G.R. No. 83748. May 12, 1989. * professional fee as provided in Art.
IV computed upon a reasonable
FLAVIO K . MACASAET & ASSOCIATES, INC., petitioner, vs.COMMISSION ON AUDIT
and PHILIPPINE TOURISM AUTHORITY, respondents.
Civil Law; Obligations and Contracts; Contracts; Obligation arising from
contract has the force of law between the contracting parties and should be complied
with in good faith. ___ The terminologies in the contract being clear, leaving no doubt
as to the intention of the contracting parties, their literal meaning control (Article
1370, Civil Code). The price escalation cost must be deemed included in the final
actual project cost and petitioner held entitled to the payment of its additional
professional fees. Obligations arising from contract have the force of law between
the contracting parties and should be complied with in good faith (Article 1159, Civil
Code).
MELENCIO-HERRERA, J.:
In this Petition for Certiorari, pursuant to Section 7, Article IX of the 1987
Constitution, 1 petitioner, Flavio K. Macasaet & Associates, Inc., prays that the ruling
of public respondent Commission on Audit (COA) denying its claim for completion of
payment of professional fees be overturned. The facts follow. On 15 September 1977
respondent Philippine Tourism Authority (PTA) entered into a Contract for "Project
Design and Management Services for the development of the proposed Zamboanga
Golf and Country Club, Calarian, Zamboanga City" with petitioner company, but
originally with Flavio K Macasaet alone (hereinafter referred to simply as the
"Contract").
Under the Contract, PTA obligated itself to pay petitioner a professional fee of seven
(7%) of the actual construction cost, as follows:
ARTICLE IV — PROFESSIONAL FEE
In consideration for the professional services to be performed by
Designer under Article I of this Agreement, the Authority shall pay
seven percent (7%) of the actual construction cost.
In addition, a Schedule of Payments was provided for while the construction was in
progress and up to its final completion, thus:
ARTICLE V — SCHEDULE OF PAYMENTS
1. Upon the execution of the Agreement but not more than fifteen
(15) days, a minimum payment equivalent to 10 percent of the
estimated construction cost of the project.
2. Upon the completion of the schematic design services, but not
more than 15 days after the submission of the schematic design to
the Authority, a sum equivalent to 15% of the professional fee as
stated in Art. IV computed upon the reasonable estimated
construction cost of the project.
3. Upon completion of the design development services, but not
more than 15 days after submission of the design development to
the authority, a sum equivalent to 20% of the professional fee as
stated in Art. IV, computed upon the reasonable estimated
construction cost.
4. Upon completion of the contract document services but not
more than 15 days after submission of the contract document to
the Authority, a sum equivalent to 25% of the professional fee as
stated in Art. IV, shall be paid computed on the same basis as
above.
5. Upon completion of the work and acceptance thereof by the
Authority, the balance of the professional fee, computed on
the final actual project cost shall be paid. (Emphasis supplied)
Pursuant to the foregoing Schedule, the PTA made periodic payments of the
stipulated professional fees to petitioner. And, upon completion of the project, PTA
paid petitioners what it perceived to be the balance of the latter's professional fees.
It turned out, however, that after the project was completed, PTA paid Supra
Construction Company, the main contractor, the additional sum of P3,148,198.26
representing the escalation cost of the contract price due to the increase in the price
of construction materials.
Upon learning of the price escalation, petitioner requested payment of P219,302.47
additional professional fee representing seven (7%) percent of P3,148,198.26.
On 3 July 1985 PTA denied payment on the ground that "the subject price escalation
referred to increased cost of construction materials and did not entail additional work
on the part of petitioner as to entitle it to additional compensation under Article VI
of the contract." 2
Reconsiderations sought by the petitioner, up to respondent COA, were to no avail.
The latter expressed the opinion that "to allow subject claim in the absence of a
showing that extra or additional services had been rendered by claimant would
certainly result in overpayment to him to the prejudice of the Government" (1st
Indorsement, July 10, 1987, p. 3, Rollo, p. 42).
Hence this Petition, to which we gave due course.
The basic issue for resolution is petitioner's entitlement to additional professional
fees, which, in turn, hinges on whether or not the price escalation should be included
in the "final actual project cost."
Public respondents, through the Solicitor General, maintain that petitioner had been
paid its professional fee upon completion of the project and that its claim for
additional payment is without any legal and factual basis for, after all, no additional
architectural services were rendered other than the ones under the terms of the
Contract. On the other hand, petitioner anchors its claim to additional professional
fees, not on any change in services rendered, but on Article IV, and paragraph 5 of
Article V, of the Contract, supra.
The very terminologies used in the Contract call for affirmative relief in petitioner's
favor.
Under Article IV of said Contract, petitioner was to be entitled to seven (7%) of the
"actual construction cost." Under paragraphs 1, 2, 3, and 4, Article V, periodic
payments were to be based on a "reasonable estimated construction cost."
ultimately, under paragraph 5, Article V, the balance of the professional fee was to
be computed on the basis of "the final actual project cost."
contractor. The increased cost of materials was not the doing of either contracting
party.
That an escalation clause was not specifically provided for in the Contract is of no
moment either for it may be considered as already "built-in" and understood from
the very terms "actual construction cost," and eventually "final actual project cost."
Article VI of the Contract, supra, has no bearing on the present controversy either. It
speaks of any major change in the planning and engineering aspects necessitating the
award and payment of additional compensation. Admittedly, there was no additional
work by petitioner, which required additional compensation. Rather, petitioner's
claim is for payment of the balance of its professional fees based on the "final actual
project cost" and not for additional compensation based on Article VI.
The terminologies in the contract being clear, leaving no doubt as to the intention of
the contracting parties, their literal meaning control (Article 1370, Civil Code). The
price escalation cost must be deemed included in the final actual project cost and
petitioner held entitled to the payment of its additional professional fees. Obligations
arising from contract have the force of law between the contracting parties and
should be complied with in good faith (Article 11 59, Civil Code).
WHEREFORE, the ruling of respondent Commission on Audit is hereby SET ASIDE and
respondent Philippines Tourism Authority is hereby ordered to pay petitioner the
additional amount of P219,302.47 to complete the payment of its professional fee
under their Contract for Project Design and Management Services.
SO ORDERED.

The use of the terms "actual construction cost", gradating into "final actual project
cost" is not without significance. The real intendment of the parties, as shown by
paragraph 5, Article V, of their Contract was to base the ultimate balance of
petitioner's professional fees not on "actual construction cost" alone but on the final
actual project cost; not on "construction cost" alone but on "project cost." By so
providing, the Contract allowed for flexibility based on actuality and as a matter of
equity for the contracting parties. For evidently, the final actual project cost would
not necessarily tally with the actual construction cost initially computed. The "final
actual project cost" covers the totality of all costs as actually and finally determined,
and logically includes the escalation cost of the contract price.

It matters not that the price escalation awarded to the construction company did not
entail additional work for petitioner. As a matter of fact, neither did it for the main
 VOL. 269, MARCH 14, 1997 733
Traders Royal Bank Employees Union-Independent vs. NLRC
G.R. No. 120592. March 14, 1997.*
TRADERS ROYAL BANK EMPLOYEES UNION-INDEPENDENT, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and EMMANUEL NOEL A. CRUZ, respondents.
Attorneys; Attorney’s Fees; There are two commonly accepted concepts of
attorney’s fees, the so-called ordinary and extraordinary.—There are two commonly
accepted concepts of attorney’s fees, the socalled ordinary and extraordinary. In its
ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer
by his client for the legal services he has rendered to the latter. The basis of this
compensation is the fact of his employment by and his agreement with the client. In
its extraordinary concept, an attorney’s fee is an indemnity for damages ordered by
the court to be paid by the losing party in a litigation. The basis of this is any of the
cases provided by law where such award can be made, such as those authorized in
Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they
have agreed that the award shall pertain to the lawyer as additional compensation
or as part thereof.
_______________
*
SECOND DIVISION.
734
734 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
Same; Same; It is well settled that a claim for attorney’s fees may be asserted
either in the very action in which the services of a lawyer had been rendered or in a
separate action.—As an adjunctive episode of the action for the recovery of bonus
differentials in NLRC-NCR Certified Case No. 0466, private respondent’s present claim
for attorney’s fees may be filed before the NLRC even though or, better stated,
especially after its earlier decision had been reviewed and partially affirmed. It is well
settled that a claim for attorney’s fees may be asserted either in the very action in
which the services of a lawyer had been rendered or in a separate action.
Same; Same; A petition for attorney’s fees may be filed before the judgment in
favor of the client is satisfied or the proceeds thereof delivered to the client.—While
a claim for attorney’s fees may be filed before the judgment is rendered, the
determination as to the propriety of the fees or as to the amount thereof will have
to be held in abeyance until the main case from which the lawyer’s claim for
attorney’s fees may arise has become final. Otherwise, the determination to be made
by the courts will be premature. Of course, a petition for attorney’s fees may be filed
before the judgment in favor of the client is satisfied or the proceeds thereof
delivered to the client.
Same; Same; A lawyer has two options as to when to file his claim for
professional fees.—It is apparent from the foregoing discussion that a lawyer has two
options as to when to file his claim for professional fees. Hence, private respondent
was well within his rights when he made his claim and waited for the finality of the
judgment for holiday pay differential, instead of filing it ahead of the award’s
complete resolution. To declare that a lawyer may file a claim for fees in the same
action only before the judgment is reviewed by a higher tribunal would deprive him
of his aforestated options and render ineffective the foregoing pronouncements of
this Court.
Same; Same; Concept of General and Special Retainer.—A general retainer, or
retaining fee, is the fee paid to a lawyer to secure his future services as general
counsel for any ordinary legal problem that may arise in the routinary business of the
client and referred to him for legal action. The future services of the lawyer are
secured and committed to the retaining client. For this, the client pays the lawyer a
fixed retainer fee which could be monthly or otherwise, depending upon their
arrangement. The fees are paid whether or not
735
VOL. 269, MARCH 14, 1997 735
Traders Royal Bank Employees Union-Independent vs. NLRC
there are cases referred to the lawyer. The reason for the remuneration is that
the lawyer is deprived of the opportunity of rendering services for a fee to the
opposing party or other parties. In fine, it is a compensation for lost opportunities. A
special retainer is a fee for a specific case handled or special service rendered by the
lawyer for a client. A client may have several cases demanding special or individual
attention. If for every case there is a separate and independent contract for
attorney’s fees, each fee is considered a special retainer.
Same; Same; Same; Generally, where the employment of an attorney is under
an express valid contract fixing the compensation for the attorney, such contract is
conclusive as to the amount of compen-sation.—Generally speaking, where the
employment of an attorney is under an express valid contract fixing the
compensation for the attorney, such contract is conclusive as to the amount of
compensation. We cannot, however, apply the foregoing rule in the instant petition
and treat the fixed fee of P3,000.00 as full and sufficient consideration for private
respondent’s services, as petitioner would have it.
Same; Same; Same; The retainer agreement cannot control the measure of
remuneration for private respondent’s services.—We have already shown that the
P3,000.00 is independent and different from the compensation which private
respondent should receive in payment for his services. While petitioner and private
respondent were able to fix a fee for the latter’s promise to extend services, they
were not able to come into agreement as to the law firm’s actual performance of
services in favor of the union. Hence, the retainer agreement cannot control the
measure of remuneration for private respondent’s services.
Same; Same; Same; Whether there is an agreement or not, the courts can fix a
reasonable compensation which lawyers should receive for their professional
services.—In any case, whether there is an agreement or not, the courts can fix a
reasonable compensation which lawyers should receive for their professional
services. However, the value of private respondent’s legal services should not be
established on the basis of Article 111 of the Labor Code alone.
Same; Same; Same; Where a lawyer is employed without a price for his services
being agreed upon, the courts shall fix the amount on quantum meruit basis.—The
measure of compensation for private
736
736 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
respondent’s services as against his client should properly be addressed by the
rule of quantum meruit long adopted in this jurisdiction. Quantum meruit, meaning
“as much as he deserves,” is used as the basis for determining the lawyer’s
professional fees in the absence of a contract, but recoverable by him from his client.
Where a lawyer is employed without a price for his services being agreed upon, the
courts shall fix the amount on quantum meruit basis. In such a case, he would be
entitled to receive what he merits for his services.
Same; Same; Same; Guidelines in ascertaining the real worth of a lawyer’s
services.—Over the years and through numerous decisions, this Court has laid down
guidelines in ascertaining the real worth of a lawyer’s services. These factors are now
codified in Rule 20.01, Canon 20 of the Code of Professional Responsibility and should
be considered in fixing a reasonable compensation for services rendered by a lawyer
on the basis of quantum meruit. These are: (a) the time spent and the extent of
services rendered or required; (b) the novelty and difficulty of the questions involved;
(c) the importance of the subject matter; (d) the skill demanded; (e) the probability
of losing other employment as a result of acceptance of the proferred case; (f) the
customary charges for similar services and the schedule of fees of the IBP chapter to
which the lawyer belongs; (g) the amount involved in the controversy and the
benefits resulting to the client from the services; (h) the contingency or certainty of
compensation; (i) the character of the employment, whether occasional or
established; and (j) the professional standing of the lawyer.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Filemon G. Tercero for petitioner.
Emmanuel Noel A. Cruz for private respondent.
REGALADO, J.:
Petitioner Traders Royal Bank Employees Union and private respondent Atty.
Emmanuel Noel A. Cruz, head of the E.N.A. Cruz and Associates law firm, entered into
a retainer agreement on February 26, 1987 whereby the former obligated itself to
pay the latter a monthly retainer fee of
737
VOL. 269, MARCH 14, 1997 737
Traders Royal Bank Employees Union-Independent vs. NLRC
P3,000.00 in consideration of the law firm’s undertaking to render the services
enumerated in their contract.1 Parenthetically, said retainer agreement was
terminated by the union on April 4, 1990.2
During the existence of that agreement, petitioner union referred to private
respondent the claims of its members for holiday, mid-year and year-end bonuses
against their employer, Traders Royal Bank (TRB). After the appropriate complaint
was filed by private respondent, the case was certified by the Secretary of Labor to
the National Labor Relations Commission (NLRC) on March 24, 1987 and docketed
as NLRC-NCR Certified Case No. 0466.3
On September 2, 1988, the NLRC rendered a decision in the foregoing case in
favor of the employees, awarding them holiday pay differential, mid-year bonus
differential, and year-end bonus differential.4 The NLRC, acting on a motion for the
issuance of a writ of execution filed by private respondent as counsel for petitioner
union, raffled the case to Labor Arbiter Oswald Lorenzo.5
However, pending the hearing of the application for the writ of execution, TRB
challenged the decision of the NLRC before the Supreme Court. The Court, in its
decision promulgated on August 30, 1990,6 modified the decision of the NLRC by
deleting the award of mid-year and year-end bonus differentials while affirming the
award of holiday pay differential.7
The bank voluntarily complied with such final judgment and determined the
holiday pay differential to be in the amount of P175,794.32. Petitioner never
contested the
_______________
1
Rollo, 26-30.
2
Ibid., 45, 105.
3
Ibid., 4.
4
Ibid., 5.
5
Ibid., 106.
6
Traders Royal Bank vs. NLRC and Traders Royal Bank Employees Union, G.R. No.
88168.
7
Ibid., 31-38.
738
738 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
amount thus found by TRB.8 The latter duly paid its concerned employees their
respective entitlement in said sum through their payroll.9
After private respondent received the above decision of the Supreme Court on
September 18, 1990,10 he notified the petitioner union, the TRB management and
the NLRC of his right to exercise and enforce his attorney’s lien over the award of
holiday pay differential through a letter dated October 8, 1990. 11
 Thereafter, on July 2, 1991, private respondent filed a motion before Labor
Arbiter Lorenzo for the determination of his attorney’s fees, praying that ten percent
(10%) of the total award for holiday pay differential computed by TRB at P175,794.32,
or the amount of P17,579.43, be declared as his attorney’s fees, and that petitioner
union be ordered to pay and remit said amount to him.12
The TRB management manifested before the labor arbiter that they did not wish
to oppose or comment on private respondent’s motion as the claim was directed
against the union,13 while petitioner union filed a comment and opposition to said
motion on July 15, 1991.14 After considering the position of the parties, the labor
arbiter issued an order15 on November 26, 1991 granting the motion of private
respondent, as follows:
WHEREFORE, premises considered, it is hereby ordered that the TRADERS ROYAL
BANK EMPLOYEES UNION with offices at Kanlaon Towers, Roxas Boulevard is hereby
ordered (sic) to pay without delay the attorney’s fees due the movant law firm, E.N.A.
_______________
8
Ibid., 106.
9
Ibid., 17, 106.
10
Ibid., 106.
11
Ibid., 112-113.
12
Ibid., 39-43.
13
Ibid., 107.
14
Ibid., 44-45.
15
Ibid., 46-49.
739
VOL. 269, MARCH 14, 1997 739
Traders Royal Bank Employees Union-Independent vs. NLRC
CRUZ and ASSOCIATES the amount of P17,574.43 or ten (10%) per cent of the
P175,794.32 awarded by the Supreme Court to the members of the former.
This constrained petitioner to file an appeal with the NLRC on December 27, 1991,
seeking a reversal of that order.16
On October 19, 1994, the First Division of the NLRC promulgated a resolution
affirming the order of the labor arbiter.17The motion for reconsideration filed by
petitioner was denied by the NLRC in a resolution dated May 23, 1995,18 hence the
petition at bar.
Petitioner maintains that the NLRC committed grave abuse of discretion
amounting to lack of jurisdiction in upholding the award of attorney’s fees in the
amount of P17,574.43, or ten percent (10%) of the P175,794.32 granted as holiday
pay differential to its members, in violation of the retainer agreement; and that the
challenged resolution of the NLRC is null and void,19 for the reasons hereunder
stated.
Although petitioner union concedes that the NLRC has jurisdiction to decide
claims for attorney’s fees, it contends that the award for attorney’s fees should have
been incorporated in the main case and not after the Supreme Court had already
reviewed and passed upon the decision of the NLRC. Since the claim for attorney’s
fees by private respondent was neither taken up nor approved by the Supreme Court,
no attorney’s fees should have been allowed by the NLRC.
Thus, petitioner posits that the NLRC acted without jurisdiction in making the
award of attorney’s fees, as said act constituted a modification of a final and
executory judgment of the Supreme Court which did not award attorney’s fees. It
then cited decisions of the Court declaring that a decision which has become final
and executory can no longer be altered or modified even by the court which rendered
the same.
_______________
16
Ibid., 7.
17
Ibid., 17-21.
18
Ibid., 22-25.
19
Ibid., 7-8.
740
740 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
On the other hand, private respondent maintains that his motion to determine
attorney’s fees was just an incident of the main case where petitioner was awarded
its money claims. The grant of attorney’s fees was the consequence of his exercise of
his attorney’s lien. Such lien resulted from and corresponds to the services he
rendered in the action wherein the favorable judgment was obtained. To include the
award of the attorney’s fees in the main case presupposes that the fees will be paid
by TRB to the adverse party. All that the non-inclusion of attorney’s fees in the award
means is that the Supreme Court did not order TRB to pay the opposing party
attorney’s fees in the concept of damages. He is not therefore precluded from filing
his motion to have his own professional fees adjudicated.
In view of the substance of the arguments submitted by petitioner and private
respondent on this score, it appears necessary to explain and consequently clarify
the nature of the attorney’s fees subject of this petition, in order to dissipate the
apparent confusion between and the conflicting views of the parties.
There are two commonly accepted concepts of attorney’s fees, the so-called
ordinary and extraordinary.20 In its ordinary concept, an attorney’s fee is the
reasonable compensation paid to a lawyer by his client for the legal services he has
rendered to the latter. The basis of this compensation is the fact of his employment
by and his agreement with the client.
In its extraordinary concept, an attorney’s fee is an indemnity for damages
ordered by the court to be paid by the losing party in a litigation. The basis of this is
any of the cases provided by law where such award can be made, such as those
authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the
client, unless they have agreed that the award shall pertain to the lawyer as
additional compensation or as part thereof.
It is the first type of attorney’s fees which private respondent demanded before
the labor arbiter. Also, the present
_______________
20
Pineda E.L., Legal and Judicial Ethics, 1994 ed., 220.
741
VOL. 269, MARCH 14, 1997 741
Traders Royal Bank Employees Union-Independent vs. NLRC
controversy stems from petitioner’s apparent misperception that the NLRC has
jurisdiction over claims for attorney’s fees only before its judgment is reviewed and
ruled upon by the Supreme Court, and that thereafter the former may no longer
entertain claims for attorney’s fees.
It will be noted that no claim for attorney’s fees was filed by private respondent
before the NLRC when it acted on the money claims of petitioner, nor before the
Supreme Court when it reviewed the decision of the NLRC. It was only after the High
Tribunal modified the judgment of the NLRC awarding the differentials that private
respondent filed his claim before the NLRC for a percentage thereof as attorney’s
fees.
It would obviously have been impossible, if not improper, for the NLRC in the first
instance and for the Supreme Court thereafter to make an award for attorney’s fees
when no claim therefor was pending before them. Courts generally rule only on
issues and claims presented to them for adjudication. Accordingly, when the labor
arbiter ordered the payment of attorney’s fees, he did not in any way modify the
judgment of the Supreme Court.
As an adjunctive episode of the action for the recovery of bonus differentials in
NLRC-NCR Certified Case No. 0466, private respondent’s present claim for attorney’s
fees may be filed before the NLRC even though or, better stated, especially after its
earlier decision had been reviewed and partially affirmed. It is well settled that a
claim for attorney’s fees may be asserted either in the very action in which the
services of a lawyer had been rendered or in a separate action. 21
With respect to the first situation, the remedy for recovering attorney’s fees as
an incident of the main action may be availed of only when something is due to the
client.22 Attor-
_______________
21
Tolentino vs. Escalona, G.R. No. L-26556, January 24, 1969, 26 SCRA 613.
22
Quirante, et al. vs. Intermediate Appellate Court, et al., G.R. No. 73886, January
31, 1989, 169 SCRA 769.
742
742 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
ney’s fees cannot be determined until after the main litigation has been decided and
the subject of the recovery is at the disposition of the court. The issue over attorney’s
fees only arises when something has been recovered from which the fee is to be
paid.23
While a claim for attorney’s fees may be filed before the judgment is rendered,
the determination as to the propriety of the fees or as to the amount thereof will
have to be held in abeyance until the main case from which the lawyer’s claim for
attorney’s fees may arise has become final. Otherwise, the determination to be made
by the courts will be premature.24 Of course, a petition for attorney’s fees may be
filed before the judgment in favor of the client is satisfied or the proceeds thereof
delivered to the client.25
It is apparent from the foregoing discussion that a lawyer has two options as to
when to file his claim for professional fees. Hence, private respondent was well within
his rights when he made his claim and waited for the finality of the judgment for
holiday pay differential, instead of filing it ahead of the award’s complete resolution.
To declare that a lawyer may file a claim for fees in the same action only before the
judgment is reviewed by a higher tribunal would deprive him of his aforestated
options and render ineffective the foregoing pronouncements of this Court.
Assailing the rulings of the labor arbiter and the NLRC, petitioner union insists
that it is not guilty of unjust enrichment because all attorney’s fees due to private
respondent were covered by the retainer fee of P3,000.00 which it has been regularly
paying to private respondent under their retainer agreement. To be entitled to the
additional attorney’s fees as provided in Part D (Special Billings) of the agreement, it
avers that there must be a separate mutual agreement between the union and the
law firm prior to the performance
_______________
23
Otto Gmur, Inc. vs. Revilla, et al., 55 Phil. 627 (1931).
24
See Quirante, et al. vs. Intermediate Appellate Court, et al., supra, Fn. 22.
25
Palanca vs. Pecson, 94 Phil. 419 (1954).
743
VOL. 269, MARCH 14, 1997 743
Traders Royal Bank Employees Union-Independent vs. NLRC
of the additional services by the latter. Since there was no agreement as to the
payment of the additional attorney’s fees, then it is considered waived.
En contra, private respondent contends that a retainer fee is not the attorney’s
fees contemplated for and commensurate to the services he rendered to petitioner.
He asserts that although there was no express agreement as to the amount of his
fees for services rendered in the case for recovery of differential pay, Article 111 of
the Labor Code supplants this omission by providing for an award of ten percent
(10%) of a money judgment in a labor case as attorney’s fees.
It is elementary that an attorney is entitled to have and received a just and
reasonable compensation for services performed at the special instance and request
of his client. As long as the lawyer was in good faith and honestly trying to represent
and serve the interests of the client, he should have a reasonable compensation for
such services.26 It will thus be appropriate, at this juncture, to determine if private
respondent is entitled to an additional remuneration under the retainer
agreement27 entered into by him and petitioner.
The parties subscribed therein to the following stipulations:
xxx
The Law Firm shall handle cases and extend legal services under the parameters
of the following terms and conditions:
A. GENERAL SERVICES
1. 1.Assurance that an Associate of the Law Firm shall be designated and be
available on a day-to-day basis depending on the Union’s needs;
2. 2.Legal consultation, advice and render opinion on any actual and/or
anticipatory situation confronting any matter within the client’s normal
course of business;
_______________
26
De Guzman vs. Visayan Rapid Transit Co., Inc., et al., 68 Phil. 643 (1939).
27
Rollo, 26-30.
744
744 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
1. 3.Proper documentation and notarization of any or all transactions entered
into by the Union in its day-to-day course of business;
2. 4.Review all contracts, deeds, agreements or any other legal document to
which the union is a party signatory thereto but prepared or caused to be
prepared by any other third party;
3. 5.Represent the Union in any case wherein the Union is a party litigant in
any court of law or quasi-judicial body subject to certain fees as qualified
hereinafter;
4. 6.Lia(i)se with and/or follow-up any pending application or any papers with
any government agency and/or any private institution which is directly
related to any legal matter referred to the Law Firm.
B. SPECIAL LEGAL SERVICES
1. 1.Documentation of any contract and other legal instrument/documents
arising and/or required by your Union which do not fall under the category
of its ordinary course of business activity but requires a special, exhaustive
or detailed study and preparation;
2. 2.Conduct or undertake researches and/or studies on special projects of the
Union;
3. 3.Render active and actual participation or assistance in conference table
negotiations with TRB management or any other third person(s), juridical
or natural, wherein the presence of counsel is not for mere consultation
except CBA negotiations which shall be subject to a specific agreement
(pursuant to PD 1391 and in relation to BP 130 & 227);
4. 4.Preparation of Position Paper(s), Memoranda or any other pleading for
and in behalf of the Union;
5. 5.Prosecution or defense of any case instituted by or against the Union; and,
6. 6.Represent any member of the Union in any proceeding provided that the
particular member must give his/her as-sent and that prior consent be
granted by the principal officers. Further, the member must conform to
the rules and policies of the Law Firm.
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Traders Royal Bank Employees Union-Independent vs. NLRC
C. FEE STRUCTURE
In consideration of our commitment to render the services enumerated above
when required or necessary, your Union shall pay a monthly retainer fee of THREE
THOUSAND PESOS (PHP 3,000.00), payable in advance on or before the fifth day of
every month.
An Appearance Fee which shall be negotiable on a case-to-case basis.
Any and all Attorney’s Fees collected from the adverse party by virtue of a
successful litigation shall belong exclusively to the Law Firm.
It is further understood that the foregoing shall be without prejudice to our claim
for reimbursement of all out-of-pocket expenses covering filing fees, transportation,
publication costs, expenses covering reproduction or authentication of documents
related to any matter referred to the Law Firm or that which redound to the benefit
of the Union.
D. SPECIAL BILLINGS
In the event that the Union avails of the services duly enumerated in Title B, the
Union shall pay the Law Firm an amount mutually agreed upon PRIOR to the
performance of such services. The sum agreed upon shall be based on actual time
and effort spent by the counsel in relation to the importance and magnitude of the
matter referred to by the Union. However, charges may be WAIVED by the Law Firm
if it finds that time and efforts expended on the particular services are
inconsequential but such right of waiver is duly reserved for the Law Firm.
xxx
The provisions of the above contract are clear and need no further interpretation; all
that is required to be done in the instant controversy is its application. The P3,000.00
which petitioner pays monthly to private respondent does not cover the services the
latter actually rendered before the labor arbiter and the NLRC in behalf of the former.
As stipulated in Part C of the agreement, the monthly fee is intended merely as a
consideration for the law firm’s commitment to render the services enumerated in
Part A (General Services) and Part B (Special Legal Services) of the retainer
agreement.
746
746 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
The difference between a compensation for a commitment to render legal services
and a remuneration for legal services actually rendered can better be appreciated
with a discussion of the two kinds of retainer fees a client may pay his lawyer. These
are a general retainer, or a retaining fee, and a special retainer. 28
A general retainer, or retaining fee, is the fee paid to a lawyer to secure his future
services as general counsel for any ordinary legal problem that may arise in the
routinary business of the client and referred to him for legal action. The future
services of the lawyer are secured and committed to the retaining client. For this, the
client pays the lawyer a fixed retainer fee which could be monthly or otherwise,
depending upon their arrangement. The fees are paid whether or not there are cases
referred to the lawyer. The reason for the remuneration is that the lawyer is deprived
of the opportunity of rendering services for a fee to the opposing party or other
parties. In fine, it is a compensation for lost opportunities.
A special retainer is a fee for a specific case handled or special service rendered
by the lawyer for a client. A client may have several cases demanding special or
individual attention. If for every case there is a separate and independent contract
for attorney’s fees, each fee is considered a special retainer.
As to the first kind of fee, the Court has had the occasion to expound on its
concept in Hilado vs. David29 in this wise:
There is in legal practice what is called a “retaining fee,” the purpose of which stems
from the realization that the attorney is disabled from acting as counsel for the other
side after he has given professional advice to the opposite party, even if he should
decline to perform the contemplated services on behalf of the latter. It is to prevent
undue hardship on the attorney resulting from the rigid observance of the rule that
a separate and independent fee for consultation and advice was conceived and
authorized. “A retaining fee is a preliminary fee given to an attorney or counsel to
insure and
_______________
28
Pineda, op. cit., 224-225, Fn. 20.
29
84 Phil. 579 (1949), citing 7 C.J.S. 1019.
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Traders Royal Bank Employees Union-Independent vs. NLRC
secure his future services, and induce him to act for the client. It is intended to
remunerate counsel for being deprived, by being retained by one party, of the
opportunity of rendering services to the other and of receiving pay from him, and the
payment of such fee, in the absence of an express understanding to the contrary, is
neither made nor received in payment of the services contemplated; its payment has
no relation to the obligation of the client to pay his attorney for the services for which
he has retained him to perform.” (Emphasis supplied).
Evidently, the P3,000.00 monthly fee provided in the retainer agreement between
the union and the law firm refers to a general retainer, or a retaining fee, as said
monthly fee covers only the law firm’s pledge, or as expressly stated therein, its
“commitment to render the legal services enumerated.” The fee is not payment for
private respondent’s execution or performance of the services listed in the contract,
subject to some particular qualifications or permutations stated there.
Generally speaking, where the employment of an attorney is under an express
valid contract fixing the compensation for the attorney, such contract is conclusive
as to the amount of compensation.30 We cannot, however, apply the foregoing rule
in the instant petition and treat the fixed fee of P3,000.00 as full and sufficient
consideration for private respondent’s services, as petitioner would have it.
We have already shown that the P3,000.00 is independent and different from the
compensation which private respondent should receive in payment for his services.
While petitioner and private respondent were able to fix a fee for the latter’s promise
to extend services, they were not able to come into agreement as to the law firm’s
actual performance of services in favor of the union. Hence, the retainer agreement
cannot control the measure of remuneration for private respondent’s services.
_______________
30
Francisco vs. Matias, G.R. No. L-16349, January 31, 1965, 10 SCRA 89.
748
748 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
We, therefore, cannot favorably consider the suggestion of petitioner that private
respondent had already waived his right to charge additional fees because of their
failure to come to an agreement as to its payment.
Firstly, there is no showing that private respondent unequivocally opted to waive
the additional charges in consonance with Part D of the agreement. Secondly, the
prompt actions taken by private respondent, i.e., serving notice of charging lien and
filing of motion to determine attorney’s fees, belie any intention on his part to
renounce his right to compensation for prosecuting the labor case instituted by the
union. And, lastly, to adopt such theory of petitioner may frustrate private
respondent’s right to attorney’s fees, as the former may simply and unreasonably
refuse to enter into any special agreement with the latter and conveniently claim
later that the law firm had relinquished its right because of the absence of the same.
 The fact that petitioner and private respondent failed to reach a meeting of the
minds with regard to the payment of professional fees for special services will not
absolve the former of civil liability for the corresponding remuneration therefor in
favor of the latter.
Obligations do not emanate only from contracts. 31 One of the sources of extra-
contractual obligations found in our Civil Code is the quasi-contract premised on the
Roman maxim that nemo cum alterius detrimento locupletari potest. As embodied in
our law,32certain lawful, voluntary and unilateral acts give rise to the juridical relation
of quasi-contract to the end that no one shall be unjustly enriched or benefited at the
expense of another.
A quasi-contract between the parties in the case at bar arose from private
respondent’s lawful, voluntary and unilateral prosecution of petitioner’s cause
without awaiting the latter’s consent and approval. Petitioner cannot deny that it did
benefit from private respondent’s efforts as the law firm
_______________
31
Article 1157, Civil Code.
32
Article 2142, Civil Code.
749
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Traders Royal Bank Employees Union-Independent vs. NLRC
was able to obtain an award of holiday pay differential in favor of the union. It cannot
even hide behind the cloak of the monthly retainer of P3,000.00 paid to private
respondent because, as demonstrated earlier, private respondent’s actual rendition
of legal services is not compensable merely by said amount.
Private respondent is entitled to an additional remuneration for pursuing legal
action in the interest of petitioner before the labor arbiter and the NLRC, on top of
the P3,000.00 retainer fee he received monthly from petitioner. The law firm’s
services are decidedly worth more than such basic fee in the retainer agreement.
Thus, in Part C thereof on “Fee Structure,” it is even provided that all attorney’s fees
collected from the adverse party by virtue of a successful litigation shall belong
exclusively to private respondent, aside from peti-tioner’s liability for appearance
fees and reimbursement of the items of costs and expenses enumerated therein.
A quasi-contract is based on the presumed will or intent of the obligor dictated
by equity and by the principles of absolute justice. Some of these principles are: (1)
It is presumed that a person agrees to that which will benefit him; (2) Nobody wants
to enrich himself unjustly at the expense of another; and (3) We must do unto others
what we want them to do unto us under the same circumstances. 33
As early as 1903, we allowed the payment of reasonable professional fees to an
interpreter, notwithstanding the lack of understanding with his client as to his
remuneration, on the basis of quasi-contract.34 Hence, it is not necessary that the
parties agree on a definite fee for the special services rendered by private respondent
in order that petitioner may be obligated to pay compensation to the former. Equity
and fair play dictate that petitioner should pay the same after it accepted, availed
itself of, and benefited from private respondent’s services.
_______________
33
Tolentino, A.M., Commentaries and Jurisprudence on the Civil Code, Vol. V,
1992 ed., 575.
34
See Perez vs. Pomar, 2 Phil. 682 (1903).
750
750 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
We are not unaware of the old ruling that a person who had no knowledge of, nor
consented to, or protested against the lawyer’s representation may not be held liable
for attorney’s fees even though he benefited from the lawyer’s services. 35 But this
doctrine may not be applied in the present case as petitioner did not object to private
respondent’s appearance before the NLRC in the case for differentials.
Viewed from another aspect, since it is claimed that petitioner obtained
respondent’s legal services and assistance regarding its claims against the bank, only
they did not enter into a special contract regarding the compensation therefor, there
is at least the innominate contract of facio ut des (I do that you may give).36 This rule
of law, likewise founded on the principle against unjust enrichment, would also
warrant payment for the services of private respondent which proved beneficial to
petitioner’s members.
In any case, whether there is an agreement or not, the courts can fix a reasonable
compensation which lawyers should receive for their professional
services.37 However, the value of private respondent’s legal services should not be
established on the basis of Article 111 of the Labor Code alone. Said article provides:
ART. 111. Attorney’s fees.—(a) In cases of unlawful withholding of wages the culpable
party may be assessed attorney’s fees equivalent to ten percent of the amount of the
wages recovered.
xxx
The implementing provision38 of the foregoing article further states:
_______________
35
Orosco vs. Heirs of Hernandez, 1 Phil. 77 (1901).
36
Corpuz vs. Court of Appeals, et al., G.R. No. L-40424, June 30, 1980, 98 SCRA
424.
37
Panis vs. Yangco, 52 Phil. 499 (1928).
38
Sec. 11, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code.
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VOL. 269, MARCH 14, 1997 751
Traders Royal Bank Employees Union-Independent vs. NLRC
Sec. 11. Attorney’s fees.—Attorney’s fees in any judicial or administrative
proceedings for the recovery of wages shall not exceed 10% of the amount awarded.
The fees may be deducted from the total amount due the winning party.
In the first place, the fees mentioned here are the extraordinary attorney’s fees
recoverable as indemnity for damages sustained by and payable to the prevailing
part. In the second place, the ten percent (10%) attorney’s fees provided for in Article
111 of the Labor Code and Section 11, Rule VIII, Book III of the Implementing Rules is
the maximum of the award that may thus be granted. 39 Article 111 thus fixes only the
limit on the amount of attorney’s fees the victorious party may recover in any judicial
or administrative proceedings and it does not even prevent the NLRC from fixing an
amount lower than the ten percent (10%) ceiling prescribed by the article when
circumstances warrant it.40
The measure of compensation for private respondent’s services as against his
client should properly be addressed by the rule of quantum meruit long adopted in
this jurisdiction. Quantum meruit, meaning “as much as he deserves,” is used as the
basis for determining the lawyer’s professional fees in the absence of a
contract,41 but recoverable by him from his client.
Where a lawyer is employed without a price for his services being agreed upon,
the courts shall fix the amount on quantum meruit basis. In such a case, he would be
entitled to receive what he merits for his services.42
It is essential for the proper operation of the principle that there is an acceptance
of the benefits by one sought to be
_______________
39
Sebuguero, et al. vs. NLRC, et al., G.R. No. 115394, September 27, 1995, 248
SCRA 532.
40
Taganas vs. NLRC, et al., G.R. No. 118746, September 7, 1995, 248 SCRA 133.
41
Sesbreño vs. Court of Appeals, et al., G.R. No. 117438, June 8, 1995, 245 SCRA
30.
42
Lorenzo vs. Court of Appeals, et al., G.R. No. 85383, August 30, 1990, 189 SCRA
260.
752
752 SUPREME COURT REPORTS ANNOTATED
Traders Royal Bank Employees Union-Independent vs. NLRC
charged for the services rendered under circumstances as reasonably to notify him
that the lawyer performing the task was expecting to be paid compensation therefor.
The doctrine of quantum meruit is a device to prevent undue enrichment based on
the equitable postulate that it is unjust for a person to retain benefit without paying
for it.43
Over the years and through numerous decisions, this Court has laid down
guidelines in ascertaining the real worth of a lawyer’s services. These factors are now
codified in Rule 20.01, Canon 20 of the Code of Professional Responsibility and should
be considered in fixing a reasonable compensation for services rendered by a lawyer
on the basis of quantum meruit. These are: (a) the time spent and the extent of
services rendered or required; (b) the novelty and difficulty of the questions involved;
(c) the importance of the subject matter; (d) the skill demanded; (e) the probability
of losing other employment as a result of acceptance of the proferred case; (f) the
customary charges for similar services and the schedule of fees of the IBP chapter to
which the lawyer belongs; (g) the amount involved in the controversy and the
benefits resulting to the client from the services; (h) the contingency or certainty of
compensation; (i) the character of the employment, whether occasional or
established; and (j) the professional standing of the lawyer.
Here, then, is the flaw we find in the award for attorney’s fees in favor of private
respondent. Instead of adopting the above guidelines, the labor arbiter forthwith but
erroneously set the amount of attorney’s fees on the basis of Article 111 of the Labor
Code. He completely relied on the operation of Article 111 when he fixed the amount
of attorney’s fees at P17,574.43.44 Observe the conclusion stated in his order.45
_______________
43
Agpalo, R.E., The Code of Professional Responsibility for Lawyers, 1991 ed.,
257.
44
The amount is short by P5.00 because 10% of P175,794.32 is P17,579.43.
45
Rollo, 48-49.
753
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Traders Royal Bank Employees Union-Independent vs. NLRC
xxx
FIRST. Art. 111 of the Labor Code, as amended, clearly declares movant’s right to
a ten (10%) per cent of the award due its client. In addition, this right to ten (10%)
per cent attorney’s fees is supplemented by Sec. 111, Rule VIII, Book III of the
Omnibus Rules Implementing the Labor Code, as amended.
xxx
As already stated, Article 111 of the Labor Code regulates the amount recoverable as
attorney’s fees in the nature of damagessustained by and awarded to the prevailing
party. It may not be used therefore, as the lone standard in fixing the exact amount
payable to the lawyer by his client for the legal services he rendered. Also, while it
limits the maximum allowable amount of attorney’s fees, it does not direct the
instantaneous and automatic award of attorney’s fees in such maximum limit.
It, therefore, behooves the adjudicator in questions and circumstances similar to
those in the case at bar, involving a conflict between lawyer and client, to observe
the above guidelines in cases calling for the operation of the principles of quasi-
contract and quantum meruit, and to conduct a hearing for the proper determination
of attorney’s fees. The criteria found in the Code of Professional Responsibility are to
be considered, and not disregarded, in assessing the proper amount. Here, the
records do not reveal that the parties were duly heard by the labor arbiter on the
matter and for the resolution of private respondent’s fees.
 It is axiomatic that the reasonableness of attorney’s fees is a question of
fact.46 Ordinarily, therefore, we would have re-manded this case for further reception
of evidence as to the extent and value of the services rendered by private respondent
to petitioner. However, so as not to needlessly prolong the resolution of a
comparatively simple controversy, we deem it just and equitable to fix in the present
recourse a reasonable amount of attorney’s fees in favor of private respondent. For
that purpose, we have duly taken into account the accepted guidelines therefor and
so much of the pertinent data as are extant in the records of this case which are
assistive in that regard. On such premises and in the exercise of our sound discretion,
we hold that the amount of P10,000.00 is a reasonable and fair compensation for the
legal services rendered by private respondent to petitioner before the labor arbiter
and the NLRC.
WHEREFORE, the impugned resolution of respondent National Labor Relations
Commission affirming the order of the labor arbiter is MODIFIED, and petitioner is
hereby ORDERED to pay the amount of TEN THOUSAND PESOS (P10,000.00) as
attorney’s fees to private respondent for the latter’s legal services rendered to the
former.
SO ORDERED.
G.R. No. L-30056 August 30, 1988
MARCELO AGCAOILI, plaintiff-appellee
vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, defendant-appellant.
NARVASA, J.:
The appellant Government Service Insurance System, (GSIS, for short) having
approved the application of the appellee Agcaoili for the purchase of a house and lot
in the GSIS Housing Project at Nangka Marikina, Rizal, subject to the condition that
the latter should forthwith occupy the house, a condition that Agacoili tried to fulfill
but could not for the reason that the house was absolutely uninhabitable; Agcaoili,
after paying the first installment and other fees, having thereafter refused to make
further payment of other stipulated installments until GSIS had made the house
habitable; and appellant having refused to do so, opting instead to cancel the award
and demand the vacation by Agcaoili of the premises; and Agcaoili having sued the
GSIS in the Court of First Instance of Manila for specific performance with damages
and having obtained a favorable judgment, the case was appealled to this Court by
the GSIS. Its appeal must fail.
The essential facts are not in dispute. Approval of Agcaoili's aforementioned
application for purchase 1 was contained in a letter 2 addressed to Agcaoili and signed
by GSIS Manager Archimedes Villanueva in behalf of the Chairman-General Manager,
reading as follows:
Please be informed that your application to purchase a house and
lot in our GSIS Housing Project at Nangka, Marikina, Rizal, has been
approved by this Office. Lot No. 26, Block No. (48) 2, together with
the housing unit constructed thereon, has been allocated to you.
You are, therefore, advised to occupy the said house immediately.
If you fail to occupy the same within three (3) days from receipt of
this notice, your application shall be considered automatically
disapproved and the said house and lot will be awarded to another
applicant.
Agcaoili lost no time in occupying the house. He could not stay in it, however, and
had to leave the very next day, because the house was nothing more than a shell, in
such a state of incompleteness that civilized occupation was not possible: ceiling,
stairs, double walling, lighting facilities, water connection, bathroom, toilet kitchen,
drainage, were inexistent. Agcaoili did however ask a homeless friend, a certain
Villanueva, to stay in the premises as some sort of watchman, pending completion of
the construction of the house. Agcaoili thereafter complained to the GSIS, to no avail.
The GSIS asked Agcaoili to pay the monthly amortizations and other fees. Agcaoili
paid the first monthly installment and the incidental fees, 3 but refused to make
further payments until and unless the GSIS completed the housing unit. What the
GSIS did was to cancel the award and require Agcaoili to vacate the
premises. 4 Agcaoili reacted by instituting suit in the Court of First Instance of Manila
for specific performance and damages. 5 Pending the action, a written protest was
lodged by other awardees of housing units in the same subdivision, regarding the
failure of the System to complete construction of their own houses. 6 Judgment was
in due course rendered ,7 on the basis of the evidence adduced by Agcaoili only, the
GSIS having opted to dispense with presentation of its own proofs. The judgment was
in Agcaoili's favor and contained the following dispositions, 8 to wit:
1) Declaring the cancellation of the award (of a house and lot) in
favor of plaintiff (Mariano Agcaoili) illegal and void;
2) Ordering the defendant (GSIS) to respect and enforce the
aforesaid award to the plaintiff relative to Lot No. 26, Block No. (48)
2 of the Government Service Insurance System (GSIS) low cost
housing project at Nangka Marikina, Rizal;
3) Ordering the defendant to complete the house in question so as
to make the same habitable and authorizing it (defendant) to
collect the monthly amortization thereon only after said house
shall have been completed under the terms and conditions
mentioned in Exhibit A ;and
4) Ordering the defendant to pay P100.00 as damages and P300.00
as and for attorney's fees, and costs.
Appellant GSIS would have this Court reverse this judgment on the argument that—
1) Agcaoili had no right to suspend payment of amortizations on account of the
incompleteness of his housing unit, since said unit had been sold "in the condition
and state of completion then existing ... (and) he is deemed to have accepted the
same in the condition he found it when he accepted the award;" and assuming
indefiniteness of the contract in this regard, such circumstance precludes a judgment
for specific performance. 9
2) Perfection of the contract of sale between it and Agcaoili being conditioned upon
the latter's immediate occupancy of the house subject thereof, and the latter having
failed to comply with the condition, no contract ever came into existence between
them ;10
3) Agcaoili's act of placing his homeless friend, Villanueva, in possession, "without the
prior or subsequent knowledge or consent of the defendant (GSIS)" operated as a
repudiation by Agcaoili of the award and a deprivation of the GSIS at the same time
of the reasonable rental value of the property. 11
Agcaoili's offer to buy from GSIS was contained in a printed form drawn up by the
latter, entitled "Application to Purchase a House and/or Lot." Agcaoili filled up the
form, signed it, and submitted it.12 The acceptance of the application was also set out
in a form (mimeographed) also prepared by the GSIS. As already mentioned, this form
sent to Agcaoili, duly filled up, advised him of the approval of his "application to
purchase a house and lot in our GSIS Housing Project at NANGKA, MARIKINA, RIZAL,"
and that "Lot No. 26, Block No. (48) 2, together with the housing unit constructed
thereon, has been allocated to you." Neither the application form nor the acceptance
or approval form of the GSIS — nor the notice to commence payment of a monthly
amortizations, which again refers to "the house and lot awarded" — contained any
hint that the house was incomplete, and was being sold "as is," i.e., in whatever state
of completion it might be at the time. On the other hand, the condition explicitly
imposed on Agcaoili — "to occupy the said house immediately," or in any case within
three (3) days from notice, otherwise his "application shall be considered
automatically disapproved and the said house and lot will be awarded to another
applicant" — would imply that construction of the house was more or less complete,
and it was by reasonable standards, habitable, and that indeed, the awardee should
stay and live in it; it could not be interpreted as meaning that the awardee would
occupy it in the sense of a pioneer or settler in a rude wilderness, making do with
whatever he found available in the envirornment.
There was then a perfected contract of sale between the parties; there had been a
meeting of the minds upon the purchase by Agcaoili of a determinate house and lot
in the GSIS Housing Project at Nangka Marikina, Rizal at a definite price payable in
amortizations at P31.56 per month, and from that moment the parties acquired the
right to reciprocally demand performance. 13 It was, to be sure, the duty of the GSIS,
as seller, to deliver the thing sold in a condition suitable for its enjoyment by the
buyer for the purpose contemplated ,14 in other words, to deliver the house subject
of the contract in a reasonably livable state. This it failed to do.
It sold a house to Agcaoili, and required him to immediately occupy it under pain of
cancellation of the sale. Under the circumstances there can hardly be any doubt that
the house contemplated was one that could be occupied for purposes of residence
in reasonable comfort and convenience. There would be no sense to require the
awardee to immediately occupy and live in a shell of a house, a structure consisting
only of four walls with openings, and a roof, and to theorize, as the GSIS does, that
this was what was intended by the parties, since the contract did not clearly impose
upon it the obligation to deliver a habitable house, is to advocate an absurdity, the
creation of an unfair situation. By any objective interpretation of its terms, the
contract can only be understood as imposing on the GSIS an obligation to deliver to
Agcaoili a reasonably habitable dwelling in return for his undertaking to pay the
stipulated price. Since GSIS did not fulfill that obligation, and was not willing to put
the house in habitable state, it cannot invoke Agcaoili's suspension of payment of
amortizations as cause to cancel the contract between them. It is axiomatic that "(i)n
reciprocal obligations, neither party incurs in delay if the other does not comply or is
not ready to comply in a proper manner with what is incumbent upon him."15
Nor may the GSIS succeed in justifying its cancellation of the award to Agcaoili by the
claim that the latter had not complied with the condition of occupying the house
within three (3) days. The record shows that Agcaoili did try to fulfill the condition;
he did try to occupy the house but found it to be so uninhabitable that he had to
leave it the following day. He did however leave a friend in the structure, who being
homeless and hence willing to accept shelter even of the most rudimentary sort,
agreed to stay therein and look after it. Thus the argument that Agcaoili breached
the agreement by failing to occupy the house, and by allowing another person to stay
in it without the consent of the GSIS, must be rejected as devoid of merit.
Finally, the GSIS should not be heard to say that the agreement between it and
Agcaoili is silent, or imprecise as to its exact prestation Blame for the imprecision
cannot be imputed to Agcaoili; it was after all the GSIS which caused the contract to
come into being by its written acceptance of Agcaoili's offer to purchase, that offer
being contained in a printed form supplied by the GSIS. Said appellant having caused
the ambiguity of which it would now make capital, the question of interpretation
arising therefrom, should be resolved against it.
It will not do, however, to dispose of the controversy by simply declaring that the
contract between the parties had not been validly cancelled and was therefore still
in force, and that Agcaoili could not be compelled by the GSIS to pay the stipulated
price of the house and lot subject of the contract until and unless it had first
completed construction of the house. This would leave the contract hanging or in
suspended animation, as it were, Agcaoili unwilling to pay unless the house were first
completed, and the GSIS averse to completing construction, which is precisely what
has been the state of affairs between the parties for more than twenty (20) years
now. On the other hand, assuming it to be feasible to still finish the construction of
the house at this time, to compel the GSIS to do so so that Agcaoili's prestation to
pay the price might in turn be demanded, without modifying the price therefor,
would not be quite fair. The cost to the GSIS of completion of construction at present
prices would make the stipulated price disproportionate, unrealistic.
The situation calls for the exercise by this Court of its equity jurisdiction, to the end
that it may render complete justice to both parties.
As we . . reaffirmed in Air Manila, Inc. vs. Court of Industrial
Relations (83 SCRA 579, 589 [1978]). "(E)quity as the complement
of legal jurisdiction seeks to reach and do complete justice where
courts of law, through the inflexibility of their rules and want of
power to adapt their judgments to the special circumstances of
cases, are incompetent so to do. Equity regards the spirit of and not
the letter, the intent and not the form, the substance rather than
the circumstance, as it is variously expressed by different courts...
" 16
In this case, the Court can not require specific performance of the contract in
question according to its literal terms, as this would result in inequity. The prevailing
rule is that in decreeing specific performance equity requires 17 —
... not only that the contract be just and equitable in its provisions,
but that the consequences of specific performance likewise be
equitable and just. The general rule is that this equitable relief will
not be granted if, under the circumstances of the case, the result
of the specific enforcement of the contract would be harsh,
inequitable, oppressive, or result in an unconscionable advantage
to the plaintiff . .
In the exercise of its equity jurisdiction, the Court may adjust the rights of parties in
accordance with the circumstances obtaining at the time of rendition of judgment,
when these are significantly different from those existing at the time of generation
of those rights.
The Court is not restricted to an adjustment of the rights of the
parties as they existed when suit was brought, but will give relief
appropriate to events occuring ending the suit. 18
While equitable jurisdiction is generally to be determined with
reference to the situation existing at the time the suit is filed, the
relief to be accorded by the decree is governed by the conditions
which are shown to exist at the time of making thereof, and not by
the circumstances attending the inception of the litigation. In
making up the final decree in an equity suit the judge may rightly
consider matters arising after suit was brought. Therefore, as a
general rule, equity will administer such relief as the nature, rights,
facts and exigencies of the case demand at the close of the trial or
at the time of the making of the decree. 19
That adjustment is entirely consistent with the Civil Law principle that in the exercise
of rights a person must act with justice, give everyone his due, and observe honesty
and good faith. 20 Adjustment of rights has been held to be particularly applicable
when there has been a depreciation of currency.
Depreciation of the currency or other medium of payment
contracted for has frequently been held to justify the court in
withholding specific performance or at least conditioning it upon
payment of the actual value of the property contracted for. Thus,
in an action for the specific performance of a real estate contract,
it has been held that where the currency in which the plaintiff had
contracted to pay had greatly depreciated before enforcement was
sought, the relief would be denied unless the complaint would
undertake to pay the equitable value of the land. (Willard & Tayloe
[U.S.] 8 Wall 557,19 L. Ed 501; Doughdrill v. Edwards, 59 Ala 424) 21
In determining the precise relief to give, the Court will "balance the equities" or the
respective interests of the parties, and take account of the relative hardship that one
relief or another may occasion to them .22
The completion of the unfinished house so that it may be put into habitable
condition, as one form of relief to the plaintiff Agcaoili, no longer appears to be a
feasible option in view of the not inconsiderable time that has already elapsed. That
would require an adjustment of the price of the subject of the sale to conform to
present prices of construction materials and labor. It is more in keeping with the
realities of the situation, and with equitable norms, to simply require payment for
the land on which the house stands, and for the house itself, in its unfinished state,
as of the time of the contract. In fact, this is an alternative relief proposed by Agcaoili
himself, i.e., "that judgment issue . . (o)rdering the defendant (GSIS) to execute a
deed of sale that would embody and provide for a reasonable amortization of
payment on the basis of the present actual unfinished and uncompleted condition,
worth and value of the said house. 23
WHEREFORE, the judgment of the Court a quo insofar as it invalidates and sets aside
the cancellation by respondent GSIS of the award in favor of petitioner Agcaoili of Lot
No. 26, Block No. (48) 2 of the GSIS low cost housing project at Nangka, Marikina,
Rizal, and orders the former to respect the aforesaid award and to pay damages in
the amounts specified, is AFFIRMED as being in accord with the facts and the law.
Said judgments is however modified by deleting the requirement for respondent GSIS
"to complete the house in question so as to make the same habitable," and instead
it is hereby ORDERED that the contract between the parties relative to the property
above described be modified by adding to the cost of the land, as of the time of
perfection of the contract, the cost of the house in its unfinished state also as of the
time of perfection of the contract, and correspondingly adjusting the amortizations
to be paid by petitioner Agcaoili, the modification to be effected after determination
by the Court a quo of the value of said house on the basis of the agreement of the
parties, or if this is not possible by such commissioner or commissioners as the Court
may appoint. No pronouncement as to costs.

SO ORDERED.

VOL. 73, JULY 8, 1942 607
Barredo vs. Garcia and Almario
title be issued in favor of Santiago Imperial, but subject to the mortgage lien of Luis
Meneses which appears duly noted in the certificate to be cancelled. Luis Meneses
may, in a single complaint, sue the Adornados and Santiago Imperial for the collection
of his mortgage credit, the former as primary obligors and the latter as owner of the
property mortgaged, without prejudice to any right which Santiago Imperial may
have against the assurance fund. We make no pronouncement as to costs in this in-
stance.
Yulo, C. J., Ozaeta, Paras, and Bocobo, J J., concur.
Judgment modified.
————————
[No. 48006. July 8, 1942]
FAUSTO BARREDO, petitioner, vs. SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.
1.DAMAGES; QUASI-DELICT OR "CULPA AQUILIANA"; PRIMARY AND DIRECT RESPONSIBILITY OF EM-
PLOYERS UNDER ARTICLES 1902-1910 OF THE CIVIL CODE.—A head-on collision between
a taxi and a carretela resulted in the death of a 16-year-old boy, one of the
passengers of the carretela. A criminal action was filed against the taxi driver and
he was convicted and sentenced accordingly. The court in the criminal case
granted the petition that the right to bring a separate civil action be reserved.
Thereafter the parents of the deceased brought suit for damages against the
proprietor of the taxi, the employer of the taxi driver, under article 1903 of the
Civil Code. Defendant contended that his liability was governed by the Revised
Penal Code, according to which his responsibility was only secondary, but no civil
action had been brought against the taxi driver. Held: That this separate civil
action lies, the employer being primarily and directly responsible in damages
under articles 1902 and 1903 of the Civil Code.
2.ID.; ID.; ID.—A quasi-delict or "culpa aquiliana" is a separate legal institution under
the Civil Code, with a substantivity all its own, and individuality that is entirely
apart and independent from a delict or crime. Upon this principle, and on the
wording and spirit of article 1903 of the Civil Code, the primary and direct
responsibility of employers may be safely anchored.
3.ID.; ID.; ID.—The individuality of cuati-delito or culpa extra-contractual looms clear
and unmistakable. This legal institution is of ancient lineage, one of its early
ancestors being the Lex Aquilia in the Roman Law. In fact, in Spanish legal
términology, this responsibility is often referred to as culpa aquiliana. The
Partidas also contributed to the genealogy of the present fault or negligence
under the Civil Code: for instance, Law 6, Title 16, of Partida 7, says: "Tenudo es
de fazer emienda, porque, cómo quier que el non fizo a sabiendas el daño al otro,
pero acaesció por su culpa."
4.ID.; ID.; ID.—The distinctive nature of cuasi-delitos survives in the Civil Code.
According to article 1089, one of the five sources of obligations is this legal
institution of cuasi-delito or culpa extra-contractual: "los actos * * * en
que intervenga cualquier genero de culpa o negligencia." Then article 1093
provides that this kind of obligation shall be governed by Chapter II of Title XVI of
Book IV, meaning articles 1902-1910. This portion of the Civil Code is exclusively
devoted to the legal institution of culpa aquiliana.
5.ID.; ID.; ID.; DISTINCTION BETWEEN CRIMES UNDER THE PENAL CODE AND THE "CULPA AQUILIANA"
OR "CUASI-DELITO" UNDER THE CIVIL CODE.—A distinction exists between the civil liabil-
ity arising from a crime and the responsibility for cuasi-delitos or culpa extra-
contractual. The same negligent act causing damages may produce civil liability
arising from a crime under article 100 of the Revised Penal Code, or create an
action for cuasi-delito or culpa extra-contractual under articles 1902-1910 of the
Civil Code. Plaintiffs were free to choose which remedy to enforce. Some of the
differences between crimes under the Penal Code and the culpa
aquiliana or cuasi-delito under the Civil Code are enumerated in the decision.
6.ID.; ID.; ID.; OPINIONS OF JURISTS.—The decision sets out extracts from opinions of
jurists on the separate existence of cuasi-delicts and the employer's primary and
direct liability under article 1903 of the Civil Code.
7.ID.; ID.; ID.; SENTENCES OF THE SUPREME TRI-
608
608 PHILIPPINE REPORTS ANNOTATED
Barredo vs. Garcia and Almario
BUNAL OF SPAIN.—The decision cites sentences of the Supreme Tribunal of Spain
upholding the principles above set forth: that a cuasi-delict or culpa extra-
contractual is a separate and distinct legal institution, independent from the civil
responsibility arising from criminal liability, and that an employer is, under article
1903 of the Civil Code, primarily and directly responsible for the negligent acts of
his employee.
8.ID.; ID.; ID.; DECISIONS OF THIS COURT.—Decisions of this Court are also cited holding
that, in this jurisdiction, the separate individuality of a cuasi-delito or culpa
aquiliana under the Civil Code has been fully and clearly recognized, even with
regard to a negligent act for. which the wrongdoer could have been prosecuted
and convicted in a criminal case and for which, after such a conviction, he could
have been sued for his civil liability arising from his crime.
9.ID.; ID.; ID.; FOUNDATIONS OF DOCTRINES ABOVE SET FORTH; LITERAL MEANING OF THE LAW.—
The Revised Penal Code punishes not only reckless but also simple negligence; if
it should be held that articles 1902-1910, Civil Code, apply only to negligence not
punishable by law, culpa aquiliana would have very little application in actual life.
The literal meaning of the law will not be used to smother a principle of such
ancient origin and such full-grown development as culpa aquiliana.
10.ID.; ID.; ID.; ID.; DEGREE OF PROOF.—There are numerous cases of criminal negligence
which can not be shown beyond reasonable doubt, but can be proved by a
preponderance of evidence. In such cases, defendant can and should be made
 responsible in a civil action under articles 1902 to 1910, Civil Code. Ubi jus ibi The main theory of the defense is that the liability of Fausto Barredo is governed
remedium. by the Revised Penal Code; hence, his liability is only subsidíary, and as there has been
11.ID.; ID.; ID.; ID.; EXPEDITIOUS REMEDY.—The primary and direct responsibility of no civil action against Pedro Fontanilla, the person criminally liable, Barredo cannot
employer under article 1903, Civil Code, is more likely to facilitate remedy for civil be
wrongs. Such primary and direct responsibility of employers is calculated to 609
protect society. VOL. 73, JULY 8, 1942 609
12.ID.; ID.; ID.; ID.; PRACTICE OF RELYING SOLELY ON CIVIL RESPONSIBILITY FOR A CRIME.—The
Barredo vs. Garcia and Almario
harm done by such practice is pointed out, and the principle of responsibility for
held responsible in this case The petitioner's brief states on page 10:
fault or negligence under articles 1902 et seq., of the Civil Code is restored to its
“* * * The Court of Appeals holds that the petitioner is being sued for his
full vigor.
failure to exercise all the diligence of a good father of a family in the selection and
PETITION for review on certiorari.
supervision of Pedro Fontanilla to prevent damages suffered by the respondents. In
The facts are stated in the opinion of the court.
other words, the Court of Appeals insists on applying in this case article 1903 of the
Celedonio P. Gloria and Antonio Barredo for petitioner.
Civil Code. Article 1903 of the Civil Code is found in Chapter II, Title 16, Book IV of the
Jose G. Advincula for respondents.
Civil Code. This fact makes said article inapplicable to a civil liability arising from a
BOCOBO, J.:
crime as in the case at bar simply because Chapter II of Title 16 of Book IV of the Civil
This case comes up from the Court of Appeals which held the petitioner herein,
Code, in the precise words of article 1903 of the Civil Code itself, is applicable only to
Fausto Barredo, liable in damages for the death of Faustino Garcia caused by the neg-
"those (obligations) arising from wrongful or negligent acts or omissions not
ligence of Pedro Fontanilla, a taxi driver employed by said Fausto Barredo.
punishable by law.'"
At about half past one in the morning of May 3, 1936, on the road between
The gist of the decision of the Court of Appeals is expressed thus:
Malabon and Navotas, Province of Rizal, there was a headon collision between a taxi
"* * * We cannot agsee to the defendant's contention. The liability sought
of the Malate Taxicab driven by Pedro Fontanilla and a carretela guided by Pedro
to be imposed upon him in this action is not a civil obligation arising from a felony or
Dimapilis. The carretela was overturned, and one of its passengers, 16-year-old boy
a misdemeanor (the crime of Pedro Fontanilla), but an obligation imposed in article
Faustino Garcia, suffered injuries from which he died two days later. A criminal action
1903 of the Civil Code by reason of his negligence in the selection or supervision of
was filed against Fontanilla in the Court of First Instance of Rizal, and he was
his servant or employee."
convicted and sentenced to an indeterminate sentence of one year and one day to
The pivotal question in this case is whether the plaintiffs may bring this separate
two years of prisión correccional. The court in the criminal case granted the petition
civil action against Fausto Barredo, thus making him primarily and directly .respon-
that the right to bring a separate civil action be reserved. The Court of Appeals
sible under article 1903 of the Civil Code as an employer of Pedro Fontanilla. The
affirmed the sentence of the lower court in the criminal case. Severino Garcia and
defendant maintains that Fontanilla's negligence being punishable by the Penal Code,
Timotea Almario, parents of the deceased, on March 7, 1939, brought an action in
his (defendant's) liability as an employer is only subsidíary, according to said Penal
the Court of First Instance of Manila against Fausto Barredo as the sole proprietor of
Code, but Fontanilla has not been sued in a civil action and his property has not been
the Malate Taxicab and employer of Pedro Fontanilla. On July 8,1939, the Court of
exhausted. To decide the main issue, we must cut through the tangle that has, in the
First Instance of Manila awarded damages in favor of the plaintiffs for P2,000 plus
minds of many, confused and jumbled together delitos and cuasi-delitos, or crimes
legal interest from the date of the complaint. This decision was modified by the Court
under the Penal Code and fault or negligence under articles 1902-1910 of the Civil
of Appeals by reducing the damages to P1.000 with legal interest from the time the
Code. This should be done, because justice may be lost in a labyrinth, unless
action was instituted. It is undisputed that Fontanilla's negligence was the cause of
principles and remedies are distinctly envisaged. Fortunately, we are aided in our
the mishap, as he was driving on the wrong side of the road, and at high speed. As to
inquiry by the luminous presentación of this perplexing subject by renown jurists and
Barredo's responsibility, the Court of Appeals found:
we' are likewise guided by the decisions of this Court in previous cases as well as by
"* * * It is admitted that defendant is Fontanilla's employer. There is no
the solemn clarity of the considerations in several sentences of the Supreme Tribunal
proof that he exercised the diligence of a good father of a family to prevent the
of Spain.
damage. (See p. 22, appellant's brief.) In fact it is shown he was careless in employing
Authorities support the proposition that a quasi-delict or "culpa aquiliana" is a
Fontanilla who had been caught several times for violation of the Automobile Law
separate legal institution under the Civil Code, with a substantivity all its own, and
and speeding (Exhibit A)—violations which appeared in the records of the Bureau of
individuality that is entirely apart and independent from a delict or crime. Upon this
Public Works available to the public and to himself. Therefore, he must indemnify
plaintiffs under the provisions of article 1903 of the Civil Code."
principle, and on the wording and spirit of article 1903 of the Civil Code, the primary
and direct responsibility of employers may be safely anchored.
The pertinent provisions of the Civil Code and Revised Penal Code are as follows
: subdivision 4 of article 11 of this Code does not include exemption from civil liability,
CIVIL CODE
"ART. 1089. Obligations arise from law, from contracts and quasi-contracts, and
from acts and omissions which are unlawful or in which any kind of fault or negligence
intervenes."
* * * * * *
"ART. 1092. Civil obligations arising from felonies or misdemeanors shall be
governed by the provisions of the Penal Code.
"ART. 1093. Those which are derived from acts or omissions in which fault or
negligence, not punishable by law, intervenes shall be subject to the provisions of
Chapter II, Title XVI of this book."
* * * * * *
"ART. 1902. Any person who by an act or omission causes damage to another by
his fault or negligence shall be liable for the damage so done.
"ART. 1903. The obligation imposed by the next preceding article is enforcible,
not only for personal acts and omissions, but also for those of persons for whom
another is responsible.
"The father, and, in case of his death or incapacity, the mother, are liable for any
damages caused by the minor children who live with them.
"Guardians are liable for damages done by minors or incapacitated persons
subject to their authority and living with them.
"Owners or directors of an establishment or business are equally liable for any
damages caused by their employees while engaged in the branch of the service in
which employed, or on occasion of the performance of their duties.
"The State is subject to the same liability when it acts through a special agent, but
not if the damage shall have been caused by the official upon whom properly
devolved the duty of doing the act performed, in which case the provisions of the
next preceding article shall be applicable.
"Finally, teachers or directors of arts and trades are liable for any damages caused
by their pupils or apprentices while they are under their custody.
"The liability imposed by this article shall cease in case the persons mentioned
therein prove that they exercised all the diligence of a good father of a family to
prevent the damage."
"ART. 1904. Any person who pays for damage caused by his employees may
recover from the latter what he may have paid."
REVISED PENAL CODE
"ART. 100. Civil liability of a person guilty of felony.—Every person criminally
liable for a felony is also civilly liable.
610
610 PHILIPPINE REPORTS ANNOTATED
Barredo vs. Garcia and Almario
"ART. 101. Rules regarding civil liability in certain cases.—The exemption from
criminal liability established in subdivisions 1, 2, 3, 5, and 6 of article 12 and in
which shall be enforced subject to the following rules:
"First. In cases of subdivisions 1, 2 and 3 of article 12 the civil liability for acts
committed by any imbecile or insane person, and by a person under nine years of
age, or by one over nine but under fifteen years of age, who has acted without
discernment, shall devolve upon those having such person under their legal authority
or control, unless it appears that there was no fault or negligence on their part.
"Should there be no person having such insane, imbecile or minor under his
authority, legal guardíanship, or control, or if such person be insolvent, said insane,
imbecile, or minor shall respond with their own property, excepting property exempt
from execution, in accordance with the civil law.
"Second. In cases falling within subdivision 4 of article 11, the persons for whose
benefit the harm has been prevented shall be civilly liable in proportion to the benefit
which they may have received.
"The courts shall determine, in their sound discretion, the proportionate amount
for which each one shall be liable.
"When the respective shares can not be equitably determined, even
approximately, or when the liability also attaches to the Government, or to the
majority of the inhabitants of the town, and, in all events, whenever the damage has
been caused with the consent of the authorities or their agents, indemnification shall
be made in the manner prescribed by special laws or regulations.
"Third. In cases falling within subdivisions 5 and 6 of article 12, the persons using
violence or causing the fear shall be primarily liable and secondarily, or, if there be
no such persons, those doing the act shall be liable, saving always to the latter that
part of their property exempt from execution.
"ART. 102. Subsidiary civil liability of innkeepers, tavern keepers and proprietors
of establishment.— In default of persons criminally liable, innkeepers, tavern
keepers, and any other persons or corporations shall be civilly liable for crimes
committed in their establishments, in all cases where a violation of municipal
ordinances or some general or special police regulation shall have been committed
by them or their employees.
"Innkeepers are also subsidíarily liable for the restitution of goods taken by
robbery or theft within their houses from guests lodging therein, or for the payment
of the value thereof, provided that such guests shall have notified in advance the
innkeeper himself, or the person representing him, of the deposit of such goods
within the inn; and shall furthermore have followed the directions which such
innkeeper or his representative may have given them with respect to the care of and
vigilance over such goods. No liability shall attach in case of robbery with violence
against or intimidation of persons unless committed by the innkeeper's employees.
 "ART. 103. Subsidiary civil liability of other persons.—The subsidíary liability
established in the next preceding article shall also apply to employers, teachers,
persons, and corporations engaged in any kind of industry for felonies committed by
their servants, pupils, workmen, apprentices, or employees in the discharge of their
duties."
* * * * * *
"ART. 365. Imprudence and Negligence.—Any person who, by reckless
imprudence, shall commit any act which, had it been intentional, would constitute a
grave felony, shall suffer the penalty of arresto mayor in its maximum period
to prisión correccional in its minimum period; if it would have constituted a less grave
felony, the penalty of arresto mayor in its minimum and medium periods shall be im-
posed.
"Any person who, by simple imprudence or negligence, shall commit an act which
would otherwise constitute a grave felony, shall suffer the penalty of arresto
mayor in its medium and maximum periods; if it would have constituted a less serious
felony, the penalty of arresto mayor in its minimum period shall be imposed."
It will thus be seen that while the terms of article 1902 of the Civil Code seem to
be broad enough to cover the driver's negligence in the instant case, nevertheless
article 1093 limits cuasi-delitos to acts or omissions "not punishable by law." But
inasmuch as article 365 of the Revised Penal Code punishes not only reckless but even
simple imprudence or negligence, the fault or negligence under article 1902 of the
Civil Code has apparently been crowded out. It is this overlapping that makes the
"confusion worse confounded." However, a closer study shows that such a
concurrence of scope in regard to negligent acts does not destroy the distinction
between the civil liability arising from a crime and the responsibility for cuasi-
delitos or culpa extra-contractual. The same negligent act causing damages may
produce civil liability arising from a crime under article 100 of the Revised Penal Code,
or create an action for cuasi-delito or culpa extra-contractual under articles 1902-
1910 of the Civil Code.
The individuality of cuasi-delito or culpa extra-contractual looms clear and
unmistakable. This legal institution is of ancient lineage, one of its early ancestors
being the Lex Aquilia in the Roman Law. In fact, in Spanish legal términology, this
responsibility is often referred to as culpa aquiliana. The Partidas also contributed to
the genealogy of the present fault or negligence under the Civil Code; for instance,
Law 6, Title 15, of Partida 7, says: "Tenudo es de fazer
611
VOL. 73, JULY 8, 1942 611
Barredo vs. Garcia and Almario
emienda, porque, cómo quier que el non fizo á sabiendas el dano al otro, pero
acaesció por su culpa."
The distinctive nature of cuasi-delitos survives in the Civil Code. According to arti-
cle 1089, one of the five sources of obligations is this legal institution of cuasi-
delito or culpa extra-contractual: "los actos * * * en que
intervenga cualquier genero de culpa o negligencia." Then article 1093 provides that
this kind of obligation shall be governed by Chapter II of Title XVI of Book IV, meaning
articles 1902-1910. This portion of the Civil Code is exclusively devoted to the legal
institution of culpa aquiliana.
Some of the differences between crimes under the Penal Code and the culpa
aquiliana or cuasi-delito under the Civil Code are:
1. That crimes affect the public interest, while cuasi-delitos are only of private
concern.
2. That, consequently, the Penal Code punishes or corrects the criminal act,
while the Civil Code, by means of indemnification, merely repairs the damage.
3. That delicts are not as broad as quasi-delicts, because the former are
punished only if there is a penal law clearly covering them, while the latter, cuasi-
delitos, include all acts in which "any kind of fault or negligence intervenes."
However, it should be noted that not all violations of the penal law produce civil
responsibility, such as begging in contravention of ordinances, violation of the game
laws, infraction of the rules of traffic when nobody is hurt. (See Colin and Capitant,
"Curso Elemental de Derecho Civil," Vol. 3, p. 728.)
Let us now ascertain what some jurjsts say on the separate existence of quasi-
delicts and the employer's primary and direct liability under article 1903 of the Civil
Code.
Dorado Montero in his essay on "Responsabilidad" in the "Enciclopedia Juridica
Española" (Vol. XXVII, p. 414) says:
"El concepto juridico de la responsabilidad civil abarca diversos aspectos y
comprende a diferentes personas. Asl, existe una responsabilidad civil propiamentc
dicha, que en ningún caso lleva aparejada responsabilidad criminal alguna, y otra que
es consecuencia indeclinable de la penal que nace de todo delito o falta."
"The juridical concept of civil responsibility has various aspects and comprises
different persons. Thus, there is a civil responsibility, properly speaking, which in no
case carries with it any criminal responsibility, and another which is a necesary con-
sequence of the penal liability as a result of every felony or misdemeanor."
Maura, an outstanding authority, was consulted on the following case: There had
been a collision between two trains belonging respectively to the Ferrocarril
Cantabrico and the Ferrocarril del Norte. An employee of the latter had been
prosecuted in a criminal case, in which the company had been made a party as
subsidíarily responsible in civil damages. The employee had been acquitted in the
criminal case, and the employer, the Ferrocarril del Norte, had also been exonerated.
The question asked was whether the Ferrocarril Cantabrico could still bring a civil
action for damages against the Ferrocarril del Norte. Maura's opinion was in the
affirmative, stating in part (Maura, Dictámenes, Vol. 6, pp. 511-513):
"Quedando las cosas así, a proposito de la realdad pura y neta de
los hechos, todavia menos parece sostenible que exista cosa juzgada acerca de la
obligacion civil de indemnizar los quebrantoa y menoscabos inferidos por el choque
de los trenee. El título en que se funda la acción para demandar el resarcimiento, no
puede confundirse con las responsabilidades civiles nacidas de delito, siquiera exista
en este, sea 61 cual sea, una culpa rodeada de notas agravatorias que motivan
sanciones penales, más o menos severas. La lesion causada por delito o falta en los
derechos civiles, requiere restituciones, reparaciones o indemnizaciones, que cual la
pena misma atanen al orden publico; por tal motivo vienen encomendadas, de
ordinario, al Ministerio Fiscal; y claro es que si por esta via se enmiendan los
quebrantoa y menoscabos, el agraviado excusa procurar el ya conseguido desagravio;
pero esta eventual coincidencia de los efectos, no borra la diversidad originaria de
las acciones civiles para pedir indemnizacion.
"Estas, para el caso actual (prescindiendo de culpas contractules, que no vendrian
a cuento y que tienen otro regimen), dimanan, según el articulo 1902 del Código Civil,
de toda acción u omision, causante de daflos o perjuicios, en que intervenga culpa o
negligencia. Es trivial que acciones semejantes son ejercitadas ante los Tribunales de
lo civil cotidíanamente, sin que la Justicia punitiva tenga que mezclarse en los
asuntos. Los artículos 18 al 21 y 121 al 128 del Código Penal, atentos al espiritu y a
los fines sociales y políticos del mismo, desenvuelven y ordenan la materia de
responsabilidades civiles nacidas de delito, en termmos separados del regimen por
ley comun de la culpa que se denomina aquiliana, por alusion a precedentes
legislatives del Corpus Juris. Seria intempestivo un paralelo entre aquellas
ordenaciones, y la de la obligation de indemnizar a título de culpa civil; pero viene al
caso y es necesaria una de las diferenciaciones que en el tal paralélo se notarian.
"Los artículos 20 y 21 del Código Penal, después de distribuir a su modo las
responsabilidades civiles, entre los que sean por diversos conceptos culpables del
delito o falta, las hacen extensivas a las em-
612
612 PHILIPPINE REPORTS ANNOTATED
Barredo vs. Garcia and Almario
presas y los establecimientos al servicio de los cuales están los delincuentes;
pero ton carácter subsidiario, o sea, Begun el texto literal, en defecto de los que sean
responsables criminalmente. No coincide en ello el Código Civil, cuyo artículo 1903,
dice; La obligación que impone el artículo anterior es exigible, no sólo por los actos y
omisiones propios, lino por los de aquellas personas de quienes se debe
responder; personas en la enumeración de las cuales figuran los dependientes y
empleados de los establecimientos o empresas, sea por actos del servicio, sea con
ocasión de sua funciones. Por esto acontece, y se observa en la jurisprudencia, que
las empresas, despulo de intervenir en las causas criminales con el carácter
subsidiario de su responsabilidad civil por razón del delito, son demandadas y
condenadas directa y aisladamente, cuando se trata de la obligacion, ante los
tribunales civiles.
"Siendo cómo se ve, diverso el título de esta obligacion, y formando verdadero
postulado de nuestro regimen judicial la separation entre justicia punitiva y
tribunales de lo civil, de suerte que tienen unos y otros normaa de fondo en distintos
cuerpos legates, y diferentes modos de proceder, habiendose, por afiadidura,
abstenido de asistir al juicio criminal la Compania del Ferrocarril Cantabrico, que se
reservo ejercitar sus acciones, parece innegable que la de indemnización por los
danos y perjuicios que le irrogd el choque, no estuvo sub judice ante el Tribunal del
Jurado, ni fué sentenciada, sino que permanecio intacta, al pronunciarse el fallo de
21 de marzo. Aun cuando el veredicto no hubiese sido de inculpabilidad, mostrose
más arriba, que tal acción quedaba legitimamente reservada para despuea del
proceso; pero al declararse que no existid delito, ni responsabilidad dimanada de
delito, materia única sobre que tenian jurisdiction aquellos juzgadores, se redobla el
motivo para la obligacion civil ex lege, y se patentiza más y más que la action para
pedir su cumplimiento permanece incolume, extrafia a la cosa juzgada."
"As things are, apropos of the reality pure and simple of the facts, it seems less
tenable that there should be res judicata with regard to the civil obligation for
damages on account of the losses caused by the collision of the trains. The title upon
which the action for reparation is based cannot be confused with the civil
responsibilities born of a crime, because there exists in the latter, whatever each
nature, a culpa surrounded with aggravating aspects which give rise to penal
measures that are more or less severe. The injury caused by a felony or misdemeanor
upon civil rights requires restitutions, reparations, or indemnifications which, like the
penalty itself, affect public order; for this reason, they are ordinarily entrusted to the
office of the prosecuting attorney; and it is clear that if by this means the losses and
damages are repaired, the injured party no longer desires to seek another relief; but
this coincidence of effects does not eliminate the peculiar nature of civil actions to
ask for indemnity.
"Such civil actions in the present case (without referring to contractual, faults
which are not pertinent and belong to another scope) are derived, according to
article 1902 of the Civil Code, from every act or omission causing losses and damages
in which culpa or negligence intervenes. It is unimportant that such actions are every
day filed before the civil courts without the criminal courts interfering therewith.
Articles 18 to 21 and 121 to 128 of the Penal Code, bearing in mind the spirit and the
social and political purposes of that Code, develop and regulate the matter of civil
responsibilities arising from a crime, separately from the regime under common law,
of culpa which is known as aquiliana, in accordance with legislative precedent of
the Corpus Juris. It would be unwarranted to make a detailed comparison between
the former provisions and that regarding the obligation to indemnify on account of
civil culpa; but it is pertinent and necessary to point out to one of such differences.
"Articles 20 and 21 of the Penal Code, after distributing in their own way the civil
responsibilities among those who, for different reasons, are guilty of felony or
misdemeanor, make such civil responsibilities applicable to enterprises and estab-
lishments for which the guilty parties render service, but with subsidíary character,
that is to say, according to the wording of the Penal Code, in default of those who are
criminally responsible. In this regard, the Civil Code does not coincide because article
1903 says: 'The obligation imposed by the next preceding article is demandable, not
only for personal acts and omissions, but also for those of persons for whom another
is responsible.' Among the persons enumerated are the subordinates and employees
of establishments or enterprises, either for acts during their service or on the
occasion of their functions. It is for this reason that it happens, and it is so observed
in judicial decisions, that the companies or enterprises, after taking part in the
criminal cases because of their subsidiary civil responsibility by reason of the crime,
are sued and sentenced directly and separately with regard to the obligation, before
the civil courts.
"Seeing that the title of this obligation is different, and the separation between
punitive justice and the civil, courts being a true postulate of our judicial system, so
that they have different fundamental norms in different codes, as well as different
modes of procedure, and inasmuch as the Compania del Ferrocarril Cantabrico has
abstained from taking part in the criminal case and has reserved the right to exercise
its actions, it seems undeniable that the action for indemnification for the losses and
damages caused to it by the collision was not sub judice before the Tribunal del
Jurado, nor was it the subject of a sentence, but it remained intact when the decision
of March 21 was rendered. Even if the verdict had not been that of acquittal, it has
already been shown that such action had been legitimately reserved till after the
criminal prosecu-
613
VOL. 73, JULY 8, 1942 613
Barredo vs. Garcia and Almario
tion; but because of the declaration of the non-existence of the felony and the non-
existence of the responsibility arising from the crime, which was the sole subject
matter upon which the Tribunal del Jurado had jurisdiction, there is greater reason
for the civil obligation ex lege, and it becomes clearer that the action for its
enforcement remain intact and is not res judicata."
Laurent, a jurist who has written a monumental work on the French Civil Code,
on which the Spanish Civil Code is largely based and whose provisions on cuasi-
delito or culpa extra-contractual are similar to those of the Spanish Civil Code, says,
referring to article 1384 of the French Civil Code which corresponds to article 1903,
Spanish Civil Code:
"The action can be brought directly against the person responsible (for another),
without including the author of the act. The action against the principal is accessory
in the sense that it implies the existence of a prejudicial act committed by the
employee, but it is not subsidíary in the sense that it can not be instituted till after
the judgment against the author of the act or at least, that it is subsidíary to the
principal action; the action for responsibility (of the employer) is in itself a principal
action." (Laurent, Principles of French Civil Law, Spanish translation, Vol. 20, pp. 734-
735.)
Amandi, in his "Cuestionario del Codigo Civil Reformado" (Vol. 4, pp. 429, 430),
declares that the responsibility of the employer is principal and not subsidíary. He
writes:
"Cuestión 1. La responsabilidad declarada en el artículo 1903 por las acciones u
omisiones de aquellas personas por las que se debe responder, es subsidiaria? es
principal? Para contestar a esta pregunta es necesario saber, en primer lugar, en que'
se funda el precepto legal. Es que realmente se impone una responsabilidad por una
falta ajena? Así parece a primera vista; pero semejante afirmación seria contraria a
la justicia y a la máxima universal, según la que las faltas son personales, y cada uno
responde de aquellas que le son imputables. La responsabilidad de que tratamos se
impone con ocasión de un delito o culpa, pero no por causa de ellos, sino por
causa del cuasi delito, esto es, de la imprudencia o de la negligencia del padre, del
tutor, del dueño o director del establecimiento, del maestro, etc. Cuando cualquiera
de las personas que enumera el artículo citado (menores de edad, in-capacitados,
dependientes, aprendices) causan un daño, la ley presume que el padre, el tutor, el
maestro, etc., han cometido una falta de negligencia para prevenir o evitar el daño.
Esta falta es la que la ley castiga. No hay, pues, responsabilidad por un hecho ajeno,
sino en la apariencia; en realidad la responsabilidad se exige por un hecho propio. La
idea de que esa responsabilidad sea subsidíaria es, por lo tanto, completamente
inadmisible."
"Question No. 1. Is the responsibility declared in article 1903 for the acts or
omissions of those persons for whom one is responsible, subsidíary or principal? In
order to answer this question it is necessary to know, in the first place, on what the
legal provision is based. Is it true that there is a responsibility for the fault of another
person? It seems so at first sight; but such assertion would be contrary to justice and
to the universal maxim that all faults are personal, and that everyone is liable for
those faults that can be imputed to him. The responsibility in question is imposed on
the occasion of a crime or fault, but not because of the same, but because of
the cuasi-delito, that is to say, the imprudence or negligence of the father, guardían,
proprietor or manager of the establishment, of the teacher, etc. Whenever anyone
of the persons enumerated in the article referred to (minors, incapacitated persons,
employees, apprentices) causes any damage, the law presumes that the father,
guardían, teacher, etc. have committed an act of negligence in not preventing or
avoiding the damage. It is this fault that is condemned by the law. It is, therefore,
only apparent that there is a responsibility for the act of another; in reality the
responsibility exacted is for one's own act. The idea that such responsibility is
subsidíary is, therefore, completely inadmissible."
Oyuelos, in his "Digesto: Principios, Doctrina y Jurisprudencia, Referentes al
Código Civil Español," says in Vol. VII, p. 743:
"Es decir, no se responde de hechos ajenos, porque se responde sólo de su propia
culpa, doctrina del artículo 1902; más por excepción, se responde de la ajena
respecto de aquellas personas con las que medía algún nexo o vinculo, que motiva o
razona la responsabilidad. Esta responsabilidad, es directa o es subsidiaria? En el
orden penal, el Código de esta clase distingue entre menores e incapacitados y los
demás, declarando directa la primera (artículo 19) y subsidiaria la segunda (articulos
20 y 21); pero en el orden civil, en el caso del artículo 1903, ha de entenderse directa,
pot/el tenor del artículo que impone la responsabilidad precisamente 'por los actos
de aquellas personas de quienes se deba responder.'"
"That is to say, one is not responsible for the acts of others, because one is liable
only for his own faults, this being the doctrine of article 1902; but, by exception, one
is liable for the acts of those persons with whom there is a bond or tie which gives Criminal, se ha atenido estrictamente a ellos, sin invadir atribuciones ajenas a su
rise to the responsibility. Is this responsibility direct or subsidiary? In the order of the jurisdicción propia, m contrariar en lo mas mínimo el fallo recaído en la causa."
penal law, the Penal Code distinguishes between minors and incapacitated persons "Considering that the first ground of the appeal is based on the mistaken
on the one hand, and other persons on the other, declaring that the responsibility for supposition that the trial court, in sentencing the Compania Madrilena to the
the former is direct (article 19), and for the latter, subsidiary (articles 20 and 21); but payment of the damage caused by the death of Ramon Lafuente Izquierdo, disregards
in the scheme of the civil law, in the case of article 1903, the responsibility should be the value and juridical effects of the sentence of acquittal rendered in the criminal
understood as direct, according to the tenor of that article, for precisely it imposes case instituted on account of the same act, when it is a fact that the two jurisdictions
responsibility for the acts of had taken cognizance of the same act in its different aspects, and as the criminal
614 jurisdiction declared within the limits of its authority that the act in question did not
614 PHILIPPINE REPORTS ANNOTATED constitute a felony because there was no grave carelessness or negligence, and this
being the only basis of acquittal, it does not exclude the co-existence of fault or
Barredo vs. Garcia and Almario
negligence which is not qualified, and is a source of civil obligations according to
those persons for whom one should be responsible.'"
article 1902 of the Civil Code, affecting, in accordance with article 1903, among other
Coming now to the sentences of the Supreme Tribunal of Spain, that court has
persons, the managers of establishments or enterprises by reason of the damages
upheld the principles above set forth: that a quasi-delict or culpa extra-contractual is
caused by employees under certain conditions, it is manifest that the civil jurisdiction
a separate and distinct legal institution, independent from the civil responsibility
in taking cognizance of the same act in this latter aspect and in ordering the company,
arising from criminal liability, and that an employer is, under article 1903 of the Civil
appellant herein, to pay an indemnity .for the damage caused by one of its
Code, primarily and directly responsible for the negligent acts of his employee.
employees, far from violating said legal provisions, in relation with article 116 of the
One of the most important of those Spanish decisions is that of October 21, 1910.
Law of Criminal Procedure, strictly followed the same, without invading attributes
In that case, Ramon Lafuente died as the result of having been run over by a street
which are beyond its own jurisdiction, and without in any way contradicting the
car owned by the "Compania Electrica Madrilena de Tracción." The conductor was
decision in that cause." (Italics supplied.)
prosecuted in a criminal case but he was acquitted. Thereupon, the widow filed a civil
It will be noted, as to the case just cited:
action against the street car company, praying for damages in the amount of 15,000
First. That the conductor was not sued in a civil case, either separately or with
pesetas. The lower court awarded damages; so the company appealed to the
the street car company. This is precisely what happens in the present case: the driver,
Supreme Tribunal, alleging violation of articles 1902 and 1903 of the Civil Code
Fontanilla, has not been sued in a civil action, either alone or with his employer.
because by final judgment the non-existence of fault or negligence had been
Second. That the conductor had been acquitted of grave criminal negligence,
declared. The Supreme Court of Spain dismissed the appeal, saying:
but the Supreme Tribunal of Spain said that this did not exclude the co-existence of
"Considerando que el primer motivo del recurso se funda en el equivocado
fault or negligence, which is not qualified, on the part of the conductor, under article
supuesto de que el Tribunal a quo, al condonar a la Compañía Eléctrica Hadrileña al
1902 of the Civil Code. In the present case, the taxi driver was found guilty of criminal
pago del daño causado con la muerte de Ramón Lafuente Izquierdo, desconoce el
negligence, so that if he had even sued for his civil responsibility arising from the
valor y efectos jurídicos de la sentencia absolutoria dictada en la causa criminal que
crime, he would have been held primarily liable for civil damages, and Barredo would
se siguió por el mismo hecho, cuando es lo cierto que de este han conocido las dos
have been held subsidíarily liable for the same. But the plaintiffs are directly suing
jurisdicciones bajo diferentes aspectos, y cómo la de lo criminal declar6 dentro de los
Barredo, "on his primary responsibility because of his own presumed negligence—
limiten de su competencia que el hecho de que se trata no era constitutivo de delito
which he did not overcome—under article 1903. Thus, there were two liabilities of
por no haber mediado descuido o negligencia graves, lo que no excluye, siendo este
Barredo: first, the subsidíary one because of the civil liability of the taxi driver arising
el único fundamento del fallo absolutorio, el concurso de la culpa o negligencia no
from the latter's criminal negligence; and, second, Barredo's primary liability as an
calificadas, fuente de obligaciones civiles Según el artículo 1902 del Código Civil, y
employer under article 1903. The plaintiffs were free to choose which course to take,
que alcanzan, según el 1903, entre otras personas, a los Directores de
and they preferred the
establecimientos o empresas por los daños causados por sus dependientes en
615
determinadas condiciones, es manifiesto que la de lo civil, al conocer del mismo
hecho bajo este ultimo aspecto y al condenar a la Compañía recurrente a la VOL. 73, JULY 8, 1942 615
indemnización del daño causado por uno de sus empleados, lejos de infringir los Barredo vs. Garcia and Almario
mencionados textos, en relación con el artículo 116 de la Ley de Enjuiciamiento second remedy. In so doing, they were acting within their rights. It might be observed
in passing, that the plaintiffs chose the more expeditious and effective method of
relief, because Fontanilla was either in prison, or had just been released, and besides,
he was probably without property which might be seized in enforcing any judgment
against him for damages.
Third. That inasmuch as in the above sentence of October 21, 1910, the
employer was held liable civilly, notwithstanding the acquittal of the employee (the
conductor) in a previous criminal case, with greater reason should Barredo, the
employer in the case at bar, be held liable for damages in a civil suit filed against him
because his taxi driver had been convicted. The degree of negligence of the
conductor in the Spanish case cited was less than that of the taxi driver, Fontanilla,
because the former was acquitted in the previous criminal case while the latter was
found guilty of criminal negligence and was sentenced to an indeterminate sentence
of one year and one day to two years of prisión correctional.
(See also Sentence of February 19, 1902, which is similar to the one above
quoted.)
In the Sentence of the Supreme Court of Spain, dated February 14, 1919, an
action was brought against a railroad company for damages because the station
agent, employed by the company, had unjustly and fraudulently, refused to deliver
certain articles consigned to the plaintiff. The Supreme Court of Spain held that this
action was properly under article 1902 of the Civil Code, the court saying:
"Considerando que la sentencia discutida reconoce, en virtud de los hechos que
consigna con relación a las pruebas del pleito: l.», que las expediciones facturadas
por la compañía ferroviaria a la consignación del actor de las vasijas vacías que en su
demanda relacionan tenían cómo fin el que este las devolviera a sus remitentes con
vinos y alcoholes; 2.°, que llegadas a su destino tales mercancías no se quisieron
entregar a dicho consignatario por el jefe de la estación sin motivo justificado y con
intención dolosa, y 3.a, que la falta de entrega de estas expediciones al tiempo de
reclamarlas el demandante le originaron danos y perjuicios en cantidad de bastante
importancia cómo expendedor al por mayor que era de vinos y alcoholes por las
ganancias que dejo de obtener al verse privado de servir los pedidos que se le habían
hecho por los remitentes en loa envases:
"Considerando que sobre esta base hay necesidad de estimar los cuatro motivos
que integran este recurso, porque la demanda inicial del pleito a que se contrae no
contiene acción que nazca del incumplimiento del contrato de transporte, toda vez
que no se funda en el retraso de la llegada de las mercancías ni de ningún otro vinculo
contractual entre las partes contendientes, careciendo, por tanto, de aplicación el
artículo 371 del Código de Comercio, en que principalmente descansa el fallo
recurrido, sino que se limita a pedir la reparación de los danos y perjuicios producidos
en el patrimonio del actor por la injustincada y dolosa negativa del porteador a la
entrega de las mercancías a su nombre consignadas, según lo reconoce la sentencia,
y cuya responsabilidad esta claramente sancionada en el artículo 1902 del Código
Civil, que obliga por el siguiente a la Compañía demandada cómo ligada con el
causante de aquellos por relaciones de carácter económico y de jerarquía
administrativa."
"Considering that the sentence, in question recognizes, in virtue of the facts
which it declares, in relation to the evidence in the case: (1) that the invoice issued
by the railroad company in favor of the plaintiff contemplated that the empty
receptacles referred to in the complaint should be returned to the consignors with
wines and liquors; (2) that when the said merchandise reached their destination,
their delivery to the consignee was refused by the station agent without justification
and with fraudulent intent, and (3) that the lack of delivery of these goods when they
were demanded by the plaintiff caused him losses and damages of considerable
importance, as he was a wholesale vendor of wines and liquors and he failed to
realize the profits when he was unable to fill the orders sent to him by the consignors
of the receptacles:
"Considering that upon this basis there is need of upholding the four assignments
of error, as the original complaint did not contain any cause of action arising from
non-fulfilment of a contract of transportation, because the action was not based on
the delay of the goods nor on any contractual relation between the parties litigant
and, therefore, article 371 of the Code of Commerce, on which the decision appealed
from is based, is not applicable; but it limits itself to asking for reparation for losses
and damages produced on the patrimony of the plaintiff tm account of the unjustified
and fraudulent refusal of the carrier to deliver the goods consigned to the plaintiff as
stated by the sentence, and the carrier's responsibility is clearly laid down in article
1902 of the Civil Code which binds, in virtue of the next article, the defendant
company, because the latter is connected with the person who caused the damage
by relations of economic character and by administrative hierarchy." (Italics
supplied.)
The above case is pertinent because it shows that the same act may come under
both the Penal Code and the Civil Code. In that case, the action of the agent.was
unjustified and fraudulent and therefore could have been the subject of a criminal
action. And yet, it was held to be also a proper subject of a civil action under article
1902 of the Civil Code. It is also to be
616
616 PHILIPPINE REPORTS ANNOTATED
Barredo vs. Garcia and Almario
noted that it was the employer and not the employee who was being sued.
Let us now examine the cases previously decided by this Court.
In the leading case of Rakes vs. Atlantic Gulf and Pacific Co. (7 Phil., 359, 362-365
[year 1907]), the trial court awarded damages to the plaintiff, a laborer of the de-
fendant, because the latter had negligently failed to repair a tramway, in
consequence of which the rails slid off while iron was being transported, and caught
the plaintiff whose leg was broken. This Court held: "It is contended by the defendant,
as its first defense to the action that the necessary conclusion from these collated
laws is that the remedy for injuries through negligence lies only in a criminal action
in which the official criminally responsible must be made primarily liable and his
employer held only subsidíarily to him. According to this theory the plaintiff should
have procured the arrest of the representative of the company accountable for not
repairing the track, and on his prosecution a suitable fine should have been imposed,
payable primarily by him and secondarily by his employer.
"This reasoning misconceived the plan of the Spanish codes upon this subject.
Article 1093 of the Civil Code makes obligations arising from faults or negligence
not punished by the law, subject to the provisions of Chapter II of Title XVI. Section
1902 of that chapter reads:
" 'A person who by an act or omission causes damage to another when there is
fault or negligence shall be obliged to repair the damage so done.
" 'SEC. 1903. The obligation imposed by the preceding article is demandable, not
only for personal acts and omissions, but also for those of the persons for whom they
should be responsible.
"'The father, and on his death or incapacity, the mother, is. liable for the damages
caused by the minors who live with them.
"'Owners or directors of an establishment or enterprise are equally liable for the
damages caused by their employees in the service of the branches in which the latter
may be employed or in the performance of their duties.
* * * * * * * *
"'The liability referred to in this article shall cease when the persons mentioned
therein prove that they employed all the diligence of a good father of a family to
avoid the damage.'"
"As an answer to the argument urged in this particular action it may be sufficient
to point out that nowhere in our general statutes is the employer penalized for failure
to provide or maintain safe appliances for his workmen. His obligation therefore is
one 'not punished by the laws' and falls under civil rather than criminal jurisprudence.
But the answer may be a broader one. We should be reluctant, under any conditions,
to adopt a forced construction of these scientific codes, such as is proposed by the
defendant, that would rob some of these articles of effect, would shut out litigants
against their will from the civil courts, would make the assertion of their rights
dependent upon the selection for prosecution of the proper criminal offender, and
render recovery doubtful by reason of the strict rules of proof prevailing in criminal
actions. Even if these articles had always stood alone, such a construction would be
unnecessary, but clear light is thrown upon their meaning by the provisions of the
Law of Criminal Procedure of Spain (Ley de Enjuiciamiento Criminal), which, though
never in actual force in these Islands, was formerly given a suppletory or explanatory
effect. Under article 111 of this law, both classes of action, civil and criminal, might
be prosecuted jointly or separately, but while the penal action was pending the civil
was suspended. According to article 112, the penal action once started, the civil
remedy should be sought therewith, unless it had been waived by the party injured
or been expressly reserved by him for civil proceedings for the future. If the civil
action alone was prosecuted, arising out of a crime that could be enforced only on
private complaint, the penal action thereunder should be extinguished. These
provisions are in harmony with those of articles 23 and 133 of our Penal Code on the
same subject.
"An examination of this topic might be carried much further, but the citation of
these articles suffices to show that.the civil liability was not intended to be merged
in the criminal nor even to be suspended thereby, except as expressly provided in the
law. Where an individual is civilly liable for a negligent act or omission, it is not
required that the injured party should seek out a third person criminally liable whose
prosecution must be a condition precedent to the enforcement of the civil right.
"Under article 20 of the Penal Code the responsibility of an employer may be
regarded as subsidíary in respect of criminal actions against his employees only while
they are in process of prosecution, or in so far as they determine the existence of the
criminal act from which liability arises, and his obligation under the civil law and its
enforcement in the civil courts is not barred thereby unless by the election of the
injured person. Inasmuch as no criminal proceeding had been instituted, growing out
of the accident in question, the provisions of the Penal Code can not affect this action.
This construction renders it unnecessary to finally determine here whether this
subsidíary civil liability in penal actions has survived the laws that fully regulated it or
has been abrogated by the American civil and criminal procedure now in force in the
Philippines.
"The difficulty in construing the articles of the code above cited in this case
appears from the briefs before us to have arisen from the interpretation of the words
of article 1093, 'fault or negligence
617
VOL. 73, JULY 8, 1942 617
Barredo vs. Garcia and Almario
not punished by law, as applied to the comprehensive definition of offenses in articles
568 and 590 of the Penal Code. It has been shown that the liability of an employer
arising out of his relation to his employee who is the offender is not to be regarded
as derived from negligence punished by the law, within the meaning of articles 1902
and 1093. More than this, however, it cannot be said to fall within the class of acts
unpunished by the law, the consequences of which are regulated by articles 1902 and
1903 of the Civil Code. The acts to which these articles are applicable are understood
to be those not growing out of pre-existing duties of the parties to one another. But
where relations already formed give rise to duties, whether springing from contract
or quasi contract, then breaches of those duties are subject to articles 1101, 1103,
and 1104 of the same code. A typical application of this distinction may be found in
the consequences of a railway accident due to defective machinery supplied by the
employer. His liability to his employee would arise out of the contract of employ-
ment, that to the passengers out of the contract for passage, while that to the injured
bystander would originate in the negligent act itself."
In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the mother of the 8 or 9-
year-old child Salvador Bona brought a civil action against Moreta to recover
damages resulting from the death of the child, who had been run.over by an
automobile driven and managed by the defendant. The trial court rendered judgment
requiring the defendant to pay the plaintiff the sum of P1,000 as indemnity. This water from the electric plant was flowing. The child died that same night from the
Court in affirming the judgment, said in part: burns. The trial court dismissed the action because of the contributory negligence of
"If it were true that the defendant, in coming from the southern part of Solana the plaintiffs. But this Court held, on appeal, that there was no contributory
Street, had to stop his auto before crossing Real Street, because he had met vehicles negligence, and allowed the parents P1,000 in damages from J. V. House who at the
which were going along the latter street or were coming from the opposite direction time of the tragic occurrence was the holder of the franchise for the electric plant.
along Solana Street, it is to be believed that, when he again started to run his auto This Court said in part:
across said Real Street and to continue its way along Solana Street northward, he 618
should have adjusted the speed of the auto which he was operating until he had fully 618 PHILIPPINE REPORTS ANNOTATED
crossed Real Street and had completely reached a clear way on Solana Street. But, as
Barredo vs. Garcia and Almario
the child was run over by the auto precisely at the entrance of Solana Street, this
"Although the trial judge made the findings of fact hereinbefore outlined, he
accident could not have occurred if the auto had been running at a slow speed, aside
nevertheless was led to order the dismissal of the action because of the contributory
from the fact that the defendant, at the moment of crossing Real Street and entering
negligence of the plaintiffs. It is from this point that a majority of the court depart
Solana Street, in a northward direction, could have seen the child in the act of
from the stand taken by the trial judge. The mother and her child had a perfect right
crossing the latter street from the sidewalk on the right to that on the left, and if the
to be on the principal street of Tacloban, Leyte, on the evening when the religious
accident had occurred in such a way that after the automobile had run over the body
procession was held. There was nothing abnormal in allowing the child to run along
of the child, and the child's body had already been stretched out on the ground, the
a few paces in advance of the mother. No one could foresee the coincidence of an
automobile still moved along a distance of about 2 meters, this circumstance shows
automobile appearing and of a frightened child running and falling into a ditch filled
the fact that the automobile entered Solana Street from Real Street, at a high speed
with hot water. The doctrine announced in the much debated case of
without the defendant having blown the horn. If these precautions had been taken
Rakes vs. Atlantic Gulf and Pacific Co. ([1907], 7 Phil., 359), still rule. Article 1902 of
by the defendant, the deplorable accident which caused the death of the child would
the Civil Code must again be enforced. The contributory negligence of the child and
not have occurred."
her mother, if any, does not operate as a bar to recovery, but in its strictest sense
It will be noticed that the defendant in the above case could have been
could only result in reduction of the damages."
prosecuted in a criminal case because his negligence causing the death of the child
It is most significant that in the case just cited, this Court specifically applied
was punishable by the Penal Code. Here is therefore a clear instance of the same act
article 1902 of the Civil Code. It is thus that although J. V. House could have been
of negligence being a proper subject-matter either of a criminal action with its
criminally prosecuted for reckless or simple negligence and not only punished but
consequent civil liability arising from a crime or of an entirely separate and
also made civilly liable because of his criminal negligence, nevertheless this Court
independent civil action for fault or negligence under article 1902 of the Civil Code.
awarded damages in an independent civil action for fault or negligence under article
Thus, in this jurisdiction, the separate individuality of a cuasi-delito or culpa
1902 of the Civil Code.
aquiliana under the Civil Code has been fully and clearly recognized, even with regard
In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915]), the action was for
to a negligent act for which the wrongdoer could have been prosecuted and
damages for the death of the plaintiff's daughter alleged to have been caused by the
convicted in a criminal case and for which, after such a conviction, he could have been
negligence of the servant in driving an automobile over the child. It appeared that
sued for this civil liability arising from his crime.
the cause of the mishap was a defect in the steering gear. The defendant Leynes had
Years later (in 1930) this Court had another occasion to apply the same doctrine.
rented the automobile from the International Garage of Manila, to be used by him in
In Bernal and Enverso vs. House and Tacloban Electric & Ice Plant, Ltd., 54 Phil., 327,
carrying passengers during the fiesta of Tuy, Batangas. Leynes was ordered by the
the parents of the five-year-old child, Purificacion Bernal, brought a civil action to
lower court to pay P1,000 as damages to the plaintiff. On appeal this Court reversed
recover damages for the child's death as a result of burns caused by the fault and
the judgment as to Leynes on the ground that he had shown that he exercised the
negligence of the defendants. On the evening of April 10, 1925, the Good Friday pro-
care of a good father of a family, thus overcoming the presumption of negligence
cession was held in Tacloban, Leyte. Fortunata Enverso with her daughter
under article 1903. This Court said:
Purificacion Bernal had come from another municipality to attend the same. After
"As to selection, the defendant has clearly shown that he exercised the care and
the procession the mother and the daughter with two others were passing along Gran
diligence of a good father of a family. He obtained the machine from a reputable
Capitan Street in front of the offices of the Tacloban Electric & Ice Plant, Ltd., owned
garage and it was, so far as appeared, in good condition. The workmen were likewise
by defendant J. V. House, when an automobile appeared from the opposite direction.
selected from a standard garage, were duly licensed by the Government in their
The little girl, who was slightly ahead of the rest, was so frightened by the automobile
particular calling, and apparently thoroughly competent. The machine had been used
that she turned to run, but unfortunately she fell into the street gutter where hot
but a few hours when the accident occurred and it is clear from the evidence that the
defendant had no notice, either actual or constructive, of the defective condition of
the steering gear."
The legal aspect of the case was discussed by this Court thus:
"Article 1903 of the Civil Code not only establishes liability in eases of negligence,
but also provides when the liability shall cease. It says:
"'The liability referred to in this article shall cease when the persons mentioned
therein prove that they employed all the diligence of a good father of a family to
avoid the damage."'
"From this article two things are apparent: (1) That when an injury is caused by
the negligence of a servant or employee there instantly arises a presumption of law
that there was negligence on the part of the master or employer either in the
selection of the servant or employee, or in supervision over him after the selection,
or both; and (2) that that presumption is juris tantum and not juris et de jure, and
consequently, may be rebutted. It follows necessarily that if the employer shows to
the satisfaction of the court that in selection and supervision he has exercised the
care and diligence of a good father of a family, the presumption is overcome and he
is relieved from liability.
"This theory bases the responsibility of the master ultimately on
his own negligence and not on that of his servant."
The doctrine of the case just cited was followed by this Court in Cerf vs. Medel
(33 Phil., 37 [year 1915]). In the latter case, the complaint alleged that the defend-
ant's servant had so negligently driven an automobile, which was operated by
defendant as a public vehicle, that said automobile struck and damaged the plaintiff's
motorcycle. This Court, applying article 1903 and following the rule in
Bahia vs. Litonjua and Leynes, said in part (p. 41) that:
"The master is liable for the negligent acts of his servant where he is the owner
or director of a business or enterprise and the negligent acts are committed while the
servant is engaged in his master's employment as such owner."
Another case which followed the decision in Bahia vs. Litonjua and Leynes was
Cuison vs. Norton & Harrison Co., 55 Phil., 18 (year 1930). The latter case was an
action for damages brought by Cuison for the death of his seven-year-old son Moises.
The little boy was on his way to school with his sister Marciana. Some large pieces of
lumber fell from a truck and pinned the boy underneath, instantly killing him. Two
youths, Telesforo Binoya and Francisco Bautista, who were working for Ora, an em-
ployee of defendant Norton & Harrison Co., pleaded guilty to the crime of homicide
619
VOL. 73, JULY 8, 1942 619
Barredo vs. Garcia and Almario
through reckless negligence and were sentenced accordingly. This Court, applying
articles 1902 and 1903, held:
"The basis of civil law liability is not respondent superior but the relationship
of pater familial. This theory bases the liability of the master ultimately on his own
negligence and not on that of his servant." (Bahia vs. Litonjua and Leynes [1915], 30
Phil., 624; Cangco vs. Manila Railroad Co. [1918], 38 Phil., 768.)
In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517 (year
1930) the plaintiff brought an action for damages for the demolition of its wharf,
which had been struck by the steamer Helen. C belonging to the defendant. This
Court held (p. 526):
"The evidence shows that Captain Lasa at the time the plaintiff's wharf collapsed
was a duly licensed captain, authorized to navigate and direct a vessel of any tonnage,
and that the appellee contracted his services because of his reputation as a captain,
according to F. C. Cadwallader. This being so, we are of the opinion that the
presumption of liability against the defendant has been overcome by the exercise of
the care and diligence of a good father of a family in selecting Captain Lasa, in
accordance with the doctrines laid down by this court in the eases cited above, and
the defendant is therefore absolved from all liability."
It is, therefore, seen that the defendant's theory about his secondary liability is
negatived by the six cases above set forth. He is, on the authority of these cases,
primarily and directly responsible in damages under article 1903, in relation to article
1902, of the Civil Code.
Let us now take up the Philippine decisions relied upon by the defendant. We
study first, City of Manila vs. Manila Electric Co., 52 Phil., 586 (year 1928). A collision
between a truck of the City of Manila and a street car of the Manila Electric Co. took
place on June 8, 1925. The truck was damaged in the amount of P1,788.27. Sixto
Eustaquio, the motorman, was prosecuted for the crime of damage to property and
slight injuries through reckless imprudence. He was found guilty and sentenced to
pay a fine of P900, to indemnify the City of Manila for P1,788.27, with subsidíary im-
prisonment in case of insolvency. Unable to collect the indemnity from Eustaquio,
the City of Manila filed an action against the Manila Electric Company to obtain
payment, claiming that the defendant was subsidíarily liable.' The main defense was
that the defendant had exercised the diligence of a good father of a family to prevent
the damage. The lower court rendered judgment in favor of the plaintiff. This Court
held, in part, that this case was governed by the Penal Code, saying:
"With this preliminary point out of the way, there is no escaping the conclusion
that the provisions of the Penal Code govern. The Penal Code in easily
understandable language authorizes the determination of subsidíary liability. The
Civil Code negatives its application by providing that civil obligations arising from
crimes or misdemeanors shall be governed by the provisions of the Penal Code. The
conviction of the motorman was a misdemeanor falling under article 604 of the Penal
Code. The act of the motorman was not a wrongful or negligent act or omission not
punishable by law. Accordingly, the civil obligation connected up with the Penal Code
and not with article 1903 of the Civil Code. In other words, the Penal Code affirms its
jurisdiction while the Civil Code negatives its jurisdiction. This is a case of criminal
negligence out of which civil liability arises and net a case of civil negligence."
* * * * * * *
 "Our deduction, therefore, is that the case relates to the Penal Code and not to
the Civil Code. Indeed, as pointed out by the trial judge, any different ruling would
permit the master to escape scot-free by simply alleging and proving that the master
had exercised all diligence in the selection and training of its servants to prevent the
damage. That would be a good defense to a strictly civil action, but might or might
not be to a civil action either as a part of or predicated on conviction for a crime or
misdemeanor. (By way of parenthesis, it may be said further that the statements here
made are offered to meet the argument advanced during our deliberations to the
effect that article 1902 of the Civil Code should be disregarded and codal articles 1093
and 1903 applied.)"
It is not clear how the above case could support the defendant's proposition,
because the Court of Appeals based its decision in the present case on the
defendant's primary responsibility under article 1903 of the Civil Code and not on his
subsidíary liability arising from Fontanilla's criminal negligence. In other words, the
case of City of Manila vs. Manila Electric Co., supra, is predicated on an entirely
different theory, which is the subsidíary liability of an employer arising from a
criminal act of his employee, whereas the foundation of the decision of the Court of
Appeals in the present case is the employer's primary liability under article 1903 of
the Civil Code. We have already seen that this is a proper and independent remedy.
Arambulo vs. Manila Electric Co. (55 Phil., 75), is another case invoked by the
defendant. A motorman in the employ of the Manila Electric Company had been
convicted of homicide by simple negligence and sentenced,
620
620 PHILIPPINE REPORTS ANNOTATED
Barredo vs. Garcia and Almario
among other things, to pay the heirs of the deceased the sum of P1,000. An action
was then brought to enforce the subsidíary liability of the defendant as employer
under the Penal Code. The defendant attempted to show that it had exercised the
diligence of a good father of a family in selecting the motorman, and therefore
claimed exemption from civil liability. But this Court held:
"In view of the foregoing considerations, we are of opinion and so hold, (1) that
the exemption from civil liability established in article 1903 of the Civil Code for all
who have acted with the diligence of a good father of a family, is not applicable to
the subsidíary civil liability provided in article 20 of the Penal Code."
The above case is also extraneous to the theory of the defendant in the instant
case, because the action there had for its purpose the enforcement of the
defendant's subsidíary liability under the Penal Code, while in the case at bar, the
plaintiff's cause of action is based on the defendant's primary and direct
responsibility under article 1903 of the Civil Code. In fact, the above case destroys
the defendant's contention because that decision illustrates the principle that the
employer's primary responsibility under article 1903 of the Civil Code is different in
character from his subsidíary liability under the Penal Code.
In trying to apply the two cases just referred to, counsel for the defendant has
failed to recognize the distinction between civil liability arising from a crime, which is
governed by the Penal Code, and the responsibility for cuasi-delito or culpa
aquiliana under the Civil Code, and has likewise failed to give due importance to the
latter type of civil action.
The defendant-petitioner also cites Francisco vs. Onrubia (46 Phil., 327). That
case need not be set forth. Suffice it to say that the question involved was also civil
liability arising from a crime. Hence, it is as inapplicable as the two cases above
discussed.
The foregoing authorities clearly demonstrate the separate individuality of cuasi-
delitos or culpa aquiliana under the Civil Code. Specifically they show that there is a
distinction between civil liability arising from criminal negligence (governed by the
Penal Code) and responsibility for fault or negligence under articles 1902 to 1910 of
the Civil Code, and that the same negligent act may produce either a civil liability
arising from a crime under the Penal Code, or a separate responsibility for fault or
negligence under articles 1902 to 1910 of the Civil Code. Still more concretely, the
authorities above cited render it inescapable to conclude that the employer—in this
case the defendant-petitioner—is primarily and directly liable under article 1903 of
the Civil Code.
The legal provisions, authors, and cases already invoked should ordinarily be
sufficient to dispose of this case. But inasmuch as we are announcing doctrines that
have been little understood in the past, it might not be inappropriate to indicate their
foundations.
Firstly, the Revised Penal Code in article 365 punishes not only reckless but also
simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer
only to fault or negligence not punished by law, according to the literal import of
article 1093 of the Civil Code, the legal institution of culpa aquiliana would
have very little scope and application in actual life. Death or injury to persons and
damage to property through any degree of negligence—even the slightest—would
have to be indemnified only through the principle of civil liability arising from a crime.
In such a state of affairs, what sphere would remain for cuasi-delito or culpa
aquiliana? We are loath to impute to the lawmaker any intention to bring about a
situation so absurd and anomalous. Nor are we, in the interpretation of the laws,
disposed to uphold the letter that killeth rather than the spirit that giveth life. We
will not use the literal meaning of the law to smother and render almost lifeless a
principle of such ancient origin and such full-grown development as culpa aqui-
liana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910
of the Spanish Civil Code.
Secondly, to find the accused guilty in a criminal case, proof of guilt beyond
reasonable doubt is required, while in a civil case, preponderance of evidence is
sufficient to make the defendant pay in damages. There are numerous cases of
criminal negligence which can not be shewn beyond reasonable doubt, but can be
proved by a preponderance of evidence. In such cases, the defendant can and should
be made responsible in a civil action under articles 1902 to 1910 of the Civil Code.
Otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi common practice to seek damages only by virtue of the civil responsibility arising
remedium. from a crime, forgetting that there is another remedy, which is by invoking articles
Thirdly, to hold that there is only one way to make defendant's liability effective, 1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it
and that is, to sue the driver and exhaust his (the latter's) property first, would be has nevertheless rendered practically useless and nugatory the more expeditious and
tantamount to compelling the plaintiff to follow a devious and cumbersome method effective remedy based on culpa aquiliana or culpa extracontractual. In the present
of obtaining relief. True, there is 'such a remedy under our laws, but there is also a case, we are asked to help perpetuate this usual course. But we believe it is high time
more expeditious way, which is based on the we pointed out to the harm done by such practice and to restore the principle of
621 responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to
VOL. 73, JULY 8, 1942 621 its full rigor. It is high time we caused the stream of quasi-delict or culpa aquiliana to
flow on its own natural channel, so tha.t its waters may no longer be diverted into
Barredo vs. Garcia and Almario
that 'of a crime under the Penal Code. This will, it is believed, make for the better
primary and direct responsibility of the defendant under article 1903 of the Civil
safeguarding of private rights because it re-establishes an ancient and additional
Code. Our view of the law is more likely to facilitate remedy for civil wrongs, because
remedy, and for the further reason that an independent civil action, not depending
the procedure indicated by the defendant is wasteful and productive of delay, it being
on the issues, limitations and results of a criminal prosecution, and entirely directed
a matter of common knowledge that professional drivers of taxis and similar public
by the party wronged or his counsel, is more likely to secure adequate and efficacious
conveyances usually do not have sufficient means with which to pay damages. Why,
redress.
then, should the plaintiff be required in all cases to go through this roundabout,
In view of the foregoing, the judgment of, the Court of Appeals should be and is
unnecessary, and probably useless procedure? In construing the laws, courts have
hereby affirmed, with costs against the defendant-petitoner.
endeavored to shorten and facilitate the pathways of right and justice.
At this juncture, it should be said that the primary and direct responsibility of
employers and their presumed negligence are principles calculated" to protect
society. Workmen and employees should be carefully chosen and supervised in order
to avoid injury to the public. It is the masters or employers who principally reap the
profits resulting from the services of these servants and employees. It is but right that
they should guarantee the latter's careful conduct for the personnel and patrimonial
safety of''others. As Theilhard has said, "they should reproach themselves, at least,
some for their weakness, others for their poor selection and all for their negligence."
And according to Manresa, "It is much more equitable and just that such
responsibility should fall upon the principal or director who could have chosen a
careful and prudent employee, and not upon the injured person who could not
exercise such selection and who used such employee because of his confidence in
the principal or director." (Vol. 12, p. 622, 2nd Ed.) Many jurists also base this primary
responsibility of the employer on the principle of representación of the principal by
the agent. Thus, Oyuelos says in the work already cited (Vol. 7, p. 747) that before
third persons the employer and employee "vienen a ser cómo una sola personalidad,
por refundición de la del dependiente en la de quien le emplea y utiliza." ("become
as one personality by the merging of the person of the employee in that of him who
employs and utilizes him.") All these observations acquire a peculiar force and
significance when it comes to motor accidents, and there is need of stressing and
accentuating the responsibility of owners of motor vehicles.
Fourthly, because of the broad sweep of the provisions of both the Penal Code
and the Civil Code on this subject, which has given rise to the overlapping or
concurrence of spheres already discussed, and for lack of understanding of the
character and efficacy of the action for culpa aquiliana, there has grown up a
98 SUPREME COURT REPORTS ANNOTATED
Elcano vs. Hill
No. L-24803. May 26, 1977.*
PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito
Elcano, deceased, plaintiffs-appellants, vs.REGINALD HILL, minor, and MARVIN HILL,
as father and Natural Guardian of said minor, defendants-appellees.
Civil law; Damages; Quasi-delicts; The concept of culpa aquiliana includes acts
which are criminal in character, whether voluntary or negligent.—Contrary to an
immediate impression one might get upon a reading of the foregoing excerpts from
the opinion in Garcia—that the concurrence of the Penal Code and the Civil Code
therein referred to contemplates only acts of negligence and not intentional
voluntary acts—deeper reflection would reveal that the thrust of the
pronouncements therein is not so limited, but that in fact is actually extends to fault
or culpa. This can be seen in the reference made therein to the Sentence of the
Supreme Court of Spain of February 14, 1919, supra, which involved a case of fraud
or estafa, not a negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force
here at the time of Garcia, provided textually that obligations “which are derived
_______________
* SECOND DIVISION
99
VOL. 77, MAY 26, 1977 99
Elcano vs. Hill
from acts or omissions in which fault or negligence, not punishable by law,
intervene shall be the subject of Chapter 11, Title XV of this book (which refers to
quasi-delicts.)” And it is precisely the underlined qualification, “not punishable by
law,” that Justice Bocobo emphasized could lead to an undesirable construction or
interpretation of the letter of the law that “killeth, rather than the spirit that giveth
life” hence, the ruling that “(W)e will not use the literal meaning of the law to smother
and render almost lifeless a principle of such ancient origin and such full-grown
development as culpa aquiliana or causi-delito, which is conserved and made
enduring in articles 1902 to 1910 of the Spanish Civil Code.” And so, because Justice
Bocobo was Chairman of the Code Commission that drafted the original text of the
new Civil Code, it is to be noted that the said Code, which was enacted after the
Garcia doctrine, no longer uses the term, “not punishable by law,” thereby making it
clear that the concept of culpa aquiliana includes acts which are criminal in character
or in violation of the penal law, whether voluntary or negligent.
Same; Same; Same; A separate civil action lies against the offender in a criminal
act, whether or not he is criminally prosecuted and found guilty or acquitted, provided
that the victim do not recover damages on both scores.—. . . It results, therefore, that
the acquittal of Reginald Hill in the criminal case has not extinguished his liability
for quasi-delict, hence that acquittal is not a bar to the instant action against him.
Same; Same; Same; The vicarious liability of the parents on account of a delict
committed by their minor child is not extinguished by the fact that said, child who is
Hiring with and dependent upon said parents is married.—Coming now to the second
issue about the effect of Reginald’s emancipation by marriage on the possible civil
liability of Atty. Hill, his father, it is also Our considered opinion that the conclusion
of appellees that Atty. Hill is already free from responsibility cannot be upheld. . . . .
It must be borne in mind that, according to Manresa, the reason behind the joint and
solidary liability of parents with their offending child under Article 2180 is that it is
the obligation of the parent to supervise their minor children in order to prevent
them from causing damage to third persons. On the other hand, the clear implication
of Article 399, in providing that a minor emancipated by marriage may not,
nevertheless, sue or be sued without the assistance of the parents, is that such
emancipation does not carry with it freedom to enter into transactions or do any act
that can give rise to judicial litigation. (See Manresa, id., Vol. II, pp. 766-767, 776.)
And surely, killing someone else invites judicial action. Otherwise stated, the
marriage of a minor child does not relieve the
100
100 SUPREME COURT REPORTS ANNOTATED
Elcano vs. Hill
parents of the duty to see to it that the child, while still a minor, does not give
cause to any litigation, in the same manner that the parents are answerable for the
borrowings of money and alienation or encumbering of real property which cannot
be done by their minor married child without their consent, (Art. 399; Manresa,
supra.) Accordingly, in Our considered view, Article 2180 applies to Atty. Hill
notwithstanding the emancipation by marriage of Reginald. However, inasmuch as it
is evident that Reginald is now of age, as a matter of equity, the liability of Atty. Hill
has become merely subsidiary to that of his son.
APPEAL from an order of the Court of First Instance of Quezon City.
The facts are stated in the opinion of the Court.
Cruz & Avecilla for appellants.
Marvin R. Hill & Associates for appellees.
BARREDO, J.:
Appeal from the order of the Court of First Instance of Quezon City dated January 29,
1965 in Civil Case No. Q-8102, Pedro Elcano et al vs. Reginald Hill et al dismissing,
upon motion to dismiss of defendants, the complaint of plaintiffs for recovery of
damages from defendant Reginald Hill, a minor, married at the time of the
occurrence, and his father, the defendant Marvin Hill, with whom he was living and
getting subsistence, for the killing by Reginald of the son of the plaintiffs, named
Agapito Elcano, of which, when criminally prosecuted, the said accused was acquitted
on the ground that his act was not criminal, because of “lack of intent to kill, coupled
with mistake.”
Actually, the motion to dismiss based on the following grounds:
1. “1.The present action is not only against but a violation of section 1, Rule
107, which is now Rule III, of the Revised Rules of Court;
2. “2.The action is barred by a prior judgment which is now final and or in res-
adjudicata;
3. “3.The complaint had no cause of action against defendant Marvin Hill,
because he was relieved as guardian of the other defendant through
emancipation by marriage.”
(P. 23, Record [p. 4, Record on Appeal.])
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VOL. 77, MAY 26, 1977 101
Elcano vs. Hill
was first denied by the trial court. It was only upon motion for reconsideration of the
defendants of such denial, reiterating the above grounds that the following order was
issued:
“Considering the motion for reconsideration filed by the defendants on January 14,
1965 and after thoroughly examining the arguments therein contained, the Court
finds the same to be meritorious and well-founded.
WHEREFORE, the Order of this Court on December 8, 1964 is hereby reconsidered
by ordering the dismissal of the above entitled case.
“SO ORDERED.
“Quezon City, Philippines, January 29, 1965.” (p. 40, Record [p, 21, Record on
Appeal.)
Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for
Our resolution the following assignment of errors:
“THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING THE CLAIM OF
DEFENDANTS THAT—
I The first issue presents no more problem than the need for a reiteration and further
“THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION OF
SECTION 1, RULE 107, NOW RULE 111, OF THE REVISED RULES OF COURT, AND THAT
SECTION 3(c) OF RULE 111, RULES OF COURT IS INAPPLICABLE;
II
“THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINAL OR RES-
ADJUDICTA;
III
“THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE CIVIL CODE,
ARE INAPPLICABLE IN THE INSTANT CASE; and
IV
“THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST DEFENDANT
MARVIN HILL BECAUSE HE WAS RELIEVED AS GUARDIAN OF THE OTHER DEFENDANT
102
102 SUPREME COURT REPORTS ANNOTATED
Elcano vs. Hill
THROUGH EMANCIPATION BY MARRIAGE.” (page 4, Record.)
It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant-
appellee Reginald Hill was prosecuted criminally in Criminal Case No. 5102 of the
Court of First Instance of Quezon City. After due trial, he was acquitted on the ground
that his act was not criminal because of “lack of intent to kill, coupled with mistake,”
Parenthetically, none of the parties has favored Us with a copy of the decision of
acquittal, presumably because appellants do not dispute that such indeed was the
basis stated in the court’s decision. And so, when appellants filed their complaint
against appellees Reginald and his father, Atty, Marvin Hill, on account of the death
of their son, the appellees filed the motion to dismiss above-referred to.
As We view the foregoing background of thin case, the two decisive issues
presented for Our resolution are:
1. 1.Is the present civil action for damages barred by the acquittal of Reginald
in the criminal case wherein the action for civil liability was not reversed?
2. 2.May Article 2180 (2nd and last paragraphs) of the Civil Code be applied
against Atty. Hill, notwithstanding the undisputed fact that at the time of
the occurrence complained of, Reginald, though a minor, living with and
getting subsistence from his father, was already legally married?
clarification of the dual character, criminal and civil, of fault or negligence as a source
of obligation which was firmly established in this jurisdiction in Barredo vs. Garcia, 73
Phil 607. In that case, this Court postulated, on the basis of a scholarly dissertation
by Justice Bocobo on the nature of culpa aquiliana in relation to culpa
criminal or delito and mere culpa or fault, with pertinent citation of decisions of the
Supreme Court of Spain, the works of recognized civilians, and earlier jurisprudence
of our own, that the same given act can result in civil liability not only under the Penal
Code but also under the Civil Code. Thus, the opinion holds:
“The above case is pertinent because it shows that the same act may come under
both the Penal Code and the Civil Code. In that case, the action of the agent was

unjustified and fraudulent and therefore could have been the subject of a criminal
action, And yet, it was held to be also a proper subject of a civil action under article
1902 of the
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VOL. 77, MAY 26, 1977 103
Elcano vs. Hill
Civil Code. It is also to be noted that it was the employer and not the employee who
was being sued.” (pp. 615-616, 73 Phil.)1
“It will be noticed that the defendant in the above case could have been
prosecuted in a criminal case because his negligence causing the death of the child
was punishable by the Penal Code. Here is therefore a clear instance of the same act
of negligence being a proper subject-matter either of a criminal action with its
consequent civil liability arising from a crime or of an entirely separate and
independent civil action for fault or negligence under article 1902 of the Civil Code.
Thus, in this jurisdiction, the separate individuality of a cuasi-delito or culpa
aquiliana under the Civil Code has been fully and clearly recognized, even with regard
to a negligent act for which the wrongdoer could have been prosecuted and
convicted in a criminal case and for which, after such a conviction, he could have been
sued for this civil liability arising from his crime.” (p. 617, 73 Phil.) 2
“It is most significant that in the case just cited, this Court specifically applied
article 1902 of the Civil Code. It is thus that although J. V House could have been
criminally prosecuted for reckless or simple negligence and not only punished but
also made civilly liable because of his criminal negligence, nevertheless this Court
awarded damages in an independent civil action for fault or negligence under article
1902 of the Civil Code,” (p. 618, 78 Phil.)3
“The legal provisions, authors, and cases already invoked should ordinarily be
sufficient to dispose of this case. But in as much as we are announcing doctrines that
have been little understood, in the past, it might not be inappropriate to indicate
their foundations.
“Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also
simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer
only to fault or negligence not punished by law, accordingly to the literal import of
article 1093 of the Civil Code, the legal institution of culpa aquilina would have very
little scope and application in actual life. Death or injury to persons and damage to
property through any degree of negligence—even the slightest—would have to be
idemnified only through the principle of civil liability arising from a crime. In such a
state of affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We are
loath to impute to the lawmaker any intention to bring about a situation so absurd
and anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the
letter that killeth rather than the spirit that giveth life. We will not use the literal
meaning of the law to smother and render almost lifeless a principle of such ancient
origin and such
_______________
1
Referring to Sentence of the Supreme Court of Spain of February 14, 1919.
2
Referring to Manzanares vs. Moreta, 38 Phil. 821.
3
Referring to Bernal et al. vs. House et al., 54 Phil. 327.
104
104 SUPREME COURT REPORTS ANNOTATED
Elcano vs. Hill
full-grown development as culpa aquiliana or cuasi-delito, which is conserved and
made enduring in articles 1902 to 1910 of the Spanish Civil Code
“Secondly, to find the accused guilty in a criminal case, proof of guilt beyond
reasonable doubt is required, while in a civil case, preponderance of evidence is
sufficient to make the defendant pay in damages. There are numerous cases of
criminal negligence which can not be shown beyond reasonable doubt, but can be
proved by a preponderance of evidence. In such cases, the defendant can and should
be made responsible in a civil action under articles 1902 to 1910 of the Civil Code.
Otherwise, there would be many instances of unvindicated civil wrongs, Ubi jus ibi
remedium.” (p. 620, 73 Phil.)
“Fourthly, because of the broad sweep of the provisions of both the Penal Code
and the Civil Code on this subject, which has given rise to the overlapping or
concurrence of spheres already discussed, and for lack of understanding of the
character and efficacy of the action for culpa aquiliana, there has grown up a
common practice to seek damages only by virtue of the civil responsibility arising
from a crime, forgetting that there is another remedy, which is by invoking articles
1902-1910 of the Civil Code, Although this habitual method is allowed by our laws, It
has nevertheless rendered practically useless and nugatory the more expeditious and
effective remedy based on culpa aquiliana or culpa extra-contractual, In the present
case, we are asked to help perpetuate this usual course. But we believe it is high time
we pointed out to the harms done by such practice and to restore the principle of
responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to
its full rigor. It is high time we caused the stream of quasi-delict or culpa aquiliana to
flow on its own natural channel, so that its waters may no longer be diverted into
that of a crime under the Penal Code. This will, it is believed, make for the better
safeguarding or private rights because it re-establishes an ancient and additional
remedy, and for the further reason that an independent civil action, not depending
on the issues, limitations and results of a criminal prosecution, and entirely directed
by the party wronged or his counsel, is more likely to secure adequate and efficacious
redress,” (p. 621, 73 Phil.)
Contrary to an immediate impression one might get upon a reading of the foregoing
excerpts from the opinion in Garcia—that the concurrence of the Penal Code and the
Civil Code therein referred to contemplate only acts of negligence and not intentional
voluntary acts—deeper reflection would reveal that the thrust of the
pronouncements therein is not so limited, but that in fact it actually extends to fault
or culpa. This can be seen in the reference made therein to the Sentence of the
Supreme Court of Spain of February 14, 1919, supra, which
 105 or ‘culpa aquiliana’ But said article forestalls a double recovery.” (Report of the Code)
VOL. 77, MAY 26, 1977 105 Commission, p. 162.)
Although, again, this Article 2177 does seem to literally refer to only acts of
Elcano vs. Hill
negligence, the same argument of Justice Bacobo about construction that upholds
involved a case of fraud or estafa, not a negligent act. Indeed, Article 1093 of the Civil
“the spirit that giveth life” rather than that which is literal that killeth the intent of
Code of Spain, in force here at the time of Garcia, provided textually that obligations
the lawmaker should be observed in applying the same. And considering that the
“which are derived from acts or omissions in which fault or negligence, not
preliminary chapter on human relations of the new Civil Code definitely establishes
punishable by law, intervene shall be the subject of Chapter II, Title XV of this book
the separability and independence of liability in a civil action for acts criminal in
(which refers to quasi-delicts.)” And it is precisely the underline qualification, “not
character (under Articles 29 to 32) from the civil responsibility arising from crime
punishable by law”, that Justice Bocobo emphasized could lead to an uudersirable
fixed by Article 100 of the Revised Penal Code, and, in a sense, the Rules of Court,
construction or interpretation of the letter of the law that “killeth, rather than the
under Sections 2 and 3 (c), Rule 111, contemplate also the same separability, it is
spirit that giveth life” hence, the ruling that “(W)e will not use the literal meaning of
“more congruent with the spirit of law, equity and justice, and more in harmony with
the law to smother and render almost lifeless a principle of such ancient origin and
modern progress”, to borrow the felicitous relevant language in Rakes vs. Atlantic.
such full-grown development as culpa aquiliana or cuasi-delito, which is conserved
Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where it
and made enduring in articles 1902 to 1910 of the Spanish Civil Code.” And so,
refers to “fault or negligence,” covers not only acts “not punishable by law” but also
because Justice Bacobo was Chairman of the Code Commission that drafted the
acts criminal in character, whether intentional and voluntary or negligent.
original text of the new Civil Code, it is to be noted that the said Code, which was
Consequently, a separate civil action lies against the offender in a criminal act,
enacted after the Garcia doctrine, no longer uses the term, “not punishable by law,”
whether or not he is criminally prosecuted and found guilty or acquitted, provided
thereby making it clear that the concept of culpa aquiliana includes acts which are
that the offended party is not allowed, if he is actually charged also criminally, to
criminal in character or in violation of the penal law, whether voluntary or negligent.
recover damages on both scores, and would be entitled in such eventuality only to
Thus, the corresponding provisions to said Article 1093 in the new code, which is
the bigger award of the two, assuming the awards made in the two cases vary. In
Article 1162, simply says, “Obligations derived from quasi-delicts shall be governed
other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule
by the provisions of Chapter 2, Title XVII of this Book, (on quasidelicts)and by special
111, refers exclusively to civil liability founded on Article 100 of the Revised Penal
laws.” More precisely, a new provision, Article 2177 of the new code provides:
Code, whereas the civil liability for the same act considered as a quasidelict only and
“ART. 2177. Responsibility for fault or negligence under the preceding article is
not as a crime is not extinguished even by a declaration in the criminal case that the
entirely separate and distinct from the civil liability arising from negligence under the
criminal act charged has not happened or has not been committed by the accused.
Penal Code. But the plaintiff cannot recover damages twice for the same act or
Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes
omission of the defendant.”
voluntary and negligent acts which may be
According to the Code Commission: “The foregoing provision (Article 2177) through
107
at first sight startling, is not so novel or extraordinary when we consider the exact
nature of criminal and civil negligence. The former is a violation of the criminal law, VOL. 77, MAY 26, 1977 107
while the latter is a ‘culpa aquilian’ or quasi-delict, of ancient origin, having always Elcano vs. Hill
had its own foundation and individuality, separate from criminal negligence. Such punishable by law.4
distinction between criminal negligence and ‘culpa extra-contractual’ or ‘cuasi-delito’ It results, therefore, that the acquittal of Reginal Hill in the criminal case has not
has been sustained by decision of the Supreme Court of Spain and maintained as extinguished his liability for quasi-delict,hence that acquittal is not a bar to the instant
clear, sound and action against him.
106 Coming now to the second issue about the effect of Reginald’s emancipation by
106 SUPREME COURT REPORTS ANNOTATED marriage on the possible civil liability of Atty. Hill, his father, it is also Our considered
opinion that the conclusion of appellees that Atty. Hill is already free from
Elcano vs. Hill
responsibility cannot be upheld.
perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the
While it is true that parental authority is terminated upon emancipation of the
proposed Article 2177, acquittal from an accusation of criminal negligence, whether
child (Article 327, Civil Code), and under Article 397, emancipation takes place “by
on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for
the marriage of the minor (child)”, it is, however, also clear that pursuant to Article
civil liability arising from criminal negligence, but for damages due to a quasi-delict
399, emancipation by marriage of the minor is not really full or absolute. Thus
‘‘(E)mancipation by marriage or by voluntary concession shall terminate parental
authority over the child’s person. It shall enable the minor to administer his property
as though he were of age, but he cannot borrow money or alienate or encumber real
property without the consent of his father or mother, or guardian. He can sue and be
sued in court only with the assistance of his father, mother or guardian.”
Now under Article 2180, “(T)he obligation imposed by article 2176 is demandable
not only for one’s own acts or omissions, but also for those of persons for whom one
is responsible. The father and, in case of his death or incapacity, the mother, are
responsible. The father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in their
company.” In the instant case, it is not controverted that Reginald, although married,
was living with his father and getting subsistence from him at the time of the
occurrence in question. Factually, therefore, Reginald was still subservient to and
dependent on his father, a situation which is not unusual
It must be borne in mind that, according to Manresa, the reason behind the joint
and solidary liability of prents with their offending child under Article 2180 is that is
the obligation of the parent to supervise their minor children in order to prevent
them from causing damage to third persons. 5 On the other hand, the clear
implication of Article 399, in providing that a minor emancipated by marriage may
not, nevertheless, sue or be sued without the assistance of the parents, is that such
emancipation does not carry with it freedom to enter into transactions or do any act
that can give rise to judicial litigation. (See Manresa, id., Vol. II, pp. 766-767, 776.)
And surely, killing someone else invites judicial action. Otherwise stated, the
marriage of a minor child does not relieve the parents of the duty to see to it that the
child, while still a minor, does not give answerable for the borrowings of money and
alienation or encumbering of real property which cannot be done by their minor
married child without their consent. (Art. 399; Manresa, supra.)
Accordingly, in Our considered view, Article 2180 applies to Atty. Hill
notwithstanding the emancipation by marriage of Reginald. However, in as much as
it is evident that Reginald is now of age, as a matter of equity, the liability of Atty. Hill
has become merely subsidiary to that of his son.
WHEREFORE, the order appealed from is reversed and the trial court is ordered
to proceed in accordance with the foregoing opinion. Costs against appellees.
 No. L-21438. September 28, 1966.
AIR FRANCE, petitioner, vs.. RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS,
respondents.
Common carriers; Contracts; First class tickets.—A written document speaks a uniform
language; the spoken word could be notoriously unreliable. If only to achieve stability in the
relations between passenger and air carrier, adherence to the terms of a ticket is desirable.
Same; Damages; Moral damages; Trial; Bad faith in breach of contract of carriage.—
Where at the start of the trial, respondent's counsel placed petitioner on guard that he
intended to prove that, while sitting in the plane in Bangkok, the respondent was ousted .by
petitioner's manager, who gave his seat to a white man, and evidence of bad faith in the
fulfillment of the contract was presented without objection on the part of the petitioner, it is
therefore unnecessary to inquire as to whether or not there is sufficient averment in the
complaint to justify an award for moral damages. Deficiency in the complaint, if any, was cured
by the evidence.
Same; Exemplary damages.—The New Civil Code gives the court ample power to grant
exemplary damages in contracts and quasi-contracts. The only condition is that defendant
should have acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. The
manner of ejectment of respondent Carrascoso from his first class seat fits into this legal
precept.
Same; Attorney's fees.—The right to attorney's fees is fully established. The grant of
exemplary damages justifies a similar judgment for attorney's fees. The least that can be said
is that the courts below felt that it is but just and equitable that attorneys’ fees be given. We
do not intend to break tradition that discretion well exercised—as it was here—should not be
disturbed.
PETITION for review by certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Lichauco, Picazo & Agcaoili for petitioner.
Bengzon, Villegas & Zarraga for respondent R. Carrascoso.
SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced petitioner to' pay respondent Rafael
Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20
representing the difference in fare between first class and tourist class for the portion of the
trip Bangkok-Rome, these various amounts with interest at the legal rate, from the date of the
filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's
plane ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all other
respects'', with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as "fully supported by the evidence of record",
are:
"Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958:
On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air
Lines, Inc., issued to plaintiff a 'first class' round trip airplane ticket from Manila to Rome. From
Manila to Bangkok, plaintiff travelled in 'first class', but at Bangkok, the Manager of the
defendant airline forced plaintiff to vacate the 'first class' seat that he was occupying because,
in the words of the witness Ernesto G. Cuento, there was a 'white man', who, the Manager
alleged, had a 'better right' to the seat. When asked to vacate his 'first class' seat, the plaintiff,
as was to be expected, refused, and told defendant's Manager that his seat would be taken
over his dead body; a commotion ensued, and, according to said Ernesto G, Cuento, 'many of
the Filipino passengers got nervous in the tourist class; when they found out that Mr.
Carrascoso was having a hot discussion with the white man [manager], they came all across to
Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man' (Transcript, p.
12, Hearing of May 26, 1959); and plaintiff reluctantly gave his 'first class' seat. in the plane."3
1. The trust of the relief petitioner now seeks is that we review "all the findings"4 of respondent
Court of Appeals. Petitioner charges that respondent court failed to make complete findings
of fact on all the issues properly laid before it. We are asked to consider- facts favorable to
petitioner, and then, to overturn the appellate court's decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered by
any court of record without expressing therein clearly and distinctly the facts and the law on
which it is based".5 This is echoed in the statutory demand that a judgment determining the
merits of the case shall state "clearly and distinctly the facts and the law on which it is based"
;6 and that "Every decision of the Court of Appeals shall contain complete findings of fact on
all issues properly raised before it".7
A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 The
law, however, solely insists that a decision state the "essential ultimate facts" upon which the
court's conclusion is drawn,9 A court of justice is not hidebound to write in its decision every
bit and piece of evidence10 presented by one party and the other upon the issues raised.
Neither is it to be burdened with the obligation "to specify in the sentence the facts" which a
party "considered as proved".11 This is but a part of the mental process from which the Court
draws the essential ultimate facts. A decision is not to be so clogged with details such that
prolixity, if not confusion, may result. So long as the decision of the Court of Appeals contains
the necessary facts to warrant its conclusions, it is no error for said court to withhold therefrom
"any specific - finding of facts with respect to the evidence for the defense". Because, as this
Court well observed, "There is no law that so requires".12Indeed, "the mere failure to specify
(in the decision) the contentions of the appellant and the reasons for refusing to believe them
is not sufficient to hold the same contrary to the requirements of the provisions of law and the
Constitution". It is in this setting. that in Manigque, it was held that the mere fact that the
findings "were based entirely on the evidence for the prosecution without taking into
consideration or even mentioning the appellant's side in the controversy as shown by his own
testimony", would not vitiate the judgment.13 If the court did not recite in the decision the
testimony of each witness for, or each item of evidence presented by, the defeated party, it
does not mean that the court has overlooked such testimony or such item of evidence.14 At
any rate, the legal presumptions are that official duty has been regularly performed, and that
all the matters within an issue in a case were laid before the court and passed upon by it. 15
Findings of fact, which the Court of Appeals is required to make, maybe* defined as "the
written statement of the ultimate facts as found by the court 'x 'x 'x and essential to support
the decision and judgment rendered thereon".16 They consist of the court's
"conclusions" with respect to the determinative facts in issue".17 A question of law, upon the
other hand. has been declared as "one which does not call for an examination of the probative
value of the evidence presented by the parties."18
2. By statute, "only questions of law may be raised" in an appeal by certiorari from a
judgment of the Court of Appeals.19 That judgment is conclusive as to the facts. It is not
appropriately the business of this Court to alter the facts or to review the questions of fact. 20
 With these guideposts, we now face the problem of whether the findings of fact of the
Court of Appeals support its judgment.
3. Was Carrascoso entitled to the first class seat he claims?
It is conceded in all quarters that on March 28, 1958 he paid to and received from
petitioner a first class ticket. But petitioner asserts that said ticket did not represent the true
and complete intent and agreement of the parties; that said respondent knew that he did not
have confirmed reservations for first class on any specific flight, although he had tourist class
protection; that, accordingly, the issuance of a first class ticket was no guarantee that he would
have a first class ride, but that such would depend upon the availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its brief
before the Court of Appeals under its third assignment of error, which reads: "The trial court
erred in finding that plaintiff had confirmed reservations for, and a right to, first class seats on
the 'definite' segments of his journey, particularly that from Saigon to Beirut".21
And, the Court of Appeals disposed of this contention thus:
"Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no
guarantee that the passenger to whom the same had been issued, would be accommodated
in the first-class compartment, for as in the case of plaintiff he had yet to make arrangements
upon arrival at every station for the necessary first-class reservation. We are not impressed by
such a reasoning. We cannot understand how a reputable firm like defendant airplane
company could have the indiscretion to give out tickets it never meant to honor at all. It
received the corresponding amount in payment of first-class tickets and yet it allowed the
passenger to be at the mercy of its employees. It is more in keeping with the ordinary course
of business that the company should know whether or not the tickets it issues are to be
honored or not."22
Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's
contention, thus:
"On the fact that plaintiff paid for, and was issued a 'First class' ticket, there can be no
question. Apart from his testimony, see plaintiff's Exhibits 'A’, 'A-1', 'B', 'B-1', 'B-2', 'C' and 'C-
1', and defendant's own witness. Rafael Altonaga, confirmed plaintiff's testimony and testified
as follows:
Q. In these tickets there are marks 'O.K.' From what you know, what does this O.K.
mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A, Yes, 'first class'. (Transcript, p. 169)
x x x x
"Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga
that although plaintiff paid for, and was issued a 'first class' airplane ticket, the ticket was
subject to confirmation in Hongkong. The court cannot give credit to the testimony of said
witnesses. Oral evidence cannot prevail over written evidence. and plaintiffs Exhibits 'A', 'A-1',
'B', 'B-1' 'C' and 'C-1' belie the testimony of said witnesses, and clearly show that the plaintiff
was issued, and paid for, a first class ticket without any reservation whatever.
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified
that the reservation for a 'first class' accommodation for the plaintiff was confirmed. The court
cannot believe that after such confirmation defendant had a verbal understanding with
plaintiff that the 'first class' ticket issued to him by defendant wouild be subject to confirmation
in Hongkong."23
We have heretofore adverted to the fact that except for a slight difference of a few pesos
in the amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was
affirmed by the Court of Appeals in all other respects. We hold the view that such a judgment
of affirmance has merged the judgment of the lower court. 24 Implicit in that affirmance is a
determination by the Court of Appeals that the proceeding in the Court of Firts Instance was
free from prejudicial error and "all questions raised by the assignments of error and all
questions that might have been raised are to be regarded as finally adjudicated against the
appellant". So also, the judgment affirmed "must be regarded as free from all error". 25 We
reached this policy construction because nothing in the decision of the Court of Appeals on
this point would suggest that its findings of fact are in any way at war with those of the trial
court. Nor was said affirmance by the Court of Appeals upon a ground or grounds different
from those which were made the basis of the conclusions of the trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class set,
nothwithstanding the fact that seat availability in apecific flights is therein confirmed, then an
air passenger is placed in the hollow of the hands of an airline. What security then can a
passenger have? it will always be an easy matter for an airline aided by its employees, to strike
out the very stipulations in the ticket, and say that there was a verbal agreement to the
contrary. What if the passenger hada a schedule to fulfill? We have long learned that, as a rule,
a written document speaks a uniform language; that spoken word could be notoriously
unreliable. If only to achieve stability in the relations between passenger and air carrier,
adherence to the ticket so issued is desirable. Such is the case here. The lower courts refused
to believe the oral evidence intended to defeat the covenants in the ticket.
The foregoing are the considerations which point to the conclusion that there are facts
upon which the Court of Appeals predicated the finding that respondent Carrascoso had a first
class ticket and was entitled to a first class seat at Bangkok, which is a stopover in the Saigon
to Beirut leg of the flight.27 We perceive no "welter of distortions by the Court of Appeals of
petitioner's statement of Its position", as charged by petitioner. 28 Nor do we subscribe to
petitioner's accusation that respondent Carrascoso "surreptitiously took a first class seat to
provoke an issue".29 And this because, as petitioner states, Carrascoso went to see the
Manager at his office in Bangkok "to confirm my seat and because from Saigon I) was told again
to see the Manager".30 Why, then, was he allowed to take a first class seat in the plane at
Bangkok, if he had no seat? Or, if another had a better right to the seat?
4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant
claim is that Carrascoso's action is planted upon breach of contract; that to authorize an award
for moral damages there must be an averment of fraud or bad 'f aith ;31 and that the decision
of the Court of Appeals fails to make a finding of bad faith. The pivotal allegations in the
complaint bearing on this issue are:
1. "3.That x x x plaintiff entered into a contract of air carriage with the Philippine Air
Lines for a valuable consideration, the latter acting as general agents for and in
behalf of the defendant, under which said contract, plaintiff was entitled to, as
defendant agreed to furnish plaintiff, First Class passage on defendant's plane
during the entire duration of plaintiff's tour of Europe with Hongkong as starting
point up to and until plaintiffs return trip to Manila, x x x.
2. 4.That, during the first two legs of the trip from Hongkong to Saigon and from Saigon
to Bangkok, defendant furnished to the plaintiff First Class accommodation but
 only after protestations, arguments and/or insistence were made by the plaintiff
with defendant's employees.
3. 5.That finally, defendant failed to provide First Class passage, but instead furnished
plaintiff only Tourist Class accommodations from Bangkok to Teheran and/or
Casablanca, x x x the plaintiff has been compelled by defendant's employees to
leave the First Class accommodation berths at Bangkok after he was already
seated.
4. 6.That consequently, the plaintiff, desiring no repetition of the inconvenience and
embarrassments brought by defendant's breach of contract was forced to take a
Pan American World Airways plane on his return trip from Madrid to Manila. 32
x x x x x x x x x
5. 2.That likewise, as a result of defendant's failure to furnish First Class
accommodations aforesaid. plaintiff suffered inconveniences, embarrassments,
and humiliations, thereby causing plaintiff mental anguish, serious anxiety,
wounded feelings, social humiliation, and the like injury, resulting in moral
damages in the amount of P30,000.00."33
x x x x
The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish
plaintiff a first class passage covering, amongst others, the BangkokTeheran leg; Second, That
said contract was breached when petitioner failed to furnish first class transportation at
Bangkok; and Third, That there was bad faith when petitioner's employee compelled
Carrascoso to leave his first class accommodation berth "after he was already seated" and to
take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments
and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and
social humiliation, resulting in moral damages. It is true that there is no specific mention of the
term bad faith in the complaint. But, the inference of bad faith is there, it may be drawn from
the facts and circumstances set forth therein.34 The contract was averred to establish the
relation between the parties. But the stress of the action is put on wrongf ul expulsion.
Quite apart from the foregoing is that (a) right at the start of the trial, respondent's counsel
placed petitioner on guard on what Carrascoso intended to prove: That while sitting in the
plane in Bangkok, Carrascoso was ousted by petitioner's manager who gave his seat to a white
man; 35 and (b) evidence of bad faith' in the fulfillment of the contract was presented without
objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to whether
or not there is sufficient averment in the complaint to justify an award for moral damages.
Deficiency in the complaint, if any, was cured by the evidence. An amendment thereof to
conform to the evidence is not even required.36 On the question of bad faith, the Court of
Appeals declared:
"That the plaintiff was forced out of his seat in the first class compartment of the plane
belonging to the defendant Air France while at Bangkok, and was transferred to the tourist
class not only without his consent but against his will, has been sufficiently established by
plaintiff in his testimony before the court, corroborated by the corresponding entry made by
the purser of the plane in his notebook which notation reads as follows:
'First-class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene',
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The
captain of the plane who was asked by the manager of defendant company at Bangkok to
intervene even refused to do so. It is noteworthy that no one on behalf of defendant ever
contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to
present its manager at Bangkok to testify at the trial of the case, or yet to secure his disposition;
but defendant did neither.37
The Court of Appeals further stated—
"Neither is there evidence as to whether or not a prior reservation was made by the white
man. Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him when
all the seats had already been taken, surely the plaintiff should not have been picked out as
the one to suffer the consequences and to be subjected to the humiliation and indignity of
being ejected from his seat in the presence of others. Instead of explaining to the white man
the improvidence committed by defendant's employees, the manager adopted the more
drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are
strengthened in our belief that this probably was what happened there, by the testimony of
defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters
'O.K.' appearing on the tickets of plaintiff, said 'that the space is confirmed' for first class.
Likewise, Zenaida Faustino, another witness for defendant, who was the chief of the
Reservation Office of defendant, testified as follows:
'Q. How does the person in the ticket-issuing office know what reservation the passenger has
arranged with you ?
A. They call us up by phone and ask for the confirmation.' (t.s.n., p. 247, June 19, 1959)
In this connection, we quote with approval what the trial Judge has said on this point:
'Why did the, using the .words of witness Ernesto G. Cuento, 'white man' have a 'better right'
to the seat occupied by Mr. Carrascoso ? The record is silent. The defendant airline did not
prove 'any better', nay, any right on the part of the 'white man' to the 'First class' seat that the
plaintiff was occupying and for which he paid and was issued a corresponding 'first class' ticket.
'lf there was a justified reason for the action of the defendant's Manager in Bangkok, the
defendant could have easily proven it by having taken the testimony of the said Manager by
deposition, but defendant did not do so; the presumption is that evidence willfully suppressed
would be adverse if produced [Sec. 69, par (e), Rules of Court] ; and, under the circumstances,
the Court is constrained to find, as it does find. that the Manager of the defendant airline in
Bangkok not merely asked but threatened the plaintiff to throw him out of the plane if he did
not give up his 'first class’ seat because the said Manager wanted to accommodate, using the
words of the witness Ernesto G. Cuento, the 'white man'." 38
It is really correct to say that the Court of Appeals in the quoted portion first transcribed did
not use the term "bad faith". But can it be doubted that the recital of facts therein points to
bad faith ? The manager not only prevented Carrascoso from enjoying his right to a first class
seat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him
suffer the humiliation of having to go to the tourist class compartment—just to give way to
another passenger whose right thereto has not been established. Certainly, this is bad faith.
Unless, of course, bad faith has assumed a meaning different from what is understood in law.
For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or
with some motive of self-interest or ill will or for ulterior purpose, " 39
And if the foregoing were not yet sufficient, there is the express finding of bad faith in the
judgment of the Court of First Instance, thus:
"The evidence shows that defendant violated its contract of transportation with plaintiff in bad
faith, with the aggravating circumstances that defendant's Manager in Bangkok went to the
extent of threatening the plaintiff in the presence of many passengers to have him thrown out
of the airplane to give the 'first class' seat that he was occupying to, again using the words of
the witness Ernesto G. Cuento, a 'white man' whom he (defendant's Manager) wished to
accommodate, and the defendant has not proven that this 'white man' had any 'better right'
to occupy the 'first class' seat that the plaintiff was occupying, duly paid for, and for which the
corresponding 'first class' ticket was issued by the defendant to him." 40
5. The responsibility of an employer for the tortious act of its employees need not be essayed.
It is well settled in law.41 For the willful malevolent act of petitioner's manager, petitioner, his
employer, must answer. Article 21 of the Civil Code says:
"ART. 21. Any person who 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."
In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the
provisions of Article 2219 (10), Civil Code, moral damages are recoverable. 42
6. A contract to transport passengers is quite different in kind and degree from any other
contractual relation.43 And this, because of the relation which an air-carrier sustains with the
public. Its business is mainly with the travelling public. It invites people to avail of the comforts
and advantages it offers. The contract of air carriage, therefore, generates a relation attended
with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give
ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be treated by
the carriers employees with kindness, respect, courtesy and due consideration. They are
entitled to be protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is, that any rule or discourteous conduct on the part of
employees towards a passenger gives the latter an action for damages against the carrier. 44
Thus, "Where a steamship company45 had accepted a passenger's check, it was a breach
of contract and a tort, giving a right of action for its agent in the presence of third persons to
falsely notify her that the check was worthless and demand payment under threat of ejection,
though the language used was not insulting and she was not ejected." 46 And this, because,
altho the relation of passenger and carrier is "contractual both in origin and nature"
nevertheless "the act that breaks the contract may be also a tort". 47 And in another case,
"Where a passenger on a railroad train, when the conductor came to collect his fare tendered
him the cash fare to a point where the train was scheduled not to stop, and told him that as
soon as the train reached such point he would pay the cash fare from that point to destination,
there was nothing in the conduct of the passenger which justified the conductor in using
insulting language to him, as by calling him a lunatic." 48 and the Supreme Court of South
Carolina there held the carrier liable for the mental suffering of said passenger.
Petitioner's contract with Carrascoso is one attended with public duty. The stress of
Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a violation
of public duty by the petitioner air carrier—a case of quasi-delict. Damages are proper.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus—
"Q. You mentioned about an attendant. Who is that attendant and purser?
A. When we left already—that was already in the trip—I could not help it. So one of
the flight attendants approached me and requested 'f rom me my ticket and I said,
What for? and she said, "We will note that you transferred to the tourist class'. I
said, 'Nothing of that kind. That is tantamount to acc epting my transfer.' And I also
said, 'You are not going to note anything there because I am protesting to this
transfer'.
Q. Was she able to note it?
A. No, because I) did not give my ticket.
Q. About that purser ?
A. Well, the seats there are so close that you feel uncomfortable and you don't have
enough leg room, I stood up and I went to the pantry that was next to me and the
purser was there. He told me, 'I have recorded the incident in my notebook.' He
read it and translated it to me—because it was recorded in French—'First class
passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene.'
Mr. VALTE—
'I move to strike out the last part of the testimony of the witness because the best
evidence would be the notes. Your Honor.
COURT—
'I will allow that as part of his testimony."49
Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his
notebook reading "First class passenger was forced to go to the tourist class against his will,
and that the captain ref used to intervene” is predicated upon evidence [Carrascoso's
testimony above] which is incompetent. We do not think so. The subject of inquiry is not the
entry, but the ouster incident. Testimony on the entry does not come within the proscription
of the best evidence rule. Such testimony is admissible.49a
Besides, from a reading of the transcript just quoted, when the dialogue happened, the
impact of the startling occurrence was still fresh and continued to be felt. The excitement had
not as yet died down, Statements then, in this environment, are admissible as part of the res
gestae.50 For, they grow "out of the nervous excitement and mental and physical condition of
the declarant".51 The utterance of the purser regarding his entry in the notebook was
spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has
been guaranteed.52 It thus escapes the operation of the hearsay rule. It forms part of the res
gestae.
At all events, the entry was made outside the Philippines. And, by an employee of
petitioner. It would have been an easy matter for petitioner to have contradicted Carrascoso's
testimony. If it were really true that no such entry was made, the deposition of the purser
could have cleared up the matter.
We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.
8. Exemplary damages are well awarded. The Civil Code gives the court ample power to
grant exemplary damages—. in contracts and quasi-contracts. The only condition is that
defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent
manner".53 The manner of ejectment of respondent Carrascoso from his first class seat fits into
this legal precept. And this, in addition to moral damages.54
9. The right to attorney's fees is fully established. The grant of exemplary damages justifies
a similar judgment for attorneys' fees. The least that can be said is that the courts below felt
that it is but just and equitable that attorneys' fees be given.55We do not intend to break faith
with the tradition that discretion well exercised—as it was here—should not be disturbed.
10. Questioned as excessive are the amounts decreed by both the trial court and the Court
of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages,
and P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial
court.56 The Court of Appeals did not interfere with the same. The dictates of good sense
suggest that we give our imprimatur thereto. Because, the facts and circumstances point to
the reasonableness thereof.57
On balance, we say that the judgment of the Court of Appeals does not suffer from
reversible error. We accordingly vote to affirm the same. Costs against petitioner. So ordered,
 VOL. 32, APRIL 30, 1970 547
Chaves vs. Gonzales
No. 27454, April 30, 1970.
ROSENDO O. CHAVES, plaintiff-appellant, vs. FRUCTUOSO GONZALES, defendant-
appellee.
Civil law; Obligations; Nature and effect of obligations; Obligation of a person
obliged to do something and fails to do it.—Under Article 1167 of the Civil Code, a
person who is obliged to do something and fails to do it shall be liable for the cost of
executing the obligation in a proper manner.
Same; Same; Same; Same; Cost of obligation; Case at bar.—The cost of
execution of the obligation to repair a typewriter is the cost of the labor or service
expended in the repair of the typewriter. In addition, the obligor, under Article 1170
of the Code, is liable for the cost of the missing parts because in
_______________
82
Republic of the Philippines vs. Hernaez, et al., 31 SCRA 219, 225-227.
548
548 SUPREME COURT REPORTS ANNOTATED
Chaves vs. Gonzales
his obligation to repair the typewriter he is bound to return the typewriter in
the same condition it was when he received it.
Same; Same; Obligation with period; Where obligation does not fix a
period; When fixing a period is mere formality.—Where the defendant virtually
admitted non-performance by returning the typewriter he was obliged to repair in a
non-working condition, with essential parts, missing, he cannot invoke Article 1137
of the Civil Code. The time for compliance having evidently expired, and there being
a breach of contract by non-performance, it was academic for the plaintiff to have
first petitioned the court to fix a period for the performance of the contract before
filing his complaint in this case. The fixing of a period would thus be a mere formality
and would serve no purpose than to delay.
Same; Damages; Claims for damages and attorney’s fees must be alleged and
proved.—Claims for damages and attorney’s fees must be pleaded, and the existence
of the actual basis thereof must be proved. Where there is no findings of fact on the
claims for damages and attorney’s fees in the lower court’s decision, there is no
factual basis upon which to make an award therefor.
DIRECT APPEAL from a decision of the Court of First Instance of Manila. Vasquez, J.
The facts are stated in the opinion of the Court.
Chaves, Elio, Chaves & Associates for plaintiff-appellant.
Sulpicio E. Platon for defendant-appellee.
REYES, J.B.L., J.:
This is a direct appeal by the party who prevailed in a suit for breach of oral contract
and recovery of damages but was unsatisfied with the decision rendered by the Court
of First Instance of Manila, in its Civil Case No. 65138, because it awarded him only
P31.10 out of his total claim of P690.00 for actual, temperate and moral damages and
attorney’s fees.
The appealed judgment, which is brief, is hereunder quoted in full:
549
VOL. 32, APRIL 30, 1970 549
Chaves vs. Gonzales
“In the early part of July, 1963, the plaintiff delivered to the defendant, who is a
typewriter repairer, a portable typewriter for routine cleaning and servicing. The
defendant was not able to finish the job after some time despite repeated reminders
made by the plaintiff. The defendant merely gave assurances, but failed to comply
with the same. In October, 1963, the defendant asked from the plaintiff the sum of
P6.00 for the purchase of spare parts, which amount the plaintiff gave to the
defendant. On October 26, 1963, after getting exasperated with the delay of the
repair of the typewriter, the plaintiff went to the house of the defendant and asked
for the return of the typewriter. The defendant delivered the typewriter in a wrapped
package. On reaching home, the plaintiff examined the typewriter returned to him
by the defendant and found out that the same was in shambles, with the interior
cover and some parts and screws missing. On October 29, 1963, the plaintiff sent a
letter to the defendant formally demanding the return of the missing parts, the
interior cover and the sum of P6.00 (Exhibit D). The following day, the defendant
returned to the plaintiff some of the missing parts, the interior cover and the P6.00.
“On August 29, 1964, the plaintiff had his typewriter repairfed by Freixas Business
Machines, and the repair job cost him a total of P89.85, including labor and materials
(Exhibit C ) .
“On August 23, 1965, the plaintiff commenced this action before the City Court
of Manila, demanding from the defendant the payment of P90.00 as actual and
compensatory damages, P100.00 for temperate damages, P500.00 for moral
damages, and P500.00 as attorney’s fees.
“In his answer as well as in his testimony given before this court, the defendant
made no denials of the facts narrated above, except the claim of the plaintiff that the
typewriter was delivered to the defendant through a certain Julio Bocalin, which the
defendant denied allegedly because the typewriter was delivered to him personally
by the plaintiff.
“The repair done on the typewriter by Freixas Business Machines with the total
cost of P89.85 should not, however, be fully chargeable against the defendant. The
repair invoice, Exhibit C, shows that the missing parts had a total value of only P31.10.
“WHEREFORE, judgment is hereby rendered ordering the defendant to pay the
plaintiff the sum of P31.10, and the costs of suit.
“SO ORDERED.”
550
550 SUPREME COURT REPORTS ANNOTATED performance of the contract before filing his complaint in this case. Defendant cannot
invoke Article 1197 of the Civil Code for he virtually admitted non-performance by
Chaves vs. Gonzales
returning the typewriter that he was obliged to repair in a nonworking condition,
The error of the court a quo, according to the plaintiff-appellant, Rosendo O. Chaves,
with essential parts missing. The fixing of a period would thus be a mere formality
is that it awarded only the value of the missing parts of the typewriter, instead of the
and would serve no purpose than to delay (cf. Tiglao, et al. v. Manila Railroad Co., 98
whole cost of labor and materials that went into the repair of the machine, as
Phil. 181).
provided for in Article 1167 of the Civil Code, reading as follows:
It is clear that the defendant-appellee contravened the tenor of his obligation
“ART. 1167. If a person obliged to do something fails to do it, the same shall be
because he not only did not repair the typewriter but returned it “in shambles”,
executed at his cost.
according to the appealed decision. For such contravention, as appellant contends,
“This same rule shall be observed if he does it in contravention of the tenor of
he is liable under Article 1167 of the Civil Code, jam quot, for the cost of executing
the obligation. Furthermore, it may be decreed that what has been poorly done be
the obligation in a proper manner. The cost of the execution of the obligation in this
undone.”
case should be the cost of the labor or service expended in the repair of the
On the other hand, the position of the defendant-appellee, Fructuoso Gonzales, is
typewriter, which is in the amount of P58.75. because the obligation or contract was
that he is not liable at all, not even for the sum of P31.10, because his contract with
to repair it.
plaintiff-appellant did not contain a period, so that plaintiff-appellant should have
In addition, the defendant-appellee is likewise liable, under Article 1170 of the
first filed a petition for the court to fix the period, under Article 1197 of the Civil Code,
Code, for the cost of the missing parts, in the amount of P31.10, for in his obligation
within which the defendant-appellee was to comply with the contract before said
to repair the typewriter he was bound, but failed or neglected, to return it in the
defendant-appellee could be held liable for breach of contract.
same condition it was when he received it.
Because the plaintiff appealed directly to the Supreme Court and the appellee did
Appellant’s claims for moral and temperate damages
not interpose any appeal, the facts, as found by the trial court, are now conclusive
552
and non-reviewable.1
The appealed judgment states that the “plaintiff delivered to the defendant x x x 552 SUPREME COURT REPORTS ANNOTATED
a portable typewriter for routine cleaning and servicing”; that the defendant was not Chaves vs. Gonzales
able to finish the job after some time despite repeated reminders made by the and attorney’s fees were, however, correctly rejected by the trial court, for these
plaintiff; that the “defendant merely gave assurances, but failed to comply with the were not alleged in his complaint (Record on Appeal, pages 1-5). Claims for damages
same”; and that “after getting exasperated with the delay of the repair of the and attorney’s fees must be pleaded, and the existence of the actual basis thereof
typewriter”, the plaintiff went to the house of the defendant and asked for its return, must be proved.2 The appealed judgment thus made no findings on these claims, nor
which was done. The inferences derivable from these findings of fact are that the on the fraud or malice charged to the appellee. As no findings of fact were made on
appellant and the appellee had a perfected contract the claims for damages and attorney’s fees, there is no factual basis upon which to
________________ make an award therefor. Appellant is bound by such judgment of the court, a quo,by
reason of his having resorted directly to the Supreme Court on questions of law.
1
Perez v. Araneta, L-18414. 15 Julv 1968. 24 SCRA 43; Cebu Portland Cement Co, IN VIEW OF THE FOREGOING REASONS, the appealed judgment is hereby
v. Mun. of Naga, L-24116-17, 22 August 1968. 24 SCRA 708. modified, by ordering the defendant-appellee to pay, as he is hereby ordered to pay,
551 the plaintiff-appellant the sum of P89.85, with interest at the legal rate from the filing
VOL. 32, APRIL 30, 1970 551 of the complaint. Costs in all instances against appellee Fructuoso Gonzales.
Chaves vs. Gonzales
for cleaning and servicing a typewriter; that they intended that the defendant was to
finish it at some future time although such time was not specified; and that such time
had passed without the work having been accomplished, for the defendant returned
the typewriter cannibalized and unrepaired, which in itself is a breach of his
obligation, without demanding that he should be given more time to finish the job,
or compensation for the work he had already done. The time for compliance having
evidently expired, and there being a breach of contract by non-performance, it was
academic for the plaintiff to have first petitioned the court to fix a period for the
 VOL. 91, JUNE 29, 1979 113
Mendoza vs. Arrieta
No. L-32599. June 29, 1979.*
EDGARDO E. MENDOZA, petitioner, vs. HON. ABUNDIO Z. ARRIETA, Presiding Judge
of Branch VIII, Court of First Instance of Manila, FELINO TIMBOL, and RODOLFO
SALAZAR, respondents.
Res Judicata; Judgment; Requisites of the rule of prior judgment as a bar to a
subsequent case.—Well-settled is the rule that for a prior judgment to constitute a
bar to a subsequent case, the following requisites must concur: (1) it must be a final
judgment; (2) it must have been rendered by a Court having jurisdiction over the
subject matter and over the parties; (3) it must be a judgment on the merits; and (4)
there must be, between the first and second actions, identity of parties, identity of
subject matter and identity of cause of action.
Same; Action; Quasi-delict; Damages; The owner of a car which was bumped by
a jeep after the latter was bumped from behind by a truck may still file a civil action
for damages against the truck driver and its owner even after the truck driver was
adjudged guilty in the criminal case filed by the jeepney driver against said truck driver
and the jeepney driver, in the case filed by the car owner was acquitted in the criminal
case for negligence filed by the car owner against the jeepney driver. Reason: There
is no identity of cause of action between the civil case in question and the criminal
case against the truck driver for damage to the jeep.—It is conceded that the first
three requisites of res judicata are present. However, we agree with petitioner that
there is no identity of case of action between Criminal Case No. SM-227 and Civil Case
No. 80803. Obvious is the fact that in said criminal case truck driver Montoya was not
prosecuted for damage to petitioner’s car but for damage to the jeep. Neither was
truck-owner Timbol a party in said case. In fact as the trial Court had put it “the owner
of the Mercedes Benz cannot recover any damages from the accused Freddie
Montoya, he (Mendoza) being a complainant only against Rodolfo Salazar in Criminal
Case No. SM-228”. And more importantly, in the criminal cases, the cause of action
was the enforcement of the civil liability arising from criminal negligence under
Article 100 of the Revised Penal Code, whereas Civil Case No. 80803 is based on quasi-
delict under Article 2180, in relation to Article 2176 of the Civil Code.
Same; Same; Failure to make a reservation in the criminal action for negligence
of the right to file an independent civil action does not bar the filing of the latter. Rule
111 of the Rules of Court cannot amend the substantive provision of Art. 31 of the
Civil Code on quasidelict.—Interpreting the above provision, this Court, in Garcia vs.
Florido, said: “As we have stated at the outset, the same negligent act causing
damages may produce a civil liability arising from crime or create an action for quasi-
delict or culpa extra-contractual. The former is a violation of the criminal law, while
the latter is a distinct and independent negligence, having always had its own
foundation and individuality. Some legal writers are of the view that in accordance
with Article 31, the Civil Action based upon quasi-delict may proceed independently
of the criminal proceeding for criminal negligence and regardless of the result of the
latter. Hence, ‘the proviso in Section 2 of Rule 111 with reference to x x x Articles 32,
33 and 34 of the Civil Code is contrary to the letter and spirit of the said articles, for
these articles were drafted x x x and are intended to constitute as exceptions to the
general rule stated in what is now Section 1 of Rule 111. The proviso, which is
procedural, may also be regarded as an unauthorized amendment of substantive law,
Articles 32, 33 and 34 of the Civil Code, which do not provide for the reservation
required in the proviso.’ x x x”.
Same; Same; Articles 2176 and 2177 of the Civil Code creates a civil liability
distinct from the civil action arising from the offense of negligence under the Revised
Penal Code. No reservation need be made in the criminal case.—In his concurring
opinion in the above case, Mr. Justice Antonio Barredo further observed that
inasmuch articles for these articles were drafted x x x and are intended to conas
Articles 2176 and 2177 of the Civil Code create a civil liability distinct and different
from the Civil Action arising from the offense of negligence under the Revised Penal
Code, no reservation, therefore, need be made in the criminal case; that Section 2 of
Rule 111 is inoperative, “it being substantive in character and is not within the power
of the Supreme Court to promulgate; and even if it were not substantive but
adjective, it cannot stand because of its inconsistency with Article 2177, an
enactment of the legislature superseding the Rules of 1940.”
Same; Same; Where the owner of a car hit by a jeep actively intervened in the
prosecution of the criminal case against the jeepney driver-owner, an independent
civil action will no longer lie after the latter’s acquittal where it is clear from the
judgment that the fact from which the civil might arise did not exist.—The
circumstances at-
115
VOL. 91, JUNE 29, 1979 115
Mendoza vs. Arrieta
tendant to the criminal case yields the conclusion that petitioner had opted to
base his cause of action against jeep-owner-driver Salazar on culpa criminal and not
on culpa aquiliana, as evidenced by his active participation and intervention in the
prosecution of the criminal suit against said Salazar. The latter’s civil liability
continued to be involved in the criminal action until its termination. Such being the
case, there was no need for petitioner to have reserved his right to file a separate
civil action as his action for civil liability was deemed impliedly instituted in Criminal
Case No. SM-228.
Same; Same; Same.—Crystal clear is the trial court’s pronouncement that
under the facts of the case, jeep-owner-driver Salazar cannot be held liable for the
damages sustained by petitioner’s car. In other words, “the fact from which the civil
might arise did not exist.” Accordingly, inasmuch as petitioner’s cause of action as
against jeep-owner-driver Salazar is ex-delictu, founded on Article 100 of the Revised
Penal Code, the civil action must be held to have been extinguished in consonance
with Section 3(c), Rule 111 of the Rules of Court.
 Same; Same; Same.—And even if petitioner’s cause of action as against jeep-
owner-driver Salazar were not ex-delictu, the end result would be the same, it being
clear from the judgment in the criminal case that Salazar’s acquittal was not based
upon reasonable doubt, consequently, a civil action for damages can no longer be
instituted. This is explicitly provided for in Article 29 of the Civil Code.
PETITION for review on certiorari of the orders of the Court of First Instance of
Manila.
The facts are stated in the opinion of the Court.
David G. Nitafan for petitioner.
Arsenio R. Reyes for respondent Timbol.
Armando M. Pulgado for respondent Salazar.
MELENCIO-HERRERA, J.:
Petitioner, Edgardo Mendoza, seeks a review on Certiorari of the Orders of
respondent Judge in Civil Case No. 80803 dismissing his Complaint for Damages
based on quasi-delict against respondents Felino Timbol and Rodolfo Salazar.
The facts which spawned the present controversy may be summarized as follows:
116
116 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Arrieta
On October 22, 1969, at about 4:00 o’clock in the afternoon, a three-way vehicular
accident occurred along Mac-Arthur Highway, Marilao, Bulacan, involving a
Mercedes Benz owned and driven by petitioner; a private jeep owned and driven by
respondent Rodolfo Salazar; and a gravel and sand truck owned by respondent
Felipino Timbol and driven by Freddie Mon-toya. As a consequence of said mishap,
two separate Informations for Reckless Imprudence Causing Damage to Property
were filed against Rodolfo Salazar and Freddie Montoya with the Court of First
Instance of Bulacan. The case against truck-driver Montoya, docketed as Criminal
Case No. SM-227, was for causing damage to the jeep owned by Salazar, in the
amount of P1,604.00, by hitting it at the right rear portion thereby causing said jeep
to hit and bump an oncoming car, which happened to be petitioner’s Mercedes Benz.
The case against jeep-owner-driver Salazar, docketed as Criminal Case No. SM-228,
was for causing damage to the Mercedes Benz of petitioner in the amount of
P8,890.00.
At the joint trial of the above cases, petitioner testified that jeep-owner-driver
Salazar overtook the truck driven by Montoya, swerved to the left going towards the
poblacion of Marilao, and hit his car which was bound for Manila. Petitioner further
testified that before the impact, Salazar had jumped from the jeep and that he was
not aware that Salazar’s jeep was bumped from behind by the truck driven by
Montoya. Petitioner’s version of the accident was adopted by truck-driver Montoya.
Jeep-owner-driver Salazar, on the other hand, tried to show that, after overtaking the
truck driven by Montoya, he flashed a signal indicating his intention to turn left
towards the poblacion of Marilao but was stopped at the intersection by a policeman
who was directing traffic; that while he was at a stop position, his jeep was bumped
at the rear by the truck driven by Montoya causing him to be thrown out of the jeep,
which then swerved to the left and hit petitioner’s car, which was coming from the
opposite direction.
On July 31, 1970, the Court of First Instance of Bulacan, Branch V, Sta. Maria,
rendered judgment, stating in its decretal portion:
“IN VIEW OF THE FOREGOING, this Court finds the accused Freddie Montoya GUILTY
beyond reasonable doubt of the crime
117
VOL. 91, JUNE 29, 1979 117
Mendoza vs. Arrieta
of damage to property thru reckless imprudence in Crim. Case No. SM-227, and
hereby sentences him to pay a fine of P972.50 and to indemnify Rodolfo Salazar in
the same amount of P972.50 as actual damages, with subsidiary imprisonment in
case of insolvency, both as to fine and indemnity, with costs.
“Accused Rodolfo Salazar is hereby ACQUITTED from the offense charged in Crim.
Case No. SM-228, with costs de oficio, and his bond is ordered cancelled.
“SO ORDERED.”1
Thus, the trial Court absolved jeep-owner-driver Salazar of any liability, civil and
criminal, in view of its findings that the collision between Salazar’s jeep and
petitioner’s car was the result of the former having been bumped from behind by the
truck driven by Montoya. Neither was petitioner awarded damages as he was not a
complainant against truck-driver Montoya but only against jeeep-owner-driver
Salazar.
On August 22, 1970, or after the termination of the criminal cases, petitioner
filed Civil Case No. 80803 with the Court of First Instance of Manila against
respondents jeep-owner-driver Salazar and Felino Timbol, the latter being the owner
of the gravel and sand truck driven by Montoya, for indemnification for the damages
sustained by his car as a result of the collision involving their vehicles. Jeep-owner-
driver Salazar and truck-owner Timbol were joined as defendants, either in the
alternative or in solidum, allegedly for the reason that petitioner was uncertain as to
whether he was entitled to relief against both on only one of them.
On September 9, 1970, truck-owner Timbol filed a Motion to Dismiss Civil Case
No. 80803 on the grounds that the Complaint is barred by a prior judgment in the
criminal cases and that it fails to state a cause of action. An Opposition thereto was
filed by petitioner.
In an Order dated September 12, 1970, respondent Judge dismissed the
Complaint against truck-owner Timbol for reasons stated in the afore-mentioned
Motion to Dismiss. On September 30, 1970, petitioner sought before this Court the
review of that dismissal, to which petition we gave due course.
 On January 30, 1971, upon motion of jeep-owner-driver
__________________
1
p. 26, Rollo
118
118 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Arrieta
Salazar, respondent Judge also dismissed the case as against the former. Respondent
Judge reasoned out that “while it is true that an independent civil action for liability
under Article 2177 of the Civil Code could be prosecuted independently of the
criminal action for the offense from which it arose, the New Rules of Court, which
took effect on January 1, 1964, requires an express reservation of the civil action to
be made in the criminal action; otherwise, the same would be barred pursuant to
Section 2, Rule 111 x x.”2Petitioner’s Motion for Reconsideration thereof was denied
in the order dated February 23, 1971, with respondent Judge suggesting that the
issue be raised to a higher Court “for a more decisive interpretation of the rule.” 3
On March 25, 1971, petitioner then filed a Supplemental Petition before us, also
to review the last two mentioned Orders, to which we required jeep-owner-driver
Salazar to file an Answer.
The Complaint against
truck-owner Timbol
We shall first discuss the validity of the Order, dated September 12, 1970, dismissing
petitioner’s Complaint against truck-owner Timbol.
In dismissing the Complaint against the truck-owner, respondent Judge sustained
Timbol’s allegations that the civil suit is barred by the prior joint judgment in Criminal
Cases Nos. SM-227 and SM-228, wherein no reservation to file a separate civil case
was made by petitioner and where the latter actively participated in the trial and
tried to prove damages against jeep-driver-Salazar only; and that the Complaint does
not state a cause of action against truck-owner Timbol inasmuch as petitioner
prosecuted jeep-owner-driver Salazar as the one solely responsible for the damage
suffered by his car.
Well-settled is the rule that for a prior judgment to constitute a bar to a
subsequent case, the following requisites must concur: (1) it must be a final
judgment; (2) it must have been rendered by a Court having jurisdiction over the
subject
__________________
2
pp. 147-449, ibid.
3
pp. 138-139, ibid.
119
VOL. 91, JUNE 29, 1979 119
Mendoza vs. Arrieta
matter and over the parties; (3) it must be a judgment on the merits; and (4) there
must be, between the first and second actions, identity of parties, identity of subject
matter and identity of cause of action.
It is conceded that the first three requisites of res judicata are present. However,
we agree with petitioner that there is no identity of cause of action between Criminal
Case No. SM-227 and Civil Case No. 80803. Obvious is the fact that in said criminal
case truck-driver Montoya was not prosecuted for damage to petitioner’s car but for
damage to the jeep. Neither was truck-owner Timbol a party in said case. In fact as
the trial Court had put it “the owner of the Mercedes Benz cannot recover any
damages from the accused Freddie Montoya, he (Mendoza) being a complainant only
against Rodolfo Salazar in Criminal Case No. SM-228.”4 And more importantly, in the
criminal cases, the cause of action was the enforcement of the civil liability arising
from criminal negligence under Article 100 of the Revised Penal Code, whereas Civil
Case No. 80803 is based on quasi-delict under Article 2180, in relation to Article 2176
of the Civil Code. As held in Barredo vs. Garcia, et al.:5
“The foregoing authorities clearly demonstrate the separate individuality of cuasi-
delitos or culpa aquiliana under the Civil Code. Specifically they show that there is a
distinction between civil liability arising from criminal negligence (governed by the
Penal Code) and responsibility for fault or negligence under articles 1902 to 1910 of
the Civil Code, and that the same negligent act may produce either a civil liability
arising from a crime under the Penal Code, or a separate responsibility for fault or
negligence under articles 1902 to 1910 of the Civil Code. Still more concretely, the
authorities above cited render it inescapable to conclude that the employer in this
case the defendant-petitioner is primarily and directly liable under article 1903 of the
Civil Code.”
That petitioner’s cause of action against Timbol in the civil case is based on quasi-
delict is evident from the recitals in the complaint, to wit: that while petitioner was
driving his car along MacArthur Highway at Marilao, Bulacan, a jeep owned and
driven by Salazar suddenly swerved to his (petitioner’s) lane and collided with his car;
That the sudden swerving of
___________________
4
Decision, p. 26, ibid.
5
73 Phil. 607, 620 (1942)
120
120 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Arrieta
Salazar’s jeep was caused either by the negligence and lack of skill of Freddie
Montoya, Timbol’s employee, who was then driving a gravel and sand truck in the
same direction as Salazar’s jeep; and that as a consequence of the collision,
petitioner’s car suffered extensive damage amounting to P12,248.20 and that he
likewise incurred actual and moral damages, litigation expenses and attorney’s fees.
Clearly, therefore, the two factors that a cause of action must consist of, namely: (1)
plaintiff’s primary right, i.e., that he is the owner of a Mercedes Benz, and (2)
defendant’s delict or wrongful act or omission which violated plaintiff’s primary right,
i.e., the negligence or lack of skill either of jeep-owner Salazar or of Timbol’s
employee, Montoya, in driving the truck, causing Salazar’s jeep to swerve and collide
with petitioner’s car, were alleged in the Complaint. 6
Consequently, petitioner’s cause of action being based on quasi-delict,
respondent Judge committed reversible error when he dismissed the civil suit against
the truck-owner, as said case may proceed independently of the criminal proceedings
and regardless of the result of the latter.
“Art. 31. When the civil action is based on an obligation not arising from the act or
omission complained of as a felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result of the latter.”
But it is truck-owner Timbol’s submission (as well as that of jeep-owner-driver
Salazar) that petitioner’s failure to make a reservation in the criminal action of his
right to file an independent civil action bars the institution of such separate civil
action, invoking section 2, Rule 111, Rules of Court, which says:
“Section 2.—Independent civil action.—In the cases provided for in Articles 31, 32,
33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action
entirely separate and distinct from the criminal action may be brought by the injured
party during the pendency of the criminal case, provided the right is reserved as
required in the preceding section. Such civil action shall proceed independently of
the criminal prosecution, and shall require only a preponderance of evidence.”
___________________
6
Racoma vs. Fortich, 39 SCRA 521 (1971)
121
VOL. 91, JUNE 29, 1979 121
Mendoza vs. Arrieta
Interpreting the above provision, this Court, in Garcia vs. Florido,7said:
“As we have stated at the outset, the same negligent act causing damages may
produce a civil liability arising from crime or create an action for quasi-delict or culpa
extra-contractual. The former is a violation of the criminal law, while the latter is a
distinct and independent negligence, having always had its own foundation and
individuality. Some legal writers are of the view that in accordance with Article 31,
the civil action based upon quasi-delict may proceed independently of the criminal
proceeding for criminal negligence and regardless of the result of the latter. Hence,
‘the proviso in Section 2 of Rule 111 with reference to x x x Articles 32, 33 and 34 of
the Civil Code is contrary to the letter and spirit of the said articles, for these articles
were drafted x x x and are intended to constitute as exceptions to the general rule
stated in what is now Section 1 of Rule 111. The proviso, which is procedural, may
also be regarded as an unauthorized amendment of substantive law, Articles 32, 33
and 34 of the Civil Code, which do not provide for the reservation required in the
proviso.’ x x x x”.
In his concurring opinion in the above case, Mr. Justice Antonio Barredo further
observed that inasmuch as Articles 2176 and 2177 of the Civil Code create a civil
liability distinct and different from the civil action arising from the offense of
negligence under the Revised Penal Code, no reservation, therefore, need be made
in the criminal case; that Section 2 of Rule 111 is inoperative, “it being substantive in
character and is not within the power of the Supreme Court to promulgate; and even
if it were not substantive but adjective, it cannot stand because of its inconsistency
with Article 2177, an enactment of the legislature superseding the Rules of 1940.”
We declare, therefore, that in so far as truck-owner Timbol is concerned, Civil
Case No. 80803 is not barred by the fact that petitioner failed to reserve, in the
criminal action, his right to file an independent civil action based on quasi-delict.
___________________
7
52 SCRA 420 (1973)
122
122 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Arrieta
The suit against
jeep-owner-driver Salazar
The case as against jeep-owner-driver Salazar, who was acquitted in Criminal Case
No. SM-228, presents a different picture altogether.
At the outset it should be clarified that inasmuch as civil liability coexists with
criminal responsibility in negligence cases, the offended party has the option
between an action for enforcement of civil liability based on culpa criminal under
Article 100 of the Revised Penal Code, and an action for recovery of damages based
on culpa aquiliana under Article 2177 of the Civil Code. The action for enforcement
of civil liability based on culpa criminal under section 1 of Rule 111 of the Rules of
Court is deemed simultaneously instituted with the criminal action, unless expressly
waived or reserved for separate application by the offended party.8
The circumstances attendant to the criminal case yields the conclusion that
petitioner had opted to base his cause of action against jeep-owner-driver Salazar
on culpa criminal and not on culpa aquiliana, as evidenced by his active participation
and intervention in the prosecution of the criminal suit against said Salazar. The
latter’s civil liability continued to be involved in the criminal action until its
termination. Such being the case, there was no need for petitioner to have reserved
his right to file a separate civil action as his action for civil liability was deemed
impliedly instituted in Criminal Case No. SM-228.
 Neither would an independent civil action lie. Noteworthy is the basis of the inferred from the text of the decision whether or not the acquittal is due to that
acquittal of jeep-owner-driver Salazar in the criminal case, expounded by the trial ground.”
Court in this wise: In so far as the suit against jeep-owner-driver Salazar is concerned, therefore, we
“In view of what has been proven and established during the trial, accused Freddie sustain respondent Judge’s Order dated January 30, 1971 dismissing the complaint,
Montoya would be held liable for having bumped and hit the rear portion of the jeep albeit on different grounds.
driven by the accused Rodolfo Salazar. WHEREFORE, 1) the Order dated September 12, 1970 dismissing Civil Case No.
“Considering that the collision between the jeep driven by Rodolfo Salazar and 80803 against private respondent Felino Timbol is set aside, and respondent Judge,
the car owned and driven by Edgardo Mendoza was the result of the hitting on the or his successor, hereby ordered to proceed with the hearing on the merits; 2) bit the
rear of the jeep by the truck Orders dated January 30, 1971 and February 23, 1971 dismissing the Complaint in
Civil Case No. 80803 against respondent Rodolfo Salazar are hereby upheld.
__________________ No costs.
SO ORDERED.
8
Padua vs. Robles, 66 SCRA 485 (1975)
123
VOL. 91, JUNE 29, 1979 123
Mendoza vs. Arrieta
driven by Freddie Montoya, this Court believes that accused Rodolfo Salazar cannot
be held liable for the damages sustained by Edgardo Mendoza’s car.”9
Crystal clear is the trial Court’s pronouncement that under the facts of the case, jeep-
owner-driver Salazar cannot be held liable for the damages sustained by petitioner’s
car. In other words, “the fact from which the civil might arise did not exist.”
Accordingly, inasmuch as petitioner’s cause of action as against jeep-owner-driver
Salazar is ex-delictu, founded on Article 100 of the Revised Penal Code, the civil action
must be held to have been extinguished in consonance with Section 3(c), Rule 111 of
the Rules of Court10 which provides:
“Sec. 3. Other civil actions arising from offenses.—In all cases not included in the
preceding section the following rules shall be observed:
xxx
(c) Extinction of the penal action does not carry with it extinction of the civil,
unless the extinction proceeds from a declaration in a final judgment that the fact
from which the civil might arise did not exist. x x x”
And even if petitioner’s cause of action as against jeep-owner-driver Salazar were
not ex-delictu, the end result would be the same, it being clear from the judgment in
the criminal case that Salazar’s acquittal was not based upon reasonable doubt,
consequently, a civil action for damages can no longer be instituted. This is explicitly
provided for in Article 29 of the Civil Code quoted hereunder:
“Art. 29. When the accused in a criminal prosecution is acquitted on the ground that
his guilt has not been proved beyond reasonable doubt, a civil action for damages for
the same act or omission may be instituted. Such action requires only a
preponderance of evidence. x x x
“If in a criminal case the judgment of acquittal is based upon reasonable doubt,
the court shall so declare. In the absence of any declaration to that effect, it may be
 G.R. No. 117190. January 2, 1997.*
JACINTO TANGUILIG doing business under the name and style J.M.T. ENGINEERING
AND GENERAL MERCHANDISING, petitioner, vs. COURT OF APPEALS and VICENTE
HERCE, JR., respondents.
Civil Law; Contracts; Interpretation; Where the terms of the instruments are
clear and leave no doubt as to their meaning, they should not be disturbed.—Notably,
nowhere in either proposal is the installation of a deep well mentioned, even
remotely. Neither is there an itemization or description of the materials to be used
in constructing the deep well. There is absolutely no mention in the two (2)
documents that a deep well pump is a component of the proposed windmill system.
The contract prices fixed in both proposals cover only the features specifically
described therein and no other. While the words “deep well” and “deep well pump”
are mentioned in both, these do not indicate that a deep well is part of the windmill
system. They merely describe the type of deep well pump for which the proposed
windmill would be suitable. As correctly pointed out by petitioner, the words “deep
well” preceded by the prepositions “for” and “suitable for” were meant only to
convey the idea that the proposed windmill would be appropriate for a deep well
pump with a diameter of 2 to 3 inches. For if the real intent of petitioner was to
include a deep well in the agreement to construct a windmill, he would have used
instead the conjunctions “and” or “with.” Since the terms of the instruments are clear
and leave no doubt as to their meaning they should not be disturbed.
Same; Same; Same; The intention of the parties shall be accorded primordial
consideration and, in case of doubt, their contemporaneous and subsequent acts shall
be principally considered.—Moreover, it is a cardinal rule in the interpretation of
contracts that the intention of the parties shall be accorded primordial consideration
and, in case of doubt, their contemporaneous and subsequent acts shall be
principally considered. An examination of such contemporaneous and subsequent
acts of respondent as well as the attendant circumstances does not persuade us to
uphold him.
_______________
*
FIRST DIVISION.
79
VOL. 266, JANUARY 2, 1997 79
Tanguilig vs. Court of Appeals
Same; Payments by a Third Person; Civil Code provisions on “payments made by
a third person” do not apply in the instant case as no creditor-debtor relationship has
been established between the parties.—Respondent cannot claim the benefit of the
law concerning “payments made by a third person.” The Civil Code provisions do not
apply in the instant case because no creditor-debtor relationship between petitioner
and Guillermo Pili and/or SPGMI has been established regarding the construction of
the deep well. Specifically, witness Pili did not testify that he entered into a contract
with petitioner for the construction of respondent’s deep well. If SPGMI was really
commissioned by petitioner to construct the deep well, an agreement particularly to
this effect should have been entered into.
Same; Civil Code; Obligations; Art. 1174; In order for a party to claim exemption
from liability by reason of fortuitous event should be the sole and proximate cause of
the loss or destruction of the object of the contract.—The second issue is not a novel
one. In a long line of cases this Court has consistently held that in order for a party to
claim exemption from liability by reason of fortuitous event under Art. 1174 of the
Civil Code the event should be the sole and proximate cause of the loss or destruction
of the object of the contract. In Nakpil vs. Court of Appeals, four (4) requisites must
concur: (a) the cause of the breach of the obligation must be independent of the will
of the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event
must be such as to render it impossible for the debtor to fulfill his obligation in a
normal manner; and, (d) the debtor must be free from any participation in or
aggravation of the injury to the creditor.
Same; Same; Same; Art. 1167; If a person obliged to do something fails to do it,
the same shall be executed at his cost.—Petitioner’s argument that private
respondent was already in default in the payment of his outstanding balance of
P15,000.00 and hence should bear his own loss, is untenable. In reciprocal
obligations, neither party incurs in delay if the other does not comply or is not ready
to comply in a proper manner with what is incumbent upon him. When the windmill
failed to function properly it became incumbent upon petitioner to institute the
proper repairs in accordance with the guaranty stated in the contract. Thus,
respondent cannot be said to have incurred in delay; instead, it is petitioner who
should bear the expenses for the reconstruction of the
80
80 SUPREME COURT REPORTS ANNOTATED
Tanguilig vs. Court of Appeals
windmill. Article 1167 of the Civil Code is explicit on this point that if a person
obliged to do something fails to do it, the same shall be executed at his cost.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ricardo C. Valmonte for petitioner.
Restituto M. Mendoza for private respondent.
BELLOSILLO, J.:
This case involves the proper interpretation of the contract entered into between
the parties.
 Sometime in April 1987 petitioner Jacinto M. Tanguilig doing business under the
name and style J.M.T. Engineering and General Merchandising proposed to
respondent Vicente Herce, Jr. to construct a windmill system for him. After some
negotiations they agreed on the construction of the windmill for a consideration of
P60,000.00 with a one-year guaranty from the date of completion and acceptance by
respondent Herce, Jr. of the project. Pursuant to the agreement respondent paid
petitioner a down payment of P30,000.00 and an installment payment of P15,000.00,
leaving a balance of P15,000.00.
On 14 March 1988, due to the refusal and failure of respondent to pay the
balance, petitioner filed a complaint to collect the amount. In his Answer before the
trial court respondent denied the claim saying that he had already paid this amount
to the San Pedro General Merchandising, Inc. (SPGMI) which constructed the deep
well to which the windmill system was to be connected. According to respondent,
since the deep well formed part of the system the payment he tendered to SPGMI
should be credited to his account by petitioner. Moreover, assuming that he owed
petitioner a balance of P15,000.00, this should be offset by the
81
VOL. 266, JANUARY 2, 1997 81
Tanguilig vs. Court of Appeals
defects in the windmill system which caused the structure to collapse after a strong
wind hit their place.1
Petitioner denied that the construction of a deep well was included in the
agreement to build the windmill system, for the contract price of P60,000.00 was
solely for the windmill assembly and its installation, exclusive of other incidental
materials needed for the project. He also disowned any obligation to repair or
reconstruct the system and insisted that he delivered it in good and working
condition to respondent who accepted the same without protest. Besides, its
collapse was attributable to a typhoon, a force majeure, which relieved him of any
liability.
In finding for plaintiff, the trial court held that the construction of the deep well
was not part of the windmill project as evidenced clearly by the letter proposals
submitted by petitioner to respondent.2 It noted that “[i]f the intention of the parties
is to include the construction of the deep well in the project, the same should be
stated in the proposals. In the absence of such an agreement, it could be safely
concluded that the construction of the deep well is not a part of the project
undertaken by the plaintiff.”3With respect to the repair of the windmill, the trial court
found that “there is no clear and convincing proof that the windmill system fell down
due to the defect of the construction.”4
The Court of Appeals reversed the trial court. It ruled that the construction of the
deep well was included in the agreement of the parties because the term “deep well”
was mentioned in both proposals. It also gave credence to the testimony of
respondent’s witness Guillermo Pili, the proprietor of SPGMI which installed the deep
well, that petitioner Tanguilig told him that the cost of constructing the deep well
would be deducted from the contract price of P60,000.00.
Upon these premises the appellate court concluded that respondent’s payment
of P15,000.00 to SPGMI should be applied to his remaining balance with petitioner
thus effectively extinguishing his contractual obligation. However, it rejected
petitioner’s claim of force majeure and ordered the latter to reconstruct the windmill
in accordance with the stipulated one-year guaranty.
His motion for reconsideration having been denied by the Court of Appeals,
petitioner now seeks relief from this Court. He raises two issues: firstly, whether the
agreement to construct the windmill system included the installation of a deep well
and, secondly, whether petitioner is under obligation to reconstruct the windmill
after it collapsed.
We reverse the appellate court on the first issue but sustain it on the second.
The preponderance of evidence supports the finding of the trial court that the
installation of a deep well was not included in the proposals of petitioner to construct
a windmill system for respondent. There were in fact two (2) proposals: one dated
19 May 1987 which pegged the contract price at P87,000.00 (Exh. “1”). This was
rejected by respondent. The other was submitted three days later, i.e., on 22 May
1987 which contained more specifications but proposed a lower contract price of
P60,000.00 (Exh. “A”). The latter proposal was accepted by respondent and the
construction immediately followed. The pertinent portions of the first letter-proposal
(Exh. “1”) are reproduced hereunder—
In connection with your Windmill System and Installation, we would like to quote
to you as follows:
One (1) Set—Windmill suitable for 2 inches diameter deepwell, 2 HP, capacity, 14
feet in diameter, with 20 pieces blade, Tower 40 feet high, including mechanism
which is not advisable to operate during extra-intensity wind. Excluding cylinder
pump.
UNIT CONTRACT PRICE P87,000.00
The second letter-proposal (Exh. “A”) provides as follows:
83
VOL. 266, JANUARY 2, 1997 83
Tanguilig vs. Court of Appeals
In connection with your Windmill System, Supply of Labor Materials and
Installation, operated water pump, we would like to quote to you as follows—
One (1) set-Windmill assembly for 2 inches or 3 inches deep-well pump, 6 Stroke,
14 feet diameter, 1-lot blade materials, 40 feet Tower complete with standard
appurtenances up to Cylinder pump, shafting U.S. adjustable International Metal.
One (1) lot—Angle bar, G.I. pipe, Reducer Coupling, Elbow Gate valve, cross Tee
coupling.
One (1) lot—Float valve.
One (1) lot—Concreting materials foundation.
 F.O.B. Laguna
Contract Price P60,000.00
Notably, nowhere in either proposal is the installation of a deep well mentioned,
even remotely. Neither is there an itemization or description of the materials to be
used in constructing the deep well. There is absolutely no mention in the two (2)
documents that a deep well pump is a component of the proposed windmill system.
The contract prices fixed in both proposals cover only the features specifically
described therein and no other. While the words “deep well” and “deep well pump”
are mentioned in both, these do not indicate that a deep well is part of the windmill
system. They merely describe the type of deep well pump for which the proposed
windmill would be suitable. As correctly pointed out by petitioner, the words “deep
well” preceded by the prepositions “for” and “suitable for” were meant only to
convey the idea that the proposed windmill would be appropriate for a deep well
pump with a diameter of 2 to 3 inches. For if the real intent of petitioner was to
include a deep well in the agreement to construct a windmill, he would have used
instead the conjunctions “and” or “with.” Since the terms of the instruments are clear
and leave no doubt as to their meaning they should not be disturbed.
Moreover, it is a cardinal rule in the interpretation of contracts that the intention
of the parties shall be accorded
84
84 SUPREME COURT REPORTS ANNOTATED
Tanguilig vs. Court of Appeals
primordial consideration5 and, in case of doubt, their contemporaneous and
subsequent acts shall be principally considered. 6 An examination of such
contemporaneous and subsequent acts of respondent as well as the attendant
circumstances does not persuade us to uphold him.
Respondent insists that petitioner verbally agreed that the contract price of
P60,000.00 covered the installation of a deep well pump. He contends that since
petitioner did not have the capacity to install the pump the latter agreed to have a
third party do the work the cost of which was to be deducted from the contract price.
To prove his point, he presented Guillermo Pili of SPGMI who declared that petitioner
Tanguilig approached him with a letter from respondent Herce, Jr. asking him to build
a deep well pump as “part of the price/contract which Engineer (Herce) had with Mr.
Tanguilig.”7
We are disinclined to accept the version of respondent. The claim of Pili that
Herce, Jr. wrote him a letter is unsubstantiated. The alleged letter was never
presented in court by private respondent for reasons known only to him. But granting
that this written communication existed, it could not have simply contained a request
for Pili to install a deep well; it would have also mentioned the party who would pay
for the undertaking. It strains credulity that respondent would keep silent on this
matter and leave it all to petitioner Tanguilig to verbally convey to Pili that the deep
well was part of the windmill construction and that its payment would come from the
contract price of P60,000.00.
We find it also unusual that Pili would readily consent to build a deep well the
payment for which would come supposedly from the windmill contract price on the
mere representation of petitioner, whom he had never met before, without a written
commitment at least from the former. For if indeed the deep well were part of the
windmill project, the contract for its installation would have been strictly a matter
between petitioner and Pili himself with the former assuming the obligation to pay
the price. That it was respondent Herce, Jr. himself who paid for the deep well by
handing over to Pili the amount of P15,000.00 clearly indicates that the contract for
the deep well was not part of the windmill project but a separate agreement between
respondent and Pili. Besides, if the price of P60,000.00 included the deep well, the
obligation of respondent was to pay the entire amount to petitioner without
prejudice to any action that Guillermo Pili or SPGMI may take, if any, against the
latter. Significantly, when asked why he tendered payment directly to Pili and not to
petitioner, respondent explained, rather lamely, that he did it “because he has (sic)
the money, so (he) just paid the money in his possession.”8
Can respondent claim that Pili accepted his payment on behalf of petitioner? No.
While the law is clear that “payment shall be made to the person in whose favor the
obligation has been constituted, or his successor in interest, or any person authorized
to receive it,”9 it does not appear from the record that Pili and/or SPGMI was so
authorized.
Respondent cannot claim the benefit of the law concerning “payments made by
a third person.”10 The Civil Code provisions do not apply in the instant case because
no creditordebtor relationship between petitioner and Guillermo Pili and/or SPGMI
has been established regarding the construction of the deep well. Specifically,
witness Pili did not testify that he entered into a contract with petitioner for the
construction of respondent’s deep well. If SPGMI was really commissioned by
petitioner to construct the deep well, an agreement particularly to this effect should
have been entered into.
The contemporaneous and subsequent acts of the parties concerned effectively
belie respondent’s assertions. These circumstances only show that the construction
of the well by SPGMI was for the sole account of respondent and that petitioner
merely supervised the installation of the well because the windmill was to be
connected to it. There is no legal nor factual basis by which this Court can impose
upon petitioner an obligation he did not expressly assume nor ratify.
The second issue is not a novel one. In a long line of cases 11 this Court has
consistently held that in order for a party to claim exemption from liability by reason
of fortuitous event under Art. 1174 of the Civil Code the event should be the sole and
proximate cause of the loss or destruction of the object of the contract. In Nakpil vs.
Court of Appeals,12 four (4) requisites must concur: (a) the cause of the breach of the
obligation must be independent of the will of the debtor; (b) the event must be either
unforseeable or unavoidable; (c) the event must be such as to render it impossible
for the debtor to fulfill his obligation in a normal manner; and, (d) the debtor must
be free from any participation in or aggravation of the injury to the creditor.
Petitioner failed to show that the collapse of the windmill was due solely to a
fortuitous event. Interestingly, the evidence does not disclose that there was actually
a typhoon on the day the windmill collapsed. Petitioner merely stated that there was
a “strong wind.” But a strong wind in this case cannot be fortuitous—unforseeable
nor unavoidable. On the contrary, a strong wind should be present in places where
windmills are constructed, otherwise the windmills will not turn.
The appellate court correctly observed that “given the newly-constructed
windmill system, the same would not have collapsed had there been no inherent
defect in it which could only be attributable to the appellee.” 13 It emphasized that
respondent had in his favor the presumption that “things have happened according
to the ordinary course of nature and the ordinary habits of life.”14 This presumption
has not been rebutted by petitioner.
Finally, petitioner’s argument that private respondent was already in default in
the payment of his outstanding balance of P15,000.00 and hence should bear his own
loss, is untenable. In reciprocal obligations, neither party incurs in delay if the other
does not comply or is not ready to comply in a proper manner with what is incumbent
upon him.15 When the windmill failed to function properly it became incumbent upon
petitioner to institute the proper repairs in accordance with the guaranty stated in
the contract. Thus, respondent cannot be said to have incurred in delay; instead, it is
petitioner who should bear the expenses for the reconstruction of the windmill.
Article 1167 of the Civil Code is explicit on this point that if a person obliged to do
something fails to do it, the same shall be executed at his cost.
WHEREFORE, the appealed decision is MODIFIED. Respondent VICENTE HERCE,
JR. is directed to pay petitioner JACINTO M. TANGUILIG the balance of P15,000.00
with interest at the legal rate from the date of the filing of the complaint. In return,
petitioner is ordered to “reconstruct subject defective windmill system, in
accordance with the oneyear guaranty”16 and to complete the same within three (3)
months from the finality of this decision.

SO ORDERED.