez, 33 SCRA 242 [1970]).
Petitioner has not endeavored to joint out to Us the
existence of any of the above quoted exceptions in
this case. Consequently, the factual findings of the
trial and appellate courts must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to
marry per se is not an actionable
wrong. Congress deliberately eliminated from the
17
draft of the New Civil Code the provisions that
would have made it so. The reason therefor is set
forth in the report of the Senate Committees on the
Proposed Civil Code, from which We quote:
The elimination of this chapter is proposed. That
breach of promise to marry is not actionable has
been definitely decided in the case of De Jesus vs.
Syquia. 18 The history of breach of promise suits in
the United States and in England has shown that
no other action lends itself more readily to abuse
by designing women and unscrupulous men. It is
this experience which has led to the abolition of
rights of action in the so-called Heart Balm suits in
many of the American states. . . . 19
14
This notwithstanding, the said Code contains a
provision, Article 21, which is designed to expand
the concept of torts or quasi-delict in this
jurisdiction by granting adequate legal remedy for
the untold number of moral wrongs which is
impossible for human foresight to specifically
enumerate and punish in the statute books. 20
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than
the sphere of wrongs defined or determined by
positive law. Fully sensible that there are countless
gaps in the statutes, which leave so many victims
of moral wrongs helpless, even though they have
actually suffered material and moral injury, the
Commission has deemed it necessary, in the
interest of justice, to incorporate in the proposed
Civil Code the following rule:
Art. 23. Any person who wilfully causes loss or
injury to another in a manner that is contrary to
morals, good customs or public policy shall
compensate the latter for the damage.
An example will illustrate the purview of the
foregoing norm: "A" seduces the nineteen-year old
daughter of "X". A promise of marriage either has
not been made, or can not be proved. The girl
becomes pregnant. Under the present laws, there
is no crime, as the girl is above nineteen years of
age. Neither can any civil action for breach of
promise of marriage be filed. Therefore, though the
grievous moral wrong has been committed, and
though the girl and family have suffered
incalculable moral damage, she and her parents
cannot bring action for damages. But under the
proposed article, she and her parents would have
such a right of action.
Thus at one stroke, the legislator, if the forgoing
rule is approved, would vouchsafe adequate legal
remedy for that untold number of moral wrongs
which it is impossible for human foresight to
provide for specifically in the statutes. 21
Article 2176 of the Civil Code, which defines
a quasi-delict thus:
Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged
to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-
delict and is governed by the provisions of this
Chapter.
is limited to negligent acts or omissions and
excludes the notion of willfulness or intent. Quasi-
delict, known in Spanish legal treatises as culpa
aquiliana, is a civil law concept while torts is an
Anglo-American or common law concept. Torts is
much broader than culpa aquiliana because it
includes not only negligence, but international
criminal acts as well such as assault and battery,
false imprisonment and deceit. In the general
scheme of the Philippine legal system envisioned
by the Commission responsible for drafting the
New Civil Code, intentional and malicious acts,
with certain exceptions, are to be governed by the
Revised Penal Code while negligent acts or
omissions are to be covered by Article 2176 of the
Civil Code. 22 In between these opposite spectrums
are injurious acts which, in the absence of Article
21, would have been beyond redress. Thus, Article
21 fills that vacuum. It is even postulated that
together with Articles 19 and 20 of the Civil Code,
Article 21 has greatly broadened the scope of the
law on civil wrongs; it has become much more
supple and adaptable than the Anglo-American law
on torts. 23
In the light of the above laudable purpose of Article
21, We are of the opinion, and so hold, that where
a man's promise to marry is in fact the proximate
cause of the acceptance of his love by a woman
and his representation to fulfill that promise
thereafter becomes the proximate cause of the
giving of herself unto him in a sexual congress,
proof that he had, in reality, no intention of
marrying her and that the promise was only a
subtle scheme or deceptive device to entice or
inveigle her to accept him and to obtain her
consent to the sexual act, could justify the award
of damages pursuant to Article 21 not because of
such promise to marry but because of the fraud
and deceit behind it and the willful injury to her
honor and reputation which followed thereafter. It
is essential, however, that such injury should have
been committed in a manner contrary to morals,
good customs or public policy.
In the instant case, respondent Court found that it
was the petitioner's "fraudulent and deceptive
protestations of love for and promise to marry
15
plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the
honest and sincere belief that he would keep said
promise, and it was likewise these fraud and
deception on appellant's part that made plaintiff's
parents agree to their daughter's living-in with him
preparatory to their supposed marriage." 24 In
short, the private respondent surrendered her
virginity, the cherished possession of every single
Filipina, not because of lust but because of moral
seduction — the kind illustrated by the Code
Commission in its example earlier adverted to. The
petitioner could not be held liable for criminal
seduction punished under either Article 337 or
Article 338 of the Revised Penal Code because the
private respondent was above eighteen (18) years of
age at the time of the seduction.
Prior decisions of this Court clearly suggest that
Article 21 may be applied in a breach of promise to
marry where the woman is a victim of moral
seduction. Thus, in Hermosisima vs. Court of
Appeals,25 this Court denied recovery of damages
to the woman because:
. . . we find ourselves unable to say that petitioner
is morally guilty of seduction, not only because he
is approximately ten (10) years younger than the
complainant — who was around thirty-six (36)
years of age, and as highly enlightened as a former
high school teacher and a life insurance agent are
supposed to be — when she became intimate with
petitioner, then a mere apprentice pilot, but, also,
because the court of first instance found that,
complainant "surrendered herself" to petitioner
because, "overwhelmed by her love" for him, she
"wanted to bind" him by having a fruit of their
engagement even before they had the benefit of
clergy.
In Tanjanco vs. Court of Appeals, 26 while this
Court likewise hinted at possible recovery if there
had been moral seduction, recovery was eventually
denied because We were not convinced that such
seduction existed. The following enlightening
disquisition and conclusion were made in the said
case:
The Court of Appeals seem to have overlooked that
the example set forth in the Code Commission's
memorandum refers to a tort upon a minor who
had been seduced. The essential feature is
seduction, that in law is more than mere sexual
intercourse, or a breach of a promise of marriage;
it connotes essentially the idea of deceit,
enticement, superior power or abuse of confidence
on the part of the seducer to which the woman has
yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S.
vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra)
that —
To constitute seduction there must in all cases be
some sufficient promise or inducement and the
woman must yield because of the promise or other
inducement. If she consents merely from carnal
lust and the intercourse is from mutual desire,
there is no seduction (43 Cent. Dig. tit. Seduction,
par. 56) She must be induced to depart from the
path of virtue by the use of some species of arts,
persuasions and wiles, which are calculated to
have and do have that effect, and which result in
her person to ultimately submitting her person to
the sexual embraces of her seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the
enticement, persuasion or deception is the essence
of the injury; and a mere proof of intercourse is
insufficient to warrant a recovery.
Accordingly it is not seduction where the
willingness arises out of sexual desire of curiosity
of the female, and the defendant merely affords her
the needed opportunity for the commission of the
act. It has been emphasized that to allow a
recovery in all such cases would tend to the
demoralization of the female sex, and would be a
reward for unchastity by which a class of
adventuresses would be swift to profit. (47 Am.
Jur. 662)
xxx xxx xxx
Over and above the partisan allegations, the fact
stand out that for one whole year, from 1958 to
1959, the plaintiff-appellee, a woman of adult age,
maintain intimate sexual relations with appellant,
with repeated acts of intercourse. Such conduct is
incompatible with the idea of seduction. Plainly
there is here voluntariness and mutual passion; for
had the appellant been deceived, had she
surrendered exclusively because of the deceit,
16
artful persuasions and wiles of the defendant, she
would not have again yielded to his embraces,
much less for one year, without exacting early
fulfillment of the alleged promises of marriage, and
would have cut short all sexual relations upon
finding that defendant did not intend to fulfill his
defendant did not intend to fulfill his promise.
Hence, we conclude that no case is made under
article 21 of the Civil Code, and no other cause of
action being alleged, no error was committed by
the Court of First Instance in dismissing the
complaint. 27
In his annotations on the Civil Code, 28 Associate
Justice Edgardo L. Paras, who recently retired from
this Court, opined that in a breach of promise to
marry where there had been carnal knowledge,
moral damages may be recovered:
. . . if there be criminal or moral seduction, but not
if the intercourse was due to mutual lust.
(Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr.,
L-14733, Sept. 30, 1960; Batarra vs. Marcos, 7
Phil. 56 (sic); Beatriz Galang vs. Court of Appeals,
et al., L-17248, Jan. 29, 1962). (In other words, if
the CAUSE be the promise to marry, and the
EFFECT be the carnal knowledge, there is a
chance that there was criminal or moral seduction,
hence recovery of moral damages will prosper. If it
be the other way around, there can be no recovery
of moral damages, because here mutual lust has
intervened). . . .
together with "ACTUAL damages, should there be
any, such as the expenses for the wedding
presentations (See Domalagon v. Bolifer, 33 Phil.
471).
Senator Arturo M. Tolentino 29 is also of the same
persuasion:
It is submitted that the rule in Batarra
vs. Marcos, 30 still subsists, notwithstanding the
incorporation of the present article31 in the Code.
The example given by the Code Commission is
correct, if there was seduction, not necessarily in
the legal sense, but in the vulgar sense of
deception. But when the sexual act is
accomplished without any deceit or qualifying
circumstance of abuse of authority or influence,
but the woman, already of age, has knowingly
given herself to a man, it cannot be said that there
is an injury which can be the basis for indemnity.
But so long as there is fraud, which is
characterized by willfulness (sic), the action lies.
The court, however, must weigh the degree of
fraud, if it is sufficient to deceive the woman under
the circumstances, because an act which would
deceive a girl sixteen years of age may not
constitute deceit as to an experienced woman
thirty years of age. But so long as there is a
wrongful act and a resulting injury, there should
be civil liability, even if the act is not punishable
under the criminal law and there should have been
an acquittal or dismissal of the criminal case for
that reason.
We are unable to agree with the petitioner's
alternative proposition to the effect that granting,
for argument's sake, that he did promise to marry
the private respondent, the latter is nevertheless
also at fault. According to him, both parties are
in pari delicto; hence, pursuant to Article 1412(1)
of the Civil Code and the doctrine laid down
in Batarra vs. Marcos, 32 the private respondent
cannot recover damages from the petitioner. The
latter even goes as far as stating that if the private
respondent had "sustained any injury or damage
in their relationship, it is primarily because of her
own doing, 33 for:
. . . She is also interested in the petitioner as the
latter will become a doctor sooner or later. Take
notice that she is a plain high school graduate and
a mere employee . . . (Annex "C") or a waitress
(TSN, p. 51, January 25, 1988) in a luncheonette
and without doubt, is in need of a man who can
give her economic security. Her family is in dire
need of financial assistance. (TSN, pp. 51-53, May
18, 1988). And this predicament prompted her to
accept a proposition that may have been offered by
the petitioner. 34
These statements reveal the true character and
motive of the petitioner. It is clear that he harbors
a condescending, if not sarcastic, regard for the
private respondent on account of the latter's
ignoble birth, inferior educational background,
poverty and, as perceived by him, dishonorable
employment. Obviously then, from the very
beginning, he was not at all moved by good faith
and an honest motive. Marrying with a woman so
17
circumstances could not have even remotely
occurred to him. Thus, his profession of love and
promise to marry were empty words directly
intended to fool, dupe, entice, beguile and deceive
the poor woman into believing that indeed, he
loved her and would want her to be his life's
partner. His was nothing but pure lust which he
wanted satisfied by a Filipina who honestly
believed that by accepting his proffer of love and
proposal of marriage, she would be able to enjoy a
life of ease and security. Petitioner clearly violated
the Filipino's concept of morality and brazenly
defied the traditional respect Filipinos have for
their women. It can even be said that the petitioner
committed such deplorable acts in blatant
disregard of Article 19 of the Civil Code which
directs every person to act with justice, give
everyone his due and observe honesty and good
faith in the exercise of his rights and in the
performance of his obligations.
No foreigner must be allowed to make a mockery of
our laws, customs and traditions.
The pari delicto rule does not apply in this case for
while indeed, the private respondent may not have
been impelled by the purest of intentions, she
eventually submitted to the petitioner in sexual
congress not out of lust, but because of moral
seduction. In fact, it is apparent that she had
qualms of conscience about the entire episode for
as soon as she found out that the petitioner was
not going to marry her after all, she left him. She is
not, therefore, in pari delicto with the
petitioner. Pari delicto means "in equal fault; in a
similar offense or crime; equal in guilt or in legal
fault." 35At most, it could be conceded that she is
merely in delicto.
Equity often interferes for the relief of the less
guilty of the parties, where his transgression has
been brought about by the imposition of undue
influence of the party on whom the burden of the
original wrong principally rests, or where his
consent to the transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud, 37 We declared:
Appellants likewise stress that both parties being
at fault, there should be no action by one against
the other (Art. 1412, New Civil Code). This rule,
however, has been interpreted as applicable only
where the fault on both sides is, more or less,
equivalent. It does not apply where one party is
literate or intelligent and the other one is not. (c.f.
Bough vs. Cantiveros, 40 Phil. 209).
We should stress, however, that while We find for
the private respondent, let it not be said that this
Court condones the deplorable behavior of her
parents in letting her and the petitioner stay
together in the same room in their house after
giving approval to their marriage. It is the solemn
duty of parents to protect the honor of their
daughters and infuse upon them the higher values
of morality and dignity.
WHEREFORE, finding no reversible error in the
challenged decision, the instant petition is hereby
DENIED, with costs against the petitioner.
SO ORDERED.
G.R. No. L-29640 June 10, 1971
GUILLERMO AUSTRIA, petitioner,
vs.
THE COURT OF APPEALS (Second Division),
PACIFICO ABAD and MARIA G.
ABAD, respondents.
Antonio Enrile Inton for petitioner.
Jose A. Buendia for respondents.
REYES, J.B.L., J.:
Guillermo Austria petitions for the review of the
decision rendered by the Court of Appeal (in CA-
G.R. No. 33572-R), on the sole issue of whether in
a contract of agency (consignment of goods for sale)
it is necessary that there be prior conviction for
robbery before the loss of the article shall exempt
the consignee from liability for such loss.
In a receipt dated 30 January 1961, Maria G. Abad
acknowledged having received from Guillermo
Austria one (1) pendant with diamonds valued at
P4,500.00, to be sold on commission basis or to be
returned on demand. On 1 February 1961,
however, while walking home to her residence in
18
Mandaluyong, Rizal, Abad was said to have been
accosted by two men, one of whom hit her on the
face, while the other snatched her purse containing
jewelry and cash, and ran away. Among the pieces
of jewelry allegedly taken by the robbers was the
consigned pendant. The incident became the
subject of a criminal case filed in the Court of First
Instance of Rizal against certain persons (Criminal
Case No. 10649, People vs. Rene Garcia, et al.).
As Abad failed to return the jewelry or pay for its
value notwithstanding demands, Austria brought
in the Court of First Instance of Manila an action
against her and her husband for recovery of the
pendant or of its value, and damages. Answering
the allegations of the complaint, defendants
spouses set up the defense that the alleged robbery
had extinguished their obligation.
After due hearing, the trial court rendered
judgment for the plaintiff, and ordered defendants
spouses, jointly and severally, to pay to the former
the sum of P4,500.00, with legal interest thereon,
plus the amount of P450.00 as reasonable
attorneys' fees, and the costs. It was held that
defendants failed to prove the fact of robbery, or, if
indeed it was committed, that defendant Maria
Abad was guilty of negligence when she went home
without any companion, although it was already
getting dark and she was carrying a large amount
of cash and valuables on the day in question, and
such negligence did not free her from liability for
damages for the loss of the jewelry.
Not satisfied with his decision, the defendants went
to the Court of Appeals, and there secured a
reversal of the judgment. The appellate court
overruling the finding of the trial court on the lack
of credibility of the two defense witnesses who
testified on the occurrence of the robbery, and
holding that the facts of robbery and defendant
Maria Abad's possesion of the pendant on that
unfortunate day have been duly published,
declared respondents not responsible for the loss
of the jewelry on account of a fortuitous event, and
relieved them from liability for damages to the
owner. Plaintiff thereupon instituted the present
proceeding.
It is now contended by herein petitioner that the
Court of Appeals erred in finding that there was
robbery in the case, although nobody has been
found guilty of the supposed crime. It is
petitioner's theory that for robbery to fall under the
category of a fortuitous event and relieve the
obligor from his obligation under a contract,
pursuant to Article 1174 of the new Civil Code,
there ought to be prior finding on the guilt of the
persons responsible therefor. In short, that the
occurrence of the robbery should be proved by a
final judgment of conviction in the criminal case.
To adopt a different view, petitioner argues, would
be to encourage persons accountable for goods or
properties received in trust or consignment to
connive with others, who would be willing to be
accused in court for the robbery, in order to be
absolved from civil liability for the loss or
disappearance of the entrusted articles.
We find no merit in the contention of petitioner.
It is recognized in this jurisdiction that to
constitute a caso fortuito that would exempt a
person from responsibility, it is necessary that (1)
the event must be independent of the human will
(or rather, of the debtor's or obligor's); (2) the
occurrence must render it impossible for the
debtor to fulfill the obligation in a normal manner;
and that (3) the obligor must be free of
participation in or aggravation of the injury to the
creditor.1 A fortuitous event, therefore, can be
produced by nature, e.g., earthquakes, storms,
floods, etc., or by the act of man, such as war,
attack by bandits, robbery,2 etc., provided that the
event has all the characteristics enumerated above.
It is not here disputed that if respondent Maria
Abad were indeed the victim of robbery, and if it
were really true that the pendant, which she was
obliged either to sell on commission or to return to
petitioner, were taken during the robbery, then the
occurrence of that fortuitous event would have
extinguished her liability. The point at issue in this
proceeding is how the fact of robbery is to be
established in order that a person may avail of the
exempting provision of Article 1174 of the new Civil
Code, which reads as follows:
ART. 1174. Except in cases expressly specified by
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
19
foreseen, or which, though foreseen, were
inevitable.
It may be noted the reform that the emphasis of
the provision is on the events, not on the agents or
factors responsible for them. To avail of the
exemption granted in the law, it is not necessary
that the persons responsible for the occurrence
should be found or punished; it would only be
sufficient to established that the enforceable event,
the robbery in this case did take place without any
concurrent fault on the debtor's part, and this can
be done by preponderant evidence. To require in
the present action for recovery the prior conviction
of the culprits in the criminal case, in order to
establish the robbery as a fact, would be to
demand proof beyond reasonable doubt to prove a
fact in a civil case.
It is undeniable that in order to completely
exonerate the debtor for reason of a fortutious
event, such debtor must, in addition to the cams
itself, be free of any concurrent or contributory
fault or negligence.3 This is apparent from Article
1170 of the Civil Code of the Philippines, providing
that:
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.
It is clear that under the circumstances prevailing
at present in the City of Manila and its suburbs,
with their high incidence of crimes against persons
and property that renders travel after nightfall a
matter to be sedulously avoided without suitable
precaution and protection, the conduct of
respondent Maria G. Abad, in returning alone to
her house in the evening, carrying jewelry of
considerable value would be negligent per se and
would not exempt her from responsibility in the
case of a robbery. We are not persuaded, however,
that the same rule should obtain ten years
previously, in 1961, when the robbery in question
did take place, for at that time criminality had not
by far reached the levels attained in the present
day.
There is likewise no merit in petitioner's argument
that to allow the fact of robbery to be recognized in
the civil case before conviction is secured in the
criminal action, would prejudice the latter case, or
would result in inconsistency should the accused
obtain an acquittal or should the criminal case be
dismissed. It must be realized that a court finding
that a robbery has happened would not necessarily
mean that those accused in the criminal action
should be found guilty of the crime; nor would a
ruling that those actually accused did not commit
the robbery be inconsistent with a finding that a
robbery did take place. The evidence to establish
these facts would not necessarily be the same.
WHEREFORE, finding no error in the decision of
the Court of Appeals under review, the petition in
this case is hereby dismissed with costs against
the petitioner.
Concepcion, C.J., Dizon, Makalintal, Zaldivar,
Fernando, Teehankee, Barredo, Villamor and
Makasiar, JJ., concur.
Castro, J., took no part.
[G.R. No. 147324. May 25, 2004]
PHILIPPINE COMMUNICATIONS SATELLITE
CORPORATION, petitioner, vs. GLOBE
TELECOM, INC. (formerly and Globe Mckay
Cable and Radio Corporation), respondents.
[G.R. No. 147334. May 25, 2004]
GLOBE TELECOM, INC., petitioner,
vs. PHILIPPINE COMMUNICATION SATELLITE
CORPORATION, respondent.
DECISION
TINGA, J.:
Before the Court are two Petitions for
Review assailing the Decision of the Court of
Appeals, dated 27 February 2001, in CA-G.R. CV
No. 63619.[1]
The facts of the case are undisputed.
For several years prior to 1991, Globe Mckay Cable
and Radio Corporation, now Globe Telecom, Inc.
(Globe), had been engaged in the coordination of
the provision of various communication facilities
for the military bases of the United States of
20
America (US) in Clark Air Base, Angeles, Pampanga
and Subic Naval Base in Cubi Point,
Zambales. The said communication facilities were
installed and configured for the exclusive use of
the US Defense Communications Agency (USDCA),
and for security reasons, were operated only by its
personnel or those of American companies
contracted by it to operate said facilities. The
USDCA contracted with said American companies,
and the latter, in turn, contracted with Globe for
the use of the communication facilities. Globe, on
the other hand, contracted with local service
providers such as the Philippine Communications
Satellite Corporation (Philcomsat) for the provision
of the communication facilities.
On 07 May 1991, Philcomsat and Globe entered
into an Agreement whereby Philcomsat obligated
itself to establish, operate and provide an IBS
Standard B earth station (earth station) within
Cubi Point for the exclusive use of the
USDCA.[2] The term of the contract was for 60
months, or five (5) years.[3] In turn, Globe promised
to pay Philcomsat monthly rentals for each leased
circuit involved.[4]
At the time of the execution of the Agreement, both
parties knew that the Military Bases Agreement
between the Republic of the Philippines and the US
(RP-US Military Bases Agreement), which was the
basis for the occupancy of the Clark Air Base and
Subic Naval Base in Cubi Point, was to expire in
1991. Under Section 25, Article XVIII of the 1987
Constitution, foreign military bases, troops or
facilities, which include those located at the US
Naval Facility in Cubi Point, shall not be allowed in
the Philippines unless a new treaty is duly
concurred in by the Senate and ratified by a
majority of the votes cast by the people in a
national referendum when the Congress so
requires, and such new treaty is recognized as
such by the US Government.
Subsequently, Philcomsat installed and
established the earth station at Cubi Point and the
USDCA made use of the same.
On 16 September 1991, the Senate passed and
adopted Senate Resolution No. 141, expressing its
decision not to concur in the ratification of the
Treaty of Friendship, Cooperation and Security and
its Supplementary Agreements that was supposed
to extend the term of the use by the US of Subic
Naval Base, among others.[5] The last two
paragraphs of the Resolution state:
FINDING that the Treaty constitutes a defective
framework for the continuing relationship between
the two countries in the spirit of friendship,
cooperation and sovereign equality: Now, therefore,
be it
Resolved by the Senate, as it is hereby resolved, To
express its decision not to concur in the
ratification of the Treaty of Friendship, Cooperation
and Security and its Supplementary Agreements,
at the same time reaffirming its desire to continue
friendly relations with the government and people
of the United States of America.[6]
On 31 December 1991, the Philippine Government
sent a Note Verbale to the US Government through
the US Embassy, notifying it of the Philippines
termination of the RP-US Military Bases
Agreement. The Note Verbale stated that since the
RP-US Military Bases Agreement, as amended,
shall terminate on 31 December 1992, the
withdrawal of all US military forces from Subic
Naval Base should be completed by said date.
In a letter dated 06 August 1992, Globe notified
Philcomsat of its intention to discontinue the use
of the earth station effective 08 November 1992 in
view of the withdrawal of US military personnel
from Subic Naval Base after the termination of the
RP-US Military Bases Agreement. Globe invoked as
basis for the letter of termination Section 8
(Default) of the Agreement, which provides:
Neither party shall be held liable or deemed to be
in default for any failure to perform its obligation
under this Agreement if such failure results
directly or indirectly from force majeure or
fortuitous event.Either party is thus precluded
from performing its obligation until such force
majeure or fortuitous event shall terminate. For
the purpose of this paragraph, force majeure shall
mean circumstances beyond the control of the
party involved including, but not limited to, any
law, order, regulation, direction or request of the
Government of the Philippines, strikes or other
labor difficulties, insurrection riots, national
emergencies, war, acts of public enemies, fire,
21
floods, typhoons or other catastrophies or acts of
God.
Philcomsat sent a reply letter dated 10 August
1992 to Globe, stating that we expect [Globe] to
know its commitment to pay the stipulated rentals
for the remaining terms of the Agreement even
after [Globe] shall have discontinue[d] the use of
the earth station after November 08,
1992.[7] Philcomsat referred to Section 7 of the
Agreement, stating as follows:
7. DISCONTINUANCE OF SERVICE
Should [Globe] decide to discontinue with the use
of the earth station after it has been put into
operation, a written notice shall be served to
PHILCOMSAT at least sixty (60) days prior to the
expected date of termination. Notwithstanding the
non-use of the earth station, [Globe] shall continue
to pay PHILCOMSAT for the rental of the actual
number of T1 circuits in use, but in no case shall
be less than the first two (2) T1 circuits, for the
remaining life of the agreement. However, should
PHILCOMSAT make use or sell the earth station
subject to this agreement, the obligation of [Globe]
to pay the rental for the remaining life of the
agreement shall be at such monthly rate as may be
agreed upon by the parties.[8]
After the US military forces left Subic Naval Base,
Philcomsat sent Globe a letter dated 24 November
1993 demanding payment of its outstanding
obligations under the Agreement amounting to
US$4,910,136.00 plus interest and attorneys
fees. However, Globe refused to heed Philcomsats
demand.
On 27 January 1995, Philcomsat filed with the
Regional Trial Court of Makati a Complaint against
Globe, praying that the latter be ordered to pay
liquidated damages under the Agreement, with
legal interest, exemplary damages, attorneys fees
and costs of suit. The case was raffled to Branch
59 of said court.
Globe filed an Answer to the Complaint, insisting
that it was constrained to end the Agreement due
to the termination of the RP-US Military Bases
Agreement and the non-ratification by the Senate
of the Treaty of Friendship and Cooperation, which
events constituted force majeure under the
Agreement. Globe explained that the occurrence of
said events exempted it from paying rentals for the
remaining period of the Agreement.
On 05 January 1999, the trial court rendered
its Decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is
hereby rendered as follows:
1. Ordering the defendant to pay the plaintiff the
amount of Ninety Two Thousand Two Hundred
Thirty Eight US Dollars (US$92,238.00) or its
equivalent in Philippine Currency (computed at the
exchange rate prevailing at the time of compliance
or payment) representing rentals for the month of
December 1992 with interest thereon at the legal
rate of twelve percent (12%) per annum starting
December 1992 until the amount is fully paid;
2. Ordering the defendant to pay the plaintiff the
amount of Three Hundred Thousand (P300,000.00)
Pesos as and for attorneys fees;
3. Ordering the DISMISSAL of defendants
counterclaim for lack of merit; and
4. With costs against the defendant.
SO ORDERED.[9]
Both parties appealed the trial courts Decision to
the Court of Appeals.
Philcomsat claimed that the trial court erred in
ruling that: (1) the non-ratification by the Senate of
the Treaty of Friendship, Cooperation and Security
and its Supplementary Agreements
constitutes force majeure which exempts Globe
from complying with its obligations under the
Agreement; (2) Globe is not liable to pay the rentals
for the remainder of the term of the Agreement;
and (3) Globe is not liable to Philcomsat for
exemplary damages.
Globe, on the other hand, contended that the RTC
erred in holding it liable for payment of rent of the
earth station for December 1992 and of attorneys
fees. It explained that it terminated Philcomsats
services on 08 November 1992; hence, it had no
reason to pay for rentals beyond that date.
On 27 February 2001, the Court of Appeals
promulgated its Decision dismissing Philcomsats
appeal for lack of merit and affirming the trial
22
courts finding that certain events constituting force
majeure under Section 8 the Agreement occurred
and justified the non-payment by Globe of rentals
for the remainder of the term of the Agreement.
The appellate court ruled that the non-ratification
by the Senate of the Treaty of Friendship,
Cooperation and Security, and its Supplementary
Agreements, and the termination by the Philippine
Government of the RP-US Military Bases
Agreement effective 31 December 1991 as stated in
the Philippine Governments Note Verbale to the US
Government, are acts, directions, or requests of the
Government of the Philippines which
constitute force majeure. In addition, there were
circumstances beyond the control of the parties,
such as the issuance of a formal order by Cdr.
Walter Corliss of the US Navy, the issuance of the
letter notification from ATT and the complete
withdrawal of all US military forces and personnel
from Cubi Point, which prevented further use of
the earth station under the Agreement.
However, the Court of Appeals ruled that although
Globe sought to terminate Philcomsats services by
08 November 1992, it is still liable to pay rentals
for the December 1992, amounting to
US$92,238.00 plus interest, considering that the
US military forces and personnel completely
withdrew from Cubi Point only on 31 December
1992.[10]
Both parties filed their respective Petitions for
Review assailing the Decision of the Court of
Appeals.
In G.R. No. 147324,[11] petitioner Philcomsat
raises the following assignments of error:
A. THE HONORABLE COURT OF APPEALS ERRED
IN ADOPTING A DEFINITION OF FORCE
MAJEURE DIFFERENT FROM WHAT ITS LEGAL
DEFINITION FOUND IN ARTICLE 1174 OF THE
CIVIL CODE, PROVIDES, SO AS TO EXEMPT
GLOBE TELECOM FROM COMPLYING WITH ITS
OBLIGATIONS UNDER THE SUBJECT
AGREEMENT.
B. THE HONORABLE COURT OF APPEALS ERRED
IN RULING THAT GLOBE TELECOM IS NOT
LIABLE TO PHILCOMSAT FOR RENTALS FOR THE
REMAINING TERM OF THE AGREEMENT,
DESPITE THE CLEAR TENOR OF SECTION 7 OF
THE AGREEMENT.
C. THE HONORABLE OCURT OF APPEALS ERRED
IN DELETING THE TRIAL COURTS AWARD OF
ATTORNEYS FEES IN FAVOR OF PHILCOMSAT.
D. THE HONORABLE COURT OF APPEALS ERRED
IN RULING THAT GLOBE TELECOM IS NOT
LIABLE TO PHILCOMSAT FOR EXEMPLARY
DAMAGES.[12]
Philcomsat argues that the termination of the RP-
US Military Bases Agreement cannot be considered
a fortuitous event because the happening thereof
was foreseeable. Although the Agreement was
freely entered into by both parties, Section 8
should be deemed ineffective because it is contrary
to Article 1174 of the Civil Code. Philcomsat posits
the view that the validity of the parties definition
of force majeure in Section 8 of the Agreement as
circumstances beyond the control of the party
involved including, but not limited to, any law,
order, regulation, direction or request of the
Government of the Philippines, strikes or other
labor difficulties, insurrection riots, national
emergencies, war, acts of public enemies, fire,
floods, typhoons or other catastrophies or acts of
God, should be deemed subject to Article 1174
which defines fortuitous events as events which
could not be foreseen, or which, though foreseen,
were inevitable.[13]
Philcomsat further claims that the Court of
Appeals erred in holding that Globe is not liable to
pay for the rental of the earth station for the entire
term of the Agreement because it runs counter to
what was plainly stipulated by the parties in
Section 7 thereof. Moreover, said ruling is
inconsistent with the appellate courts
pronouncement that Globe is liable to pay rentals
for December 1992 even though it terminated
Philcomsats services effective 08 November 1992,
because the US military and personnel completely
withdrew from Cubi Point only in December
1992. Philcomsat points out that it was Globe
which proposed the five-year term of the
Agreement, and that the other provisions of the
Agreement, such as Section 4.1[14] thereof, evince
the intent of Globe to be bound to pay rentals for
the entire five-year term.[15]
23
Philcomsat also maintains that contrary to the
appellate courts findings, it is entitled to attorneys
fees and exemplary damages.[16]
In its Comment to Philcomsats Petition, Globe
asserts that Section 8 of the Agreement is not
contrary to Article 1174 of the Civil Code because
said provision does not prohibit parties to a
contract from providing for other instances when
they would be exempt from fulfilling their
contractual obligations. Globe also claims that the
termination of the RP-US Military Bases Agreement
constitutes force majeure and exempts it from
complying with its obligations under the
Agreement.[17] On the issue of the propriety of
awarding attorneys fees and exemplary damages to
Philcomsat, Globe maintains that Philcomsat is not
entitled thereto because in refusing to pay rentals
for the remainder of the term of the Agreement,
Globe only acted in accordance with its rights.[18]
In G.R. No. 147334,[19] Globe, the petitioner
therein, contends that the Court of Appeals erred
in finding it liable for the amount of US$92,238.00,
representing rentals for December 1992, since
Philcomsats services were actually terminated on
08 November 1992.[20]
In its Comment, Philcomsat claims that Globes
petition should be dismissed as it raises a factual
issue which is not cognizable by the Court in a
petition for review on certiorari.[21]
On 15 August 2001, the Court issued
a Resolution giving due course to
Philcomsats Petition in G.R. No. 147324 and
required the parties to submit their respective
memoranda.[22]
Similarly, on 20 August 2001, the Court issued
a Resolution giving due course to the Petition filed
by Globe in G.R. No. 147334 and required both
parties to submit their memoranda.[23]
Philcomsat and Globe thereafter filed their
respective Consolidated Memoranda in the two
cases, reiterating their arguments in their
respective petitions.
The Court is tasked to resolve the following issues:
(1) whether the termination of the RP-US Military
Bases Agreement, the non-ratification of the Treaty
of Friendship, Cooperation and Security, and the
consequent withdrawal of US military forces and
personnel from Cubi Point constitute force
majeure which would exempt Globe from
complying with its obligation to pay rentals under
its Agreement with Philcomsat; (2) whether Globe
is liable to pay rentals under the Agreement for the
month of December 1992; and (3) whether
Philcomsat is entitled to attorneys fees and
exemplary damages.
No reversible error was committed by the Court of
Appeals in issuing the assailed Decision; hence the
petitions are denied.
There is no merit is Philcomsats argument that
Section 8 of the Agreement cannot be given effect
because the enumeration of events
constituting force majeure therein unduly expands
the concept of a fortuitous event under Article
1174 of the Civil Code and is therefore invalid.
In support of its position, Philcomsat contends that
under Article 1174 of the Civil Code, an event must
be unforeseen in order to exempt a party to a
contract from complying with its obligations
therein. It insists that since the expiration of the
RP-US Military Bases Agreement, the non-
ratification of the Treaty of Friendship, Cooperation
and Security and the withdrawal of US military
forces and personnel from Cubi Point were not
unforeseeable, but were possibilities known to it
and Globe at the time they entered into the
Agreement, such events cannot exempt Globe from
performing its obligation of paying rentals for the
entire five-year term thereof.
However, Article 1174, which exempts an obligor
from liability on account of fortuitous events
or force majeure, refers not only to events that are
unforeseeable, but also to those which are
foreseeable, but inevitable:
Art. 1174. Except in cases 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.
A fortuitous event under Article 1174 may either
be an act of God, or natural occurrences such as
floods or typhoons,[24] or an act of man, such as
riots, strikes or wars.[25]
24
Philcomsat and Globe agreed in Section 8 of the
Agreement that the following events shall be
deemed events constituting force majeure:
1. Any law, order, regulation, direction or request
of the Philippine Government;
2. Strikes or other labor difficulties;
3. Insurrection;
4. Riots;
5. National emergencies;
6. War;
7. Acts of public enemies;
8. Fire, floods, typhoons or other catastrophies or
acts of God;
9. Other circumstances beyond the control of the
parties.
Clearly, the foregoing are either unforeseeable, or
foreseeable but beyond the control of the
parties. There is nothing in the enumeration that
runs contrary to, or expands, the concept of a
fortuitous event under Article 1174.
Furthermore, under Article 1306[26] of the Civil
Code, parties to a contract may establish such
stipulations, clauses, terms and conditions as they
may deem fit, as long as the same do not run
counter to the law, morals, good customs, public
order or public policy.[27]
Article 1159 of the Civil Code also provides that
[o]bligations arising from contracts have the force
of law between the contracting parties and should
be complied with in good faith.[28]Courts cannot
stipulate for the parties nor amend their agreement
where the same does not contravene law, morals,
good customs, public order or public policy, for to
do so would be to alter the real intent of the
parties, and would run contrary to the function of
the courts to give force and effect thereto.[29]
Not being contrary to law, morals, good customs,
public order, or public policy, Section 8 of the
Agreement which Philcomsat and Globe freely
agreed upon has the force of law between them.[30]
In order that Globe may be exempt from non-
compliance with its obligation to pay rentals under
Section 8, the concurrence of the following
elements must be established: (1) the event must
be independent of the human will; (2) the
occurrence must render it impossible for the
debtor to fulfill the obligation in a normal manner;
and (3) the obligor must be free of participation in,
or aggravation of, the injury to the creditor.[31]
The Court agrees with the Court of Appeals and
the trial court that the abovementioned requisites
are present in the instant case. Philcomsat and
Globe had no control over the non-renewal of the
term of the RP-US Military Bases Agreement when
the same expired in 1991, because the prerogative
to ratify the treaty extending the life thereof
belonged to the Senate. Neither did the parties
have control over the subsequent withdrawal of the
US military forces and personnel from Cubi Point
in December 1992:
Obviously the non-ratification by the Senate of the
RP-US Military Bases Agreement (and its
Supplemental Agreements) under its Resolution
No. 141. (Exhibit 2) on September 16, 1991 is
beyond the control of the parties. This resolution
was followed by the sending on December 31, 1991
o[f] a Note Verbale (Exhibit 3) by the Philippine
Government to the US Government notifying the
latter of the formers termination of the RP-US
Military Bases Agreement (as amended) on 31
December 1992 and that accordingly, the
withdrawal of all U.S. military forces from Subic
Naval Base should be completed by said
date. Subsequently, defendant [Globe] received a
formal order from Cdr. Walter F. Corliss II
Commander USN dated July 31, 1992 and a
notification from ATT dated July 29, 1992 to
terminate the provision of T1s services (via an IBS
Standard B Earth Station) effective November 08,
1992. Plaintiff [Philcomsat] was furnished with
copies of the said order and letter by the defendant
on August 06, 1992.
Resolution No. 141 of the Philippine Senate and
the Note Verbale of the Philippine Government to
the US Government are acts, direction or request
of the Government of the Philippines and
circumstances beyond the control of the
defendant. The formal order from Cdr. Walter
Corliss of the USN, the letter notification from ATT
25
and the complete withdrawal of all the military
forces and personnel from Cubi Point in the year-
end 1992 are also acts and circumstances beyond
the control of the defendant.
Considering the foregoing, the Court finds and so
holds that the afore-narrated circumstances
constitute force majeure or fortuitous event(s) as
defined under paragraph 8 of the Agreement.
From the foregoing, the Court finds that the
defendant is exempted from paying the rentals for
the facility for the remaining term of the contract.
As a consequence of the termination of the RP-US
Military Bases Agreement (as amended) the
continued stay of all US Military forces and
personnel from Subic Naval Base would no longer
be allowed, hence, plaintiff would no longer be in
any position to render the service it was obligated
under the Agreement. To put it blantly (sic), since
the US military forces and personnel left or
withdrew from Cubi Point in the year end
December 1992, there was no longer any necessity
for the plaintiff to continue maintaining the IBS
facility. [32] (Emphasis in the original.)
The aforementioned events made impossible the
continuation of the Agreement until the end of its
five-year term without fault on the part of either
party. The Court of Appeals was thus correct in
ruling that the happening of such fortuitous events
rendered Globe exempt from payment of rentals for
the remainder of the term of the Agreement.
Moreover, it would be unjust to require Globe to
continue paying rentals even though Philcomsat
cannot be compelled to perform its corresponding
obligation under the Agreement. As noted by the
appellate court:
We also point out the sheer inequity of
PHILCOMSATs position. PHILCOMSAT would like
to charge GLOBE rentals for the balance of the
lease term without there being any corresponding
telecommunications service subject of the lease. It
will be grossly unfair and iniquitous to hold
GLOBE liable for lease charges for a service that
was not and could not have been rendered due to
an act of the government which was clearly beyond
GLOBEs control. The binding effect of a contract
on both parties is based on the principle that the
obligations arising from contracts have the force of
law between the contracting parties, and there
must be mutuality between them based essentially
on their equality under which it is repugnant to
have one party bound by the contract while leaving
the other party free therefrom (Allied Banking
Corporation v. Court of Appeals, 284 SCRA
357).[33]
With respect to the issue of whether Globe is liable
for payment of rentals for the month of December
1992, the Court likewise affirms the appellate
courts ruling that Globe should pay the same.
Although Globe alleged that it terminated the
Agreement with Philcomsat effective 08 November
1992 pursuant to the formal order issued by Cdr.
Corliss of the US Navy, the date when they actually
ceased using the earth station subject of the
Agreement was not established during the
trial.[34] However, the trial court found that the US
military forces and personnel completely withdrew
from Cubi Point only on 31 December
1992.[35] Thus, until that date, the USDCA
had control over the earth station and had the
option of using the same. Furthermore, Philcomsat
could not have removed or rendered ineffective said
communication facility until after 31 December
1992 because Cubi Point was accessible only to US
naval personnel up to that time. Hence, the Court
of Appeals did not err when it affirmed the trial
courts ruling that Globe is liable for payment of
rentals until December 1992.
Neither did the appellate court commit any error in
holding that Philcomsat is not entitled to attorneys
fees and exemplary damages.
The award of attorneys fees is the exception rather
than the rule, and must be supported by factual,
legal and equitable justifications.[36] In previously
decided cases, the Court awarded attorneys fees
where a party acted in gross and evident bad faith
in refusing to satisfy the other partys claims and
compelled the former to litigate to protect his
rights;[37] when the action filed is clearly
unfounded,[38] or where moral or exemplary
damages are awarded.[39] However, in cases where
both parties have legitimate claims against each
other and no party actually prevailed, such as in
the present case where the claims of both parties
were sustained in part, an award of attorneys fees
would not be warranted.[40]
26
Exemplary damages may be awarded in cases
involving contracts or quasi-contracts, if the erring
party acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner.[41] In the present
case, it was not shown that Globe acted wantonly
or oppressively in not heeding Philcomsats
demands for payment of rentals. It was established
during the trial of the case before the trial court
that Globe had valid grounds for refusing to
comply with its contractual obligations after 1992.
WHEREFORE, the Petitions are DENIED for lack of
merit. The assailed Decision of the Court of Appeals
in CA-G.R. CV No. 63619 is AFFIRMED.
SO ORDERED.
[G.R. No. 107968. October 30, 1996]
ELIAS S. CIPRIANO and/or E.S. CIPRIANO
ENTERPRISES, petitioner, vs. THE COURT OF
APPEALS and MACLIN ELECTRONICS,
INC., respondents.
DECISION
MENDOZA, J.:
This is a petition for review of the decision[1] of the
Court of Appeals in CA-G.R. CV No. 36045 which
affirmed in toto the decision of Branch 58[2] of the
Quezon City Regional Trial Court, ordering the
petitioner to pay P252,155.00 to private
respondent for the loss of the latters vehicle while
undergoing rustproofing and P10,000.00 in
attorneys fees.
The facts of the case are as follows:
Petitioner Elias S. Cipriano is the owner of E.S.
Cipriano Enterprises, which is engaged in the
rustproofing of vehicles, under the style
Motobilkote. On April 30, 1991, private respondent
Maclin Electronics, Inc., through an employee,
brought a 1990 model Kia Pride Peoples car to
petitioners shop for rustproofing. The car had been
purchased the year before from the Integrated Auto
Sales, Inc. for P252,155.00.
The vehicle was received in the shop under Job
Order No. 123581,[3] which showed the date it was
received for rustproofing as well its condition at the
time. Neither the time of acceptance nor the hour
of release, however, was specified. According to the
petitioner, the car was brought to his shop at 10
oclock in the morning of April 30, 1991 and was
ready for release later that afternoon, as it took
only six hours to complete the process of
rustproofing.
In the afternoon of May 1, 1991, fire broke out at
the Lambat restaurant, which petitioner also
owned, adjoining his Mobilkote rustproofing
shop. The fire destroyed both the shop and the
restaurant, including private respondents Kia
Pride. The car had been kept inside the building,
allegedly to protect it from theft. Petitioner claimed
that despite efforts to save the vehicle, there was
simply not enough time to get it out of the
building, unlike three other cars which had been
saved because they were parked near the entrance
of the garage.[4]
On May 8 1991, private respondent sent a letter to
petitioner, demanding reimbursement for the value
of the Kia Pride. In reply, petitioner denied liability
on the ground that the fire was a fortuitous
event. This prompted private respondent to bring
this suit for the value of its vehicle and for
damages against petitioner. Private respondent
alleged that its vehicle was lost due to the
negligence and imprudence of the petitioner, citing
petitioners failure to register his business with the
Department of Trade and Industry under P.D. No.
1572 and to insure it as required in the rules
implementing the Decree.[5]
In his Answer, petitioner invoked Art. 1174 of the
Civil Code and denied liability for the loss which he
alleged was due to a fortuitous event. He later
testified that he employed an electrician who
regularly inspected the lighting in his restaurant
and rustproofing shop. In addition, he claimed he
had installed fire-fighting devices and that the fire
was an accident entirely independent of his will
and devoid of any negligence on his part. He
further averred that private respondents car was
ready for release as early as afternoon of April 30,
1991, and that it was private respondents delay in
claiming it that was the cause of the loss.
Petitioner explained that rustproofing involved
spraying asphalt-like materials underneath motor
vehicle so that rust will not corrode its body and
27
that the materials and chemicals used for this
purpose are not inflammable. Therefore, he could
not be made to assume the risk of loss due to
fire. He also claimed that he was not required to
register his business with the Department of Trade
and Industry, because he was not covered by P.D.
No. 1572.
On the other hand, private respondent argued that
petitioner was liable for the loss of the car even if it
was caused by a fortuitous event. It contended that
the nature of petitioners business required him to
assume the risk because under P.D. No. 1572,
petitioner was required to insure his property as
well as those of his customers.
The trial court sustained the private respondents
contention that the failure of defendant to comply
with P.D. No. 1572 is in effect a manifest act of
negligence which renders defendant [petitioner
herein] liable for the loss of the car even if the
same was caused by fire,[6] even as it ruled that the
business of rustproffing is definitely covered by
P.D. No. 1572. Since petitioner did not register his
business and insure it, he must bear the cost of
loss of his customers. As already noted, the court
ordered petitioner to pay private
respondent P252,155.00 with interest at 6% per
annum from the filing of the case and attorneys
fees in the amount of P10,000.00.
On appeal, the decision was affirmed. The Court of
Appeals ruled that the provisions of the Civil Code
relied upon by the petitioner are not applicable to
this case, and that the law applicable to the case is
P.D. No. 1572, the purpose of which is to protect
customers who entrust their properties to service
and repair enterprises. The Court of Appeals held
that by virtue of the provisions of P.D. No. 1572
and its implementing rules and regulations which
require fire insurance coverage prior to
accreditation, owners of service and repair
enterprises assume the risk of loss of their
customers property. The appellate court stated:
Defendant-appellant was operating the business of
rustproofing of cars and other motor vehicles
illegally at the time of the fire in question; i.e.,
without the necessary accreditation and license
from the Department of Trade and Industry, and it
is for this reason that it did not carry at least a fire
insurance coverage to protect the vehicles
entrusted to it by its customers. Therefore, it must
bear the consequences of such illegal operation,
including the risk of losses or injuries to the
vehicles of its customers brought by unforeseen or
fortuitous events like the fire that gutted its shop
and completely burned appellees car while said
vehicle was in its possession.[7]
The Court of Appeals also affirmed the award of
attorneys fees, ruling that although the lower court
did not expressly and specifically state the reason
for the award, the basis therefor could be inferred
from the finding that petitioner unjustly refused to
pay private respondents valid and demandable
claim. Said the appellate court:
Such wanton, reckless, and illegal operation of
appellants business resulted in appellees lack of
protection from the fire that gutted appellants shop
and which completely burned its car while in
appellants possession for rustproofing. Yet
appellant adamantly and stubbornly refused to pay
appellee the value of its lost car. It was, therefore,
correctly ordered by the court a quo to pay appellee
reasonable attorneys fees as it had unjustly and
unreasonably refused to satisfy the latters plainly
valid, just, and demandable claim, compelling said
appellee to file this action to protect its interest
(Art. 2208, pars. (2) and (5), New Civil Code).[8]
Hence, this appeal. Petitioner contends that the
fire which destroyed private respondents car was a
fortuitous event for which he cannot be held
responsible. In support of his argument, he cites
the following provisions of the Civil Code:
ART. 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.
ART. 1262. An obligation which consists in the
delivery of a determinate thing shall be
extinguished if it should be lost or destroyed
without the fault of the debtor, and before he has
incurred in delay.
When by law or stipulation, the obligor is liable
even for fortuitous events, the loss of the thing
does not extinguish the obligation, and he shall be
28
responsible for damages. The same rule applies
when the nature of the obligation requires the
assumption of risk.
The contention is without merit. The issue in this
case is whether petitioner was required to insure
his business and the vehicles received by him in
the course of his business and, if so, whether his
failure to do so constituted negligence, rendering
him liable for loss due to the risk required to be
insured against. We hold that both questions must
be answered in the affirmative.
We have already held that violation of a statutory
duty is negligence per se. In F.F. Cruz and Co., Inc.
v. Court of Appeals,[9] we held the owner of a
furniture shop liable for the destruction of the
plaintiffs house in a fire which started in his
establishment in view of his failure to comply with
an ordinance which required the construction of a
firewall. In Teague v. Fernandez,[10] we stated that
where the very injury which was intended to be
prevented by the ordinance has happened, non-
compliance with the ordinance was not only an act
negligence, but also the proximate cause of the
death.
Indeed, the existence of a contract between
petitioner and private respondent does not bar a
finding of negligence under the principles of quasi-
delict, as we recently held in Fabre v. Court of
Appeals.[11] Petitioner's negligence is the source of
his obligation. He is not being held liable for
breach of his contractual obligation due to
negligence but for his negligence in not complying
with a duty imposed on him by law. It is therefore
immaterial that the loss occasioned to private
respondent was due to a fortuitous event, since it
was petitioners negligence in not insuring against
the risk which was the proximate cause of the loss.
Thus, P.D. No. 1572, 1 requires service and repair
enterprises for motor vehicles, like that of
petitioners to register with the Department of
Trade and Industry. As condition for such
registration or accreditation, Ministry Order No. 32
requires covered enterprises to secure insurance
coverage. Rule III of this Order provides in
pertinent parts:[12]
1- REQUIREMENTS FOR ACCREDITATION
1) Enterprises applying for original accreditation left to inference as the appellate court held in this
shall submit the following: case. The reason for this is that it is not sound
policy to penalize the right to litigate. An award of
1.1. List of machineries/equipment/tools in useful attorneys fees, being an exception to this policy
condition; and limited to the grounds enumerated in the
law,[15] must be fully justified in the decision. It can
1.2. List of certified engineers/accredited
not simply be inserted as an item of recoverable
technicians mechanics with their personal data;
damages in the judgment of the court. Since in this
1.3. Copy of Insurance Policy of the shop covering case there is no justification for the award of
the property entrusted by its customer for repair, attorneys fees in the decision of the trial court, it
service or maintenance together with a copy of the was error for the Court of Appeals to sustain such
official receipt covering the full payment of award.
premium;
WHEREFORE, the decision, dated November 18,
1.4. Copy of Bond referred to under Section 7, Rule 1992, of the Court of Appeals is AFFIRMED, with
III of this Rules and Regulations; the modification that the award of attorneys fees is
DELETED.
1.5. Written service warranty in the form
prescribed by the Bureau; SO ORDERED.

1.6. Certificate issued by the Securities and Regalado (Chairman), Romero, Puno, and Torres,
Exchange Commission and Articles of Jr., JJ., concur.
Incorporation or Partnership in case of corporation
or partnership;

1.7. Such other additional documents which the

Director may require from time to time.

8 - INSURANCE POLICY

The insurance policy for the following risks like

theft, pilferage, fire, flood and loss should cover
exclusively the machines, motor vehicles, heavy
equipment, engines, electronics, electrical,
airconditioners, refrigerators, office machines and
data processing equipment, medical and dental
equipment, other consumer mechanical and
industrial equipment stored for repair and/or
service in the premises of the applicant.

There is thus a statutory duty imposed on

petitioner and it is for his failure to comply with
this duty that he was guilty of negligence rendering
him liable for damages to private
respondent. While the fire in this case may be
considered a fortuitous event,[13] this circumstance
cannot exempt petitioner from liability for loss.

We think, however, that the Court of Appeals erred

in sustaining the award of attorneys fees by the
lower court. It is now settled that the reasons or
grounds for an award of attorneys fees must be set
forth in the decision of the court.[14] They cannot be
29