G.R. No.

L-39999 May 31, 1984

ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO
and JOSE FARLEY BEDENIA, petitioners,
vs.
COURT OF APPEALS, respondent.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of a Court of Appeals'
decision which reversed the trial court's judgment of conviction
and acquitted the petitioners of the crime of grave coercion on
the ground of reasonable doubt but inspite of the acquittal
ordered them to pay jointly and severally the amount of
P9,000.00 to the complainants as actual damages.
The petitioners were charged under the following information:
The undersigned Fiscal accused ROY PADILLA, FILOMENO
GALDONES, PEPITO BEDENIA, YOLLY RICO, DAVID BERMUNDO,
VILLANOAC, ROBERTO ROSALES, VILLANIA, ROMEO GARRIDO,
JOSE ORTEGA, JR., RICARDO CELESTINO, REALINGO alias
"KAMLON", JOHN DOE alias TATO, and FOURTEEN (14) RICARDO
DOES of the crime of GRAVE COERCION, committed as follows:
That on or about February 8, 1964 at around 9:00 o'clock in the
morning, in the municipality of Jose Panganiban, province of
Camarines Norte, Philippines, and within the jurisdiction of this
Honorable Court, the above- named accused, Roy Padilla,
Filomeno Galdones, Pepito Bedenia, Yolly Rico, David Bermundo,
Villanoac, Roberto Rosales, Villania, Romeo Garrido, Jose Ortega,
Jr., Ricardo Celestino, Realingo alias Kamlon, John Doe alias Tato,
and Fourteen Richard Does, by confederating and mutually
helping one another, and acting without any authority of law, did
then and there wilfully, unlawfully, and feloniously, by means of
threats, force and violence prevent Antonio Vergara and his
family to close their stall located at the Public Market, Building
No. 3, Jose Panganiban, Camarines Norte, and by subsequently
forcibly opening the door of said stall and thereafter brutally
demolishing and destroying said stall and the furnitures therein
by axes and other massive instruments, and carrying away the
goods, wares and merchandise, to the damage and prejudice of
the said Antonio Vergara and his family in the amount of
P30,000.00 in concept of actual or compensatory and moral
damages, and further the sum of P20,000.00 as exemplary
damages.
That in committing the offense, the accused took advantage of

their public positions: Roy Padilla, being the incumbent municipal

mayor, and the rest of the accused being policemen, except
Ricardo Celestino who is a civilian, all of Jose Panganiban,
Camarines Norte, and that it was committed with evident
premeditation.
The Court of First Instance of Camarines Norte, Tenth Judicial
District rendered a decision, the dispositive portion of which
states that:
IN VIEW OF THE FOREGOING, the Court finds the accused Roy
Padilla, Filomeno Galdonez, Ismael Gonzalgo and Jose Parley
Bedenia guilty beyond reasonable doubt of the crime of grave
coercion, and hereby imposes upon them to suffer an
imprisonment of FIVE (5) months and One (1) day; to pay a fine
of P500.00 each; to pay actual and compensatory damages in
the amount of P10,000.00; moral damages in the amount of
P30,000.00; and another P10,000.00 for exemplary damages,
jointly and severally, and all the accessory penalties provided for
by law; and to pay the proportionate costs of this proceedings.
The accused Federico Realingo alias 'Kamlon', David Bermundo,
Christopher Villanoac, Godofredo Villania, Romeo Garrido,
Roberto Rosales, Ricardo Celestino and Jose Ortega, are hereby
ordered acquitted on grounds of reasonable doubt for their
criminal participation in the crime charged.
The petitioners appealed the judgment of conviction to the Court
of Appeals. They contended that the trial court's finding of grave
coercion was not supported by the evidence. According to the
petitioners, the town mayor had the power to order the clearance
of market premises and the removal of the complainants' stall
because the municipality had enacted municipal ordinances
pursuant to which the market stall was a nuisance per se. The
petitioners stated that the lower court erred in finding that the
demolition of the complainants' stall was a violation of the very
directive of the petitioner Mayor which gave the stall owners
seventy two (72) hours to vacate the market premises. The
petitioners questioned the imposition of prison terms of five
months and one day and of accessory penalties provided by law.
They also challenged the order to pay fines of P500.00 each,
P10,000.00 actual and compensatory damages, P30,000.00
moral damages, P10,000.00 exemplary damages, and the costs
of the suit.
The dispositive portion of the decision of the respondent Court of
Appeals states:

WHEREFORE, we hereby modify the judgment appealed from in

the sense that the appellants are acquitted on ground of
reasonable doubt. but they are ordered to pay jointly and
severally to complainants the amount of P9,600.00, as actual
damages.
The petitioners filed a motion for reconsideration contending that
the acquittal of the defendants-appellants as to criminal liability
results in the extinction of their civil liability. The Court of Appeals
denied the motion holding that:
xxx xxx xxx
... appellants' acquittal was based on reasonable doubt whether
the crime of coercion was committed, not on facts that no
unlawful act was committed; as their taking the law into their
hands, destructing (sic) complainants' properties is unlawful,
and, as evidence on record established that complainants
suffered actual damages, the imposition of actual damages is
correct.
Consequently, the petitioners filed this special civil action,
contending that:
I
THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW
OR GRAVELY ABUSED ITS DISCRETION IN IMPOSING UPON
PETITIONERS PAYMENT OF DAMAGES TO COMPLAINANTS AFTER
ACQUITTING PETITIONERS OF THE CRIME CHARGED FROM WHICH
SAID LIABILITY AROSE.
II
THE COURT OF APPEALS ERRED IN HOLDING IN ITS RESOLUTION
DATED DECEMBER 26, 1974 THAT SINCE APPELLANTS'
ACQUITTAL WAS BASED ON REASONABLE DOUBT, NOT ON FACTS
THAT NO UNLAWFUL ACT WAS COMMITTED, THE IMPOSITION OF
ACTUAL DAMAGES IS CORRECT.
III
THE COURT OF APPEALS COMMITTED A LEGAL INCONSISTENCY,
IF NOT PLAIN JUDICIAL ERROR, IN HOLDING IN ITS APPEALED
RESOLUTION THAT PETITIONERS COMMITTED AN UNLAWFUL ACT,
THAT IS TAKING THE LAW INTO THEIR HANDS, DESTRUCTING (sic)
'COMPLAINANTS' PROPERTIES', AFTER HOLDING IN ITS MAIN
DECISION OF NOVEMBER 6,1974 THAT THE ACTS FOR WHICH
THEY WERE CHARGED DID NOT CONSTITUTE GRAVE COERCION
AND THEY WERE NOT CHARGED OF ANY OTHER CRIME.
IV
THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONERS

HEREIN, APPELLANTS IN CA-G.R. NO. 13456CR, JOINTLY AND

SEVERALLY, TO PAY COMPLAINANTS P9,600.00 IN SUPPOSED
ACTUAL DAMAGES.
The issue posed in the instant proceeding is whether or not the
respondent court committed a reversible error in requiring the
petitioners to pay civil indemnity to the complainants after
acquitting them from the criminal charge.
Petitioners maintain the view that where the civil liability which is
included in the criminal action is that arising from and as a
consequence of the criminal act, and the defendant was
acquitted in the criminal case, (no civil liability arising from the
criminal case), no civil liability arising from the criminal charge
could be imposed upon him. They cite precedents to the effect
that the liability of the defendant for the return of the amount
received by him may not be enforced in the criminal case but
must be raised in a separate civil action for the recovery of the
said amount (People v. Pantig, 97 Phil. 748; following the doctrine
laid down in Manila Railroad Co. v. Honorable Rodolfo Baltazar,
49 O.G. 3874; Pueblo contra Abellera, 69 Phil. 623; People v.
Maniago 69 Phil. 496; People v. Miranda, 5 SCRA 1067; Aldaba v.
Elepafio 116 Phil. 457). In the case before us, the petitioners
were acquitted not because they did not commit the acts stated
in the charge against them. There is no dispute over the forcible
opening of the market stall, its demolition with axes and other
instruments, and the carting away of the merchandize. The
petitioners were acquitted because these acts were denominated
coercion when they properly constituted some other offense such
as threat or malicious mischief.
The respondent Court of Appeals stated in its decision:
For a complaint to prosper under the foregoing provision, the
violence must be employed against the person, not against
property as what happened in the case at bar. ...
xxx xxx xxx
The next problem is: May the accused be convicted of an offense
other than coercion?
From all appearances, they should have been prosecuted either
for threats or malicious mischief. But the law does not allow us to
render judgment of conviction for either of these offenses for the
reason that they were not indicted for, these offenses. The
information under which they were prosecuted does not allege
the elements of either threats or malicious mischief. Although the
information mentions that the act was by means of threats', it

does not allege the particular threat made. An accused person is

entitled to be informed of the nature of the acts imputed to him
before he can be made to enter into trial upon a valid
information.
We rule that the crime of grave coercion has not been proved in
accordance with law.
While appellants are entitled to acquittal they nevertheless are
liable for the actual damages suffered by the complainants by
reason of the demolition of the stall and loss of some of their
properties. The extinction of the penal action does not carry with
it that 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. (Rule 111, Sec. 3 (c), Rev. Rules of
Court; Laperal v. Aliza, 51 OG.R. 1311, People v. Velez, 44 OG.
1811). In the instant case, the fact from which the civil might
arise, namely, the demolition of the stall and loss of the
properties contained therein; exists, and this is not denied by the
accused. And since there is no showing that the complainants
have reserved or waived their right to institute a separate civil
action, the civil aspect therein is deemed instituted with the
criminal action. (Rule 111, Sec. 1, Rev. Rules of Court).
xxx xxx xxx
Section 1 of Rule 111 of the Rules of Court states the
fundamental proposition that when a criminal action is instituted,
the civil action for recovery of civil liability arising from the
offense charged is impliedly instituted with it. There is no implied
institution when the offended party expressly waives the civil
action or reserves his right to institute it separately. (Morte Sr. v.
Alvizo, Jr., 101 SCRA 221).
The extinction of the civil action by reason of acquittal in the
criminal case refers exclusively to civil liability ex delicto founded
on Article 100 of the Revised Penal Code. (Elcano v. Hill, 77 SCRA
98; Virata v. Ochoa, 81 SCRA 472). In other words, the civil
liability which is also extinguished upon acquittal of the accused
is the civil liability arising from the act as a crime.
As easily as 1942, the Supreme Court speaking through Justice
Jorge Bocobo in Barredo v. Garcia, et at. 73 Phil. 607 laid down
the rule that the same punishable act or omission can create two
kinds of civil liabilities against the accused and, where provided
by law, his employer. 'There is the civil liability arising from the
act as a crime and the liability arising from the same act as a
quasi-delict. Either one of these two types of civil liability may be

enforced against the accused, However, the offended party

cannot recover damages under both types of liability. For
instance, in cases of criminal negligence or crimes due to
reckless imprudence, Article 2177 of the Civil Code provides:
Responsibility for fault or negligence under the preceding article
is entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the defendant.
Section 3 (c) of Rule 111 specifically provides that:
Sec. 3. Other civil actions arising from offenses. In all cases
not included in the preceding section the following rules shall be
observed:
xxx xxx xxx
xxx xxx 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. In other cases, the person entitled to the civil action
may institute it in the Jurisdiction and in the manner provided by
law against the person who may be liable for restitution of the
thing and reparation or indemnity for the damage suffered.
The judgment of acquittal extinguishes the liability of the
accused for damages only when it includes a declaration that the
facts from which the civil might arise did not exist. Thus, the civil
liability is not extinguished by acquittal where the acquittal is
based on reasonable doubt (PNB v. Catipon, 98 Phil. 286) as only
preponderance of evidence is required in civil cases; where the
court expressly declares that the liability of the accused is not
criminal but only civil in nature (De Guzman v. Alvia, 96 Phil. 558;
People v. Pantig, supra) as, for instance, in the felonies of estafa,
theft, and malicious mischief committed by certain relatives who
thereby incur only civil liability (See Art. 332, Revised Penal
Code); and, where the civil liability does not arise from or is not
based upon the criminal act of which the accused was acquitted
(Castro v. Collector of Internal Revenue, 4 SCRA 1093; See
Regalado, Remedial Law Compendium, 1983 ed., p. 623). Article
29 of the Civil Code also provides that:
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. Upon motion of the defendant, the court may require

the plaintiff to file a bond to answer for damages in case the

complaint should be found to be malicious.
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 inferred from the text of
the decision whether or not the acquittal is due to that ground.
More recently, we held that the acquittal of the defendant in the
criminal case would not constitute an obstacle to the filing of a
civil case based on the same acts which led to the criminal
prosecution:
... The finding by the respondent court that he spent said sum for
and in the interest of the Capiz Agricultural and Fishery School
and for his personal benefit is not a declaration that the fact
upon which Civil Case No. V-3339 is based does not exist. The
civil action barred by such a declaration is the civil liability
arising from the offense charged, which is the one impliedly
instituted with the criminal action. (Section 1, Rule III, Rules of
Court.) Such a declaration would not bar a civil action filed
against an accused who had been acquitted in the criminal case
if the criminal action is predicated on factual or legal
considerations other than the commission of the offense
charged. A person may be acquitted of malversation where, as in
the case at bar, he could show that he did not misappropriate the
public funds in his possession, but he could be rendered liable to
restore said funds or at least to make a proper accounting
thereof if he shall spend the same for purposes which are not
authorized nor intended, and in a manner not permitted by
applicable rules and regulations. (Republic v. Bello, 120 SCRA
203)
There appear to be no sound reasons to require a separate civil
action to still be filed considering that the facts to be proved in
the civil case have already been established in the criminal
proceedings where the accused was acquitted. Due process has
been accorded the accused. He was, in fact, exonerated of the
criminal charged. The constitutional presumption of innocence
called for more vigilant efforts on the part of prosecuting
attorneys and defense counsel, a keener awareness by all
witnesses of the serious implications of perjury, and a more
studied consideration by the judge of the entire records and of
applicable statutes and precedents. To require a separate civil
action simply because the accused was acquitted would mean
needless clogging of court dockets and unnecessary duplication

of litigation with all its attendant loss of time, effort, and money
on the part of all concerned.
The trial court found the following facts clearly established by the
evidence adduced by both the prosecution and the defense:
xxx xxx xxx
(9) In the morning of February 8, 1964, then Chief Galdones,
complying with the instructions contained in said Memorandum
No. 32 of the Mayor, and upon seeing that Antonio Vergara had
not vacated the premises in question, with the aid of his
policemen, forced upon the store or stall and ordered the
removal of the goods inside the store of Vergara, at the same
time taking inventory of the goods taken out, piled them outside
in front of the store and had it cordoned with a rope, and after all
the goods were taken out from the store, ordered the demolition
of said stall of Antonio Vergara. Since then up to the trial of this
case, the whereabouts of the goods taken out from the store nor
the materials of the demolished stall have not been made
known.
The respondent Court of Appeals made a similar finding that:
On the morning of February 8th, because the said Vergaras had
not up to that time complied with the order to vacate, the coaccused Chief of Police Galdones and some members of his
police force, went to the market and, using ax, crowbars and
hammers, demolished the stall of the Vergaras who were not
present or around, and after having first inventoried the goods
and merchandise found therein, they had them brought to the
municipal building for safekeeping. Inspite of notice served upon
the Vergaras to take possession of the goods and merchandise
thus taken away, the latter refused to do so.
The loss and damage to the Vergaras as they evaluated them
were:
Cost of stall construction P1,300.00
Value of furniture and equipment
judgment destroyed 300.00
Value of goods and equipment taken 8,000.00
P9,600.00
It is not disputed that the accused demolished the grocery stall
of the complainants Vergaras and carted away its contents. The
defense that they did so in order to abate what they considered a
nuisance per se is untenable, This finds no support in law and in
fact. The couple has been paying rentals for the premises to the
government which allowed them to lease the stall. It is,

therefore, farfetched to say that the stall was a nuisance per se

which could be summarily abated.
The petitioners, themselves, do not deny the fact that they
caused the destruction of the complainant's market stall and had
its contents carted away. They state:
On February 8, 1964, despite personal pleas on Vergaras by the
Mayor to vacate the passageways of Market Building No. 3, the
Vergaras were still in the premises, so the petitioners Chief of
Police and members of the Police Force of Jose Panganiban,
pursuant to the Mayor' 6 directives, demolished the store of the
Vergaras, made an inventory of the goods found in said store,
and brought these goods to the municipal building under the
custody of the Municipal Treasurer, ...
The only supposed obstacle is the provision of Article 29 of the
Civil Code, earlier cited, that "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." According to some
scholars, this provision of substantive law calls for a separate
civil action and cannot be modified by a rule of remedial law
even in the interests of economy and simplicity and following the
dictates of logic and common sense.
As stated by retired Judge J. Cezar Sangco:
... if the Court finds the evidence sufficient to sustain the civil
action but inadequate to justify a conviction in the criminal
action, may it render judgment acquitting the accused on
reasonable doubt, but hold him civilly liable nonetheless? An
affirmative answer to this question would be consistent with the
doctrine that the two are distinct and separate actions, and win
(a) dispense with the reinstituting of the same civil action, or one
based on quasi-delict or other independent civil action, and of
presenting the same evidence: (b) save the injured party
unnecessary expenses in the prosecution of the civil action or
enable him to take advantage of the free services of the fiscal;
and (c) otherwise resolve the unsettling implications of
permitting the reinstitution of a separate civil action whether
based on delict, or quasi-delict, or other independent civil
actions.
... But for the court to be able to adjudicate in the manner here
suggested, Art. 29 of the Civil Code should be amended because
it clearly and expressly provides that the civil action based on
the same act or omission may only be instituted in a separate

action, and therefore, may not inferentially be resolved in the

same criminal action. To dismiss the civil action upon acquittal of
the accused and disallow the reinstitution of any other civil
action, would likewise render, unjustifiably, the acquittal on
reasonable doubt without any significance, and would violate the
doctrine that the two actions are distinct and separate.
In the light of the foregoing exposition, it seems evident that
there is much sophistry and no pragmatism in the doctrine that it
is inconsistent to award in the same proceedings damages
against the accused after acquitting him on reasonable doubt.
Such doctrine must recognize the distinct and separate character
of the two actions, the nature of an acquittal on reasonable
doubt, the vexatious and oppressive effects of a reservation or
institution of a separate civil action, and that the injured party is
entitled to damages not because the act or omission is
punishable but because he was damaged or injured thereby
(Sangco, Philippine Law on Torts and Damages, pp. 288-289).
We see no need to amend Article 29 of the Civil Code in order to
allow a court to grant damages despite a judgment of acquittal
based on reasonable doubt. What Article 29 clearly and expressly
provides is a remedy for the plaintiff in case the defendant has
been acquitted in a criminal prosecution on the ground that his
guilt has not been proved beyond reasonable doubt. It merely
emphasizes that a civil action for damages is not precluded by an
acquittal for the same criminal act or omission. The Civil Code
provision does not state that the remedy can be availed of only
in a separate civil action. A separate civil case may be filed but
there is no statement that such separate filing is the only and
exclusive permissible mode of recovering damages.
There is nothing contrary to the Civil Code provision in the
rendition of a judgment of acquittal and a judgment awarding
damages in the same criminal action. The two can stand side by
side. A judgment of acquittal operates to extinguish the criminal
liability. It does not, however, extinguish the civil liability unless
there is clear showing that the act from which civil liability might
arise did not exist.
A different conclusion would be attributing to the Civil Code a
trivial requirement, a provision which imposes an uncalled for
burden before one who has already been the victim of a
condemnable, yet non-criminal, act may be accorded the justice
which he seeks.
We further note the rationale behind Art. 29 of the Civil Code in

arriving at the intent of the legislator that they could not possibly
have intended to make it more difficult for the aggrieved party to
recover just compensation by making a separate civil action
mandatory and exclusive:
The old rule that the acquittal of the accused in a criminal case
also releases him from civil liability is one of the most serious
flaws in the Philippine legal system. It has given rise to
numberless instances of miscarriage of justice, where the
acquittal was due to a reasonable doubt in the mind of the court
as to the guilt of the accused. The reasoning followed is that
inasmuch as the civil responsibility is derived from the the
criminal offense, when the latter is not proved, civil liability
cannot be demanded.
This is one of those cases where confused thinking leads to
unfortunate and deplorable consequences. Such reasoning fails
to draw a clear line of demarcation between criminal liability and
civil responsibility, and to determine the logical result of the
distinction. The two liabilities are separate and distinct from each
other. One affects the social order and the other, private rights.
One is for the punishment or correction of the offender while the
other is for reparation of damages suffered by the aggrieved
party... it is just and proper that, for the purposes of the
imprisonment of or fine upon the accused, the offense should be
proved beyond reasonable doubt. But for the purpose of
indemnifying the complaining party, why should the offense also
be proved beyond reasonable doubt? Is not the invasion or
violation of every private right to be proved only by
preponderance of evidence? Is the right of the aggrieved person
any less private because the wrongful act is also punishable by
the criminal law? (Code Commission, pp. 45-46).
A separate civil action may be warranted where additional facts
have to be established or more evidence must be adduced or
where the criminal case has been fully terminated and a
separate complaint would be just as efficacious or even more
expedient than a timely remand to the trial court where the
criminal action was decided for further hearings on the civil
aspects of the case. The offended party may, of course, choose
to file a separate action. These do not exist in this case.
Considering moreover the delays suffered by the case in the trial,
appellate, and review stages, it would be unjust to the
complainants in this case to require at this time a separate civil
action to be filed.

With this in mind, we therefore hold that the respondent Court of

Appeals did not err in awarding damages despite a judgment of
acquittal.
WHEREFORE, we hereby AFFIRM the decision of the respondent
Court of Appeals and dismiss the petition for lack of merit.
SO ORDERED.

G.R. No. 98695 January 27, 1993

JUAN J. SYQUIA, CORAZON C. SYQUIA, CARLOTA C.
SYQUIA, CARLOS C. SYQUIA and ANTHONY C. SYQUIA,
petitioners,
vs.
THE HONORABLE COURT OF APPEALS, and THE MANILA
MEMORIAL PARK CEMETERY, INC., respondents.
Pacis & Reyes Law Offices for petitioners.
Augusto S. San Pedro & Ari-Ben C. Sebastian for private
respondents.
CAMPOS, JR., J.:
Herein petitioners, Juan J. Syquia and Corazon C. Syquia, Carlota
C. Syquia, Carlos C. Syquia, and Anthony Syquia, were the
parents and siblings, respectively, of the deceased Vicente Juan
Syquia. On March 5, 1979, they filed a complaint 1 in the then
Court of First Instance against herein private respondent, Manila
Memorial Park Cemetery, Inc. for recovery of damages arising
from breach of contract and/or quasi-delict. The trial court
dismissed the complaint.
The antecedent facts, as gathered by the respondent Court, are
as follows:
On March 5, 1979, Juan, Corazon, Carlota and Anthony all
surnamed Syquia, plaintiff-appellants herein, filed a complaint for
damages against defendant-appellee, Manila Memorial Park
Cemetery, Inc.
The complaint alleged among others, that pursuant to a Deed of
Sale (Contract No. 6885) dated August 27, 1969 and Interment
Order No. 7106 dated July 21, 1978 executed between plaintiffappellant Juan J. Syquia and defendant-appellee, the former,
father of deceased Vicente Juan J. Syquia authorized and
instructed defendant-appellee to inter the remains of deceased
in the Manila Memorial Park Cemetery in the morning of July 25,
1978 conformably and in accordance with defendant-appellant's
(sic) interment procedures; that on September 4, 1978,
preparatory to transferring the said remains to a newly
purchased family plot also at the Manila Memorial Park
Cemetery, the concrete vault encasing the coffin of the deceased
was removed from its niche underground with the assistance of
certain employees of defendant-appellant (sic); that as the
concrete vault was being raised to the surface, plaintiffsappellants discovered that the concrete vault had a hole

approximately three (3) inches in diameter near the bottom of

one of the walls closing out the width of the vault on one end and
that for a certain length of time (one hour, more or less), water
drained out of the hole; that because of the aforesaid discovery,
plaintiffs-appellants became agitated and upset with concern
that the water which had collected inside the vault might have
risen as it in fact did rise, to the level of the coffin and flooded
the same as well as the remains of the deceased with ill effects
thereto; that pursuant to an authority granted by the Municipal
Court of Paraaque, Metro Manila on September 14, 1978,
plaintiffs-appellants with the assistance of licensed morticians
and certain personnel of defendant-appellant (sic) caused the
opening of the concrete vault on September 15, 1978; that upon
opening the vault, the following became apparent to the
plaintiffs-appellants: (a) the interior walls of the concrete vault
showed evidence of total flooding; (b) the coffin was entirely
damaged by water, filth and silt causing the wooden parts to
warp and separate and to crack the viewing glass panel located
directly above the head and torso of the deceased; (c) the entire
lining of the coffin, the clothing of the deceased, and the
exposed parts of the deceased's remains were damaged and
soiled by the action of the water and silt and were also coated
with filth.
Due to the alleged unlawful and malicious breach by the
defendant-appellee of its obligation to deliver a defect-free
concrete vault designed to protect the remains of the deceased
and the coffin against the elements which resulted in the
desecration of deceased's grave and in the alternative, because
of defendant-appellee's gross negligence conformably to Article
2176 of the New Civil Code in failing to seal the concrete vault,
the complaint prayed that judgment be rendered ordering
defendant-appellee to pay plaintiffs-appellants P30,000.00 for
actual damages, P500,000.00 for moral damages, exemplary
damages in the amount determined by the court, 20% of
defendant-appellee's total liability as attorney's fees, and
expenses of litigation and costs of suit. 2
In dismissing the complaint, the trial court held that the contract
between the parties did not guarantee that the cement vault
would be waterproof; that there could be no quasi-delict because
the defendant was not guilty of any fault or negligence, and
because there was a pre-existing contractual relation between
the Syquias and defendant Manila Memorial Park Cemetery, Inc..

The trial court also noted that the father himself, Juan Syquia,
chose the gravesite despite knowing that said area had to be
constantly sprinkled with water to keep the grass green and that
water would eventually seep through the vault. The trial court
also accepted the explanation given by defendant for boring a
hole at the bottom side of the vault: "The hole had to be bored
through the concrete vault because if it has no hole the vault will
(sic) float and the grave would be filled with water and the
digging would caved (sic) in the earth, the earth would caved
(sic) in the (sic) fill up the grave." 3
From this judgment, the Syquias appealed. They alleged that the
trial court erred in holding that the contract allowed the flooding
of the vault; that there was no desecration; that the boring of the
hole was justifiable; and in not awarding damages.
The Court of Appeals in the Decision 4 dated December 7, 1990
however, affirmed the judgment of dismissal. Petitioner's motion
for reconsideration was denied in a Resolution dated April 25,
1991. 5
Unsatisfied with the respondent Court's decision, the Syquias
filed the instant petition. They allege herein that the Court of
Appeals committed the following errors when it:
1. held that the contract and the Rules and Resolutions of private
respondent allowed the flooding of the vault and the entrance
thereto of filth and silt;
2. held that the act of boring a hole was justifiable and corollarily,
when it held that no act of desecration was committed;
3. overlooked and refused to consider relevant, undisputed facts,
such as those which have been stipulated upon by the parties,
testified to by private respondent's witnesses, and admitted in
the answer, which could have justified a different conclusion;
4. held that there was no tort because of a pre-existing contract
and the absence of fault/negligence; and
5. did not award the P25,000.00 actual damages which was
agreed upon by the parties, moral and exemplary damages, and
attorney's fees.
At the bottom of the entire proceedings is the act of boring a hole
by private respondent on the vault of the deceased kin of the
bereaved petitioners. The latter allege that such act was either a
breach of private respondent's contractual obligation to provide a
sealed vault, or, in the alternative, a negligent act which
constituted a quasi-delict. Nonetheless, petitioners claim that
whatever kind of negligence private respondent has committed,

the latter is liable for desecrating the grave of petitioners' dead.

In the instant case, We are called upon to determine whether the
Manila Memorial Park Cemetery, Inc., breached its contract with
petitioners; or, alternatively, whether private respondent was
guilty of a tort.
We understand the feelings of petitioners and empathize with
them. Unfortunately, however, We are more inclined to answer
the foregoing questions in the negative. There is not enough
ground, both in fact and in law, to justify a reversal of the
decision of the respondent Court and to uphold the pleas of the
petitioners.
With respect to herein petitioners' averment that private
respondent has committed culpa aquiliana, the Court of Appeals
found no negligent act on the part of private respondent to
justify an award of damages against it. Although a pre-existing
contractual relation between the parties does not preclude the
existence of a culpa aquiliana, We find no reason to disregard the
respondent's Court finding that there was no negligence.
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a
quasi-delict . . . . (Emphasis supplied).
In this case, it has been established that the Syquias and the
Manila Memorial Park Cemetery, Inc., entered into a contract
entitled "Deed of Sale and Certificate of Perpetual Care" 6 on
August 27, 1969. That agreement governed the relations of the
parties and defined their respective rights and obligations.
Hence, had there been actual negligence on the part of the
Manila Memorial Park Cemetery, Inc., it would be held liable not
for a quasi-delict or culpa aquiliana, but for culpa contractual as
provided by Article 1170 of the Civil Code, to wit:
Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.
The Manila Memorial Park Cemetery, Inc. bound itself to provide
the concrete box to be send in the interment. Rule 17 of the
Rules and Regulations of private respondent provides that:
Rule 17. Every earth interment shall be made enclosed in a
concrete box, or in an outer wall of stone, brick or concrete, the
actual installment of which shall be made by the employees of
the Association. 7

Pursuant to this above-mentioned Rule, a concrete vault was

provided on July 27, 1978, the day before the interment, and
was, on the same day, installed by private respondent's
employees in the grave which was dug earlier. After the burial,
the vault was covered by a cement lid.
Petitioners however claim that private respondent breached its
contract with them as the latter held out in the brochure it
distributed that the . . . lot may hold single or double internment
(sic) underground in sealed concrete vault." 8 Petitioners claim
that the vault provided by private respondent was not sealed,
that is, not waterproof. Consequently, water seeped through the
cement enclosure and damaged everything inside it.
We do not agree. There was no stipulation in the Deed of Sale
and Certificate of Perpetual Care and in the Rules and
Regulations of the Manila Memorial Park Cemetery, Inc. that the
vault would be waterproof. Private respondent's witness, Mr.
Dexter Heuschkel, explained that the term "sealed" meant
"closed." 9 On the other hand, the word "seal" is defined as . . .
any of various closures or fastenings . . . that cannot be opened
without rupture and that serve as a check against tampering or
unauthorized opening." 10 The meaning that has been given by
private respondent to the word conforms with the cited
dictionary definition. Moreover, it is also quite clear that "sealed"
cannot be equated with "waterproof". Well settled is the rule that
when the terms of the contract are clear and leave no doubt as
to the intention of the contracting parties, then the literal
meaning of the stipulation shall control. 11 Contracts should be
interpreted according to their literal meaning and should not be
interpreted beyond their obvious intendment. 12 As ruled by the
respondent Court:
When plaintiff-appellant Juan J. Syquia affixed his signature to the
Deed of Sale (Exhibit "A") and the attached Rules and
Regulations (Exhibit "1"), it can be assumed that he has
accepted defendant-appellee's undertaking to merely provide a
concrete vault. He can not now claim that said concrete vault
must in addition, also be waterproofed (sic). It is basic that the
parties are bound by the terms of their contract, which is the law
between them (Rizal Commercial Banking Corporation vs. Court
of Appeals, et al. 178 SCRA 739). Where there is nothing in the
contract which is contrary to law, morals, good customs, public
order, or public policy, the validity of the contract must be
sustained (Phil. American Insurance Co. vs. Judge Pineda, 175

SCRA 416). Consonant with this ruling, a contracting party

cannot incur a liability more than what is expressly specified in
his undertaking. It cannot be extended by implication, beyond
the terms of the contract (Rizal Commercial Banking Corporation
vs. Court of Appeals, supra). And as a rule of evidence, where the
terms of an agreement are reduced to writing, the document
itself, being constituted by the parties as the expositor of their
intentions, is the only instrument of evidence in respect of that
agreement which the law will recognize, so long as its (sic) exists
for the purpose of evidence (Starkie, Ev., pp. 648, 655,
Kasheenath vs. Chundy, 5 W.R. 68 cited in Francisco, Revised
Rules of Court in the Phil. p. 153, 1973 Ed.). And if the terms of
the contract are clear and leave no doubt upon the intention of
the contracting parties, the literal meaning of its stipulations
shall control (Santos vs. CA, et al., G. R. No. 83664, Nov. 13,
1989; Prudential Bank & Trust Co. vs. Community Builders Co.,
Inc., 165 SCRA 285; Balatero vs. IAC, 154 SCRA 530). 13
We hold, therefore, that private respondent did not breach the
tenor of its obligation to the Syquias. While this may be so, can
private respondent be liable for culpa aquiliana for boring the
hole on the vault? It cannot be denied that the hole made
possible the entry of more water and soil than was natural had
there been no hole.
The law defines negligence as the "omission of that diligence
which is required by the nature of the obligation and corresponds
with the circumstances of the persons, of the time and of the
place." 14 In the absence of stipulation or legal provision
providing the contrary, the diligence to be observed in the
performance of the obligation is that which is expected of a good
father of a family.
The circumstances surrounding the commission of the assailed
act boring of the hole negate the allegation of negligence.
The reason for the act was explained by Henry Flores, Interment
Foreman, who said that:
Q It has been established in this particular case that a certain
Vicente Juan Syquia was interred on July 25, 1978 at the
Paraaque Cemetery of the Manila Memorial Park Cemetery, Inc.,
will you please tell the Hon. Court what or whether you have
participation in connection with said internment (sic)?
A A day before Juan (sic) Syquia was buried our personnel dug a
grave. After digging the next morning a vault was taken and
placed in the grave and when the vault was placed on the grave

a hole was placed on the vault so that water could come into the
vault because it was raining heavily then because the vault has
no hole the vault will float and the grave would be filled with
water and the digging would caved (sic) in and the earth, the
earth would (sic) caved in and fill up the grave. 15 (Emphasis
ours)
Except for the foreman's opinion that the concrete vault may
float should there be a heavy rainfall, from the above-mentioned
explanation, private respondent has exercised the diligence of a
good father of a family in preventing the accumulation of water
inside the vault which would have resulted in the caving in of
earth around the grave filling the same with earth.
Thus, finding no evidence of negligence on the part of private
respondent, We find no reason to award damages in favor of
petitioners.
In the light of the foregoing facts, and construed in the language
of the applicable laws and jurisprudence, We are constrained to
AFFIRM in toto the decision of the respondent Court of Appeals
dated December 7, 1990. No costs.
SO ORDERED.

GASHEM SHOOKAT BAKSH, petitioner,

vs.
HON. COURT OF APPEALS and MARILOU T. GONZALES,
respondents.
Public Attorney's Office for petitioner.
Corleto R. Castro for private respondent.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court
seeking to review and set aside the Decision 1 of the respondent
Court of Appeals in CA-G.R. CV No. 24256 which affirmed in toto
the 16 October 1939 Decision of Branch 38 (Lingayen) of the
Regional Trial Court (RTC) of Pangasinan in Civil Case No. 16503.
Presented is the issue of whether or not damages may be
recovered for a breach of promise to marry on the basis of Article
21 of the Civil Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without the assistance
of counsel, filed with the aforesaid trial court a complaint 2 for
damages against the petitioner for the alleged violation of their
agreement to get married. She alleges in said complaint that:
she is twenty-two (22) years old, single, Filipino and a pretty lass
of good moral character and reputation duly respected in her
community; petitioner, on the other hand, is an Iranian citizen
residing at the Lozano Apartments, Guilig, Dagupan City, and is
an exchange student taking a medical course at the Lyceum
Northwestern Colleges in Dagupan City; before 20 August 1987,
the latter courted and proposed to marry her; she accepted his
love on the condition that they would get married; they therefore
agreed to get married after the end of the school semester,
which was in October of that year; petitioner then visited the
private respondent's parents in Baaga, Bugallon, Pangasinan to
secure their approval to the marriage; sometime in 20 August
1987, the petitioner forced her to live with him in the Lozano
Apartments; she was a virgin before she began living with him; a
week before the filing of the complaint, petitioner's attitude
towards her started to change; he maltreated and threatened to
kill her; as a result of such maltreatment, she sustained injuries;
during a confrontation with a representative of the barangay
captain of Guilig a day before the filing of the complaint,
petitioner repudiated their marriage agreement and asked her
not to live with him anymore and; the petitioner is already

married to someone living in Bacolod City. Private respondent

then prayed for judgment ordering the petitioner to pay her
damages in the amount of not less than P45,000.00,
reimbursement for actual expenses amounting to P600.00,
attorney's fees and costs, and granting her such other relief and
remedies as may be just and equitable. The complaint was
docketed as Civil Case No. 16503.
In his Answer with Counterclaim, 3 petitioner admitted only the
personal circumstances of the parties as averred in the complaint
and denied the rest of the allegations either for lack of
knowledge or information sufficient to form a belief as to the
truth thereof or because the true facts are those alleged as his
Special and Affirmative Defenses. He thus claimed that he never
proposed marriage to or agreed to be married with the private
respondent; he neither sought the consent and approval of her
parents nor forced her to live in his apartment; he did not
maltreat her, but only told her to stop coming to his place
because he discovered that she had deceived him by stealing his
money and passport; and finally, no confrontation took place
with a representative of the barangay captain. Insisting, in his
Counterclaim, that the complaint is baseless and unfounded and
that as a result thereof, he was unnecessarily dragged into court
and compelled to incur expenses, and has suffered mental
anxiety and a besmirched reputation, he prayed for an award of
P5,000.00 for miscellaneous expenses and P25,000.00 as moral
damages.
After conducting a pre-trial on 25 January 1988, the trial court
issued a Pre-Trial Order 4 embodying the stipulated facts which
the parties had agreed upon, to wit:
1. That the plaintiff is single and resident (sic) of Baaga,
Bugallon, Pangasinan, while the defendant is single, Iranian
citizen and resident (sic) of Lozano Apartment, Guilig, Dagupan
City since September 1, 1987 up to the present;
2. That the defendant is presently studying at Lyceum
Northwestern, Dagupan City, College of Medicine, second year
medicine proper;
3. That the plaintiff is (sic) an employee at Mabuhay
Luncheonette , Fernandez Avenue, Dagupan City since July, 1986
up to the present and a (sic) high school graduate;
4. That the parties happened to know each other when the
manager of the Mabuhay Luncheonette, Johhny Rabino
introduced the defendant to the plaintiff on August 3, 1986.

After trial on the merits, the lower court, applying Article 21 of

the Civil Code, rendered on 16 October 1989 a decision 5 favoring
the private respondent. The petitioner was thus ordered to pay
the latter damages and attorney's fees; the dispositive portion of
the decision reads:
IN THE LIGHT of the foregoing consideration, judgment is hereby
rendered in favor of the plaintiff and against the defendant.
1. Condemning (sic) the defendant to pay the plaintiff the sum of
twenty thousand (P20,000.00) pesos as moral damages.
2. Condemning further the defendant to play the plaintiff the
sum of three thousand (P3,000.00) pesos as atty's fees and two
thousand (P2,000.00) pesos at (sic) litigation expenses and to
pay the costs.
3. All other claims are denied. 6
The decision is anchored on the trial court's findings and
conclusions that (a) petitioner and private respondent were
lovers, (b) private respondent is not a woman of loose morals or
questionable virtue who readily submits to sexual advances, (c)
petitioner, through machinations, deceit and false pretenses,
promised to marry private respondent, d) because of his
persuasive promise to marry her, she allowed herself to be
deflowered by him, (e) by reason of that deceitful promise,
private respondent and her parents in accordance with Filipino
customs and traditions made some preparations for the
wedding that was to be held at the end of October 1987 by
looking for pigs and chickens, inviting friends and relatives and
contracting sponsors, (f) petitioner did not fulfill his promise to
marry her and (g) such acts of the petitioner, who is a foreigner
and who has abused Philippine hospitality, have offended our
sense of morality, good customs, culture and traditions. The trial
court gave full credit to the private respondent's testimony
because, inter alia, she would not have had the temerity and
courage to come to court and expose her honor and reputation
to public scrutiny and ridicule if her claim was false. 7
The above findings and conclusions were culled from the detailed
summary of the evidence for the private respondent in the
foregoing decision, digested by the respondent Court as follows:
According to plaintiff, who claimed that she was a virgin at the
time and that she never had a boyfriend before, defendant
started courting her just a few days after they first met. He later
proposed marriage to her several times and she accepted his
love as well as his proposal of marriage on August 20, 1987, on

which same day he went with her to her hometown of Baaga,

Bugallon, Pangasinan, as he wanted to meet her parents and
inform them of their relationship and their intention to get
married. The photographs Exhs. "A" to "E" (and their
submarkings) of defendant with members of plaintiff's family or
with plaintiff, were taken that day. Also on that occasion,
defendant told plaintiffs parents and brothers and sisters that he
intended to marry her during the semestral break in October,
1987, and because plaintiff's parents thought he was good and
trusted him, they agreed to his proposal for him to marry their
daughter, and they likewise allowed him to stay in their house
and sleep with plaintiff during the few days that they were in
Bugallon. When plaintiff and defendant later returned to
Dagupan City, they continued to live together in defendant's
apartment. However, in the early days of October, 1987,
defendant would tie plaintiff's hands and feet while he went to
school, and he even gave her medicine at 4 o'clock in the
morning that made her sleep the whole day and night until the
following day. As a result of this live-in relationship, plaintiff
became pregnant, but defendant gave her some medicine to
abort the fetus. Still plaintiff continued to live with defendant and
kept reminding him of his promise to marry her until he told her
that he could not do so because he was already married to a girl
in Bacolod City. That was the time plaintiff left defendant, went
home to her parents, and thereafter consulted a lawyer who
accompanied her to the barangay captain in Dagupan City.
Plaintiff, her lawyer, her godmother, and a barangay tanod sent
by the barangay captain went to talk to defendant to still
convince him to marry plaintiff, but defendant insisted that he
could not do so because he was already married to a girl in
Bacolod City, although the truth, as stipulated by the parties at
the pre-trial, is that defendant is still single.
Plaintiff's father, a tricycle driver, also claimed that after
defendant had informed them of his desire to marry Marilou, he
already looked for sponsors for the wedding, started preparing
for the reception by looking for pigs and chickens, and even
already invited many relatives and friends to the forthcoming
wedding. 8
Petitioner appealed the trial court's decision to the respondent
Court of Appeals which docketed the case as CA-G.R. CV No.
24256. In his Brief, 9 he contended that the trial court erred (a) in
not dismissing the case for lack of factual and legal basis and (b)

in ordering him to pay moral damages, attorney's fees, litigation

expenses and costs.
On 18 February 1991, respondent Court promulgated the
challenged decision 10 affirming in toto the trial court's ruling of
16 October 1989. In sustaining the trial court's findings of fact,
respondent Court made the following analysis:
First of all, plaintiff, then only 21 years old when she met
defendant who was already 29 years old at the time, does not
appear to be a girl of loose morals. It is uncontradicted that she
was a virgin prior to her unfortunate experience with defendant
and never had boyfriend. She is, as described by the lower court,
a barrio lass "not used and accustomed to trend of modern urban
life", and certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there was no
persuasive promise made by the defendant to marry her." In fact,
we agree with the lower court that plaintiff and defendant must
have been sweethearts or so the plaintiff must have thought
because of the deception of defendant, for otherwise, she would
not have allowed herself to be photographed with defendant in
public in so (sic) loving and tender poses as those depicted in the
pictures Exhs. "D" and "E". We cannot believe, therefore,
defendant's pretense that plaintiff was a nobody to him except a
waitress at the restaurant where he usually ate. Defendant in
fact admitted that he went to plaintiff's hometown of Baaga,
Bugallon, Pangasinan, at least thrice; at (sic) the town fiesta on
February 27, 1987 (p. 54, tsn May 18, 1988), at (sic) a beach
party together with the manager and employees of the Mabuhay
Luncheonette on March 3, 1987 (p. 50, tsn id.), and on April 1,
1987 when he allegedly talked to plaintiff's mother who told him
to marry her daughter (pp. 55-56, tsn id.). Would defendant have
left Dagupan City where he was involved in the serious study of
medicine to go to plaintiff's hometown in Baaga, Bugallon,
unless there was (sic) some kind of special relationship between
them? And this special relationship must indeed have led to
defendant's insincere proposal of marriage to plaintiff,
communicated not only to her but also to her parents, and (sic)
Marites Rabino, the owner of the restaurant where plaintiff was
working and where defendant first proposed marriage to her,
also knew of this love affair and defendant's proposal of marriage
to plaintiff, which she declared was the reason why plaintiff
resigned from her job at the restaurant after she had accepted
defendant's proposal (pp. 6-7, tsn March 7, 1988).

Upon the other hand, appellant does not appear to be a man of

good moral character and must think so low and have so little
respect and regard for Filipino women that he openly admitted
that when he studied in Bacolod City for several years where he
finished his B.S. Biology before he came to Dagupan City to
study medicine, he had a common-law wife in Bacolod City. In
other words, he also lived with another woman in Bacolod City
but did not marry that woman, just like what he did to plaintiff. It
is not surprising, then, that he felt so little compunction or
remorse in pretending to love and promising to marry plaintiff, a
young, innocent, trustful country girl, in order to satisfy his lust
on her. 11
and then concluded:
In sum, we are strongly convinced and so hold that it was
defendant-appellant's fraudulent and deceptive protestations of
love for and promise to marry plaintiff that made her surrender
her virtue and womanhood to him and to live with him on the
honest and sincere belief that he would keep said promise, and it
was likewise these (sic) fraud and deception on appellant's part
that made plaintiff's parents agree to their daughter's living-in
with him preparatory to their supposed marriage. And as these
acts of appellant are palpably and undoubtedly against morals,
good customs, and public policy, and are even gravely and
deeply derogatory and insulting to our women, coming as they
do from a foreigner who has been enjoying the hospitality of our
people and taking advantage of the opportunity to study in one
of our institutions of learning, defendant-appellant should indeed
be made, under Art. 21 of the Civil Code of the Philippines, to
compensate for the moral damages and injury that he had
caused plaintiff, as the lower court ordered him to do in its
decision in this case. 12
Unfazed by his second defeat, petitioner filed the instant petition
on 26 March 1991; he raises therein the single issue of whether
or not Article 21 of the Civil Code applies to the case at bar. 13
It is petitioner's thesis that said Article 21 is not applicable
because he had not committed any moral wrong or injury or
violated any good custom or public policy; he has not professed
love or proposed marriage to the private respondent; and he has
never maltreated her. He criticizes the trial court for liberally
invoking Filipino customs, traditions and culture, and ignoring the
fact that since he is a foreigner, he is not conversant with such
Filipino customs, traditions and culture. As an Iranian Moslem, he

is not familiar with Catholic and Christian ways. He stresses that

even if he had made a promise to marry, the subsequent failure
to fulfill the same is excusable or tolerable because of his
Moslem upbringing; he then alludes to the Muslim Code which
purportedly allows a Muslim to take four (4) wives and concludes
that on the basis thereof, the trial court erred in ruling that he
does not posses good moral character. Moreover, his
controversial "common law life" is now his legal wife as their
marriage had been solemnized in civil ceremonies in the Iranian
Embassy. As to his unlawful cohabitation with the private
respondent, petitioner claims that even if responsibility could be
pinned on him for the live-in relationship, the private respondent
should also be faulted for consenting to an illicit arrangement.
Finally, petitioner asseverates that even if it was to be assumed
arguendo that he had professed his love to the private
respondent and had also promised to marry her, such acts would
not be actionable in view of the special circumstances of the
case. The mere breach of promise is not actionable. 14
On 26 August 1991, after the private respondent had filed her
Comment to the petition and the petitioner had filed his Reply
thereto, this Court gave due course to the petition and required
the parties to submit their respective Memoranda, which they
subsequently complied with.
As may be gleaned from the foregoing summation of the
petitioner's arguments in support of his thesis, it is clear that
questions of fact, which boil down to the issue of the credibility of
witnesses, are also raised. It is the rule in this jurisdiction that
appellate courts will not disturb the trial court's findings as to the
credibility of witnesses, the latter court having heard the
witnesses and having had the opportunity to observe closely
their deportment and manner of testifying, unless the trial court
had plainly overlooked facts of substance or value which, if
considered, might affect the result of the case. 15
Petitioner has miserably failed to convince Us that both the
appellate and trial courts had overlooked any fact of substance
or values which could alter the result of the case.
Equally settled is the rule that only questions of law may be
raised in a petition for review on certiorari under Rule 45 of the
Rules of Court. It is not the function of this Court to analyze or
weigh all over again the evidence introduced by the parties
before the lower court. There are, however, recognized
exceptions to this rule. Thus, in Medina vs. Asistio, Jr., 16 this

Court took the time, again, to enumerate these exceptions:

xxx xxx xxx
(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures (Joaquin v. Navarro, 93 Phil.
257 [1953]); (2) When the inference made is manifestly
mistaken, absurb or impossible (Luna v. Linatok, 74 Phil. 15
[1942]); (3) Where there is a grave abuse of discretion (Buyco v.
People, 95 Phil. 453 [1955]); (4) When the judgment is based on
a misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are
conflicting (Casica v. Villaseca, L-9590 Ap. 30, 1957; unrep.) (6)
When the Court of Appeals, in making its findings, went beyond
the issues of the case and the same is contrary to the admissions
of both appellate and appellee (Evangelista v. Alto Surety and
Insurance Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to those of
the trial court (Garcia v. Court of Appeals, 33 SCRA 622 [1970];
Sacay v. Sandiganbayan, 142 SCRA 593 [1986]); (8) When the
findings of fact are conclusions without citation of specific
evidence on which they are based (Ibid.,); (9) When the facts set
forth in the petition as well as in the petitioners main and reply
briefs are not disputed by the respondents (Ibid.,); and (10) The
finding of fact of the Court of Appeals is premised on the
supposed absence of evidence and is contradicted by the
evidence on record (Salazar v. Gutierrez, 33 SCRA 242 [1970]).
Petitioner has not endeavored to joint out to Us the existence of
any of the above quoted exceptions in this case. Consequently,
the factual findings of the trial and appellate courts must be
respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is
not an actionable wrong. 17 Congress deliberately eliminated
from the draft of the New Civil Code the provisions that would
have made it so. The reason therefor is set forth in the report of
the Senate Committees on the Proposed Civil Code, from which
We quote:
The elimination of this chapter is proposed. That breach of
promise to marry is not actionable has been definitely decided in
the case of De Jesus vs. Syquia. 18 The history of breach of
promise suits in the United States and in England has shown that
no other action lends itself more readily to abuse by designing
women and unscrupulous men. It is this experience which has led

to the abolition of rights of action in the so-called Heart Balm

suits in many of the American states. . . . 19
This notwithstanding, the said Code contains a provision, Article
21, which is designed to expand the concept of torts or quasidelict in this jurisdiction by granting adequate legal remedy for
the untold number of moral wrongs which is impossible for
human foresight to specifically enumerate and punish in the
statute books. 20
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than the sphere of
wrongs defined or determined by positive law. Fully sensible that
there are countless gaps in the statutes, which leave so many
victims of moral wrongs helpless, even though they have actually
suffered material and moral injury, the Commission has deemed
it necessary, in the interest of justice, to incorporate in the
proposed Civil Code the following rule:
Art. 23. Any person who wilfully causes loss or injury to another
in a manner that is contrary to morals, good customs or public
policy shall compensate the latter for the damage.
An example will illustrate the purview of the foregoing norm: "A"
seduces the nineteen-year old daughter of "X". A promise of
marriage either has not been made, or can not be proved. The
girl becomes pregnant. Under the present laws, there is no
crime, as the girl is above nineteen years of age. Neither can any
civil action for breach of promise of marriage be filed. Therefore,
though the grievous moral wrong has been committed, and
though the girl and family have suffered incalculable moral
damage, she and her parents cannot bring action for damages.
But under the proposed article, she and her parents would have
such a right of action.
Thus at one stroke, the legislator, if the forgoing rule is approved,
would vouchsafe adequate legal remedy for that untold number
of moral wrongs which it is impossible for human foresight to
provide for specifically in the statutes. 21
Article 2176 of the Civil Code, which defines a quasi-delict thus:
Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
is limited to negligent acts or omissions and excludes the notion
of willfulness or intent. Quasi-delict, known in Spanish legal

treatises as culpa aquiliana, is a civil law concept while torts is an

Anglo-American or common law concept. Torts is much broader
than culpa aquiliana because it includes not only negligence, but
international criminal acts as well such as assault and battery,
false imprisonment and deceit. In the general scheme of the
Philippine legal system envisioned by the Commission
responsible for drafting the New Civil Code, intentional and
malicious acts, with certain exceptions, are to be governed by
the Revised Penal Code while negligent acts or omissions are to
be covered by Article 2176 of the Civil Code. 22 In between these
opposite spectrums are injurious acts which, in the absence of
Article 21, would have been beyond redress. Thus, Article 21 fills
that vacuum. It is even postulated that together with Articles 19
and 20 of the Civil Code, Article 21 has greatly broadened the
scope of the law on civil wrongs; it has become much more
supple and adaptable than the Anglo-American law on torts. 23
In the light of the above laudable purpose of Article 21, We are of
the opinion, and so hold, that where a man's promise to marry is
in fact the proximate cause of the acceptance of his love by a
woman and his representation to fulfill that promise thereafter
becomes the proximate cause of the giving of herself unto him in
a sexual congress, proof that he had, in reality, no intention of
marrying her and that the promise was only a subtle scheme or
deceptive device to entice or inveigle her to accept him and to
obtain her consent to the sexual act, could justify the award of
damages pursuant to Article 21 not because of such promise to
marry but because of the fraud and deceit behind it and the
willful injury to her honor and reputation which followed
thereafter. It is essential, however, that such injury should have
been committed in a manner contrary to morals, good customs
or public policy.
In the instant case, respondent Court found that it was the
petitioner's "fraudulent and deceptive protestations of love for
and promise to marry plaintiff that made her surrender her virtue
and womanhood to him and to live with him on the honest and
sincere belief that he would keep said promise, and it was
likewise these fraud and deception on appellant's part that made
plaintiff's parents agree to their daughter's living-in with him
preparatory to their supposed marriage." 24 In short, the private
respondent surrendered her virginity, the cherished possession of
every single Filipina, not because of lust but because of moral
seduction the kind illustrated by the Code Commission in its

example earlier adverted to. The petitioner could not be held

liable for criminal seduction punished under either Article 337 or
Article 338 of the Revised Penal Code because the private
respondent was above eighteen (18) years of age at the time of
the seduction.
Prior decisions of this Court clearly suggest that Article 21 may
be applied in a breach of promise to marry where the woman is a
victim of moral seduction. Thus, in Hermosisima vs. Court of
Appeals, 25 this Court denied recovery of damages to the woman
because:
. . . we find ourselves unable to say that petitioner is morally
guilty of seduction, not only because he is approximately ten (10)
years younger than the complainant who was around thirty-six
(36) years of age, and as highly enlightened as a former high
school teacher and a life insurance agent are supposed to be
when she became intimate with petitioner, then a mere
apprentice pilot, but, also, because the court of first instance
found that, complainant "surrendered herself" to petitioner
because, "overwhelmed by her love" for him, she "wanted to
bind" him by having a fruit of their engagement even before they
had the benefit of clergy.
In Tanjanco vs. Court of Appeals, 26 while this Court likewise
hinted at possible recovery if there had been moral seduction,
recovery was eventually denied because We were not convinced
that such seduction existed. The following enlightening
disquisition and conclusion were made in the said case:
The Court of Appeals seem to have overlooked that the example
set forth in the Code Commission's memorandum refers to a tort
upon a minor who had been seduced. The essential feature is
seduction, that in law is more than mere sexual intercourse, or a
breach of a promise of marriage; it connotes essentially the idea
of deceit, enticement, superior power or abuse of confidence on
the part of the seducer to which the woman has yielded (U.S. vs.
Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that
To constitute seduction there must in all cases be some sufficient
promise or inducement and the woman must yield because of
the promise or other inducement. If she consents merely from
carnal lust and the intercourse is from mutual desire, there is no
seduction (43 Cent. Dig. tit. Seduction, par. 56) She must be
induced to depart from the path of virtue by the use of some
species of arts, persuasions and wiles, which are calculated to

have and do have that effect, and which result in her person to
ultimately submitting her person to the sexual embraces of her
seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the enticement,
persuasion or deception is the essence of the injury; and a mere
proof of intercourse is insufficient to warrant a recovery.
Accordingly it is not seduction where the willingness arises out of
sexual desire of curiosity of the female, and the defendant
merely affords her the needed opportunity for the commission of
the act. It has been emphasized that to allow a recovery in all
such cases would tend to the demoralization of the female sex,
and would be a reward for unchastity by which a class of
adventuresses would be swift to profit. (47 Am. Jur. 662)
xxx xxx xxx
Over and above the partisan allegations, the fact stand out that
for one whole year, from 1958 to 1959, the plaintiff-appellee, a
woman of adult age, maintain intimate sexual relations with
appellant, with repeated acts of intercourse. Such conduct is
incompatible with the idea of seduction. Plainly there is here
voluntariness and mutual passion; for had the appellant been
deceived, had she surrendered exclusively because of the deceit,
artful persuasions and wiles of the defendant, she would not
have again yielded to his embraces, much less for one year,
without exacting early fulfillment of the alleged promises of
marriage, and would have cut short all sexual relations upon
finding that defendant did not intend to fulfill his defendant did
not intend to fulfill his promise. Hence, we conclude that no case
is made under article 21 of the Civil Code, and no other cause of
action being alleged, no error was committed by the Court of
First Instance in dismissing the complaint. 27
In his annotations on the Civil Code, 28 Associate Justice Edgardo
L. Paras, who recently retired from this Court, opined that in a
breach of promise to marry where there had been carnal
knowledge, moral damages may be recovered:
. . . if there be criminal or moral seduction, but not if the
intercourse was due to mutual lust. (Hermosisima vs. Court of
Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept.
30, 1960; Batarra vs. Marcos, 7 Phil. 56 (sic); Beatriz Galang vs.
Court of Appeals, et al., L-17248, Jan. 29, 1962). (In other words,
if the CAUSE be the promise to marry, and the EFFECT be the

carnal knowledge, there is a chance that there was criminal or

moral seduction, hence recovery of moral damages will prosper.
If it be the other way around, there can be no recovery of moral
damages, because here mutual lust has intervened). . . .
together with "ACTUAL damages, should there be any, such as
the expenses for the wedding presentations (See Domalagon v.
Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino 29 is also of the same persuasion:
It is submitted that the rule in Batarra vs. Marcos, 30 still subsists,
notwithstanding the incorporation of the present article 31 in the
Code. The example given by the Code Commission is correct, if
there was seduction, not necessarily in the legal sense, but in the
vulgar sense of deception. But when the sexual act is
accomplished without any deceit or qualifying circumstance of
abuse of authority or influence, but the woman, already of age,
has knowingly given herself to a man, it cannot be said that
there is an injury which can be the basis for indemnity.
But so long as there is fraud, which is characterized by
willfulness (sic), the action lies. The court, however, must weigh
the degree of fraud, if it is sufficient to deceive the woman under
the circumstances, because an act which would deceive a girl
sixteen years of age may not constitute deceit as to an
experienced woman thirty years of age. But so long as there is a
wrongful act and a resulting injury, there should be civil liability,
even if the act is not punishable under the criminal law and there
should have been an acquittal or dismissal of the criminal case
for that reason.
We are unable to agree with the petitioner's alternative
proposition to the effect that granting, for argument's sake, that
he did promise to marry the private respondent, the latter is
nevertheless also at fault. According to him, both parties are in
pari delicto; hence, pursuant to Article 1412(1) of the Civil Code
and the doctrine laid down in Batarra vs. Marcos, 32 the private
respondent cannot recover damages from the petitioner. The
latter even goes as far as stating that if the private respondent
had "sustained any injury or damage in their relationship, it is
primarily because of her own doing, 33 for:
. . . She is also interested in the petitioner as the latter will
become a doctor sooner or later. Take notice that she is a plain
high school graduate and a mere employee . . . (Annex "C") or a
waitress (TSN, p. 51, January 25, 1988) in a luncheonette and
without doubt, is in need of a man who can give her economic

security. Her family is in dire need of financial assistance. (TSN,

pp. 51-53, May 18, 1988). And this predicament prompted her to
accept a proposition that may have been offered by the
petitioner. 34
These statements reveal the true character and motive of the
petitioner. It is clear that he harbors a condescending, if not
sarcastic, regard for the private respondent on account of the
latter's ignoble birth, inferior educational background, poverty
and, as perceived by him, dishonorable employment. Obviously
then, from the very beginning, he was not at all moved by good
faith and an honest motive. Marrying with a woman so
circumstances could not have even remotely occurred to him.
Thus, his profession of love and promise to marry were empty
words directly intended to fool, dupe, entice, beguile and deceive
the poor woman into believing that indeed, he loved her and
would want her to be his life's partner. His was nothing but pure
lust which he wanted satisfied by a Filipina who honestly believed
that by accepting his proffer of love and proposal of marriage,
she would be able to enjoy a life of ease and security. Petitioner
clearly violated the Filipino's concept of morality and brazenly
defied the traditional respect Filipinos have for their women. It
can even be said that the petitioner committed such deplorable
acts in blatant disregard of Article 19 of the Civil Code which
directs every person to act with justice, give everyone his due
and observe honesty and good faith in the exercise of his rights
and in the performance of his obligations.
No foreigner must be allowed to make a mockery of our laws,
customs and traditions.
The pari delicto rule does not apply in this case for while indeed,
the private respondent may not have been impelled by the
purest of intentions, she eventually submitted to the petitioner in
sexual congress not out of lust, but because of moral seduction.
In fact, it is apparent that she had qualms of conscience about
the entire episode for as soon as she found out that the
petitioner was not going to marry her after all, she left him. She
is not, therefore, in pari delicto with the petitioner. Pari delicto
means "in equal fault; in a similar offense or crime; equal in guilt
or in legal fault." 35 At most, it could be conceded that she is
merely in delicto.
Equity often interferes for the relief of the less guilty of the
parties, where his transgression has been brought about by the
imposition of undue influence of the party on whom the burden

of the original wrong principally rests, or where his consent to the

transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud, 37 We declared:
Appellants likewise stress that both parties being at fault, there
should be no action by one against the other (Art. 1412, New
Civil Code). This rule, however, has been interpreted as
applicable only where the fault on both sides is, more or less,
equivalent. It does not apply where one party is literate or
intelligent and the other one is not. (c.f. Bough vs. Cantiveros, 40
Phil. 209).
We should stress, however, that while We find for the private
respondent, let it not be said that this Court condones the
deplorable behavior of her parents in letting her and the
petitioner stay together in the same room in their house after
giving approval to their marriage. It is the solemn duty of parents
to protect the honor of their daughters and infuse upon them the
higher values of morality and dignity.
WHEREFORE, finding no reversible error in the challenged
decision, the instant petition is hereby DENIED, with costs
against the petitioner.
SO ORDERED

G.R. No. 145804

February 6, 2003
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN,
petitioners,
vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD
& PRUDENT SECURITY AGENCY, respondents.
DECISION
VITUG, J.:
The case before the Court is an appeal from the decision and
resolution of the Court of Appeals, promulgated on 27 April 2000
and 10 October 2000, respectively, in CA-G.R. CV No. 60720,
entitled "Marjorie Navidad and Heirs of the Late Nicanor Navidad
vs. Rodolfo Roman, et. al.," which has modified the decision of 11
August 1998 of the Regional Trial Court, Branch 266, Pasig City,
exonerating Prudent Security Agency (Prudent) from liability and
finding Light Rail Transit Authority (LRTA) and Rodolfo Roman
liable for damages on account of the death of Nicanor Navidad.
On 14 October 1993, about half an hour past seven oclock in the
evening, Nicanor Navidad, then drunk, entered the EDSA LRT
station after purchasing a "token" (representing payment of the
fare). While Navidad was standing on the platform near the LRT
tracks, Junelito Escartin, the security guard assigned to the area
approached Navidad. A misunderstanding or an altercation
between the two apparently ensued that led to a fist fight. No
evidence, however, was adduced to indicate how the fight
started or who, between the two, delivered the first blow or how
Navidad later fell on the LRT tracks. At the exact moment that
Navidad fell, an LRT train, operated by petitioner Rodolfo Roman,
was coming in. Navidad was struck by the moving train, and he
was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent
Marjorie Navidad, along with her children, filed a complaint for
damages against Junelito Escartin, Rodolfo Roman, the LRTA, the
Metro Transit Organization, Inc. (Metro Transit), and Prudent for
the death of her husband. LRTA and Roman filed a counterclaim
against Navidad and a cross-claim against Escartin and Prudent.
Prudent, in its answer, denied liability and averred that it had
exercised due diligence in the selection and supervision of its
security guards.
The LRTA and Roman presented their evidence while Prudent and
Escartin, instead of presenting evidence, filed a demurrer
contending that Navidad had failed to prove that Escartin was

negligent in his assigned task. On 11 August 1998, the trial court

rendered its decision; it adjudged:
"WHEREFORE, judgment is hereby rendered in favor of the
plaintiffs and against the defendants Prudent Security and
Junelito Escartin ordering the latter to pay jointly and severally
the plaintiffs the following:
"a) 1) Actual damages of P44,830.00;
2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of
P50,000.00;
"b) Moral damages of P50,000.00;
"c) Attorneys fees of P20,000;
"d) Costs of suit.
"The complaint against defendants LRTA and Rodolfo Roman are
dismissed for lack of merit.
"The compulsory counterclaim of LRTA and Roman are likewise
dismissed."1
Prudent appealed to the Court of Appeals. On 27 August 2000,
the appellate court promulgated its now assailed decision
exonerating Prudent from any liability for the death of Nicanor
Navidad and, instead, holding the LRTA and Roman jointly and
severally liable thusly:
"WHEREFORE, the assailed judgment is hereby MODIFIED, by
exonerating the appellants from any liability for the death of
Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the
Light Rail Transit Authority (LRTA) are held liable for his death and
are hereby directed to pay jointly and severally to the plaintiffsappellees, the following amounts:
a) P44,830.00 as actual damages;
b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the deceased; and
e) P20,000.00 as and for attorneys fees."2
The appellate court ratiocinated that while the deceased might
not have then as yet boarded the train, a contract of carriage
theretofore had already existed when the victim entered the
place where passengers were supposed to be after paying the
fare and getting the corresponding token therefor. In exempting
Prudent from liability, the court stressed that there was nothing
to link the security agency to the death of Navidad. It said that
Navidad failed to show that Escartin inflicted fist blows upon the
victim and the evidence merely established the fact of death of

Navidad by reason of his having been hit by the train owned and
managed by the LRTA and operated at the time by Roman. The
appellate court faulted petitioners for their failure to present
expert evidence to establish the fact that the application of
emergency brakes could not have stopped the train.
The
appellate
court
denied
petitioners
motion
for
reconsideration in its resolution of 10 October 2000.
In their present recourse, petitioners recite alleged errors on the
part of the appellate court; viz:
"I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY
DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT
"II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT PETITIONERS ARE LIABLE FOR THE DEATH OF
NICANOR NAVIDAD, JR.
"III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT RODOLFO ROMAN IS AN EMPLOYEE OF LRTA."3
Petitioners would contend that the appellate court ignored the
evidence and the factual findings of the trial court by holding
them liable on the basis of a sweeping conclusion that the
presumption of negligence on the part of a common carrier was
not overcome. Petitioners would insist that Escartins assault
upon Navidad, which caused the latter to fall on the tracks, was
an act of a stranger that could not have been foreseen or
prevented. The LRTA would add that the appellate courts
conclusion on the existence of an employer-employee
relationship between Roman and LRTA lacked basis because
Roman himself had testified being an employee of Metro Transit
and not of the LRTA.
Respondents, supporting the decision of the appellate court,
contended that a contract of carriage was deemed created from
the moment Navidad paid the fare at the LRT station and entered
the premises of the latter, entitling Navidad to all the rights and
protection under a contractual relation, and that the appellate
court had correctly held LRTA and Roman liable for the death of
Navidad in failing to exercise extraordinary diligence imposed
upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from
the nature of its business and for reasons of public policy, is
burdened with the duty of exercising utmost diligence in ensuring

the safety of passengers.4 The Civil Code, governing the liability

of a common carrier for death of or injury to its passengers,
provides:
"Article 1755. A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for
all the circumstances.
"Article 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755."
"Article 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or willful acts of
the formers employees, although such employees may have
acted beyond the scope of their authority or in violation of the
orders of the common carriers.
"This liability of the common carriers does not cease upon proof
that they exercised all the diligence of a good father of a family
in the selection and supervision of their employees."
"Article 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if the common
carriers employees through the exercise of the diligence of a
good father of a family could have prevented or stopped the act
or omission."
The law requires common carriers to carry passengers safely
using the utmost diligence of very cautious persons with due
regard for all circumstances.5 Such duty of a common carrier to
provide safety to its passengers so obligates it not only during
the course of the trip but for so long as the passengers are within
its premises and where they ought to be in pursuance to the
contract of carriage.6 The statutory provisions render a common
carrier liable for death of or injury to passengers (a) through the
negligence or wilful acts of its employees or b) on account of
wilful acts or negligence of other passengers or of strangers if
the common carriers employees through the exercise of due
diligence could have prevented or stopped the act or omission. 7
In case of such death or injury, a carrier is presumed to have
been at fault or been negligent, and8 by simple proof of injury,
the passenger is relieved of the duty to still establish the fault or
negligence of the carrier or of its employees and the burden
shifts upon the carrier to prove that the injury is due to an

unforeseen event or to force majeure. 9 In the absence of

satisfactory explanation by the carrier on how the accident
occurred, which petitioners, according to the appellate court,
have failed to show, the presumption would be that it has been
at fault,10 an exception from the general rule that negligence
must be proved.11
The foundation of LRTAs liability is the contract of carriage and
its obligation to indemnify the victim arises from the breach of
that contract by reason of its failure to exercise the high
diligence required of the common carrier. In the discharge of its
commitment to ensure the safety of passengers, a carrier may
choose to hire its own employees or avail itself of the services of
an outsider or an independent firm to undertake the task. In
either case, the common carrier is not relieved of its
responsibilities under the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability
could only be for tort under the provisions of Article 2176 12 and
related provisions, in conjunction with Article 2180, 13 of the Civil
Code. The premise, however, for the employers liability is
negligence or fault on the part of the employee. Once such fault
is established, the employer can then be made liable on the
basis of the presumption juris tantum that the employer failed to
exercise diligentissimi patris families in the selection and
supervision of its employees. The liability is primary and can only
be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been
shown. Absent such a showing, one might ask further, how then
must the liability of the common carrier, on the one hand, and an
independent contractor, on the other hand, be described? It
would be solidary. A contractual obligation can be breached by
tort and when the same act or omission causes the injury, one
resulting in culpa contractual and the other in culpa aquiliana,
Article 219414 of the Civil Code can well apply. 15 In fine, a liability
for tort may arise even under a contract, where tort is that which
breaches the contract.16 Stated differently, when an act which
constitutes a breach of contract would have itself constituted the
source of a quasi-delictual liability had no contract existed
between the parties, the contract can be said to have been
breached by tort, thereby allowing the rules on tort to apply.17
Regrettably for LRT, as well as perhaps the surviving spouse and
heirs of the late Nicanor Navidad, this Court is concluded by the
factual finding of the Court of Appeals that "there is nothing to

link (Prudent) to the death of Nicanor (Navidad), for the reason

that the negligence of its employee, Escartin, has not been duly
proven x x x." This finding of the appellate court is not without
substantial justification in our own review of the records of the
case.
There being, similarly, no showing that petitioner Rodolfo Roman
himself is guilty of any culpable act or omission, he must also be
absolved from liability. Needless to say, the contractual tie
between the LRT and Navidad is not itself a juridical relation
between the latter and Roman; thus, Roman can be made liable
only for his own fault or negligence.
The award of nominal damages in addition to actual damages is
untenable. Nominal damages are adjudicated in order that a
right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by
him.18 It is an established rule that nominal damages cannot coexist with compensatory damages.19
WHEREFORE, the assailed decision of the appellate court is
AFFIRMED with MODIFICATION but only in that (a) the award of
nominal damages is DELETED and (b) petitioner Rodolfo Roman
is absolved from liability. No costs.
SO ORDERED.

VICENTE CALALAS, petitioner,

vs.
COURT OF APPEALS, ELIZA
FRANCISCO SALVA, respondents.

JUJEURCHE

SUNGA

and

MENDOZA, J.:
This is a petition for review on certiorari of the decision1 of the
Court of Appeals, dated March 31, 1991, reversing the contrary
decision of the Regional Trial Court, Branch 36, Dumaguete City,
and awarding damages instead to private respondent Eliza
Jujeurche Sunga as plaintiff in an action for breach of contract of
carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private
respondent Eliza Jujeurche G. Sunga, then a college freshman
majoring in Physical Education at the Siliman University, took a
passenger jeepney owned and operated by petitioner Vicente
Calalas. As the jeepney was filled to capacity of about 24
passengers, Sunga was given by the conductor an "extension
seat," a wooden stool at the back of the door at the rear end of
the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney
stopped to let a passenger off. As she was seated at the rear of
the vehicle, Sunga gave way to the outgoing passenger. Just as
she was doing so, an Isuzu truck driven by Iglecerio Verena and
owned by Francisco Salva bumped the left rear portion of the
jeepney. As a result, Sunga was injured. She sustained a fracture
of the "distal third of the left tibia-fibula with severe necrosis of
the underlying skin." Closed reduction of the fracture, long leg
circular casting, and case wedging were done under sedation.
Her confinement in the hospital lasted from August 23 to
September 7, 1989. Her attending physician, Dr. Danilo V.
Oligario, an orthopedic surgeon, certified she would remain on a
cast for a period of three months and would have to ambulate in
crutches during said period.
On October 9, 1989, Sunga filed a complaint for damages against
Calalas, alleging violation of the contract of carriage by the
former in failing to exercise the diligence required of him as a
common carrier. Calalas, on the other hand, filed a third-party
complaint against Francisco Salva, the owner of the Isuzu truck.
The lower court rendered judgment against Salva as third-party
defendant and absolved Calalas of liability, holding that it was

the driver of the Isuzu truck who was responsible for the
accident. It took cognizance of another case (Civil Case No.
3490), filed by Calalas against Salva and Verena, for quasi-delict,
in which Branch 37 of the same court held Salva and his driver
Verena jointly liable to Calalas for the damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court
was reversed on the ground that Sunga's cause of action was
based on a contract of carriage, not quasi-delict, and that the
common carrier failed to exercise the diligence required under
the Civil Code. The appellate court dismissed the third-party
complaint against Salva and adjudged Calalas liable for damages
to Sunga. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from is hereby REVERSED
and SET ASIDE, and another one is entered ordering defendantappellee Vicente Calalas to pay plaintiff-appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil
Case No. 3490 that the negligence of Verena was the proximate
cause of the accident negates his liability and that to rule
otherwise would be to make the common carrier an insurer of the
safety of its passengers. He contends that the bumping of the
jeepney by the truck owned by Salva was a caso fortuito.
Petitioner further assails the award of moral damages to Sunga
on the ground that it is not supported by evidence.
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No.
3490 finding the driver and the owner of the truck liable for
quasi-delict ignores the fact that she was never a party to that
case and, therefore, the principle of res judicata does not apply.
Nor are the issues in Civil Case No. 3490 and in the present case
the same. The issue in Civil Case No. 3490 was whether Salva
and his driver Verena were liable for quasi-delict for the damage
caused to petitioner's jeepney. On the other hand, the issue in
this case is whether petitioner is liable on his contract of
carriage. The first, quasi-delict, also known as culpa aquiliana or
culpa extra contractual, has as its source the negligence of the
tortfeasor. The second, breach of contract or culpa contractual, is

premised upon the negligence in the performance of a

contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be
clearly established because it is the basis of the action, whereas
in breach of contract, the action can be prosecuted merely by
proving the existence of the contract and the fact that the
obligor, in this case the common carrier, failed to transport his
passenger safely to his destination. 2 In case of death or injuries
to passengers, Art. 1756 of the Civil Code provides that common
carriers are presumed to have been at fault or to have acted
negligently unless they prove that they observed extraordinary
diligence as defined in Arts. 1733 and 1755 of the Code. This
provision necessarily shifts to the common carrier the burden of
proof.
There is, thus, no basis for the contention that the ruling in Civil
Case No. 3490, finding Salva and his driver Verena liable for the
damage to petitioner's jeepney, should be binding on Sunga. It is
immaterial that the proximate cause of the collision between the
jeepney and the truck was the negligence of the truck driver. The
doctrine of proximate cause is applicable only in actions for
quasi-delict, not in actions involving breach of contract. The
doctrine is a device for imputing liability to a person where there
is no relation between him and another party. In such a case, the
obligation is created by law itself. But, where there is a preexisting contractual relation between the parties, it is the parties
themselves who create the obligation, and the function of the
law is merely to regulate the relation thus created. Insofar as
contracts of carriage are concerned, some aspects regulated by
the Civil Code are those respecting the diligence required of
common carriers with regard to the safety of passengers as well
as the presumption of negligence in cases of death or injury to
passengers. It provides:
Art. 1733. Common carriers, from the nature of their business
and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to
all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is
further expressed in articles 1734, 1735, and 1746, Nos. 5, 6,
and 7, while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passengers

safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with due regard for all
the circumstances.
Art. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed by articles 1733 and 1755.
In the case at bar, upon the happening of the accident, the
presumption of negligence at once arose, and it became the duty
of petitioner to prove that he had to observe extraordinary
diligence in the care of his passengers.
Now, did the driver of jeepney carry Sunga "safely as far as
human care and foresight could provide, using the utmost
diligence of very cautious persons, with due regard for all the
circumstances" as required by Art. 1755? We do not think so.
Several factors militate against petitioner's contention.
First, as found by the Court of Appeals, the jeepney was not
properly parked, its rear portion being exposed about two meters
from the broad shoulders of the highway, and facing the middle
of the highway in a diagonal angle. This is a violation of the R.A.
No. 4136, as amended, or the Land Transportation and Traffic
Code, which provides:
Sec. 54. Obstruction of Traffic. No person shall drive his motor
vehicle in such a manner as to obstruct or impede the passage of
any vehicle, nor, while discharging or taking on passengers or
loading or unloading freight, obstruct the free passage of other
vehicles on the highway.
Second, it is undisputed that petitioner's driver took in more
passengers than the allowed seating capacity of the jeepney, a
violation of 32(a) of the same law. It provides:
Exceeding registered capacity. No person operating any motor
vehicle shall allow more passengers or more freight or cargo in
his vehicle than its registered capacity.
The fact that Sunga was seated in an "extension seat" placed her
in a peril greater than that to which the other passengers were
exposed. Therefore, not only was petitioner unable to overcome
the presumption of negligence imposed on him for the injury
sustained by Sunga, but also, the evidence shows he was
actually negligent in transporting passengers.
We find it hard to give serious thought to petitioner's contention
that Sunga's taking an "extension seat" amounted to an implied
assumption of risk. It is akin to arguing that the injuries to the

many victims of the tragedies in our seas should not be

compensated merely because those passengers assumed a
greater risk of drowning by boarding an overloaded ferry. This is
also true of petitioner's contention that the jeepney being
bumped while it was improperly parked constitutes caso fortuito.
A caso fortuito is an event which could not be foreseen, or which,
though foreseen, was inevitable.3 This requires that the following
requirements be present: (a) the cause of the breach is
independent of the debtor's will; (b) the event is unforeseeable
or unavoidable; (c) the event is such as to render it impossible
for the debtor to fulfill his obligation in a normal manner, and (d)
the debtor did not take part in causing the injury to the
creditor.4 Petitioner should have foreseen the danger of parking
his jeepney with its body protruding two meters into the highway.
Finally, petitioner challenges the award of moral damages
alleging that it is excessive and without basis in law. We find this
contention well taken.
In awarding moral damages, the Court of Appeals stated:
Plaintiff-appellant at the time of the accident was a first-year
college student in that school year 1989-1990 at the Silliman
University, majoring in Physical Education. Because of the injury,
she was not able to enroll in the second semester of that school
year. She testified that she had no more intention of continuing
with her schooling, because she could not walk and decided not
to pursue her degree, major in Physical Education "because of
my leg which has a defect already."
Plaintiff-appellant likewise testified that even while she was
under confinement, she cried in pain because of her injured left
foot. As a result of her injury, the Orthopedic Surgeon also
certified that she has "residual bowing of the fracture side." She
likewise decided not to further pursue Physical Education as her
major subject, because "my left leg . . . has a defect already."
Those are her physical pains and moral sufferings, the inevitable
bedfellows of the injuries that she suffered. Under Article 2219 of
the Civil Code, she is entitled to recover moral damages in the
sum of P50,000.00, which is fair, just and reasonable.
As a general rule, moral damages are not recoverable in actions
for damages predicated on a breach of contract for it is not one
of the items enumerated under Art. 2219 of the Civil Code. 5 As
an exception, such damages are recoverable: (1) in cases in
which the mishap results in the death of a passenger, as
provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code;

and (2) in the cases in which the carrier is guilty of fraud or bad
faith, as provided in Art. 2220.6
In this case, there is no legal basis for awarding moral damages
since there was no factual finding by the appellate court that
petitioner acted in bad faith in the performance of the contract of
carriage. Sunga's contention that petitioner's admission in open
court that the driver of the jeepney failed to assist her in going to
a nearby hospital cannot be construed as an admission of bad
faith. The fact that it was the driver of the Isuzu truck who took
her to the hospital does not imply that petitioner was utterly
indifferent to the plight of his injured passenger. If at all, it is
merely implied recognition by Verena that he was the one at fault
for the accident.
WHEREFORE, the decision of the Court of Appeals, dated March
31, 1995, and its resolution, dated September 11, 1995, are
AFFIRMED, with the MODIFICATION that the award of moral
damages is DELETED.
SO ORDERED.

G.R. No. L-48006

July 8, 1942
FAUSTO BARREDO, petitioner,
vs.
SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.
Celedonio P. Gloria and Antonio Barredo for petitioner.Jose G.
Advincula for respondents.
BOCOBO, J.:
This case comes up from the Court of Appeals which held the
petitioner herein, Fausto Barredo, liable in damages for the death
of Faustino Garcia caused by the negligence of Pedro Fontanilla,
a taxi driver employed by said Fausto Barredo.
At about half past one in the morning of May 3, 1936, on the road
between Malabon and Navotas, Province of Rizal, there was a
head-on collision between a taxi of the Malate Taxicab driven by
Pedro Fontanilla and a carretela guided by Pedro Dimapalis. The
carretela was overturned, and one of its passengers, 16-year-old
boy Faustino Garcia, suffered injuries from which he died two
days later. A criminal action was filed against Fontanilla in the
Court of First Instance of Rizal, and he was convicted and
sentenced to an indeterminate sentence of one year and one day
to two years of prision correccional. The court in the criminal
case granted the petition that the right to bring a separate civil
action be reserved. The Court of Appeals affirmed the sentence
of the lower court in the criminal case. Severino Garcia and
Timotea Almario, parents of the deceased on March 7, 1939,
brought an action in the Court of First Instance of Manila against
Fausto Barredo as the sole proprietor of the Malate Taxicab and
employer of Pedro Fontanilla. On July 8, 1939, the Court of First
Instance of Manila awarded damages in favor of the plaintiffs for
P2,000 plus legal interest from the date of the complaint. This
decision was modified by the Court of Appeals by reducing the
damages to P1,000 with legal interest from the time the action
was instituted. It is undisputed that Fontanilla 's negligence was
the cause of the mishap, as he was driving on the wrong side of
the road, and at high speed. As to Barredo's responsibility, the
Court of Appeals found:
... It is admitted that defendant is Fontanilla's employer. There is
proof that he exercised the diligence of a good father of a family
to prevent damage. (See p. 22, appellant's brief.) In fact it is
shown he was careless in employing Fontanilla who had been
caught several times for violation of the Automobile Law and
speeding (Exhibit A) violation which appeared in the records of

the Bureau of Public Works available to be public and to himself.

Therefore, he must indemnify plaintiffs under the provisions of
article 1903 of the Civil Code.
The main theory of the defense is that the liability of Fausto
Barredo is governed by the Revised Penal Code; hence, his
liability is only subsidiary, and as there has been no civil action
against Pedro Fontanilla, the person criminally liable, Barredo
cannot be held responsible in the case. The petitioner's brief
states on page 10:
... The Court of Appeals holds that the petitioner is being sued for
his failure to exercise all the diligence of a good father of a family
in the selection and supervision of Pedro Fontanilla to prevent
damages suffered by the respondents. In other words, The Court
of Appeals insists on applying in the case article 1903 of the Civil
Code. Article 1903 of the Civil Code is found in Chapter II, Title
16, Book IV of the Civil Code. This fact makes said article to a
civil liability arising from a crime as in the case at bar simply
because Chapter II of Title 16 of Book IV of the Civil Code, in the
precise words of article 1903 of the Civil Code itself, is applicable
only to "those (obligations) arising from wrongful or negligent
acts or commission not punishable by law.
The gist of the decision of the Court of Appeals is expressed thus:
... We cannot agree to the defendant's contention. The liability
sought to be imposed upon him in this action is not a civil
obligation arising from a felony or a misdemeanor (the crime of
Pedro Fontanilla,), but an obligation imposed in article 1903 of
the Civil Code by reason of his negligence in the selection or
supervision of his servant or employee.
The pivotal question in this case is whether the plaintiffs may
bring this separate civil action against Fausto Barredo, thus
making him primarily and directly, responsible under article 1903
of the Civil Code as an employer of Pedro Fontanilla. The
defendant maintains that Fontanilla's negligence being
punishable by the Penal Code, his (defendant's) liability as an
employer is only subsidiary, according to said Penal code, but
Fontanilla has not been sued in a civil action and his property has
not been exhausted. To decide the main issue, we must cut
through the tangle that has, in the minds of many confused and
jumbled together delitos and cuasi delitos, or crimes under the
Penal Code and fault or negligence under articles 1902-1910 of
the Civil Code. This should be done, because justice may be lost
in a labyrinth, unless principles and remedies are distinctly

envisaged. Fortunately, we are aided in our inquiry by the

luminous presentation of the perplexing subject by renown jurists
and we are likewise guided by the decisions of this Court in
previous cases as well as by the solemn clarity of the
consideration in several sentences of the Supreme Tribunal of
Spain.
Authorities support the proposition that a quasi-delict or "culpa
aquiliana " is a separate legal institution under the Civil Code
with a substantivity all its own, and individuality that is entirely
apart and independent from delict or crime. Upon this principle
and on the wording and spirit article 1903 of the Civil Code, the
primary and direct responsibility of employers may be safely
anchored.
The pertinent provisions of the Civil Code and Revised Penal
Code are as follows:
CIVIL CODE
ART. 1089 Obligations arise from law, from contracts and quasicontracts, and from acts and omissions which are unlawful or in
which any kind of fault or negligence intervenes.
xxx
xxx
xxx
ART. 1092. Civil obligations arising from felonies or
misdemeanors shall be governed by the provisions of the Penal
Code.
ART. 1093. Those which are derived from acts or omissions in
which fault or negligence, not punishable by law, intervenes shall
be subject to the provisions of Chapter II, Title XVI of this book.
xxx
xxx
xxx
ART 1902. Any person who by an act or omission causes damage
to another by his fault or negligence shall be liable for the
damage so done.
ART. 1903. The obligation imposed by the next preceding article
is enforcible, not only for personal acts and omissions, but also
for those of persons for whom another is responsible.
The father and in, case of his death or incapacity, the mother,
are liable for any damages caused by the minor children who live
with them.
Guardians are liable for damages done by minors or
incapacitated persons subject to their authority and living with
them.
Owners or directors of an establishment or business are equally
liable for any damages caused by their employees while engaged
in the branch of the service in which employed, or on occasion of

the performance of their duties.

The State is subject to the same liability when it acts through a
special agent, but not if the damage shall have been caused by
the official upon whom properly devolved the duty of doing the
act performed, in which case the provisions of the next preceding
article shall be applicable.
Finally, teachers or directors of arts trades are liable for any
damages caused by their pupils or apprentices while they are
under their custody.
The liability imposed by this article shall cease in case the
persons mentioned therein prove that they are exercised all the
diligence of a good father of a family to prevent the damage.
ART. 1904. Any person who pays for damage caused by his
employees may recover from the latter what he may have paid.
REVISED PENAL CODE
ART. 100. Civil liability of a person guilty of felony. Every
person criminally liable for a felony is also civilly liable.
ART. 101. Rules regarding civil liability in certain cases. The
exemption from criminal liability established in subdivisions 1, 2,
3, 5, and 6 of article 12 and in subdivision 4 of article 11 of this
Code does not include exemption from civil liability, which shall
be enforced to the following rules:
First. In cases of subdivision, 1, 2 and 3 of article 12 the civil
liability for acts committed by any imbecile or insane person, and
by a person under nine years of age, or by one over nine but
under fifteen years of age, who has acted without discernment
shall devolve upon those having such person under their legal
authority or control, unless it appears that there was no fault or
negligence on their part.
Should there be no person having such insane, imbecile or minor
under his authority, legal guardianship, or control, or if such
person be insolvent, said insane, imbecile, or minor shall respond
with their own property, excepting property exempt from
execution, in accordance with the civil law.
Second. In cases falling within subdivision 4 of article 11, the
person for whose benefit the harm has been prevented shall be
civilly liable in proportion to the benefit which they may have
received.
The courts shall determine, in their sound discretion, the
proportionate amount for which each one shall be liable.
When the respective shares can not be equitably determined,
even approximately, or when the liability also attaches to the

Government, or to the majority of the inhabitants of the town,

and, in all events, whenever the damage has been caused with
the consent of the authorities or their agents, indemnification
shall be made in the manner prescribed by special laws or
regulations.
Third. In cases falling within subdivisions 5 and 6 of article 12,
the persons using violence or causing the fear shall be primarily
liable and secondarily, or, if there be no such persons, those
doing the act shall be liable, saving always to the latter that part
of their property exempt from execution.
ART. 102. Subsidiary civil liability of innkeepers, tavern keepers
and proprietors of establishment. In default of persons
criminally liable, innkeepers, tavern keepers, and any other
persons or corporation shall be civilly liable for crimes committed
in their establishments, in all cases where a violation of
municipal ordinances or some general or special police regulation
shall have been committed by them or their employees.
Innkeepers are also subsidiarily liable for the restitution of goods
taken by robbery or theft within their houses lodging therein, or
the person, or for the payment of the value thereof, provided
that such guests shall have notified in advance the innkeeper
himself, or the person representing him, of the deposit of such
goods within the inn; and shall furthermore have followed the
directions which such innkeeper or his representative may have
given them with respect to the care of and vigilance over such
goods. No liability shall attach in case of robbery with violence
against or intimidation against or intimidation of persons unless
committed by the innkeeper's employees.
ART. 103. Subsidiary civil liability of other persons. The
subsidiary liability established in the next preceding article shall
also apply to employers, teachers, persons, and corporations
engaged in any kind of industry for felonies committed by their
servants, pupils, workmen, apprentices, or employees in the
discharge of their duties.
xxx
xxx
xxx
ART. 365. Imprudence and negligence. Any person who, by
reckless imprudence, shall commit any act which, had it been
intentional, would constitute a grave felony, shall suffer the
penalty of arresto mayor in its maximum period to prision
correccional in its minimum period; if it would have constituted a
less grave felony, the penalty of arresto mayor in its minimum
and medium periods shall be imposed.

Any person who, by simple imprudence or negligence, shall

commit an act which would otherwise constitute a grave felony,
shall suffer the penalty of arresto mayor in its medium and
maximum periods; if it would have constituted a less serious
felony, the penalty of arresto mayor in its minimum period shall
be imposed."
It will thus be seen that while the terms of articles 1902 of the
Civil Code seem to be broad enough to cover the driver's
negligence in the instant case, nevertheless article 1093 limits
cuasi-delitos to acts or omissions "not punishable by law." But
inasmuch as article 365 of the Revised Penal Code punishes not
only reckless but even simple imprudence or negligence, the
fault or negligence under article 1902 of the Civil Code has
apparently been crowded out. It is this overlapping that makes
the "confusion worse confounded." However, a closer study
shows that such a concurrence of scope in regard to negligent
acts does not destroy the distinction between the civil liability
arising from a crime and the responsibility for cuasi-delitos or
culpa extra-contractual. The same negligent act causing
damages may produce civil liability arising from a crime under
article 100 of the Revised Penal Code, or create an action for
cuasi-delito or culpa extra-contractual under articles 1902-1910
of the Civil Code.
The individuality of cuasi-delito or culpa extra-contractual looms
clear and unmistakable. This legal institution is of ancient
lineage, one of its early ancestors being the Lex Aquilia in the
Roman Law. In fact, in Spanish legal terminology, this
responsibility is often referred to as culpa aquiliana. The Partidas
also contributed to the genealogy of the present fault or
negligence under the Civil Code; for instance, Law 6, Title 15, of
Partida 7, says: "Tenudo es de fazer emienda, porque, como quier
que el non fizo a sabiendas en dao al otro, pero acaescio por su
culpa."
The distinctive nature of cuasi-delitos survives in the Civil Code.
According to article 1089, one of the five sources of obligations is
this legal institution of cuasi-delito or culpa extra-contractual:
"los actos . . . en que intervenga cualquier genero de culpa o
negligencia." Then article 1093 provides that this kind of
obligation shall be governed by Chapter II of Title XVI of Book IV,
meaning articles 1902-0910. This portion of the Civil Code is
exclusively devoted to the legal institution of culpa aquiliana.
Some of the differences between crimes under the Penal Code

and the culpa aquiliana or cuasi-delito under the Civil Code are:
1. That crimes affect the public interest, while cuasi-delitos are
only of private concern.
2. That, consequently, the Penal Code punishes or corrects the
criminal act, while the Civil Code, by means of indemnification,
merely repairs the damage.
3. That delicts are not as broad as quasi-delicts, because the
former are punished only if there is a penal law clearly covering
them, while the latter, cuasi-delitos, include all acts in which "any
king of fault or negligence intervenes." However, it should be
noted that not all violations of the penal law produce civil
responsibility, such as begging in contravention of ordinances,
violation of the game laws, infraction of the rules of traffic when
nobody is hurt. (See Colin and Capitant, "Curso Elemental de
Derecho Civil," Vol. 3, p. 728.)
Let us now ascertain what some jurists say on the separate
existence of quasi-delicts and the employer's primary and direct
liability under article 1903 of the Civil Code.
Dorado Montero in his essay on "Responsibilidad" in the
"Enciclopedia Juridica Espaola" (Vol. XXVII, p. 414) says:
El concepto juridico de la responsabilidad civil abarca diversos
aspectos y comprende a diferentes personas. Asi, existe una
responsabilidad civil propiamente dicha, que en ningun casl lleva
aparejada responsabilidad criminal alguna, y otra que es
consecuencia indeclinable de la penal que nace de todo delito o
falta."
The juridical concept of civil responsibility has various aspects
and comprises different persons. Thus, there is a civil
responsibility, properly speaking, which in no case carries with it
any criminal responsibility, and another which is a necessary
consequence of the penal liability as a result of every felony or
misdemeanor."
Maura, an outstanding authority, was consulted on the following
case: There had been a collision between two trains belonging
respectively to the Ferrocarril Cantabrico and the Ferrocarril del
Norte. An employee of the latter had been prosecuted in a
criminal case, in which the company had been made a party as
subsidiarily responsible in civil damages. The employee had been
acquitted in the criminal case, and the employer, the Ferrocarril
del Norte, had also been exonerated. The question asked was
whether the Ferrocarril Cantabrico could still bring a civil action
for damages against the Ferrocarril del Norte. Maura's opinion

was in the affirmative, stating in part (Maura, Dictamenes, Vol. 6,

pp. 511-513):
Quedando las cosas asi, a proposito de la realidad pura y neta de
los hechos, todavia menos parece sostenible que exista cosa
juzgada acerca de la obligacion civil de indemnizar los
quebrantos y menoscabos inferidos por el choque de los trenes.
El titulo en que se funda la accion para demandar el
resarcimiento, no puede confundirse con las responsabilidades
civiles nacidas de delito, siquiera exista en este, sea el cual sea,
una culpa rodeada de notas agravatorias que motivan sanciones
penales, mas o menos severas. La lesion causada por delito o
falta en los derechos civiles, requiere restituciones, reparaciones
o indemnizaciones, que cual la pena misma ataen al orden
publico; por tal motivo vienen encomendadas, de ordinario, al
Ministerio Fiscal; y claro es que si por esta via se enmiendan los
quebrantos y menoscabos, el agraviado excusa procurar el ya
conseguido desagravio; pero esta eventual coincidencia de los
efectos, no borra la diversidad originaria de las acciones civiles
para pedir indemnizacion.
Estas, para el caso actual (prescindiendo de culpas
contractuales, que no vendrian a cuento y que tiene otro
regimen), dimanan, segun el articulo 1902 del Codigo Civil, de
toda accion u omision, causante de daos o perjuicios, en que
intervenga culpa o negligencia. Es trivial que acciones
semejantes son ejercitadas ante los Tribunales de lo civil
cotidianamente, sin que la Justicia punitiva tenga que mezclarse
en los asuntos. Los articulos 18 al 21 y 121 al 128 del Codigo
Penal, atentos al espiritu y a los fines sociales y politicos del
mismo, desenvuelven y ordenan la materia de responsabilidades
civiles nacidas de delito, en terminos separados del regimen por
ley comun de la culpa que se denomina aquiliana, por alusion a
precedentes legislativos del Corpus Juris. Seria intempestivo un
paralelo entre aquellas ordenaciones, y la de la obligacion de
indemnizar a titulo de culpa civil; pero viene al caso y es
necesaria una de las diferenciaciones que en el tal paralelo se
notarian.
Los articulos 20 y 21 del Codigo Penal, despues de distribuir a su
modo las responsabilidades civiles, entre los que sean por
diversos conceptos culpables del delito o falta, las hacen
extensivas a las empresas y los establecimientos al servicio de
los cuales estan los delincuentes; pero con caracter subsidiario, o
sea, segun el texto literal, en defecto de los que sean

responsables criminalmente. No coincide en ello el Codigo Civil,

cuyo articulo 1903, dice; La obligacion que impone el articulo
anterior es exigible, no solo por los actos y omisiones propios,
sino por los de aquellas personas de quienes se debe responder;
personas en la enumeracion de las cuales figuran los
dependientes y empleados de los establecimientos o empresas,
sea por actos del servicio, sea con ocasion de sus funciones. Por
esto acontece, y se observa en la jurisprudencia, que las
empresas, despues de intervenir en las causas criminales con el
caracter subsidiario de su responsabilidad civil por razon del
delito, son demandadas y condenadas directa y aisladamente,
cuando se trata de la obligacion, ante los tribunales civiles.
Siendo como se ve, diverso el titulo de esta obligacion, y
formando verdadero postulado de nuestro regimen judicial la
separacion entre justicia punitiva y tribunales de lo civil, de
suerte que tienen unos y otros normas de fondo en distintos
cuerpos legales, y diferentes modos de proceder, habiendose,
por aadidura, abstenido de asistir al juicio criminal la Compaia
del Ferrocarril Cantabrico, que se reservo ejercitar sus acciones,
parece innegable que la de indemnizacion por los daos y
perjuicios que le irrogo el choque, no estuvo sub judice ante el
Tribunal del Jurado, ni fue sentenciada, sino que permanecio
intacta, al pronunciarse el fallo de 21 de marzo. Aun cuando el
veredicto no hubiese sido de inculpabilidad, mostrose mas arriba,
que tal accion quedaba legitimamente reservada para despues
del proceso; pero al declararse que no existio delito, ni
responsabilidad dimanada de delito, materia unica sobre que
tenian jurisdiccion aquellos juzgadores, se redobla el motivo para
la obligacion civil ex lege, y se patentiza mas y mas que la
accion para pedir su cumplimiento permanece incolume, extraa
a la cosa juzgada.
As things are, apropos of the reality pure and simple of the facts,
it seems less tenable that there should be res judicata with
regard to the civil obligation for damages on account of the
losses caused by the collision of the trains. The title upon which
the action for reparation is based cannot be confused with the
civil responsibilities born of a crime, because there exists in the
latter, whatever each nature, a culpa surrounded with
aggravating aspects which give rise to penal measures that are
more or less severe. The injury caused by a felony or
misdemeanor upon civil rights requires restitutions, reparations,
or indemnifications which, like the penalty itself, affect public

order; for this reason, they are ordinarily entrusted to the office
of the prosecuting attorney; and it is clear that if by this means
the losses and damages are repaired, the injured party no longer
desires to seek another relief; but this coincidence of effects
does not eliminate the peculiar nature of civil actions to ask for
indemnity.
Such civil actions in the present case (without referring to
contractual faults which are not pertinent and belong to another
scope) are derived, according to article 1902 of the Civil Code,
from every act or omission causing losses and damages in which
culpa or negligence intervenes. It is unimportant that such
actions are every day filed before the civil courts without the
criminal courts interfering therewith. Articles 18 to 21 and 121 to
128 of the Penal Code, bearing in mind the spirit and the social
and political purposes of that Code, develop and regulate the
matter of civil responsibilities arising from a crime, separately
from the regime under common law, of culpa which is known as
aquiliana, in accordance with legislative precedent of the Corpus
Juris. It would be unwarranted to make a detailed comparison
between the former provisions and that regarding the obligation
to indemnify on account of civil culpa; but it is pertinent and
necessary to point out to one of such differences.
Articles 20 and 21 of the Penal Code, after distriburing in their
own way the civil responsibilities among those who, for different
reasons, are guilty of felony or misdemeanor, make such civil
responsibilities applicable to enterprises and establishments for
which the guilty parties render service, but with subsidiary
character, that is to say, according to the wording of the Penal
Code, in default of those who are criminally responsible. In this
regard, the Civil Code does not coincide because article 1903
says: "The obligation imposed by the next preceding article is
demandable, not only for personal acts and omissions, but also
for those of persons for whom another is responsible." Among
the persons enumerated are the subordinates and employees of
establishments or enterprises, either for acts during their service
or on the occasion of their functions. It is for this reason that it
happens, and it is so observed in judicial decisions, that the
companies or enterprises, after taking part in the criminal cases
because of their subsidiary civil responsibility by reason of the
crime, are sued and sentenced directly and separately with
regard to the obligation, before the civil courts.
Seeing that the title of this obligation is different, and the

separation between punitive justice and the civil courts being a

true postulate of our judicial system, so that they have different
fundamental norms in different codes, as well as different modes
of procedure, and inasmuch as the Compaa del Ferrocarril
Cantabrico has abstained from taking part in the criminal case
and has reserved the right to exercise its actions, it seems
undeniable that the action for indemnification for the losses and
damages caused to it by the collision was not sub judice before
the Tribunal del Jurado, nor was it the subject of a sentence, but
it remained intact when the decision of March 21 was rendered.
Even if the verdict had not been that of acquittal, it has already
been shown that such action had been legitimately reserved till
after the criminal prosecution; but because of the declaration of
the non-existence of the felony and the non-existence of the
responsibility arising from the crime, which was the sole subject
matter upon which the Tribunal del Jurado had jurisdiction, there
is greater reason for the civil obligation ex lege, and it becomes
clearer that the action for its enforcement remain intact and is
not res judicata.
Laurent, a jurist who has written a monumental work on the
French Civil Code, on which the Spanish Civil Code is largely
based and whose provisions on cuasi-delito or culpa extracontractual are similar to those of the Spanish Civil Code, says,
referring to article 1384 of the French Civil Code which
corresponds to article 1903, Spanish Civil Code:
The action can be brought directly against the person responsible
(for another), without including the author of the act. The action
against the principal is accessory in the sense that it implies the
existence of a prejudicial act committed by the employee, but it
is not subsidiary in the sense that it can not be instituted till after
the judgment against the author of the act or at least, that it is
subsidiary to the principal action; the action for responsibility (of
the employer) is in itself a principal action. (Laurent, Principles of
French Civil Law, Spanish translation, Vol. 20, pp. 734-735.)
Amandi, in his "Cuestionario del Codigo Civil Reformado" (Vol. 4,
pp. 429, 430), declares that the responsibility of the employer is
principal and not subsidiary. He writes:
Cuestion 1. La responsabilidad declarada en el articulo 1903 por
las acciones u omisiones de aquellas personas por las que se
debe responder, es subsidiaria? es principal? Para contestar a
esta pregunta es necesario saber, en primer lugar, en que se
funda el precepto legal. Es que realmente se impone una

responsabilidad por una falta ajena? Asi parece a primera vista;

pero semejante afirmacion seria contraria a la justicia y a la
maxima universal, segun la que las faltas son personales, y cada
uno responde de aquellas que le son imputables. La
responsabilidad de que tratamos se impone con ocasion de un
delito o culpa, pero no por causa de ellos, sino por causa del
causi delito, esto es, de la imprudencia o de la negligencia del
padre, del tutor, del dueo o director del establecimiento, del
maestro, etc. Cuando cualquiera de las personas que enumera el
articulo citado (menores de edad, incapacitados, dependientes,
aprendices) causan un dao, la ley presume que el padre, el
tutor, el maestro, etc., han cometido una falta de negligencia
para prevenir o evitar el dao. Esta falta es la que la ley castiga.
No hay, pues, responsabilidad por un hecho ajeno, sino en la
apariencia; en realidad la responsabilidad se exige por un hecho
propio. La idea de que esa responsabilidad sea subsidiaria es, por
lo tanto, completamente inadmisible.
Question No. 1. Is the responsibility declared in article 1903 for
the acts or omissions of those persons for who one is
responsible, subsidiary or principal? In order to answer this
question it is necessary to know, in the first place, on what the
legal provision is based. Is it true that there is a responsibility for
the fault of another person? It seems so at first sight; but such
assertion would be contrary to justice and to the universal
maxim that all faults are personal, and that everyone is liable for
those faults that can be imputed to him. The responsibility in
question is imposed on the occasion of a crime or fault, but not
because of the same, but because of the cuasi-delito, that is to
say, the imprudence or negligence of the father, guardian,
proprietor or manager of the establishment, of the teacher, etc.
Whenever anyone of the persons enumerated in the article
referred to (minors, incapacitated persons, employees,
apprentices) causes any damage, the law presumes that the
father, guardian, teacher, etc. have committed an act of
negligence in not preventing or avoiding the damage. It is this
fault that is condemned by the law. It is, therefore, only apparent
that there is a responsibility for the act of another; in reality the
responsibility exacted is for one's own act. The idea that such
responsibility is subsidiary is, therefore, completely inadmissible.
Oyuelos, in his "Digesto: Principios, Doctrina y Jurisprudencia,
Referentes al Codigo Civil Espaol," says in Vol. VII, p. 743:
Es decir, no responde de hechos ajenos, porque se responde solo

de su propia culpa, doctrina del articulo 1902; mas por

excepcion, se responde de la ajena respecto de aquellas
personas con las que media algun nexo o vinculo, que motiva o
razona la responsabilidad. Esta responsabilidad, es directa o es
subsidiaria? En el orden penal, el Codigo de esta clase distingue
entre menores e incapacitados y los demas, declarando directa
la primera (articulo 19) y subsidiaria la segunda (articulos 20 y
21); pero en el orden civil, en el caso del articulo 1903, ha de
entenderse directa, por el tenor del articulo que impone la
responsabilidad precisamente "por los actos de aquellas
personas de quienes se deba responder."
That is to say, one is not responsible for the acts of others,
because one is liable only for his own faults, this being the
doctrine of article 1902; but, by exception, one is liable for the
acts of those persons with whom there is a bond or tie which
gives rise to the responsibility. Is this responsibility direct or
subsidiary? In the order of the penal law, the Penal Code
distinguishes between minors and incapacitated persons on the
one hand, and other persons on the other, declaring that the
responsibility for the former is direct (article 19), and for the
latter, subsidiary (articles 20 and 21); but in the scheme of the
civil law, in the case of article 1903, the responsibility should be
understood as direct, according to the tenor of that articles, for
precisely it imposes responsibility "for the acts of those persons
for whom one should be responsible."
Coming now to the sentences of the Supreme Tribunal of Spain,
that court has upheld the principles above set forth: that a quasidelict or culpa extra-contractual is a separate and distinct legal
institution, independent from the civil responsibility arising from
criminal liability, and that an employer is, under article 1903 of
the Civil Code, primarily and directly responsible for the
negligent acts of his employee.
One of the most important of those Spanish decisions is that of
October 21, 1910. In that case, Ramon Lafuente died as the
result of having been run over by a street car owned by the
"compaia Electric Madrilea de Traccion." The conductor was
prosecuted in a criminal case but he was acquitted. Thereupon,
the widow filed a civil action against the street car company,
paying for damages in the amount of 15,000 pesetas. The lower
court awarded damages; so the company appealed to the
Supreme Tribunal, alleging violation of articles 1902 and 1903 of
the Civil Code because by final judgment the non-existence of

fault or negligence had been declared. The Supreme Court of

Spain dismissed the appeal, saying:
Considerando que el primer motivo del recurso se funda en el
equivocado supuesto de que el Tribunal a quo, al condonar a la
compaia Electrica Madrilea al pago del dao causado con la
muerte de Ramon La fuente Izquierdo, desconoce el valor y
efectos juridicos de la sentencia absolutoria deictada en la causa
criminal que se siguio por el mismo hecho, cuando es lo cierto
que de este han conocido las dos jurisdicciones bajo diferentes
as pectos, y como la de lo criminal declrao dentro de los limites
de su competencia que el hecho de que se trata no era
constitutivo de delito por no haber mediado descuido o
negligencia graves, lo que no excluye, siendo este el unico
fundamento del fallo absolutorio, el concurso de la culpa o
negligencia no califacadas, fuente de obligaciones civiles segun
el articulo 1902 del Codigo, y que alcanzan, segun el 1903, netre
otras perosnas, a los Directores de establecimientos o empresas
por los daos causados por sus dependientes en determinadas
condiciones, es manifesto que la de lo civil, al conocer del mismo
hehco baho este ultimo aspecto y al condenar a la compaia
recurrente a la indemnizacion del dao causado por uno de sus
empleados, lejos de infringer los mencionados textos, en relacion
con el articulo 116 de la Ley de Enjuciamiento Criminal, se ha
atenido estrictamente a ellos, sin invadir atribuciones ajenas a su
jurisdiccion propia, ni contrariar en lo mas minimo el fallo recaido
en la causa.
Considering that the first ground of the appeal is based on the
mistaken supposition that the trial court, in sentencing the
Compaia Madrilea to the payment of the damage caused by
the death of Ramon Lafuente Izquierdo, disregards the value and
juridical effects of the sentence of acquittal rendered in the
criminal case instituted on account of the same act, when it is a
fact that the two jurisdictions had taken cognizance of the same
act in its different aspects, and as the criminal jurisdiction
declared within the limits of its authority that the act in question
did not constitute a felony because there was no grave
carelessness or negligence, and this being the only basis of
acquittal, it does no exclude the co-existence of fault or
negligence which is not qualified, and is a source of civil
obligations according to article 1902 of the Civil Code, affecting,
in accordance with article 1903, among other persons, the
managers of establishments or enterprises by reason of the

damages caused by employees under certain conditions, it is

manifest that the civil jurisdiccion in taking cognizance of the
same act in this latter aspect and in ordering the company,
appellant herein, to pay an indemnity for the damage caused by
one of its employees, far from violating said legal provisions, in
relation with article 116 of the Law of Criminal Procedure, strictly
followed the same, without invading attributes which are beyond
its own jurisdiction, and without in any way contradicting the
decision in that cause. (Emphasis supplied.)
It will be noted, as to the case just cited:
First. That the conductor was not sued in a civil case, either
separately or with the street car company. This is precisely what
happens in the present case: the driver, Fontanilla, has not been
sued in a civil action, either alone or with his employer.
Second. That the conductor had been acquitted of grave criminal
negligence, but the Supreme Tribunal of Spain said that this did
not exclude the co-existence of fault or negligence, which is not
qualified, on the part of the conductor, under article 1902 of the
Civil Code. In the present case, the taxi driver was found guilty of
criminal negligence, so that if he had even sued for his civil
responsibility arising from the crime, he would have been held
primarily liable for civil damages, and Barredo would have been
held subsidiarily liable for the same. But the plaintiffs are directly
suing Barredo, on his primary responsibility because of his own
presumed negligence which he did not overcome under
article 1903. Thus, there were two liabilities of Barredo: first, the
subsidiary one because of the civil liability of the taxi driver
arising from the latter's criminal negligence; and, second,
Barredo's primary liability as an employer under article 1903.
The plaintiffs were free to choose which course to take, and they
preferred the second remedy. In so doing, they were acting within
their rights. It might be observed in passing, that the plaintiff
choose the more expeditious and effective method of relief,
because Fontanilla was either in prison, or had just been
released, and besides, he was probably without property which
might be seized in enforcing any judgment against him for
damages.
Third. That inasmuch as in the above sentence of October 21,
1910, the employer was held liable civilly, notwithstanding the
acquittal of the employee (the conductor) in a previous criminal
case, with greater reason should Barredo, the employer in the
case at bar, be held liable for damages in a civil suit filed against

him because his taxi driver had been convicted. The degree of
negligence of the conductor in the Spanish case cited was less
than that of the taxi driver, Fontanilla, because the former was
acquitted in the previous criminal case while the latter was found
guilty of criminal negligence and was sentenced to an
indeterminate sentence of one year and one day to two years of
prision correccional.
(See also Sentence of February 19, 1902, which is similar to the
one above quoted.)
In the Sentence of the Supreme Court of Spain, dated February
14, 1919, an action was brought against a railroad company for
damages because the station agent, employed by the company,
had unjustly and fraudulently, refused to deliver certain articles
consigned to the plaintiff. The Supreme Court of Spain held that
this action was properly under article 1902 of the Civil Code, the
court saying:
Considerando que la sentencia discutida reconoce, en virtud de
los hechos que consigna con relacion a las pruebas del pleito:
1., que las expediciones facturadas por la compaia ferroviaria a
la consignacion del actor de las vasijas vacias que en su
demanda relacionan tenian como fin el que este las devolviera a
sus remitentes con vinos y alcoholes; 2., que llegadas a su
destino tales mercanias no se quisieron entregar a dicho
consignatario por el jefe de la estacion sin motivo justificado y
con intencion dolosa, y 3., que la falta de entrega de estas
expediciones al tiempo de reclamarlas el demandante le
originaron daos y perjuicios en cantidad de bastante
importancia como expendedor al por mayor que era de vinos y
alcoholes por las ganancias que dejo de obtener al verse privado
de servir los pedidos que se le habian hecho por los remitentes
en los envases:
Considerando que sobre esta base hay necesidad de estimar los
cuatro motivos que integran este recurso, porque la demanda
inicial del pleito a que se contrae no contiene accion que nazca
del incumplimiento del contrato de transporte, toda vez que no
se funda en el retraso de la llegada de las mercancias ni de
ningun otro vinculo contractual entre las partes contendientes,
careciendo, por tanto, de aplicacion el articulo 371 del Codigo de
Comercio, en que principalmente descansa el fallo recurrido, sino
que se limita a pedir la reparaction de los daos y perjuicios
producidos en el patrimonio del actor por la injustificada y dolosa
negativa del porteador a la entrega de las mercancias a su

nombre consignadas, segun lo reconoce la sentencia, y cuya

responsabilidad esta claramente sancionada en el articulo 1902
del Codigo Civil, que obliga por el siguiente a la Compaia
demandada como ligada con el causante de aquellos por
relaciones de caracter economico y de jurarquia administrativa.
Considering that the sentence, in question recognizes, in virtue
of the facts which it declares, in relation to the evidence in the
case: (1) that the invoice issued by the railroad company in favor
of the plaintiff contemplated that the empty receptacles referred
to in the complaint should be returned to the consignors with
wines and liquors; (2) that when the said merchandise reached
their destination, their delivery to the consignee was refused by
the station agent without justification and with fraudulent intent,
and (3) that the lack of delivery of these goods when they were
demanded by the plaintiff caused him losses and damages of
considerable importance, as he was a wholesale vendor of wines
and liquors and he failed to realize the profits when he was
unable to fill the orders sent to him by the consignors of the
receptacles:
Considering that upon this basis there is need of upholding the
four assignments of error, as the original complaint did not
contain any cause of action arising from non-fulfillment of a
contract of transportation, because the action was not based on
the delay of the goods nor on any contractual relation between
the parties litigant and, therefore, article 371 of the Code of
Commerce, on which the decision appealed from is based, is not
applicable; but it limits to asking for reparation for losses and
damages produced on the patrimony of the plaintiff on account
of the unjustified and fraudulent refusal of the carrier to deliver
the goods consigned to the plaintiff as stated by the sentence,
and the carrier's responsibility is clearly laid down in article 1902
of the Civil Code which binds, in virtue of the next article, the
defendant company, because the latter is connected with the
person who caused the damage by relations of economic
character and by administrative hierarchy. (Emphasis supplied.)
The above case is pertinent because it shows that the same act
may come under both the Penal Code and the Civil Code. In that
case, the action of the agent was unjustified and fraudulent and
therefore could have been the subject of a criminal action. And
yet, it was held to be also a proper subject of a civil action under
article 1902 of the Civil Code. It is also to be noted that it was the
employer and not the employee who was being sued.

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

In the leading case of Rakes vs. Atlantic Gulf and Pacific Co. (7
Phil., 359, 362-365 [year 1907]), the trial court awarded
damages to the plaintiff, a laborer of the defendant, because the
latter had negligently failed to repair a tramway in consequence
of which the rails slid off while iron was being transported, and
caught the plaintiff whose leg was broken. This Court held:
It is contended by the defendant, as its first defense to the action
that the necessary conclusion from these collated laws is that the
remedy for injuries through negligence lies only in a criminal
action in which the official criminally responsible must be made
primarily liable and his employer held only subsidiarily to him.
According to this theory the plaintiff should have procured the
arrest of the representative of the company accountable for not
repairing the track, and on his prosecution a suitable fine should
have been imposed, payable primarily by him and secondarily by
his employer.
This reasoning misconceived the plan of the Spanish codes upon
this subject. Article 1093 of the Civil Code makes obligations
arising from faults or negligence not punished by the law, subject
to the provisions of Chapter II of Title XVI. Section 1902 of that
chapter reads:
"A person who by an act or omission causes damage to another
when there is fault or negligence shall be obliged to repair the
damage so done.
"SEC. 1903. The obligation imposed by the preceeding article is
demandable, not only for personal acts and omissions, but also
for those of the persons for whom they should be responsible.
"The father, and on his death or incapacity, the mother, is liable
for the damages caused by the minors who live with them.
xxx
xxx
xxx
"Owners or directors of an establishment or enterprise are
equally liable for the damages caused by their employees in the
service of the branches in which the latter may be employed or
in the performance of their duties.
xxx
xxx
xxx
"The liability referred to in this article shall cease when the
persons mentioned therein prove that they employed all the
diligence of a good father of a family to avoid the damage."
As an answer to the argument urged in this particular action it
may be sufficient to point out that nowhere in our general
statutes is the employer penalized for failure to provide or

maintain safe appliances for his workmen. His obligation

therefore is one 'not punished by the laws' and falls under civil
rather than criminal jurisprudence. But the answer may be a
broader one. We should be reluctant, under any conditions, to
adopt a forced construction of these scientific codes, such as is
proposed by the defendant, that would rob some of these articles
of effect, would shut out litigants against their will from the civil
courts, would make the assertion of their rights dependent upon
the selection for prosecution of the proper criminal offender, and
render recovery doubtful by reason of the strict rules of proof
prevailing in criminal actions. Even if these articles had always
stood alone, such a construction would be unnecessary, but clear
light is thrown upon their meaning by the provisions of the Law
of Criminal Procedure of Spain (Ley de Enjuiciamiento Criminal),
which, though never in actual force in these Islands, was formerly
given a suppletory or explanatory effect. Under article 111 of this
law, both classes of action, civil and criminal, might be
prosecuted jointly or separately, but while the penal action was
pending the civil was suspended. According to article 112, the
penal action once started, the civil remedy should be sought
therewith, unless it had been waived by the party injured or been
expressly reserved by him for civil proceedings for the future. If
the civil action alone was prosecuted, arising out of a crime that
could be enforced only on private complaint, the penal action
thereunder should be extinguished. These provisions are in
harmony with those of articles 23 and 133 of our Penal Code on
the same subject.
An examination of this topic might be carried much further, but
the citation of these articles suffices to show that the civil liability
was not intended to be merged in the criminal nor even to be
suspended thereby, except as expressly provided in the law.
Where an individual is civilly liable for a negligent act or
omission, it is not required that the injured party should seek out
a third person criminally liable whose prosecution must be a
condition precedent to the enforcement of the civil right.
Under article 20 of the Penal Code the responsibility of an
employer may be regarded as subsidiary in respect of criminal
actions against his employees only while they are in process of
prosecution, or in so far as they determine the existence of the
criminal act from which liability arises, and his obligation under
the civil law and its enforcement in the civil courts is not barred
thereby unless by the election of the injured person. Inasmuch as

no criminal proceeding had been instituted, growing our of the

accident in question, the provisions of the Penal Code can not
affect this action. This construction renders it unnecessary to
finally determine here whether this subsidiary civil liability in
penal actions has survived the laws that fully regulated it or has
been abrogated by the American civil and criminal procedure
now in force in the Philippines.
The difficulty in construing the articles of the code above cited in
this case appears from the briefs before us to have arisen from
the interpretation of the words of article 1093, "fault or
negligence not punished by law," as applied to the
comprehensive definition of offenses in articles 568 and 590 of
the Penal Code. It has been shown that the liability of an
employer arising out of his relation to his employee who is the
offender is not to be regarded as derived from negligence
punished by the law, within the meaning of articles 1902 and
1093. More than this, however, it cannot be said to fall within the
class of acts unpunished by the law, the consequence of which
are regulated by articles 1902 and 1903 of the Civil Code. The
acts to which these articles are applicable are understood to be
those not growing out of pre-existing duties of the parties to one
another. But where relations already formed give rise to duties,
whether springing from contract or quasi contract, then breaches
of those duties are subject to articles 1101, 1103, and 1104 of
the same code. A typical application of this distinction may be
found in the consequences of a railway accident due to defective
machinery supplied by the employer. His liability to his employee
would arise out of the contract of employment, that to the
passengers out of the contract for passage, while that to the
injured bystander would originate in the negligent act itself.
In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the mother
of the 8 of 9-year-old child Salvador Bona brought a civil action
against Moreta to recover damages resulting from the death of
the child, who had been run over by an automobile driven and
managed by the defendant. The trial court rendered judgment
requiring the defendant to pay the plaintiff the sum of P1,000 as
indemnity: This Court in affirming the judgment, said in part:
If it were true that the defendant, in coming from the southern
part of Solana Street, had to stop his auto before crossing Real
Street, because he had met vehicles which were going along the
latter street or were coming from the opposite direction along
Solana Street, it is to be believed that, when he again started to

run his auto across said Real Street and to continue its way along
Solana Street northward, he should have adjusted the speed of
the auto which he was operating until he had fully crossed Real
Street and had completely reached a clear way on Solana Street.
But, as the child was run over by the auto precisely at the
entrance of Solana Street, this accident could not have occurred
if the auto had been running at a slow speed, aside from the fact
that the defendant, at the moment of crossing Real Street and
entering Solana Street, in a northward direction, could have seen
the child in the act of crossing the latter street from the sidewalk
on the right to that on the left, and if the accident had occurred
in such a way that after the automobile had run over the body of
the child, and the child's body had already been stretched out on
the ground, the automobile still moved along a distance of about
2 meters, this circumstance shows the fact that the automobile
entered Solana Street from Real Street, at a high speed without
the defendant having blown the horn. If these precautions had
been taken by the defendant, the deplorable accident which
caused the death of the child would not have occurred.
It will be noticed that the defendant in the above case could have
been prosecuted in a criminal case because his negligence
causing the death of the child was punishable by the Penal Code.
Here is therefore a clear instance of the same act of negligence
being a proper subject-matter either of a criminal action with its
consequent civil liability arising from a crime or of an entirely
separate and independent civil action for fault or negligence
under article 1902 of the Civil Code. Thus, in this jurisdiction, the
separate individually of a cuasi-delito or culpa aquiliana under
the Civil Code has been fully and clearly recognized, even with
regard to a negligent act for which the wrongdoer could have
been prosecuted and convicted in a criminal case and for which,
after such a conviction, he could have been sued for this civil
liability arising from his crime.
Years later (in 1930) this Court had another occasion to apply the
same doctrine. In Bernal and Enverso vs. House and Tacloban
Electric & Ice Plant, Ltd., 54 Phil., 327, the parents of the fiveyear-old child, Purificacion Bernal, brought a civil action to
recover damages for the child's death as a result of burns caused
by the fault and negligence of the defendants. On the evening of
April 10, 1925, the Good Friday procession was held in Tacloban,
Leyte. Fortunata Enverso with her daughter Purificacion Bernal
had come from another municipality to attend the same. After

the procession the mother and the daughter with two others
were passing along Gran Capitan Street in front of the offices of
the Tacloban Electric & Ice Plant, Ltd., owned by defendants J. V.
House, when an automobile appeared from the opposite
direction. The little girl, who was slightly ahead of the rest, was
so frightened by the automobile that she turned to run, but
unfortunately she fell into the street gutter where hot water from
the electric plant was flowing. The child died that same night
from the burns. The trial courts dismissed the action because of
the contributory negligence of the plaintiffs. But this Court held,
on appeal, that there was no contributory negligence, and
allowed the parents P1,000 in damages from J. V. House who at
the time of the tragic occurrence was the holder of the franchise
for the electric plant. This Court said in part:
Although the trial judge made the findings of fact hereinbefore
outlined, he nevertheless was led to order the dismissal of the
action because of the contributory negligence of the plaintiffs. It
is from this point that a majority of the court depart from the
stand taken by the trial judge. The mother and her child had a
perfect right to be on the principal street of Tacloban, Leyte, on
the evening when the religious procession was held. There was
nothing abnormal in allowing the child to run along a few paces
in advance of the mother. No one could foresee the coincidence
of an automobile appearing and of a frightened child running and
falling into a ditch filled with hot water. The doctrine announced
in the much debated case of Rakes vs. Atlantic Gulf and Pacific
Co. ([1907]), 7 Phil., 359), still rule. Article 1902 of the Civil Code
must again be enforced. The contributory negligence of the child
and her mother, if any, does not operate as a bar to recovery,
but in its strictest sense could only result in reduction of the
damages.
It is most significant that in the case just cited, this Court
specifically applied article 1902 of the Civil Code. It is thus that
although J. V. House could have been criminally prosecuted for
reckless or simple negligence and not only punished but also
made civilly liable because of his criminal negligence,
nevertheless this Court awarded damages in an independent civil
action for fault or negligence under article 1902 of the Civil Code.
In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915), the
action was for damages for the death of the plaintiff's daughter
alleged to have been caused by the negligence of the servant in
driving an automobile over the child. It appeared that the cause

of the mishap was a defect in the steering gear. The defendant

Leynes had rented the automobile from the International Garage
of Manila, to be used by him in carrying passengers during the
fiesta of Tuy, Batangas. Leynes was ordered by the lower court to
pay P1,000 as damages to the plaintiff. On appeal this Court
reversed the judgment as to Leynes on the ground that he had
shown that the exercised the care of a good father of a family,
thus overcoming the presumption of negligence under article
1903. This Court said:
As to selection, the defendant has clearly shown that he
exercised the care and diligence of a good father of a family. He
obtained the machine from a reputable garage and it was, so far
as appeared, in good condition. The workmen were likewise
selected from a standard garage, were duly licensed by the
Government in their particular calling, and apparently thoroughly
competent. The machine had been used but a few hours when
the accident occurred and it is clear from the evidence that the
defendant had no notice, either actual or constructive, of the
defective condition of the steering gear.
The legal aspect of the case was discussed by this Court thus:
Article 1903 of the Civil Code not only establishes liability in
cases of negligence, but also provides when the liability shall
cease. It says:
"The liability referred to in this article shall cease when the
persons mentioned therein prove that they employed all the
diligence of a good father of a family to avoid the damage."
From this article two things are apparent: (1) That when an injury
is caused by the negligence of a servant or employee there
instantly arises a presumption of law that there was negligence
on the part of the matter or employer either in the selection of
the servant or employee, or in supervision over him after the
selection, or both; and (2) that presumption is juris tantum and
not juris et de jure, and consequently, may be rebutted. It follows
necessarily that if the employer shows to the satisfaction of the
court that in selection and supervision he has exercised the care
and diligence of a good father of a family, the presumption is
overcome and he is relieve from liability.
This theory bases the responsibility of the master ultimately on
his own negligence and not on that of his servant.
The doctrine of the case just cited was followed by this Court in
Cerf vs. Medel (33 Phil., 37 [year 1915]). In the latter case, the
complaint alleged that the defendant's servant had so

negligently driven an automobile, which was operated by

defendant as a public vehicle, that said automobile struck and
damaged the plaintiff's motorcycle. This Court, applying article
1903 and following the rule in Bahia vs. Litonjua and Leynes, said
in part (p. 41) that:
The master is liable for the negligent acts of his servant where he
is the owner or director of a business or enterprise and the
negligent acts are committed while the servant is engaged in his
master's employment as such owner.
Another case which followed the decision in Bahia vs. Litonjua
and Leynes was Cuison vs. Norton & Harrison Co., 55 Phil., 18
(year 1930). The latter case was an action for damages brought
by Cuison for the death of his seven-year-old son Moises. The
little boy was on his way to school with his sister Marciana. Some
large pieces of lumber fell from a truck and pinned the boy
underneath, instantly killing him. Two youths, Telesforo Binoya
and Francisco Bautista, who were working for Ora, an employee
of defendant Norton & Harrison Co., pleaded guilty to the crime
of homicide through reckless negligence and were sentenced
accordingly. This Court, applying articles 1902 and 1903, held:
The basis of civil law liability is not respondent superior but the
relationship of pater familias. This theory bases the liability of the
master ultimately on his own negligence and not on that of his
servant. (Bahia vs. Litonjua and Leynes [1915], 30 Phil., 624;
Cangco vs. Manila Railroad Co. [1918], 38 Phil., 768.)
In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55
Phil., 517 (year 1930) the plaintiff brought an action for damages
for the demolition of its wharf, which had been struck by the
steamer Helen C belonging to the defendant. This Court held (p.
526):
The evidence shows that Captain Lasa at the time the plaintiff's
wharf collapsed was a duly licensed captain, authorized to
navigate and direct a vessel of any tonnage, and that the
appellee contracted his services because of his reputation as a
captain, according to F. C. Cadwallader. This being so, we are of
the opinion that the presumption of liability against the
defendant has been overcome by the exercise of the care and
diligence of a good father of a family in selecting Captain Lasa, in
accordance with the doctrines laid down by this court in the
cases cited above, and the defendant is therefore absolved from
all liability.
It is, therefore, seen that the defendant's theory about his

secondary liability is negatived by the six cases above set forth.

He is, on the authority of these cases, primarily and directly
responsible in damages under article 1903, in relation to article
1902, of the Civil Code.
Let us now take up the Philippine decisions relied upon by the
defendant. We study first, City of Manila vs. Manila Electric Co.,
52 Phil., 586 (year 1928). A collision between a truck of the City
of Manila and a street car of the Manila Electric Co. took place on
June 8, 1925. The truck was damaged in the amount of
P1,788.27. Sixto Eustaquio, the motorman, was prosecuted for
the crime of damage to property and slight injuries through
reckless imprudence. He was found guilty and sentenced to pay
a fine of P900, to indemnify the City of Manila for P1,788.27, with
subsidiary imprisonment in case of insolvency. Unable to collect
the indemnity from Eustaquio, the City of Manila filed an action
against the Manila Electric Company to obtain payment, claiming
that the defendant was subsidiarily liable. The main defense was
that the defendant had exercised the diligence of a good father
of a family to prevent the damage. The lower court rendered
judgment in favor of the plaintiff. This Court held, in part, that
this case was governed by the Penal Code, saying:
With this preliminary point out of the way, there is no escaping
the conclusion that the provisions of the Penal Code govern. The
Penal Code in easily understandable language authorizes the
determination of subsidiary liability. The Civil Code negatives its
application by providing that civil obligations arising from crimes
or misdemeanors shall be governed by the provisions of the
Penal Code. The conviction of the motorman was a misdemeanor
falling under article 604 of the Penal Code. The act of the
motorman was not a wrongful or negligent act or omission not
punishable by law. Accordingly, the civil obligation connected up
with the Penal Code and not with article 1903 of the Civil Code.
In other words, the Penal Code affirms its jurisdiction while the
Civil Code negatives its jurisdiction. This is a case of criminal
negligence out of which civil liability arises and not a case of civil
negligence.
xxx
xxx
xxx
Our deduction, therefore, is that the case relates to the Penal
Code and not to the Civil Code. Indeed, as pointed out by the
trial judge, any different ruling would permit the master to
escape scot-free by simply alleging and proving that the master
had exercised all diligence in the selection and training of its

servants to prevent the damage. That would be a good defense

to a strictly civil action, but might or might not be to a civil action
either as a part of or predicated on conviction for a crime or
misdemeanor. (By way of parenthesis, it may be said further that
the statements here made are offered to meet the argument
advanced during our deliberations to the effect that article 0902
of the Civil Code should be disregarded and codal articles 1093
and 1903 applied.)
It is not clear how the above case could support the defendant's
proposition, because the Court of Appeals based its decision in
the present case on the defendant's primary responsibility under
article 1903 of the Civil Code and not on his subsidiary liability
arising from Fontanilla's criminal negligence. In other words, the
case of City of Manila vs. Manila Electric Co., supra, is predicated
on an entirely different theory, which is the subsidiary liability of
an employer arising from a criminal act of his employee, whereas
the foundation of the decision of the Court of Appeals in the
present case is the employer's primary liability under article
1903 of the Civil Code. We have already seen that this is a proper
and independent remedy.
Arambulo vs. Manila Electric Co. (55 Phil., 75), is another case
invoked by the defendant. A motorman in the employ of the
Manila Electric Company had been convicted o homicide by
simple negligence and sentenced, among other things, to pay
the heirs of the deceased the sum of P1,000. An action was then
brought to enforce the subsidiary liability of the defendant as
employer under the Penal Code. The defendant attempted to
show that it had exercised the diligence of a good father of a
family in selecting the motorman, and therefore claimed
exemption from civil liability. But this Court held:
In view of the foregoing considerations, we are of opinion and so
hold, (1) that the exemption from civil liability established in
article 1903 of the Civil Code for all who have acted with the
diligence of a good father of a family, is not applicable to the
subsidiary civil liability provided in article 20 of the Penal Code.
The above case is also extraneous to the theory of the defendant
in the instant case, because the action there had for its purpose
the enforcement of the defendant's subsidiary liability under the
Penal Code, while in the case at bar, the plaintiff's cause of
action is based on the defendant's primary and direct
responsibility under article 1903 of the Civil Code. In fact, the
above case destroys the defendant's contention because that

decision illustrates the principle that the employer's primary

responsibility under article 1903 of the Civil Code is different in
character from his subsidiary liability under the Penal Code.
In trying to apply the two cases just referred to, counsel for the
defendant has failed to recognize the distinction between civil
liability arising from a crime, which is governed by the Penal
Code, and the responsibility for cuasi-delito or culpa aquiliana
under the Civil Code, and has likewise failed to give the
importance to the latter type of civil action.
The defendant-petitioner also cites Francisco vs. Onrubia (46
Phil., 327). That case need not be set forth. Suffice it to say that
the question involved was also civil liability arising from a crime.
Hence, it is as inapplicable as the two cases above discussed.
The foregoing authorities clearly demonstrate the separate
individuality of cuasi-delitos or culpa aquiliana under the Civil
Code. Specifically they show that there is a distinction between
civil liability arising from criminal negligence (governed by the
Penal Code) and responsibility for fault or negligence under
articles 1902 to 1910 of the Civil Code, and that the same
negligent act may produce either a civil liability arising from a
crime under the Penal Code, or a separate responsibility for fault
or negligence under articles 1902 to 1910 of the Civil Code. Still
more concretely, the authorities above cited render it
inescapable to conclude that the employer in this case the
defendant-petitioner is primarily and directly liable under
article 1903 of the Civil Code.
The legal provisions, authors, and cases already invoked should
ordinarily be sufficient to dispose of this case. But inasmuch as
we are announcing doctrines that have been little understood in
the past, it might not be inappropriate to indicate their
foundations.
Firstly, the Revised Penal Code in article 365 punishes not only
reckless but also simple negligence. If we were to hold that
articles 1902 to 1910 of the Civil Code refer only to fault or
negligence not punished by law, according to the literal import of
article 1093 of the Civil Code, the legal institution of culpa
aquiliana would have very little scope and application in actual
life. Death or injury to persons and damage to property through
any degree of negligence even the slightest would have to
be indemnified only through the principle of civil liability arising
from a crime. In such a state of affairs, what sphere would
remain for cuasi-delito or culpa aquiliana? We are loath to impute

to the lawmaker any intention to bring about a situation so

absurd and anomalous. Nor are we, in the interpretation of the
laws, disposed to uphold the letter that killeth rather than the
spirit that giveth life. We will not use the literal meaning of the
law to smother and render almost lifeless a principle of such
ancient origin and such full-grown development as culpa
aquiliana or cuasi-delito, which is conserved and made enduring
in articles 1902 to 1910 of the Spanish Civil Code.
Secondly, to find the accused guilty in a criminal case, proof of
guilt beyond reasonable doubt is required, while in a civil case,
preponderance of evidence is sufficient to make the defendant
pay in damages. There are numerous cases of criminal
negligence which can not be shown beyond reasonable doubt,
but can be proved by a preponderance of evidence. In such
cases, the defendant can and should be made responsible in a
civil action under articles 1902 to 1910 of the Civil Code.
Otherwise, there would be many instances of unvindicated civil
wrongs. Ubi jus ibi remedium.
Thirdly, to hold that there is only one way to make defendant's
liability effective, and that is, to sue the driver and exhaust his
(the latter's) property first, would be tantamount to compelling
the plaintiff to follow a devious and cumbersome method of
obtaining relief. True, there is such a remedy under our laws, but
there is also a more expeditious way, which is based on the
primary and direct responsibility of the defendant under article
1903 of the Civil Code. Our view of the law is more likely to
facilitate remedy for civil wrongs, because the procedure
indicated by the defendant is wasteful and productive of delay, it
being a matter of common knowledge that professional drivers of
taxis and similar public conveyance usually do not have sufficient
means with which to pay damages. Why, then, should the
plaintiff be required in all cases to go through this roundabout,
unnecessary, and probably useless procedure? In construing the
laws, courts have endeavored to shorten and facilitate the
pathways of right and justice.
At this juncture, it should be said that the primary and direct
responsibility of employers and their presumed negligence are
principles calculated to protect society. Workmen and employees
should be carefully chosen and supervised in order to avoid
injury to the public. It is the masters or employers who principally
reap the profits resulting from the services of these servants and
employees. It is but right that they should guarantee the latter's

careful conduct for the personnel and patrimonial safety of

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

depending on the issues, limitations and results of a criminal

prosecution, and entirely directed by the party wronged or his
counsel, is more likely to secure adequate and efficacious
redress.
In view of the foregoing, the judgment of the Court of Appeals
should be and is hereby affirmed, with costs against the
defendant-petitioner

G.R. No. L-12191

October 14, 1918
JOSE CANGCO, plaintiff-appellant,
vs.
MANILA RAILROAD CO., defendant-appellee.
Ramon Sotelo for appellant.Kincaid & Hartigan for appellee.
FISHER, J.:
At the time of the occurrence which gave rise to this litigation the
plaintiff, Jose Cangco, was in the employment of Manila Railroad
Company in the capacity of clerk, with a monthly wage of P25.
He lived in the pueblo of San Mateo, in the province of Rizal,
which is located upon the line of the defendant railroad
company; and in coming daily by train to the company's office in
the city of Manila where he worked, he used a pass, supplied by
the company, which entitled him to ride upon the company's
trains free of charge. Upon the occasion in question, January 20,
1915, the plaintiff arose from his seat in the second class-car
where he was riding and, making, his exit through the door, took
his position upon the steps of the coach, seizing the upright
guardrail with his right hand for support.
On the side of the train where passengers alight at the San
Mateo station there is a cement platform which begins to rise
with a moderate gradient some distance away from the
company's office and extends along in front of said office for a
distance sufficient to cover the length of several coaches. As the
train slowed down another passenger, named Emilio Zuiga, also
an employee of the railroad company, got off the same car,
alighting safely at the point where the platform begins to rise
from the level of the ground. When the train had proceeded a
little farther the plaintiff Jose Cangco stepped off also, but one or
both of his feet came in contact with a sack of watermelons with
the result that his feet slipped from under him and he fell
violently on the platform. His body at once rolled from the
platform and was drawn under the moving car, where his right
arm was badly crushed and lacerated. It appears that after the
plaintiff alighted from the train the car moved forward possibly
six meters before it came to a full stop.
The accident occurred between 7 and 8 o'clock on a dark night,
and as the railroad station was lighted dimly by a single light
located some distance away, objects on the platform where the
accident occurred were difficult to discern especially to a person
emerging from a lighted car.

The explanation of the presence of a sack of melons on the

platform where the plaintiff alighted is found in the fact that it
was the customary season for harvesting these melons and a
large lot had been brought to the station for the shipment to the
market. They were contained in numerous sacks which has been
piled on the platform in a row one upon another. The testimony
shows that this row of sacks was so placed of melons and the
edge of platform; and it is clear that the fall of the plaintiff was
due to the fact that his foot alighted upon one of these melons at
the moment he stepped upon the platform. His statement that
he failed to see these objects in the darkness is readily to be
credited.
The plaintiff was drawn from under the car in an unconscious
condition, and it appeared that the injuries which he had
received were very serious. He was therefore brought at once to
a certain hospital in the city of Manila where an examination was
made and his arm was amputated. The result of this operation
was unsatisfactory, and the plaintiff was then carried to another
hospital where a second operation was performed and the
member was again amputated higher up near the shoulder. It
appears in evidence that the plaintiff expended the sum of
P790.25 in the form of medical and surgical fees and for other
expenses in connection with the process of his curation.
Upon August 31, 1915, he instituted this proceeding in the Court
of First Instance of the city of Manila to recover damages of the
defendant company, founding his action upon the negligence of
the servants and employees of the defendant in placing the
sacks of melons upon the platform and leaving them so placed as
to be a menace to the security of passenger alighting from the
company's trains. At the hearing in the Court of First Instance, his
Honor, the trial judge, found the facts substantially as above
stated, and drew therefrom his conclusion to the effect that,
although negligence was attributable to the defendant by reason
of the fact that the sacks of melons were so placed as to obstruct
passengers passing to and from the cars, nevertheless, the
plaintiff himself had failed to use due caution in alighting from
the coach and was therefore precluded form recovering.
Judgment was accordingly entered in favor of the defendant
company, and the plaintiff appealed.
It can not be doubted that the employees of the railroad
company were guilty of negligence in piling these sacks on the
platform in the manner above stated; that their presence caused

the plaintiff to fall as he alighted from the train; and that they
therefore constituted an effective legal cause of the injuries
sustained by the plaintiff. It necessarily follows that the
defendant company is liable for the damage thereby occasioned
unless recovery is barred by the plaintiff's own contributory
negligence. In resolving this problem it is necessary that each of
these conceptions of liability, to-wit, the primary responsibility of
the defendant company and the contributory negligence of the
plaintiff should be separately examined.
It is important to note that the foundation of the legal liability of
the defendant is the contract of carriage, and that the obligation
to respond for the damage which plaintiff has suffered arises, if
at all, from the breach of that contract by reason of the failure of
defendant to exercise due care in its performance. That is to say,
its liability is direct and immediate, differing essentially, in legal
viewpoint from that presumptive responsibility for the negligence
of its servants, imposed by article 1903 of the Civil Code, which
can be rebutted by proof of the exercise of due care in their
selection and supervision. Article 1903 of the Civil Code is not
applicable to obligations arising ex contractu, but only to extracontractual obligations or to use the technical form of
expression, that article relates only to culpa aquiliana and not to
culpa contractual.
Manresa (vol. 8, p. 67) in his commentaries upon articles 1103
and 1104 of the Civil Code, clearly points out this distinction,
which was also recognized by this Court in its decision in the
case of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359).
In commenting upon article 1093 Manresa clearly points out the
difference between "culpa, substantive and independent, which
of itself constitutes the source of an obligation between persons
not formerly connected by any legal tie" and culpa considered as
an accident in the performance of an obligation already existing .
. . ."
In the Rakes case (supra) the decision of this court was made to
rest squarely upon the proposition that article 1903 of the Civil
Code is not applicable to acts of negligence which constitute the
breach of a contract.
Upon this point the Court said:
The acts to which these articles [1902 and 1903 of the Civil
Code] 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 article 1101, 1103, and 1104 of the same code.
(Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)
This distinction is of the utmost importance. The liability, which,
under the Spanish law, is, in certain cases imposed upon
employers with respect to damages occasioned by the
negligence of their employees to persons to whom they are not
bound by contract, is not based, as in the English Common Law,
upon the principle of respondeat superior if it were, the master
would be liable in every case and unconditionally but upon the
principle announced in article 1902 of the Civil Code, which
imposes upon all persons who by their fault or negligence, do
injury to another, the obligation of making good the damage
caused. One who places a powerful automobile in the hands of a
servant whom he knows to be ignorant of the method of
managing such a vehicle, is himself guilty of an act of negligence
which makes him liable for all the consequences of his
imprudence. The obligation to make good the damage arises at
the very instant that the unskillful servant, while acting within
the scope of his employment causes the injury. The liability of the
master is personal and direct. But, if the master has not been
guilty of any negligence whatever in the selection and direction
of the servant, he is not liable for the acts of the latter, whatever
done within the scope of his employment or not, if the damage
done by the servant does not amount to a breach of the contract
between the master and the person injured.
It is not accurate to say that proof of diligence and care in the
selection and control of the servant relieves the master from
liability for the latter's acts on the contrary, that proof shows
that the responsibility has never existed. As Manresa says (vol. 8,
p. 68) the liability arising from extra-contractual culpa is always
based upon a voluntary act or omission which, without willful
intent, but by mere negligence or inattention, has caused
damage to another. A master who exercises all possible care in
the selection of his servant, taking into consideration the
qualifications they should possess for the discharge of the duties
which it is his purpose to confide to them, and directs them with
equal diligence, thereby performs his duty to third persons to
whom he is bound by no contractual ties, and he incurs no
liability whatever if, by reason of the negligence of his servants,
even within the scope of their employment, such third person
suffer damage. True it is that under article 1903 of the Civil Code

the law creates a presumption that he has been negligent in the

selection or direction of his servant, but the presumption is
rebuttable and yield to proof of due care and diligence in this
respect.
The supreme court of Porto Rico, in interpreting identical
provisions, as found in the Porto Rico Code, has held that these
articles are applicable to cases of extra-contractual culpa
exclusively. (Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)
This distinction was again made patent by this Court in its
decision in the case of Bahia vs. Litonjua and Leynes, (30 Phil.
rep., 624), which was an action brought upon the theory of the
extra-contractual liability of the defendant to respond for the
damage caused by the carelessness of his employee while acting
within the scope of his employment. The Court, after citing the
last paragraph of article 1903 of the Civil Code, said:
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 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. This is the
notable peculiarity of the Spanish law of negligence. It is, of
course, in striking contrast to the American doctrine that, in
relations with strangers, the negligence of the servant in
conclusively the negligence of the master.
The opinion there expressed by this Court, to the effect that in
case of extra-contractual culpa based upon negligence, it is
necessary that there shall have been some fault attributable to
the defendant personally, and that the last paragraph of article
1903 merely establishes a rebuttable presumption, is in complete
accord with the authoritative opinion of Manresa, who says (vol.
12, p. 611) that the liability created by article 1903 is imposed by
reason of the breach of the duties inherent in the special
relations of authority or superiority existing between the person
called upon to repair the damage and the one who, by his act or

omission, was the cause of it.

On the other hand, the liability of masters and employers for the
negligent acts or omissions of their servants or agents, when
such acts or omissions cause damages which amount to the
breach of a contact, is not based upon a mere presumption of the
master's negligence in their selection or control, and proof of
exercise of the utmost diligence and care in this regard does not
relieve the master of his liability for the breach of his contract.
Every legal obligation must of necessity be extra-contractual or
contractual. Extra-contractual obligation has its source in the
breach or omission of those mutual duties which civilized society
imposes upon it members, or which arise from these relations,
other than contractual, of certain members of society to others,
generally embraced in the concept of status. The legal rights of
each member of society constitute the measure of the
corresponding legal duties, mainly negative in character, which
the existence of those rights imposes upon all other members of
society. The breach of these general duties whether due to willful
intent or to mere inattention, if productive of injury, give rise to
an obligation to indemnify the injured party. The fundamental
distinction between obligations of this character and those which
arise from contract, rests upon the fact that in cases of noncontractual obligation it is the wrongful or negligent act or
omission itself which creates the vinculum juris, whereas in
contractual relations the vinculum exists independently of the
breach of the voluntary duty assumed by the parties when
entering into the contractual relation.
With respect to extra-contractual obligation arising from
negligence, whether of act or omission, it is competent for the
legislature to elect and our Legislature has so elected whom
such an obligation is imposed is morally culpable, or, on the
contrary, for reasons of public policy, to extend that liability,
without regard to the lack of moral culpability, so as to include
responsibility for the negligence of those person who acts or
mission are imputable, by a legal fiction, to others who are in a
position to exercise an absolute or limited control over them. The
legislature which adopted our Civil Code has elected to limit
extra-contractual liability with certain well-defined exceptions
to cases in which moral culpability can be directly imputed to
the persons to be charged. This moral responsibility may consist
in having failed to exercise due care in the selection and control
of one's agents or servants, or in the control of persons who, by

reason of their status, occupy a position of dependency with

respect to the person made liable for their conduct.
The position of a natural or juridical person who has undertaken
by contract to render service to another, is wholly different from
that to which article 1903 relates. When the sources of the
obligation upon which plaintiff's cause of action depends is a
negligent act or omission, the burden of proof rests upon plaintiff
to prove the negligence if he does not his action fails. But
when the facts averred show a contractual undertaking by
defendant for the benefit of plaintiff, and it is alleged that
plaintiff has failed or refused to perform the contract, it is not
necessary for plaintiff to specify in his pleadings whether the
breach of the contract is due to willful fault or to negligence on
the part of the defendant, or of his servants or agents. Proof of
the contract and of its nonperformance is sufficient prima facie to
warrant a recovery.
As a general rule . . . it is logical that in case of extra-contractual
culpa, a suing creditor should assume the burden of proof of its
existence, as the only fact upon which his action is based; while
on the contrary, in a case of negligence which presupposes the
existence of a contractual obligation, if the creditor shows that it
exists and that it has been broken, it is not necessary for him to
prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]).
As it is not necessary for the plaintiff in an action for the breach
of a contract to show that the breach was due to the negligent
conduct of defendant or of his servants, even though such be in
fact the actual cause of the breach, it is obvious that proof on the
part of defendant that the negligence or omission of his servants
or agents caused the breach of the contract would not constitute
a defense to the action. If the negligence of servants or agents
could be invoked as a means of discharging the liability arising
from contract, the anomalous result would be that person acting
through the medium of agents or servants in the performance of
their contracts, would be in a better position than those acting in
person. If one delivers a valuable watch to watchmaker who
contract to repair it, and the bailee, by a personal negligent act
causes its destruction, he is unquestionably liable. Would it be
logical to free him from his liability for the breach of his contract,
which involves the duty to exercise due care in the preservation
of the watch, if he shows that it was his servant whose
negligence caused the injury? If such a theory could be accepted,
juridical persons would enjoy practically complete immunity from

damages arising from the breach of their contracts if caused by

negligent acts as such juridical persons can of necessity only act
through agents or servants, and it would no doubt be true in
most instances that reasonable care had been taken in selection
and direction of such servants. If one delivers securities to a
banking corporation as collateral, and they are lost by reason of
the negligence of some clerk employed by the bank, would it be
just and reasonable to permit the bank to relieve itself of liability
for the breach of its contract to return the collateral upon the
payment of the debt by proving that due care had been
exercised in the selection and direction of the clerk?
This distinction between culpa aquiliana, as the source of an
obligation, and culpa contractual as a mere incident to the
performance of a contract has frequently been recognized by the
supreme court of Spain. (Sentencias of June 27, 1894; November
20, 1896; and December 13, 1896.) In the decisions of November
20, 1896, it appeared that plaintiff's action arose ex contractu,
but that defendant sought to avail himself of the provisions of
article 1902 of the Civil Code as a defense. The Spanish Supreme
Court rejected defendant's contention, saying:
These are not cases of injury caused, without any pre-existing
obligation, by fault or negligence, such as those to which article
1902 of the Civil Code relates, but of damages caused by the
defendant's failure to carry out the undertakings imposed by the
contracts . . . .
A brief review of the earlier decision of this court involving the
liability of employers for damage done by the negligent acts of
their servants will show that in no case has the court ever
decided that the negligence of the defendant's servants has
been held to constitute a defense to an action for damages for
breach of contract.
In the case of Johnson vs. David (5 Phil. Rep., 663), the court held
that the owner of a carriage was not liable for the damages
caused by the negligence of his driver. In that case the court
commented on the fact that no evidence had been adduced in
the trial court that the defendant had been negligent in the
employment of the driver, or that he had any knowledge of his
lack of skill or carefulness.
In the case of Baer Senior & Co's Successors vs. Compania
Maritima (6 Phil. Rep., 215), the plaintiff sued the defendant for
damages caused by the loss of a barge belonging to plaintiff
which was allowed to get adrift by the negligence of defendant's

servants in the course of the performance of a contract of

towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if
the "obligation of the defendant grew out of a contract made
between it and the plaintiff . . . we do not think that the
provisions of articles 1902 and 1903 are applicable to the case."
In the case of Chapman vs. Underwood (27 Phil. Rep., 374),
plaintiff sued the defendant to recover damages for the personal
injuries caused by the negligence of defendant's chauffeur while
driving defendant's automobile in which defendant was riding at
the time. The court found that the damages were caused by the
negligence of the driver of the automobile, but held that the
master was not liable, although he was present at the time,
saying:
. . . unless the negligent acts of the driver are continued for a
length of time as to give the owner a reasonable opportunity to
observe them and to direct the driver to desist therefrom. . . .
The act complained of must be continued in the presence of the
owner for such length of time that the owner by his
acquiescence, makes the driver's acts his own.
In the case of Yamada vs. Manila Railroad Co. and Bachrach
Garage & Taxicab Co. (33 Phil. Rep., 8), it is true that the court
rested its conclusion as to the liability of the defendant upon
article 1903, although the facts disclosed that the injury
complaint of by plaintiff constituted a breach of the duty to him
arising out of the contract of transportation. The express ground
of the decision in this case was that article 1903, in dealing with
the liability of a master for the negligent acts of his servants
"makes the distinction between private individuals and public
enterprise;" that as to the latter the law creates a rebuttable
presumption of negligence in the selection or direction of
servants; and that in the particular case the presumption of
negligence had not been overcome.
It is evident, therefore that in its decision Yamada case, the court
treated plaintiff's action as though founded in tort rather than as
based upon the breach of the contract of carriage, and an
examination of the pleadings and of the briefs shows that the
questions of law were in fact discussed upon this theory. Viewed
from the standpoint of the defendant the practical result must
have been the same in any event. The proof disclosed beyond
doubt that the defendant's servant was grossly negligent and
that his negligence was the proximate cause of plaintiff's injury. It
also affirmatively appeared that defendant had been guilty of

negligence in its failure to exercise proper discretion in the

direction of the servant. Defendant was, therefore, liable for the
injury suffered by plaintiff, whether the breach of the duty were
to be regarded as constituting culpa aquiliana or culpa
contractual. As Manresa points out (vol. 8, pp. 29 and 69)
whether negligence occurs an incident in the course of the
performance of a contractual undertaking or its itself the source
of an extra-contractual undertaking obligation, its essential
characteristics are identical. There is always an act or omission
productive of damage due to carelessness or inattention on the
part of the defendant. Consequently, when the court holds that a
defendant is liable in damages for having failed to exercise due
care, either directly, or in failing to exercise proper care in the
selection and direction of his servants, the practical result is
identical in either case. Therefore, it follows that it is not to be
inferred, because the court held in the Yamada case that
defendant was liable for the damages negligently caused by its
servants to a person to whom it was bound by contract, and
made reference to the fact that the defendant was negligent in
the selection and control of its servants, that in such a case the
court would have held that it would have been a good defense to
the action, if presented squarely upon the theory of the breach of
the contract, for defendant to have proved that it did in fact
exercise care in the selection and control of the servant.
The true explanation of such cases is to be found by directing the
attention to the relative spheres of contractual and extracontractual obligations. The field of non- contractual obligation is
much more broader than that of contractual obligations,
comprising, as it does, the whole extent of juridical human
relations. These two fields, figuratively speaking, concentric; that
is to say, the mere fact that a person is bound to another by
contract does not relieve him from extra-contractual liability to
such person. When such a contractual relation exists the obligor
may break the contract under such conditions that the same act
which constitutes the source of an extra-contractual obligation
had no contract existed between the parties.
The contract of defendant to transport plaintiff carried with it, by
implication, the duty to carry him in safety and to provide safe
means of entering and leaving its trains (civil code, article 1258).
That duty, being contractual, was direct and immediate, and its
non-performance could not be excused by proof that the fault
was morally imputable to defendant's servants.

The railroad company's defense involves the assumption that

even granting that the negligent conduct of its servants in
placing an obstruction upon the platform was a breach of its
contractual obligation to maintain safe means of approaching
and leaving its trains, the direct and proximate cause of the
injury suffered by plaintiff was his own contributory negligence in
failing to wait until the train had come to a complete stop before
alighting. Under the doctrine of comparative negligence
announced in the Rakes case (supra), if the accident was caused
by plaintiff's own negligence, no liability is imposed upon
defendant's negligence and plaintiff's negligence merely
contributed to his injury, the damages should be apportioned. It
is, therefore, important to ascertain if defendant was in fact
guilty of negligence.
It may be admitted that had plaintiff waited until the train had
come to a full stop before alighting, the particular injury suffered
by him could not have occurred. Defendant contends, and cites
many authorities in support of the contention, that it is
negligence per se for a passenger to alight from a moving train.
We are not disposed to subscribe to this doctrine in its absolute
form. We are of the opinion that this proposition is too badly
stated and is at variance with the experience of every-day life. In
this particular instance, that the train was barely moving when
plaintiff alighted is shown conclusively by the fact that it came to
stop within six meters from the place where he stepped from it.
Thousands of person alight from trains under these conditions
every day of the year, and sustain no injury where the company
has kept its platform free from dangerous obstructions. There is
no reason to believe that plaintiff would have suffered any injury
whatever in alighting as he did had it not been for defendant's
negligent failure to perform its duty to provide a safe alighting
place.
We are of the opinion that the correct doctrine relating to this
subject is that expressed in Thompson's work on Negligence (vol.
3, sec. 3010) as follows:
The test by which to determine whether the passenger has been
guilty of negligence in attempting to alight from a moving railway
train, is that of ordinary or reasonable care. It is to be considered
whether an ordinarily prudent person, of the age, sex and
condition of the passenger, would have acted as the passenger
acted under the circumstances disclosed by the evidence. This
care has been defined to be, not the care which may or should

be used by the prudent man generally, but the care which a man
of ordinary prudence would use under similar circumstances, to
avoid injury." (Thompson, Commentaries on Negligence, vol. 3,
sec. 3010.)
Or, it we prefer to adopt the mode of exposition used by this
court in Picart vs. Smith (37 Phil. rep., 809), we may say that the
test is this; Was there anything in the circumstances surrounding
the plaintiff at the time he alighted from the train which would
have admonished a person of average prudence that to get off
the train under the conditions then existing was dangerous? If so,
the plaintiff should have desisted from alighting; and his failure
so to desist was contributory negligence.1awph!l.net
As the case now before us presents itself, the only fact from
which a conclusion can be drawn to the effect that plaintiff was
guilty of contributory negligence is that he stepped off the car
without being able to discern clearly the condition of the platform
and while the train was yet slowly moving. In considering the
situation thus presented, it should not be overlooked that the
plaintiff was, as we find, ignorant of the fact that the obstruction
which was caused by the sacks of melons piled on the platform
existed; and as the defendant was bound by reason of its duty as
a public carrier to afford to its passengers facilities for safe
egress from its trains, the plaintiff had a right to assume, in the
absence of some circumstance to warn him to the contrary, that
the platform was clear. The place, as we have already stated,
was dark, or dimly lighted, and this also is proof of a failure upon
the part of the defendant in the performance of a duty owing by
it to the plaintiff; for if it were by any possibility concede that it
had right to pile these sacks in the path of alighting passengers,
the placing of them adequately so that their presence would be
revealed.
As pertinent to the question of contributory negligence on the
part of the plaintiff in this case the following circumstances are to
be noted: The company's platform was constructed upon a level
higher than that of the roadbed and the surrounding ground. The
distance from the steps of the car to the spot where the alighting
passenger would place his feet on the platform was thus
reduced, thereby decreasing the risk incident to stepping off. The
nature of the platform, constructed as it was of cement material,
also assured to the passenger a stable and even surface on
which to alight. Furthermore, the plaintiff was possessed of the
vigor and agility of young manhood, and it was by no means so

risky for him to get off while the train was yet moving as the
same act would have been in an aged or feeble person. In
determining the question of contributory negligence in
performing such act that is to say, whether the passenger
acted prudently or recklessly the age, sex, and physical
condition of the passenger are circumstances necessarily
affecting the safety of the passenger, and should be considered.
Women, it has been observed, as a general rule are less capable
than men of alighting with safety under such conditions, as the
nature of their wearing apparel obstructs the free movement of
the limbs. Again, it may be noted that the place was perfectly
familiar to the plaintiff as it was his daily custom to get on and of
the train at this station. There could, therefore, be no uncertainty
in his mind with regard either to the length of the step which he
was required to take or the character of the platform where he
was alighting. Our conclusion is that the conduct of the plaintiff
in undertaking to alight while the train was yet slightly under way
was not characterized by imprudence and that therefore he was
not guilty of contributory negligence.
The evidence shows that the plaintiff, at the time of the accident,
was earning P25 a month as a copyist clerk, and that the injuries
he has suffered have permanently disabled him from continuing
that employment. Defendant has not shown that any other
gainful occupation is open to plaintiff. His expectancy of life,
according to the standard mortality tables, is approximately
thirty-three years. We are of the opinion that a fair compensation
for the damage suffered by him for his permanent disability is
the sum of P2,500, and that he is also entitled to recover of
defendant the additional sum of P790.25 for medical attention,
hospital services, and other incidental expenditures connected
with the treatment of his injuries.
The decision of lower court is reversed, and judgment is hereby
rendered plaintiff for the sum of P3,290.25, and for the costs of
both instances. So ordered.
Arellano, C.J., Torres, Street and Avancea, JJ., concur.

AMADO PICART, plaintiff-appellant,

vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover of the
defendant, Frank Smith, jr., the sum of P31,000, as damages
alleged to have been caused by an automobile driven by the
defendant. From a judgment of the Court of First Instance of the
Province of La Union absolving the defendant from liability the
plaintiff has appealed.
The occurrence which gave rise to the institution of this action
took place on December 12, 1912, on the Carlatan Bridge, at San
Fernando, La Union. It appears that upon the occasion in
question the plaintiff was riding on his pony over said bridge.
Before he had gotten half way across, the defendant approached
from the opposite direction in an automobile, going at the rate of
about ten or twelve miles per hour. As the defendant neared the
bridge he saw a horseman on it and blew his horn to give
warning of his approach. He continued his course and after he
had taken the bridge he gave two more successive blasts, as it
appeared to him that the man on horseback before him was not
observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and heard
the warning signals. However, being perturbed by the novelty of
the apparition or the rapidity of the approach, he pulled the pony
closely up against the railing on the right side of the bridge
instead of going to the left. He says that the reason he did this
was that he thought he did not have sufficient time to get over to
the other side. The bridge is shown to have a length of about 75
meters and a width of 4.80 meters. As the automobile
approached, the defendant guided it toward his left, that being
the proper side of the road for the machine. In so doing the
defendant assumed that the horseman would move to the other
side. The pony had not as yet exhibited fright, and the rider had
made no sign for the automobile to stop. Seeing that the pony
was apparently quiet, the defendant, instead of veering to the
right while yet some distance away or slowing down, continued
to approach directly toward the horse without diminution of
speed. When he had gotten quite near, there being then no
possibility of the horse getting across to the other side, the
defendant quickly turned his car sufficiently to the right to

escape hitting the horse alongside of the railing where it as then

standing; but in so doing the automobile passed in such close
proximity to the animal that it became frightened and turned its
body across the bridge with its head toward the railing. In so
doing, it as struck on the hock of the left hind leg by the flange of
the car and the limb was broken. The horse fell and its rider was
thrown off with some violence. From the evidence adduced in the
case we believe that when the accident occurred the free space
where the pony stood between the automobile and the railing of
the bridge was probably less than one and one half meters. As a
result of its injuries the horse died. The plaintiff received
contusions which caused temporary unconsciousness and
required medical attention for several days.
The question presented for decision is whether or not the
defendant in maneuvering his car in the manner above described
was guilty of negligence such as gives rise to a civil obligation to
repair the damage done; and we are of the opinion that he is so
liable. As the defendant started across the bridge, he had the
right to assume that the horse and the rider would pass over to
the proper side; but as he moved toward the center of the bridge
it was demonstrated to his eyes that this would not be done; and
he must in a moment have perceived that it was too late for the
horse to cross with safety in front of the moving vehicle. In the
nature of things this change of situation occurred while the
automobile was yet some distance away; and from this moment
it was not longer within the power of the plaintiff to escape being
run down by going to a place of greater safety. The control of the
situation had then passed entirely to the defendant; and it was
his duty either to bring his car to an immediate stop or, seeing
that there were no other persons on the bridge, to take the other
side and pass sufficiently far away from the horse to avoid the
danger of collision. Instead of doing this, the defendant ran
straight on until he was almost upon the horse. He was, we think,
deceived into doing this by the fact that the horse had not yet
exhibited fright. But in view of the known nature of horses, there
was an appreciable risk that, if the animal in question was
unacquainted with automobiles, he might get exited and jump
under the conditions which here confronted him. When the
defendant exposed the horse and rider to this danger he was, in
our opinion, negligent in the eye of the law.
The test by which to determine the existence of negligence in a
particular case may be stated as follows: Did the defendant in

doing the alleged negligent act use that person would have used
in the same situation? If not, then he is guilty of negligence. The
law here in effect adopts the standard supposed to be supplied
by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not
determined by reference to the personal judgment of the actor in
the situation before him. The law considers what would be
reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a
prudent man in a given situation must of course be always
determined in the light of human experience and in view of the
facts involved in the particular case. Abstract speculations
cannot here be of much value but this much can be profitably
said: Reasonable men govern their conduct by the circumstances
which are before them or known to them. They are not, and are
not supposed to be, omniscient of the future. Hence they can be
expected to take care only when there is something before them
to suggest or warn of danger. Could a prudent man, in the case
under consideration, foresee harm as a result of the course
actually pursued? If so, it was the duty of the actor to take
precautions to guard against that harm. Reasonable foresight of
harm, followed by ignoring of the suggestion born of this
prevision, is always necessary before negligence can be held to
exist. Stated in these terms, the proper criterion for determining
the existence of negligence in a given case is this: Conduct is
said to be negligent when a prudent man in the position of the
tortfeasor would have foreseen that an effect harmful to another
was sufficiently probable to warrant his foregoing conduct or
guarding against its consequences.
Applying this test to the conduct of the defendant in the present
case we think that negligence is clearly established. A prudent
man, placed in the position of the defendant, would in our
opinion, have recognized that the course which he was pursuing
was fraught with risk, and would therefore have foreseen harm to
the horse and the rider as reasonable consequence of that
course. Under these circumstances the law imposed on the
defendant the duty to guard against the threatened harm.
It goes without saying that the plaintiff himself was not free from
fault, for he was guilty of antecedent negligence in planting
himself on the wrong side of the road. But as we have already
stated, the defendant was also negligent; and in such case the

problem always is to discover which agent is immediately and

directly responsible. It will be noted that the negligent acts of the
two parties were not contemporaneous, since the negligence of
the defendant succeeded the negligence of the plaintiff by an
appreciable interval. Under these circumstances the law is that
the person who has the last fair chance to avoid the impending
harm and fails to do so is chargeable with the consequences,
without reference to the prior negligence of the other party.
The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co.
(7 Phil. Rep., 359) should perhaps be mentioned in this
connection. This Court there held that while contributory
negligence on the part of the person injured did not constitute a
bar to recovery, it could be received in evidence to reduce the
damages which would otherwise have been assessed wholly
against the other party. The defendant company had there
employed the plaintiff, as a laborer, to assist in transporting iron
rails from a barge in Manila harbor to the company's yards
located not far away. The rails were conveyed upon cars which
were hauled along a narrow track. At certain spot near the
water's edge the track gave way by reason of the combined
effect of the weight of the car and the insecurity of the road bed.
The car was in consequence upset; the rails slid off; and the
plaintiff's leg was caught and broken. It appeared in evidence
that the accident was due to the effects of the typhoon which
had dislodged one of the supports of the track. The court found
that the defendant company was negligent in having failed to
repair the bed of the track and also that the plaintiff was, at the
moment of the accident, guilty of contributory negligence in
walking at the side of the car instead of being in front or behind.
It was held that while the defendant was liable to the plaintiff by
reason of its negligence in having failed to keep the track in
proper repair nevertheless the amount of the damages should be
reduced on account of the contributory negligence in the
plaintiff. As will be seen the defendant's negligence in that case
consisted in an omission only. The liability of the company arose
from its responsibility for the dangerous condition of its track. In
a case like the one now before us, where the defendant was
actually present and operating the automobile which caused the
damage, we do not feel constrained to attempt to weigh the
negligence of the respective parties in order to apportion the
damage according to the degree of their relative fault. It is
enough to say that the negligence of the defendant was in this

case the immediate and determining cause of the accident and

that the antecedent negligence of the plaintiff was a more
remote factor in the case.
A point of minor importance in the case is indicated in the special
defense pleaded in the defendant's answer, to the effect that the
subject matter of the action had been previously adjudicated in
the court of a justice of the peace. In this connection it appears
that soon after the accident in question occurred, the plaintiff
caused criminal proceedings to be instituted before a justice of
the peace charging the defendant with the infliction of serious
injuries (lesiones graves). At the preliminary investigation the
defendant was discharged by the magistrate and the
proceedings were dismissed. Conceding that the acquittal of the
defendant at the trial upon the merits in a criminal prosecution
for the offense mentioned would be res adjudicata upon the
question of his civil liability arising from negligence -- a point
upon which it is unnecessary to express an opinion -- the action
of the justice of the peace in dismissing the criminal proceeding
upon the preliminary hearing can have no effect. (See U. S. vs.
Banzuela and Banzuela, 31 Phil. Rep., 564.)
From what has been said it results that the judgment of the lower
court must be reversed, and judgment is her rendered that the
plaintiff recover of the defendant the sum of two hundred pesos
(P200), with costs of other instances. The sum here awarded is
estimated to include the value of the horse, medical expenses of
the plaintiff, the loss or damage occasioned to articles of his
apparel, and lawful interest on the whole to the date of this
recovery. The other damages claimed by the plaintiff are remote
or otherwise of such character as not to be recoverable. So
ordered.

G.R. No. L-13505

February 4, 1919
GEO. W. DAYWALT, plaintiff-appellant,
vs.
LA
CORPORACION
DE
LOS
PADRES
AGUSTINOS
RECOLETOS, ET AL., defendants-appellees.
C. C. Cohn and Thos. D. Aitken for appellant.Crossfield & O'Brien
for appellee.
STREET, J.:
In the year 1902, Teodorica Endencia, an unmarried woman,
resident in the Province of Mindoro, executed a contract whereby
she obligated herself to convey to Geo. W. Daywalt, a tract of
land situated in the barrio of Mangarin, municipality of Bulalacao,
now San Jose, in said province. It was agreed that a deed should
be executed as soon as the title to the land should be perfected
by proceedings in the Court of Land Registration and a Torrens
certificate should be produced therefore in the name of Teodorica
Endencia. A decree recognizing the right of Teodorica as owner
was entered in said court in August 1906, but the Torrens
certificate was not issued until later. The parties, however, met
immediately upon the entering of this decree and made a new
contract with a view to carrying their original agreement into
effect. This new contract was executed in the form of a deed of
conveyance and bears date of August 16, 1906. The stipulated
price was fixed at P4,000, and the area of the land enclosed in
the boundaries defined in the contract was stated to be 452
hectares and a fraction.
The second contract was not immediately carried into effect for
the reason that the Torrens certificate was not yet obtainable and
in fact said certificate was not issued until the period of
performance contemplated in the contract had expired.
Accordingly, upon October 3, 1908, the parties entered into still
another agreement, superseding the old, by which Teodorica
Endencia agreed upon receiving the Torrens title to the land in
question, to deliver the same to the Hongkong and Shanghai
Bank in Manila, to be forwarded to the Crocker National Bank in
San Francisco, where it was to be delivered to the plaintiff upon
payment of a balance of P3,100.
The Torrens certificate was in time issued to Teodorica Endencia,
but in the course of the proceedings relative to the registration of
the land, it was found by official survey that the area of the tract
inclosed in the boundaries stated in the contract was about 1.248
hectares of 452 hectares as stated in the contract. In view of this

development Teodorica Endencia became reluctant to transfer

the whole tract to the purchaser, asserting that she never
intended to sell so large an amount of land and that she had
been misinformed as to its area.
This attitude of hers led to litigation in which Daywalt finally
succeeded, upon appeal to the Supreme Court, in obtaining a
decree for specific performance; and Teodorica Endencia was
ordered to convey the entire tract of land to Daywalt pursuant to
the contract of October 3, 1908, which contract was declared to
be in full force and effect. This decree appears to have become
finally effective in the early part of the year 1914.1
The defendant, La Corporacion de los Padres Recoletos, is a
religious corporation, with its domicile in the city of Manila. Said
corporation was formerly the owner of a large tract of land,
known as the San Jose Estate, on the island of Mindoro, which
was sold to the Government of the Philippine Islands in the year
1909. The same corporation was at this time also the owner of
another estate on the same island immediately adjacent to the
land which Teodorica Endencia had sold to Geo. W. Daywalt; and
for many years the Recoletos Fathers had maintained large herds
of cattle on the farms referred to. Their representative, charged
with management of these farms, was father Isidoro Sanz,
himself a members of the order. Father Sanz had long been well
acquainted with Teodorica Endencia and exerted over her an
influence and ascendency due to his religious character as well
as to the personal friendship which existed between them.
Teodorica appears to be a woman of little personal force, easily
subject to influence, and upon all the important matters of
business was accustomed to seek, and was given, the advice of
father Sanz and other members of his order with whom she came
in contact.
Father Sanz was fully aware of the existence of the contract of
1902 by which Teodorica Endencia agreed to sell her land to the
plaintiff as well as of the later important developments
connected with the history of that contract and the contract
substituted successively for it; and in particular Father Sanz, as
well as other members of the defendant corporation, knew of the
existence of the contract of October 3, 1908, which, as we have
already seen finally fixed the rights of the parties to the property
in question. When the Torrens certificate was finally issued in
1909 in favor of Teodorica Endencia, she delivered it for
safekeeping to the defendant corporation, and it was then taken

to Manila where it remained in the custody and under the control

of P. Juan Labarga the procurador and chief official of the
defendant corporation, until the deliver thereof to the plaintiff
was made compulsory by reason of the decree of the Supreme
Court in 1914.
When the defendant corporation sold the San Jose Estate, it was
necessary to bring the cattle off of that property; and, in the first
half of 1909, some 2,368 head were removed to the estate of the
corporation immediately adjacent to the property which the
plaintiff had purchased from Teodorica Endencia. As Teodorica
still retained possession of said property Father Sanz entered into
an arrangement with her whereby large numbers of cattle
belonging to the defendant corporation were pastured upon said
land during a period extending from June 1, 1909, to May 1,
1914.
Under the first cause stated in the complaint in the present
action the plaintiff seeks to recover from the defendant
corporation the sum of P24,000, as damages for the use and
occupation of the land in question by reason of the pasturing of
cattle thereon during the period stated. The trial court came to
the conclusion that the defendant corporation was liable for
damages by reason of the use and occupation of the premises in
the manner stated; and fixed the amount to be recovered at
P2,497. The plaintiff appealed and has assigned error to this part
of the judgment of the court below, insisting that damages
should have been awarded in a much larger sum and at least to
the full extent of P24,000, the amount claimed in the complaint.
As the defendant did not appeal, the property of allowing
damages for the use and occupation of the land to the extent o
P2,497, the amount awarded, is not now in question an the only
thing here to be considered, in connection with this branch of the
case, is whether the damages allowed under this head should be
increased. The trial court rightly ignored the fact that the
defendant corporation had paid Teodorica Endencia of ruse and
occupation of the same land during the period in question at the
rate of P425 per annum, inasmuch as the final decree of this
court in the action for specific performance is conclusive against
her right, and as the defendant corporation had notice of the
rights of the plaintiff under this contract of purchase, it can not
be permitted that the corporation should escape liability in this
action by proving payment of rent to a person other than the
true owner.

With reference to the rate of which compensation should be

estimated the trial court came to the following conclusion:
As to the rate of the compensation, the plaintiff contends that
the defendant corporation maintained at leas one thousand head
of cattle on the land and that the pasturage was of the value of
forty centavos per head monthly, or P4,800 annually, for the
whole tract. The court can not accept this view. It is rather
improbable that 1,248 hectares of wild Mindoro land would
furnish sufficient pasturage for one thousand head of cattle
during the entire year, and, considering the locality, the rate of
forty centavos per head monthly seems too high. The evidence
shows that after having recovered possession of the land the
plaintiff rented it to the defendant corporation for fifty centavos
per hectares annually, the tenant to pay the taxes on the land,
and this appears to be a reasonable rent. There is no reason to
suppose that the land was worth more for grazing purposes
during the period from 1909 to 1913, than it was at the later
period. Upon this basis the plaintiff is entitled to damages in the
sum of p2,497, and is under no obligation to reimburse the
defendants for the land taxes paid by either of them during the
period the land was occupied by the defendant corporation. It
may be mentioned in this connection that the Lontok tract
adjoining the land in question and containing over three
thousand hectares appears to have been leased for only P1,000
a year, plus the taxes.
From this it will be seen that the trial court estimated the rental
value of the land for grazing purposes at 50 centavos per hectare
per annum, and roughly adopted the period of four years as the
time for which compensation at that rate should be made. As the
court had already found that the defendant was liable for these
damages from June, 1, 1909, to May 1, 1914, or a period of four
years and eleven months, there seems some ground for the
contention made in the appellant's first assignment of error that
the court's computation was erroneous, even accepting the rule
upon which the damages were assessed, as it is manifest that at
the rate of 50 centavos per hectare per annum, the damages for
four years and eleven months would be P3,090.
Notwithstanding this circumstance, we are of the opinion that the
damages assessed are sufficient to compensate the plaintiff for
the use and occupation of the land during the whole time it was
used. There is evidence in the record strongly tending to show
that the wrongful use of the land by the defendant was not

continuous throughout the year but was confined mostly to the

reason when the forage obtainable on the land of the defendant
corporation was not sufficient to maintain its cattle, for which
reason it became necessary to allow them to go over to pasture
on the land in question; and it is not clear that the whole of the
land was used for pasturage at any time. Considerations of this
character probably led the trial court to adopt four years as
roughly being the period during which compensation should be
allowed. But whether this was advertently done or not, we see no
sufficient reason, in the uncertainty of the record with reference
to the number of the cattle grazed and the period when the land
was used, for substituting our guess for the estimate made by
the trial court.
In the second cause of action stated in the complaint the plaintiff
seeks to recover from the defendant corporation the sum of
P500,000, as damages, on the ground that said corporation, for
its own selfish purposes, unlawfully induced Teodorica Endencia
to refrain from the performance of her contract for the sale of the
land in question and to withhold delivery to the plaintiff of the
Torrens title, and further, maliciously and without reasonable
cause, maintained her in her defense to the action of specific
performance which was finally decided in favor of the plaintiff in
this court. The cause of action here stated is based on liability
derived from the wrongful interference of the defendant in the
performance of the contract between the plaintiff and Teodorica
Endencia; and the large damages laid in the complaint were,
according to the proof submitted by the plaintiff, incurred as a
result of a combination of circumstances of the following nature:
In 1911, it appears, the plaintiff, as the owner of the land which
he had bought from Teodorica Endencia entered into a contract
(Exhibit C) with S. B. Wakefield, of San Francisco, for the sale and
disposal of said lands to a sugar growing and milling enterprise,
the successful launching of which depended on the ability of
Daywalt to get possession of the land and the Torrens certificate
of title. In order to accomplish this end, the plaintiff returned to
the Philippine Islands, communicated his arrangement to the
defendant,, and made repeated efforts to secure the registered
title for delivery in compliance with said agreement with
Wakefield. Teodorica Endencia seems to have yielded her
consent to the consummation of her contract, but the Torrens
title was then in the possession of Padre Juan Labarga in Manila,
who refused to deliver the document. Teodorica also was in the

end contract with the plaintiff, with the result that the plaintiff
was kept out of possession until the Wakefield project for the
establishment of a large sugar growing and milling enterprise fell
through. In the light of what has happened in recent years in the
sugar industry, we feel justified in saying that the project above
referred to, if carried into effect, must inevitably have proved a
great success.
The determination of the issue presented in this second cause of
action requires a consideration of two points. The first is whether
a person who is not a party to a contract for the sale of land
makes himself liable for damages to the vendee, beyond the
value of the use and occupation, by colluding with the vendor
and maintaining him in the effort to resist an action for specific
performance. The second is whether the damages which the
plaintiff seeks to recover under this head are too remote and
speculative to be the subject of recovery.
As preliminary to a consideration of the first of these questions,
we deem it well it dispose of the contention that the members of
the defendants corporation, in advising and prompting Teodorica
Endencia not to comply with the contract of sale, were actuated
by improper and malicious motives. The trial court found that
this contention was not sustained, observing that while it was
true that the circumstances pointed to an entire sympathy on the
part of the defendant corporation with the efforts of Teodorica
Endencia to defeat the plaintiff's claim to the land, the fact that
its officials may have advised her not to carry the contract into
effect would not constitute actionable interference with such
contract. It may be added that when one considers the hardship
that the ultimate performance of that contract entailed on the
vendor, and the doubt in which the issue was involved to the
extent that the decision of the Court of the First Instance was
unfavorable to the plaintiff and the Supreme Court itself was
divided the attitude of the defendant corporation, as exhibited
in the conduct of its procurador, Juan Labarga, and other
members of the order of the Recollect Fathers, is not difficult to
understand. To our mind a fair conclusion on this feature of the
case is that father Juan Labarga and his associates believed in
good faith that the contract cold not be enforced and that
Teodorica would be wronged if it should be carried into effect.
Any advice or assistance which they may have given was,
therefore, prompted by no mean or improper motive. It is not, in
our opinion, to be denied that Teodorica would have surrendered

the documents of title and given possession of the land but for
the influence and promptings of members of the defendants
corporation. But we do not credit the idea that they were in any
degree influenced to the giving of such advice by the desire to
secure to themselves the paltry privilege of grazing their cattle
upon the land in question to the prejudice of the just rights of the
plaintiff.
The attorney for the plaintiff maintains that, by interfering in the
performance of the contract in question and obstructing the
plaintiff in his efforts to secure the certificate of tittle to the land,
the defendant corporation made itself a co-participant with
Teodorica Endencia in the breach of said contract; and inasmuch
as father Juan Labarga, at the time of said unlawful intervention
between the contracting parties, was fully aware of the existence
of the contract (Exhibit C) which the plaintiff had made with S. B.
Wakefield, of San Francisco, it is insisted that the defendant
corporation is liable for the loss consequent upon the failure of
the project outlined in said contract.
In this connection reliance is placed by the plaintiff upon certain
American and English decisions in which it is held that a person
who is a stranger to contract may, by an unjustifiable
interference in the performance thereof, render himself liable for
the damages consequent upon non-performance. It is said that
the doctrine of these cases was recognized by this court in
Gilchrist vs. Cuddy (29 Phil. Rep., 542); and we have been
earnestly pressed to extend the rule there enunciated to the
situation here presente.
Somewhat more than half a century ago the English Court of the
Queen's Bench saw its way clear to permit an action for damages
to be maintained against a stranger to a contract wrongfully
interfering in its performance. The leading case on this subject is
Lumley vs. Gye ([1853], 2 El. & Bl., 216). It there appeared that
the plaintiff, as manager of a theatre, had entered into a contract
with Miss Johanna Wagner, an opera singer,, whereby she bound
herself for a period to sing in the plaintiff's theatre and nowhere
else. The defendant, knowing of the existence of this contract,
and, as the declaration alleged, "maliciously intending to injure
the plaintiff," enticed and produced Miss Wagner to leave the
plaintiff's employment. It was held that the plaintiff was entitled
to recover damages. The right which was here recognized had its
origin in a rule, long familiar to the courts of the common law, to
the effect that any person who entices a servant from his

employment is liable in damages to the master. The master's

interest in the service rendered by his employee is here
considered as a distinct subject of juridical right. It being thus
accepted that it is a legal wrong to break up a relation of
personal service, the question now arose whether it is illegal for
one person to interfere with any contract relation subsisting
between others. Prior to the decision of Lumley vs. Gye [supra] it
had been supposed that the liability here under consideration
was limited to the cases of the enticement of menial servants,
apprentices, and others to whom the English Statutes of Laborers
were applicable. But in the case cited the majority of the judges
concurred in the opinion that the principle extended to all cases
of hiring. This doctrine was followed by the Court of Appeal in
Bowen vs. Hall ([1881], 6 Q. B., Div., 333); and in Temperton vs.
Russell ([1893], Q. B., 715), it was held that the right of action for
maliciously procuring a breach of contract is not confined to
contracts for personal services, but extends to contracts in
general. In that case the contract which the defendant had
procured to be breached was a contract for the supply of building
material.
Malice in some form is generally supposed to be an essential
ingredient in cases of interference with contract relations. But
upon the authorities it is enough if the wrong-doer, having
knowledge of the existence of the contract relations, in bad faith
sets about to break it up. Whether his motive is to benefit himself
or gratify his spite by working mischief to the employer is
immaterial. Malice in the sense of ill-will or spite is not essential.
Upon the question as to what constitutes legal justification, a
good illustration was put in the leading case. If a party enters
into contract to go for another upon a journey to a remote and
unhealthful climate, and a third person, with a bona fide purpose
of benefiting the one who is under contract to go, dissuades him
from the step, no action will lie. But if the advice is not
disinterested and the persuasion is used for "the indirect purpose
of benefiting the defendant at the expense of the plaintiff," the
intermedler is liable if his advice is taken and the contract
broken.
The doctrine embodied in the cases just cited has sometimes
been found useful, in the complicated relations of modern
industry, as a means of restraining the activities of labor unions
and industrial societies when improperly engaged in the
promotion of strikes. An illustration of the application of the

doctrine in question in a case of this kind is found in South Wales

Miners Federation vs. Glamorgan Coal Co. ([1905]), A. C., 239). It
there appeared that certain miners employed in the plaintiff's
collieries, acting under the order of the executive council of the
defendant federation, violated their contract with the plaintiff by
abstaining from work on certain days. The federation and council
acted without any actual malice or ill-will towards the plaintiff,
and the only object of the order in question was that the price of
coal might thereby be kept up, a factor which affected the
miner's wage scale. It was held that no sufficient justification was
shown and that the federation was liable.
In the United States, the rule established in England by Lumley
vs. Gye [supra] and subsequent cases is commonly accepted,
though in a few of the States the broad idea that a stranger to a
contract can be held liable upon its is rejected, and in these
jurisdictions the doctrine, if accepted at all, is limited to the
situation where the contract is strictly for personal service.
(Boyson vs. Thorn, 98 Cal., 578; Chambers & Marshall vs.
Baldwin 91 Ky., 121; Bourlier vs. Macauley, 91 Ky., 135; Glencoe
Land & Gravel Co. vs. Hudson Bros. Com. Co., 138 Mo., 439.)
It should be observed in this connection that, according to the
English and American authorities, no question can be made as to
the liability to one who interferes with a contract existing
between others by means which, under known legal cannons,
can be denominated an unlawful means. Thus, if performance is
prevented by force, intimidation, coercion, or threats, or by false
or defamatory statements, or by nuisance or riot, the person
using such unlawful means is, under all the authorities, liable for
the damage which ensues. And in jurisdictions where the
doctrine of Lumley vs. Gye [supra] is rejected, no liability can
arise from a meddlesome and malicious interference with a
contract relation unless some such unlawful means as those just
indicated are used. (See cases last above cited.)
This brings us to the decision made by this court in Gilchrist vs.
Cuddy (29 Phil. Rep., 542). It there appeared that one Cuddy, the
owner of a cinematographic film, let it under a rental contract to
the plaintiff Gilchrist for a specified period of time. In violation of
the terms of this agreement, Cuddy proceeded to turn over the
film also under a rental contract, to the defendants Espejo and
Zaldarriaga. Gilchrist thereupon restored to the Court of First
Instance and produced an injunction restraining the defendants
from exhibiting the film in question in their theater during the

period specified in the contract of Cuddy with Gilchrist. Upon

appeal to this court it was in effect held that the injunction was
not improperly granted, although the defendants did not, at the
time their contract was made, know the identity of the plaintiff as
the person holding the prior contract but did know of the
existence of a contract in favor of someone. It was also said
arguendo, that the defendants would have been liable in
damages under article 1902 of the Civil Code, if the action had
been brought by the plaintiff to recover damages. The force of
the opinion is, we think, somewhat weakened by the criticism
contain in the concurring opinion, where it is said that the
question of breach of contract by inducement was not really
involved in the case. Taking the decision upon the point which
was rally decided, it is authority for the proposition that one who
buys something which he knows has been sold to some other
person can be restrained from using that thing to the prejudice of
the person having the prior and better right.
Translated into terms applicable to the case at bar, the decision
in Gilchrist vs. Cuddy (29 Phil. Rep., 542), indicates that the
defendant corporation, having notice of the sale of the land in
question to Daywalt, might have been enjoined by the latter from
using the property for grazing its cattle thereon. That the
defendant corporation is also liable in this action for the damage
resulting to the plaintiff from the wrongful use and occupation of
the property has also been already determined. But it will be
observed that in order to sustain this liability it is not necessary
to resort to any subtle exegesis relative to the liability of a
stranger to a contract for unlawful interference in the
performance thereof. It is enough that defendant use the
property with notice that the plaintiff had a prior and better right.
Article 1902 of the Civil Code declares that any person who by an
act or omission, characterized by fault or negligence, causes
damage to another shall be liable for the damage so done.
Ignoring so much of this article as relates to liability for
negligence, we take the rule to be that a person is liable for
damage done to another by any culpable act; and by "culpable
act" we mean any act which is blameworthy when judged by
accepted legal standards. The idea thus expressed is
undoubtedly broad enough to include any rational conception of
liability for the tortious acts likely to be developed in any society.
Thus considered, it cannot be said that the doctrine of Lumley
vs. Gye [supra] and related cases is repugnant to the principles

of the civil law.

Nevertheless, it must be admitted that the codes and
jurisprudence of the civil law furnish a somewhat uncongenial
field in which to propagate the idea that a stranger to a contract
may sued for the breach thereof. Article 1257 of the Civil Code
declares that contracts are binding only between the parties and
their privies. In conformity with this it has been held that a
stranger to a contract has no right of action for the nonfulfillment
of the contract except in the case especially contemplated in the
second paragraph of the same article. (Uy Tam and Uy Yet vs.
Leonard, 30 Phil. Rep., 471.) As observed by this court in Manila
Railroad Co. vs. Compaia Transatlantica, R. G. No. 11318 (38
Phil. Rep., 875), a contract, when effectually entered into
between certain parties, determines not only the character and
extent of the liability of the contracting parties but also the
person or entity by whom the obligation is exigible. The same
idea should apparently be applicable with respect to the person
against whom the obligation of the contract may be enforced; for
it is evident that there must be a certain mutuality in the
obligation, and if the stranger to a contract is not permitted to
sue to enforce it, he cannot consistently be held liable upon it.
If the two antagonistic ideas which we have just brought into
juxtaposition are capable of reconciliation, the process must be
accomplished by distinguishing clearly between the right of
action arising from the improper interference with the contract
by a stranger thereto, considered as an independent act
generate of civil liability, and the right of action ex contractu
against a party to the contract resulting from the breach thereof.
However, we do not propose here to pursue the matter further,
inasmuch as, for reasons presently to be stated, we are of the
opinion that neither the doctrine of Lumley vs. Gye [supra] nor
the application made of it by this court in Gilchrist vs. Cuddy (29
Phil. Rep., 542), affords any basis for the recovery of the
damages which the plaintiff is supposed to have suffered by
reason of his inability to comply with the terms of the Wakefield
contract.
Whatever may be the character of the liability which a stranger
to a contract may incur by advising or assisting one of the
parties to evade performance, there is one proposition upon
which all must agree. This is, that the stranger cannot become
more extensively liable in damages for the nonperformance of
the contract than the party in whose behalf he intermeddles. To

hold the stranger liable for damages in excess of those that could
be recovered against the immediate party to the contract would
lead to results at once grotesque and unjust. In the case at bar,
as Teodorica Endencia was the party directly bound by the
contract, it is obvious that the liability of the defendant
corporation, even admitting that it has made itself coparticipant
in the breach of the contract, can in no even exceed hers. This
leads us to consider at this point the extent of the liability of
Teodorica Endencia to the plaintiff by reason of her failure to
surrender the certificate of title and to place the plaintiff in
possession.
It should in the first place be noted that the liability of Teodorica
Endencia for damages resulting from the breach of her contract
with Daywalt was a proper subject for adjudication in the action
for specific performance which Daywalt instituted against her in
1909 and which was litigated by him to a successful conclusion
in this court, but without obtaining any special adjudication with
reference to damages. Indemnification for damages resulting
from the breach of a contract is a right inseparably annexed to
every action for the fulfillment of the obligation (art. 1124, Civil
Code); and its is clear that if damages are not sought or
recovered in the action to enforce performance they cannot be
recovered in an independent action. As to Teodorica Endencia,
therefore, it should be considered that the right of action to
recover damages for the breach of the contract in question was
exhausted in the prior suit. However, her attorneys have not
seen fit to interpose the defense of res judicata in her behalf; and
as the defendant corporation was not a party to that action, and
such defense could not in any event be of any avail to it, we
proceed to consider the question of the liability of Teodorica
Endencia for damages without refernce to this point.
The most that can be said with refernce to the conduct of
Teodorica Endencia is that she refused to carry out a contract for
the sale of certain land and resisted to the last an action for
specific performance in court. The result was that the plaintiff
was prevented during a period of several years from exerting
that control over the property which he was entitled to exert and
was meanwhile
unable
to dispose
of the
property
advantageously. Now, what is the measure of damages for the
wrongful detention of real property by the vender after the time
has come for him to place the purchaser in possession?
The damages ordinarily and normally recoverable against a

vendor for failure to deliver land which he has contracted to

deliver is the value of the use and occupation of the land for the
time during which it is wrongfully withheld. And of course where
the purchaser has not paid the purchaser money, a deduction
may be made in respect to the interest on the money which
constitutes the purchase price. Substantially the same rule holds
with respect to the liability of a landlord who fails to put his
tenant in possession pursuant to contract of lease. The measure
of damages is the value of the leasehold interest, or use and
occupation, less the stipulated rent, where this has not been
paid. The rule that the measure of damages for the wrongful
detention of land is normally to be found in the value of use and
occupation is, we believe, one of the things that may be
considered certain in the law (39 cyc., 1630; 24 Cyc., 1052
Sedgewick on Damages, Ninth ed., sec. 185.) almost as
wellsettled, indeed, as the rule that the measure of damages for
the wrongful detention of money is to be found in the interest.
We recognize the possibility that more extensive damages may
be recovered where, at the time of the creation of the
contractual obligation, the vendor, or lessor, is aware of the use
to which the purchaser or lessee desires to put the property
which is the subject of the contract, and the contract is made
with the eyes of the vendor or lessor open to the possibility of
the damage which may result to the other party from his own
failure to give possession. The case before us is not this
character, inasmuch as at the time when the rights of the parties
under the contract were determined, nothing was known to any
to them about the San Francisco capitalist who would be willing
to back the project portrayed in Exhibit C.
The extent of the liability for the breach of a contract must be
determined in the light of the situation in existence at the time
the contract is made; and the damages ordinarily recoverable
are in all events limited to such as might be reasonable are in all
events limited to such as might be reasonably foreseen in the
light of the facts then known to the contracting parties. Where
the purchaser desires to protect himself, in the contingency of
the failure of the vendor promptly to give possession, from the
possibility of incurring other damages than such as the incident
to the normal value of the use and occupation, he should cause
to be inserted in the contract a clause providing for stipulated
amount to the paid upon failure of the vendor to give possession;
and not case has been called to our attention where, in the

absence of such a stipulation, damages have been held to be

recoverable by the purchaser in excess of the normal value of
use and occupation. On the contrary, the most fundamental
conceptions of the law relative to the assessment of damages
are inconsistent with such idea.
The principles governing this branch of the law were profoundly
considered in the case Hadley vs. Baxendale (9 Exch., 341),
decided in the English Court of Exchequer in 1854; and a few
words relative to the principles governing will here be found
instructive. The decision in that case is considered a leading
authority in the jurisprudence of the common law. The plaintiffs
in that case were proprietors of a mill in Gloucester, which was
propelled by steam, and which was engaged in grinding and
supplying meal and flour to customers. The shaft of the engine
got broken, and it became necessarily that the broken shaft be
sent to an engineer or foundry man at Greenwich, to serve as a
model for casting or manufacturing another that would fit into
the machinery. The broken shaft could be delivered at Greenwich
on the second day after its receipts by the carrier it. It was
delivered to the defendants, who were common carriers engaged
in that business between these points, and who had told
plaintiffs it would be delivered at Greenwich on the second day
after its delivery to them, if delivered at a given hour. The
carriers were informed that the mill was stopped, but were not
informed of the special purpose for which the broken shaft was
desired to forwarded, They were not told the mill would remain
idle until the new shaft would be returned, or that the new shaft
could not be manufactured at Greenwich until the broken one
arrived to serve as a model. There was delay beyond the two
days in delivering the broken shaft at Greenwich, and a
corresponding delay in starting the mill. No explanation of the
delay was offered by the carriers. The suit was brought to
recover damages for the lost profits of the mill, cause by the
delay in delivering the broken shaft. It was held that the plaintiff
could not recover.
The discussion contained in the opinion of the court in that case
leads to the conclusion that the damages recoverable in case of
the breach of a contract are two sorts, namely, (1) the ordinary,
natural, and in a sense necessary damage; and (2) special
damages.
Ordinary damages is found in all breaches of contract where the
are no special circumstances to distinguish the case specially

from other contracts. The consideration paid for an unperformed

promise is an instance of this sort of damage. In all such cases
the damages recoverable are such as naturally and generally
would result from such a breach, "according to the usual course
of things." In case involving only ordinary damage no discussion
is ever indulged as to whether that damage was contemplated or
not. This is conclusively presumed from the immediateness and
inevitableness of the damage, and the recovery of such damage
follows as a necessary legal consequence of the breach. Ordinary
damage is assumed as a matter of law to be within the
contemplation of the parties.
Special damage, on the other hand, is such as follows less
directly from the breach than ordinary damage. It is only found in
case where some external condition, apart from the actual terms
to the contract exists or intervenes, as it were, to give a turn to
affairs and to increase damage in a way that the promisor,
without actual notice of that external condition, could not
reasonably be expected to foresee. Concerning this sort of
damage, Hadley vs. Baxendale (1854) [supra] lays down the
definite and just rule that before such damage can be recovered
the plaintiff must show that the particular condition which made
the damage a possible and likely consequence of the breach was
known to the defendant at the time the contract was made.
The statement that special damages may be recovered where
the likelihood of such damages flowing from the breach of the
contract is contemplated and foreseen by the parties needs to be
supplemented by a proposition which, though not enunciated in
Hadley vs. Baxendale, is yet clearly to be drawn from subsequent
cases. This is that where the damage which a plaintiff seeks to
recover as special damage is so far speculative as to be in
contemplation of law remote, notification of the special
conditions which make that damage possible cannot render the
defendant liable therefor. To bring damages which would
ordinarily be treated as remote within the category of
recoverable special damages, it is necessary that the condition
should be made the subject of contract in such sense as to
become an express or implied term of the engagement. Horne
vs. Midland R. Co. (L. R., 8 C. P., 131) is a case where the damage
which was sought to be recovered as special damage was really
remote, and some of the judges rightly places the disallowance
of the damage on the ground that to make such damage
recoverable, it must so far have been within the contemplation of

the parties as to form at least an implied term of the contract.

But others proceeded on the idea that the notice given to the
defendant was not sufficiently full and definite. The result was
the same in either view. The facts in that case were as follows:
The plaintiffs, shoe manufacturers at K, were under contract to
supply by a certain day shoes to a firm in London for the French
government. They delivered the shoes to a carrier in sufficient
time for the goods to reach London at the time stipulated in the
contract and informed the railroad agent that the shoes would be
thrown back upon their hands if they did not reach the
destination in time. The defendants negligently failed to forward
the good in due season. The sale was therefore lost, and the
market having fallen, the plaintiffs had to sell at a loss.
In the preceding discussion we have considered the plaintiff's
right chiefly against Teodorica Endencia; and what has been said
suffices in our opinion to demonstrate that the damages laid
under the second cause of action in the complaint could not be
recovered from her, first, because the damages laid under the
second cause of action in the complaint could not be recovered
from her, first, because the damages in question are special
damages which were not within contemplation of the parties
when the contract was made, and secondly, because said
damages are too remote to be the subject of recovery. This
conclusion is also necessarily fatal to the right of the plaintiff to
recover such damages from the defendant corporation, for, as
already suggested, by advising Teodorica not to perform the
contract, said corporation could in no event render itself more
extensively liable than the principle in the contract.
Our conclusion is that the judgment of the trial court should be
affirmed, and it is so ordered, with costs against the appellant.
Arellano, C.J., Torres, Carson, Araullo, Malcolm, Avancea and
Moir, JJ., concur.

G.R. No. L-21438

September 28, 1966
AIR FRANCE, petitioner,
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF
APPEALS, respondents.
Lichauco, Picazo and Agcaoili for petitioner.Bengzon Villegas and
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 evidence 10
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". 12 Indeed, "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 ... 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 riot 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 OK mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx
xxx
xxx
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 plaintiff's Exhibits "A", "A-l", "B", "B-l",
"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 would 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 First
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 seat, notwithstanding the fact that seat
availability in specific 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 had 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 faith; 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:
3. That ... 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 plaintiff's return trip to
Manila, ... .
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.
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, ... the plaintiff has
been compelled by defendant's employees to leave the First
Class accommodation berths at Bangkok after he was already
seated.
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
xxx
xxx
xxx
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
xxx
xxx
xxx
The foregoing, in our opinion, substantially aver: First, That there
was a contract to furnish plaintiff a first class passage covering,
amongst others, the Bangkok-Teheran leg; Second, That said

contract was breached when petitioner failed to furnish first class

transportation at Bangkok; and Third, that there was bad faith
when petitioner's employee compelled Carrascoso to leave his
first class accommodation berth "after he was already, seated"
and to take a seat in the tourist class, by reason of which he
suffered inconvenience, embarrassments and humiliations,
thereby causing him mental anguish, serious anxiety, wounded
feelings and social humiliation, resulting in moral damages. It is
true that there is no specific mention of the term bad faith in the
complaint. But, the inference of bad faith is there, it may be
drawn from the facts and circumstances set forth therein. 34 The
contract was averred to establish the relation between the
parties. But the stress of the action is put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of the
trial, respondent's counsel placed petitioner on guard on what
Carrascoso intended to prove: That while sitting in the plane in
Bangkok, Carrascoso was ousted by petitioner's manager who
gave his seat to a white man; 35 and (b) evidence of bad faith in
the fulfillment of the contract was presented without objection on
the part of the petitioner. It is, therefore, unnecessary to inquire
as to whether or not there is sufficient averment in the complaint
to justify an award for moral damages. Deficiency in the
complaint, if any, was cured by the evidence. An amendment
thereof to conform to the evidence is not even required. 36 On the
question of bad faith, the Court of Appeals declared:
That the plaintiff was forced out of his seat in the first class
compartment of the plane belonging to the defendant Air France
while at Bangkok, and was transferred to the tourist class not
only without his consent but against his will, has been sufficiently
established by plaintiff in his testimony before the court,
corroborated by the corresponding entry made by the purser of
the plane in his notebook which notation reads as follows:
"First-class passenger was forced to go to the tourist class
against his will, and that the captain refused to intervene",
and by the testimony of an eye-witness, Ernesto G. Cuento, who
was a co-passenger. The captain of the plane who was asked by
the manager of defendant company at Bangkok to intervene
even refused to do so. It is noteworthy that no one on behalf of
defendant ever contradicted or denied this evidence for the
plaintiff. It could have been easy for defendant to present its
manager at Bangkok to testify at the trial of the case, or yet to
secure his disposition; but defendant did neither. 37

The Court of appeals further stated

Neither is there evidence as to whether or not a prior reservation
was made by the white man. Hence, if the employees of the
defendant at Bangkok sold a first-class ticket to him when all the
seats had already been taken, surely the plaintiff should not have
been picked out as the one to suffer the consequences and to be
subjected to the humiliation and indignity of being ejected from
his seat in the presence of others. Instead of explaining to the
white man the improvidence committed by defendant's
employees, the manager adopted the more drastic step of
ousting the plaintiff who was then safely ensconsced in his
rightful seat. We are strengthened in our belief that this probably
was what happened there, by the testimony of defendant's
witness Rafael Altonaga who, when asked to explain the meaning
of the letters "O.K." appearing on the tickets of plaintiff, said
"that the space is confirmed for first class. Likewise, Zenaida
Faustino, another witness for defendant, who was the chief of the
Reservation Office of defendant, testified as follows:
"Q How does the person in the ticket-issuing office know what
reservation the passenger has arranged with you?
A They call us up by phone and ask for the confirmation." (t.s.n.,
p. 247, June 19, 1959)
In this connection, we quote with approval what the trial Judge
has said on this point:
Why did the, using the words of witness Ernesto G. Cuento,
"white man" have a "better right" to the seat occupied by Mr.
Carrascoso? The record is silent. The defendant airline did not
prove "any better", nay, any right on the part of the "white man"
to the "First class" seat that the plaintiff was occupying and for
which he paid and was issued a corresponding "first class" ticket.
If there was a justified reason for the action of the defendant's
Manager in Bangkok, the defendant could have easily proven it
by having taken the testimony of the said Manager by
deposition, but defendant did not do so; the presumption is that
evidence willfully suppressed would be adverse if produced [Sec.
69, par (e), Rules of Court]; and, under the circumstances, the
Court is constrained to find, as it does find, that the Manager of
the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not
give up his "first class" seat because the said Manager wanted to
accommodate, using the words of the witness Ernesto G. Cuento,
the "white man".38

It is really correct to say that the Court of Appeals in the quoted

portion first transcribed did not use the term "bad faith". But can
it be doubted that the recital of facts therein points to bad faith?
The manager not only prevented Carrascoso from enjoying his
right to a first class seat; worse, he imposed his arbitrary will; he
forcibly ejected him from his seat, made him suffer the
humiliation of having to go to the tourist class compartment just to give way to another passenger whose right thereto has
not been established. Certainly, this is bad faith. Unless, of
course, bad faith has assumed a meaning different from what is
understood in law. For, "bad faith" contemplates a "state of mind
affirmatively operating with furtive design or with some motive of
self-interest or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is the express
finding of bad faith in the judgment of the Court of First Instance,
thus:
The evidence shows that the defendant violated its contract of
transportation with plaintiff in bad faith, with the aggravating
circumstances that defendant's Manager in Bangkok went to the
extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the
"first class" seat that he was occupying to, again using the words
of the witness Ernesto G. Cuento, a "white man" whom he
(defendant's Manager) wished to accommodate, and the
defendant has not proven that this "white man" had any "better
right" to occupy the "first class" seat that the plaintiff was
occupying, duly paid for, and for which the corresponding "first
class" ticket was issued by the defendant to him.40
5. The responsibility of an employer for the tortious act of its
employees need not be essayed. It is well settled in law. 41 For the
willful malevolent act of petitioner's manager, petitioner, his
employer, must answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another
in a manner that is contrary to morals, good customs or public
policy shall compensate the latter for the damage.
In parallel circumstances, we applied the foregoing legal precept;
and, we held that upon the provisions of Article 2219 (10), Civil
Code, moral damages are recoverable. 42
6. A contract to transport passengers is quite different in kind
and degree from any other contractual relation. 43 And this,
because of the relation which an air-carrier sustains with the
public. Its business is mainly with the travelling public. It invites

people to avail of the comforts and advantages it offers. The

contract of air carriage, therefore, generates a relation attended
with a public duty. Neglect or malfeasance of the carrier's
employees, naturally, could give ground for an action for
damages.
Passengers do not contract merely for transportation. They have
a right to be treated by the carrier's employees with kindness,
respect, courtesy and due consideration. They are entitled to be
protected against personal misconduct, injurious language,
indignities and abuses from such employees. So it is, that any
rule or discourteous conduct on the part of employees towards a
passenger gives the latter an action for damages against the
carrier. 44
Thus, "Where a steamship company 45 had accepted a
passenger's check, it was a breach of contract and a tort, giving
a right of action for its agent in the presence of third persons to
falsely notify her that the check was worthless and demand
payment under threat of ejection, though the language used was
not insulting and she was not ejected." 46 And this, because,
although the relation of passenger and carrier is "contractual
both in origin and nature" nevertheless "the act that breaks the
contract may be also a tort". 47 And in another case, "Where a
passenger on a railroad train, when the conductor came to
collect his fare tendered him the cash fare to a point where the
train was scheduled not to stop, and told him that as soon as the
train reached such point he would pay the cash fare from that
point to destination, there was nothing in the conduct of the
passenger which justified the conductor in using insulting
language to him, as by calling him a lunatic," 48 and the Supreme
Court of South Carolina there held the carrier liable for the
mental suffering of said passenger.1awphl.nt
Petitioner's contract with Carrascoso is one attended with public
duty. The stress of Carrascoso's action as we have said, is placed
upon his wrongful expulsion. This is a violation of public duty by
the petitioner air carrier a case of quasi-delict. Damages are
proper.
7. Petitioner draws our attention to respondent Carrascoso's
testimony, thus
Q You mentioned about an attendant. Who is that attendant and
purser?
A When we left already that was already in the trip I could
not help it. So one of the flight attendants approached me and

requested from me my ticket and I said, What for? and she said,
"We will note that you transferred to the tourist class". I said,
"Nothing of that kind. That is tantamount to accepting my
transfer." And I also said, "You are not going to note anything
there because I am protesting to this transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you feel uncomfortable
and you don't have enough leg room, I stood up and I went to the
pantry that was next to me and the purser was there. He told
me, "I have recorded the incident in my notebook." He read it
and translated it to me because it was recorded in French
"First class passenger was forced to go to the tourist class
against his will, and that the captain refused to intervene."
Mr. VALTE
I move to strike out the last part of the testimony of the witness
because the best evidence would be the notes. Your Honor.
COURT
I will allow that as part of his testimony. 49
Petitioner charges that the finding of the Court of Appeals that
the purser made an entry in his notebook reading "First class
passenger was forced to go to the tourist class against his will,
and that the captain refused to intervene" is predicated upon
evidence [Carrascoso's testimony above] which is incompetent.
We do not think so. The subject of inquiry is not the entry, but
the ouster incident. Testimony on the entry does not come within
the proscription of the best evidence rule. Such testimony is
admissible. 49a
Besides, from a reading of the transcript just quoted, when the
dialogue happened, the impact of the startling occurrence was
still fresh and continued to be felt. The excitement had not as yet
died down. Statements then, in this environment, are admissible
as part of the res gestae. 50 For, they grow "out of the nervous
excitement and mental and physical condition of the declarant".
51
The utterance of the purser regarding his entry in the notebook
was spontaneous, and related to the circumstances of the ouster
incident. Its trustworthiness has been guaranteed. 52 It thus
escapes the operation of the hearsay rule. It forms part of the
res gestae.
At all events, the entry was made outside the Philippines. And, by
an employee of petitioner. It would have been an easy matter for

petitioner to have contradicted Carrascoso's testimony. If it were

really true that no such entry was made, the deposition of the
purser could have cleared up the matter.
We, therefore, hold that the transcribed testimony of Carrascoso
is admissible in evidence.
8. Exemplary damages are well awarded. The Civil Code gives
the court ample power to grant exemplary damages in
contracts and quasi- contracts. The only condition is that
defendant should have "acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner." 53 The manner of ejectment
of respondent Carrascoso from his first class seat fits into this
legal precept. And this, in addition to moral damages.54
9. The right to attorney's fees is fully established. The grant of
exemplary damages justifies a similar judgment for attorneys'
fees. The least that can be said is that the courts below felt that
it is but just and equitable that attorneys' fees be given. 55 We do
not intend to break faith with the tradition that discretion well
exercised as it was here should not be disturbed.
10. Questioned as excessive are the amounts decreed by both
the trial court and the Court of Appeals, thus: P25,000.00 as
moral damages; P10,000.00, by way of exemplary damages, and
P3,000.00 as attorneys' fees. The task of fixing these amounts is
primarily with the trial court. 56 The Court of Appeals did not
interfere with the same. The dictates of good sense suggest that
we give our imprimatur thereto. Because, the facts and
circumstances point to the reasonableness thereof.57
On balance, we say that the judgment of the Court of Appeals
does not suffer from reversible error. We accordingly vote to
affirm the same. Costs against petitioner. So ordered.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal,
Zaldivar and Castro, JJ., concur.Bengzon, J.P., J., took no part.

G.R. No. L-9356

February 18, 1915
C. S. GILCHRIST, plaintiff-appellee,
vs.
E. A. CUDDY, ET AL., defendants.
JOSE FERNANDEZ ESPEJO and MARIANO ZALDARRIAGA,
appellants.
C. Lozano for appellants. Bruce, Lawrence, Ross and Block for
appellee.
TRENT, J.:
An appeal by the defendants, Jose Fernandez Espejo and Mariano
Zaldarriaga, from a judgment of the Court of First Instance of
Iloilo, dismissing their cross-complaint upon the merits for
damages against the plaintiff for the alleged wrongful issuance of
a mandatory and a preliminary injunction.
Upon the application of the appellee an ex parte mandatory
injunction was issued on the 22d of May, 1913, directing the
defendant, E. A. Cuddy, to send to the appellee a certain
cinematograph film called "Zigomar" in compliance with an
alleged contract which had been entered into between these two
parties, and at the time an ex parte preliminary injunction was
issued restraining the appellants from receiving and exhibiting in
their theater the Zigomar until further orders of the court. On the
26th of that month the appellants appeared and moved the court
to dissolve the preliminary injunction. When the case was called
for trial on August 6, the appellee moved for the dismissal of the
complaint "for the reason that there is no further necessity for
the maintenance of the injunction." The motion was granted
without objection as to Cuddy and denied as to the appellants in
order to give them an opportunity to prove that the injunction
were wrongfully issued and the amount of damages suffered by
reason thereof.
The pertinent part of the trial court's findings of fact in this case
is as follows:
It appears in this case that Cuddy was the owner of the film
Zigomar and that on the 24th of April he rented it to C. S.
Gilchrist for a week for P125, and it was to be delivered on the
26th of May, the week beginning that day. A few days prior to
this Cuddy sent the money back to Gilchrist, which he had
forwarded to him in Manila, saying that he had made other
arrangements with his film. The other arrangements was the
rental to these defendants Espejo and his partner for P350 for
the week and the injunction was asked by Gilchrist against these

parties from showing it for the week beginning the 26th of May.
It appears from the testimony in this case, conclusively, that
Cuddy willfully violated his contract, he being the owner of the
picture, with Gilchrist because the defendants had offered him
more for the same period. Mr. Espejo at the trial on the
permanent injunction on the 26th of May admitted that he knew
that Cuddy was the owner of the film. He was trying to get it
through his agents Pathe Brothers in Manila. He is the agent of
the same concern in Iloilo. There is in evidence in this case on
the trial today as well as on the 26th of May, letters showing that
the Pathe Brothers in Manila advised this man on two different
occasions not to contend for this film Zigomar because the rental
price was prohibitive and assured him also that he could not get
the film for about six weeks. The last of these letters was written
on the 26th of April, which showed conclusively that he knew
they had to get this film from Cuddy and from this letter that the
agent in Manila could not get it, but he made Cuddy an offer
himself and Cuddy accepted it because he was paying about
three times as much as he had contracted with Gilchrist for.
Therefore, in the opinion of this court, the defendants failed
signally to show the injunction against the defendant was
wrongfully procured.
The appellants duly excepted to the order of the court denying
their motion for new trial on the ground that the evidence was
insufficient to justify the decision rendered. There is lacking from
the record before us the deposition of the defendant Cuddy,
which apparently throws light upon a contract entered into
between him and the plaintiff Gilchrist. The contents of this
deposition are discussed at length in the brief of the appellants
and an endeavor is made to show that no such contract was
entered into. The trial court, which had this deposition before it,
found that there was a contract between Cuddy and Gilchrist.
Not having the deposition in question before us, it is impossible
to say how strongly it militates against this findings of fact. By a
series of decisions we have construed section 143 and 497 (2) of
the Code of Civil Procedure to require the production of all the
evidence in this court. This is the duty of the appellant and, upon
his failure to perform it, we decline to proceed with a review of
the evidence. In such cases we rely entirely upon the pleadings
and the findings of fact of the trial court and examine only such
assigned errors as raise questions of law. (Ferrer vs. Neri
Abejuela, 9 Phil. Rep., 324; Valle vs. Galera, 10 Phil. Rep., 619;

Salvacion vs. Salvacion, 13 Phil. Rep., 366; Breta vs. Smith, Bell &
Co., 15 Phil. Rep., 446; Arroyo vs. Yulo, 18 Phil. Rep., 236; Olsen
& Co. vs. Matson, Lord & Belser Co., 19 Phil. Rep., 102; Blum vs.
Barretto, 19 Phil. Rep., 161; Cuyugan vs. Aguas, 19 Phil. Rep.,
379; Mapa vs. Chaves, 20 Phil. Rep., 147; Mans vs. Garry, 20 Phil.
Rep., 134.) It is true that some of the more recent of these cases
make exceptions to the general rule. Thus, in Olsen & Co. vs.
Matson, Lord & Belser Co., (19 Phil. Rep., 102), that portion of the
evidence before us tended to show that grave injustice might
result from a strict reliance upon the findings of fact contained in
the judgment appealed from. We, therefore, gave the appellant
an opportunity to explain the omission. But we required that such
explanation must show a satisfactory reason for the omission,
and that the missing portion of the evidence must be submitted
within sixty days or cause shown for failing to do so. The other
cases making exceptions to the rule are based upon peculiar
circumstances which will seldom arise in practice and need not
here be set forth, for the reason that they are wholly inapplicable
to the present case. The appellants would be entitled to
indulgence only under the doctrine of the Olsen case. But from
that portion of the record before us, we are not inclined to
believe that the missing deposition would be sufficient to justify
us in reversing the findings of fact of the trial court that the
contract in question had been made. There is in the record not
only the positive and detailed testimony of Gilchrist to this effect,
but there is also a letter of apology from Cuddy to Gilchrist in
which the former enters into a lengthy explanation of his reasons
for leasing the film to another party. The latter could only have
been called forth by a broken contract with Gilchrist to lease the
film to him. We, therefore, fail to find any reason for overlooking
the omission of the defendants to bring up the missing portion of
the evidence and, adhering to the general rule above referred to,
proceed to examine the questions of law raised by the
appellants.
From the above-quoted findings of fact it is clear that Cuddy, a
resident of Manila, was the owner of the "Zigomar;" that Gilchrist
was the owner of a cinematograph theater in Iloilo; that in
accordance with the terms of the contract entered into between
Cuddy and Gilchrist the former leased to the latter the "Zigomar"
for exhibition in his (Gilchrist's) theater for the week beginning
May 26, 1913; and that Cuddy willfully violate his contract in
order that he might accept the appellant's offer of P350 for the

film for the same period. Did the appellants know that they were
inducing Cuddy to violate his contract with a third party when
they induced him to accept the P350? Espejo admitted that he
knew that Cuddy was the owner of the film. He received a letter
from his agents in Manila dated April 26, assuring him that he
could not get the film for about six weeks. The arrangement
between Cuddy and the appellants for the exhibition of the film
by the latter on the 26th of May were perfected after April 26, so
that the six weeks would include and extend beyond May 26. The
appellants must necessarily have known at the time they made
their offer to Cuddy that the latter had booked or contracted the
film for six weeks from April 26. Therefore, the inevitable
conclusion is that the appellants knowingly induced Cuddy to
violate his contract with another person. But there is no specific
finding that the appellants knew the identity of the other party.
So we must assume that they did not know that Gilchrist was the
person who had contracted for the film.
The appellants take the position that if the preliminary injunction
had not been issued against them they could have exhibited the
film in their theater for a number of days beginning May 26, and
could have also subleased it to other theater owners in the
nearby towns and, by so doing, could have cleared, during the
life of their contract with Cuddy, the amount claimed as
damages. Taking this view of the case, it will be unnecessary for
us to inquire whether the mandatory injunction against Cuddy
was properly issued or not. No question is raised with reference
to the issuance of that injunction.
The right on the part of Gilchrist to enter into a contract with
Cuddy for the lease of the film must be fully recognized and
admitted by all. That Cuddy was liable in an action for damages
for the breach of that contract, there can be no doubt. Were the
appellants likewise liable for interfering with the contract
between Gilchrist and Cuddy, they not knowing at the time the
identity of one of the contracting parties? The appellants claim
that they had a right to do what they did. The ground upon which
the appellants base this contention is, that there was no valid
and binding contract between Cuddy and Gilchrist and that,
therefore, they had a right to compete with Gilchrist for the lease
of the film, the right to compete being a justification for their
acts. If there had been no contract between Cuddy and Gilchrist
this defense would be tenable, but the mere right to compete
could not justify the appellants in intentionally inducing Cuddy to

take away the appellee's contractual rights.

Chief Justice Wells in Walker vs. Cronin (107 Mass., 555), said:
"Everyone has a right to enjoy the fruits and advantages of his
own enterprise, industry, skill and credit. He has no right to be
free from malicious and wanton interference, disturbance or
annoyance. If disturbance or loss come as a result of
competition, or the exercise of like rights by others, it is damnum
absque injuria, unless some superior right by contract or
otherwise is interfered with."
In Read vs. Friendly Society of Operative Stonemasons ([1902] 2
K. B., 88), Darling, J., said: "I think the plaintiff has a cause of
action against the defendants, unless the court is satisfied that,
when they interfered with the contractual rights of plaintiff, the
defendants had a sufficient justification for their interference; . . .
for it is not a justification that `they acted bona fide in the best
interests of the society of masons,' i. e., in their own interests.
Nor is it enough that `they were not actuated by improper
motives.' I think their sufficient justification for interference with
plaintiff's right must be an equal or superior right in themselves,
and that no one can legally excuse himself to a man, of whose
contract he has procured the breach, on the ground that he
acted on a wrong understanding of his own rights, or without
malice, or bona fide, or in the best interests of himself, or even
that he acted as an altruist, seeking only good of another and
careless of his own advantage." (Quoted with approval in
Beekman vs. Marsters, 195 Mass., 205.)
It is said that the ground on which the liability of a third party for
interfering with a contract between others rests, is that the
interference was malicious. The contrary view, however, is taken
by the Supreme Court of the United States in the case of Angle
vs. Railway Co. (151 U. S., 1). The only motive for interference by
the third party in that case was the desire to make a profit to the
injury of one of the parties of the contract. There was no malice
in the case beyond the desire to make an unlawful gain to the
detriment of one of the contracting parties.
In the case at bar the only motive for the interference with the
Gilchrist Cuddy contract on the part of the appellants was a
desire to make a profit by exhibiting the film in their theater.
There was no malice beyond this desire; but this fact does not
relieve them of the legal liability for interfering with that contract
and causing its breach. It is, therefore, clear, under the above
authorities, that they were liable to Gilchrist for the damages

caused by their acts, unless they are relieved from such liability
by reason of the fact that they did not know at the time the
identity of the original lessee (Gilchrist) of the film.
The liability of the appellants arises from unlawful acts and not
from contractual obligations, as they were under no such
obligations to induce Cuddy to violate his contract with Gilchrist.
So that if the action of Gilchrist had been one for damages, it
would be governed by chapter 2, title 16, book 4 of the Civil
Code. Article 1902 of that code provides that a person who, by
act or omission, causes damages to another when there is fault
or negligence, shall be obliged to repair the damage do done.
There is nothing in this article which requires as a condition
precedent to the liability of a tort-feasor that he must know the
identity of a person to whom he causes damages. In fact, the
chapter wherein this article is found clearly shows that no such
knowledge is required in order that the injured party may recover
for the damage suffered.
But the fact that the appellants' interference with the Gilchrist
contract was actionable did not of itself entitle Gilchrist to sue
out an injunction against them. The allowance of this remedy
must be justified under section 164 of the Code of Civil
Procedure, which specifies the circumstance under which an
injunction may issue. Upon the general doctrine of injunction we
said in Devesa vs. Arbes (13 Phil. Rep., 273):
An injunction is a "special remedy" adopted in that code (Act No.
190) from American practice, and originally borrowed from
English legal procedure, which was there issued by the authority
and under the seal of a court of equity, and limited, as in order
cases where equitable relief is sought, to cases where there is no
"plain, adequate, and complete remedy at law," which "will not
be granted while the rights between the parties are
undetermined, except in extraordinary cases where material and
irreparable injury will be done," which cannot be compensated in
damages, and where there will be no adequate remedy, and
which will not, as a rule, be granted, to take property out of the
possession of one party and put it into that of another whose title
has not been established by law.
We subsequently affirmed the doctrine of the Devesa case in
Palafox vs. Madamba (19 Phil., Rep., 444), and we take this
occasion of again affirming it, believing, as we do, that the
indiscriminate use of injunctions should be discouraged.
Does the fact that the appellants did not know at the time the

identity of the original lessee of the film militate against

Gilchrist's right to a preliminary injunction, although the
appellant's incurred civil liability for damages for such
interference? In the examination of the adjudicated cases, where
in injunctions have been issued to restrain wrongful interference
with contracts by strangers to such contracts, we have been
unable to find any case where this precise question was involved,
as in all of those cases which we have examined, the identity of
both of the contracting parties was known to the tort-feasors. We
might say, however, that this fact does not seem to have a
controlling feature in those cases. There is nothing in section 164
of the Code of Civil Procedure which indicates, even remotely,
that before an injunction may issue restraining the wrongful
interference with contrast by strangers, the strangers must know
the identity of both parties. It would seem that this is not
essential, as injunctions frequently issue against municipal
corporations, public service corporations, public officers, and
others to restrain the commission of acts which would tend to
injuriously affect the rights of person whose identity the
respondents could not possibly have known beforehand. This
court has held that in a proper case injunction will issue at the
instance of a private citizen to restrain ultra vires acts of public
officials. (Severino vs. Governor-General, 16 Phil. Rep., 366.) So
we proceed to the determination of the main question of whether
or not the preliminary injunction ought to have been issued in
this case.
As a rule, injunctions are denied to those who have an adequate
remedy at law. Where the choice is between the ordinary and the
extraordinary processes of law, and the former are sufficient, the
rule will not permit the use of the latter. (In re Debs, 158 U. S.,
564.) If the injury is irreparable, the ordinary process is
inadequate. In Wahle vs. Reinbach (76 Ill., 322), the supreme
court of Illinois approved a definition of the term "irreparable
injury" in the following language: "By `irreparable injury' is not
meant such injury as is beyond the possibility of repair, or
beyond possible compensation in damages, nor necessarily great
injury or great damage, but that species of injury, whether great
or small, that ought not to be submitted to on the one hand or
inflicted on the other; and, because it is so large on the one
hand, or so small on the other, is of such constant and frequent
recurrence that no fair or reasonable redress can be had therefor
in a court of law." (Quoted with approval in Nashville R. R. Co. vs.

McConnell, 82 Fed., 65.)

The case at bar is somewhat novel, as the only contract which
was broken was that between Cuddy and Gilchrist, and the
profits of the appellee depended upon the patronage of the
public, for which it is conceded the appellants were at liberty to
complete by all fair does not deter the application of remarked in
the case of the "ticket scalpers" (82 Fed., 65), the novelty of the
facts does not deter the application of equitable principles. This
court takes judicial notice of the general character of a
cinematograph or motion-picture theater. It is a quite modern
form of the play house, wherein, by means of an apparatus
known as a cinematograph or cinematograph, a series of views
representing closely successive phases of a moving object, are
exhibited in rapid sequence, giving a picture which, owing to the
persistence of vision, appears to the observer to be in continuous
motion. (The Encyclopedia Britanica, vol. 6, p. 374.) The subjects
which have lent themselves to the art of the photographer in this
manner have increased enormously in recent years, as well as
have the places where such exhibition are given. The
attendance, and, consequently, the receipts, at one of these
cinematograph or motion-picture theaters depends in no small
degree upon the excellence of the photographs, and it is quite
common for the proprietor of the theater to secure an especially
attractive exhibit as his "feature film" and advertise it as such in
order to attract the public. This feature film is depended upon to
secure a larger attendance that if its place on the program were
filled by other films of mediocre quality. It is evident that the
failure to exhibit the feature film will reduce the receipts of the
theater.
Hence, Gilchrist was facing the immediate prospect of diminished
profits by reason of the fact that the appellants had induced
Cuddy to rent to them the film Gilchrist had counted upon as his
feature film. It is quite apparent that to estimate with any decree
of accuracy the damages which Gilchrist would likely suffer from
such an event would be quite difficult if not impossible. If he
allowed the appellants to exhibit the film in Iloilo, it would be
useless for him to exhibit it again, as the desire of the public to
witness the production would have been already satisfied. In this
extremity, the appellee applied for and was granted, as we have
indicated, a mandatory injunction against Cuddy requiring him to
deliver the Zigomar to Gilchrist, and a preliminary injunction
against the appellants restraining them from exhibiting that film

in their theater during the weeks he (Gilchrist) had a right to

exhibit it. These injunction saved the plaintiff harmless from
damages due to the unwarranted interference of the defendants,
as well as the difficult task which would have been set for the
court of estimating them in case the appellants had been allowed
to carry out their illegal plans. As to whether or not the
mandatory injunction should have been issued, we are not, as we
have said, called upon to determine. So far as the preliminary
injunction issued against the appellants is concerned, which
prohibited them from exhibiting the Zigomar during the week
which Gilchrist desired to exhibit it, we are of the opinion that the
circumstances justified the issuance of that injunction in the
discretion of the court.
We are not lacking in authority to support our conclusion that the
court was justified in issuing the preliminary injunction against
the appellants. Upon the precise question as to whether
injunction will issue to restrain wrongful interference with
contracts by strangers to such contracts, it may be said that
courts in the United States have usually granted such relief
where the profits of the injured person are derived from his
contractual relations with a large and indefinite number of
individuals, thus reducing him to the necessity of proving in an
action against the tort-feasor that the latter was responsible in
each case for the broken contract, or else obliging him to
institute individual suits against each contracting party and so
exposing him to a multiplicity of suits. Sperry & Hutchinson Co.
vs. Mechanics' Clothing Co. (128 Fed., 800); Sperry & Hutchinson
Co. vs. Louis Weber & Co. (161 Fed., 219); Sperry & Hutchinson
Co. vs. Pommer (199 Fed., 309); were all cases wherein the
respondents were inducing retail merchants to break their
contracts with the company for the sale of the latters' trading
stamps. Injunction issued in each case restraining the
respondents from interfering with such contracts.
In the case of the Nashville R. R. Co. vs. McConnell (82 Fed., 65),
the court, among other things, said: "One who wrongfully
interferes in a contract between others, and, for the purpose of
gain to himself induces one of the parties to break it, is liable to
the party injured thereby; and his continued interference may be
ground for an injunction where the injuries resulting will be
irreparable."
In Hamby & Toomer vs. Georgia Iron & Coal Co. (127 Ga., 792), it
appears that the respondents were interfering in a contract for

prison labor, and the result would be, if they were successful, the
shutting down of the petitioner's plant for an indefinite time. The
court held that although there was no contention that the
respondents were insolvent, the trial court did not abuse its
discretion in granting a preliminary injunction against the
respondents.
In Beekman vs. Marsters (195 Mass., 205), the plaintiff had
obtained from the Jamestown Hotel Corporation, conducting a
hotel within the grounds of the Jamestown Exposition, a contract
whereby he was made their exclusive agent for the New England
States to solicit patronage for the hotel. The defendant induced
the hotel corporation to break their contract with the plaintiff in
order to allow him to act also as their agent in the New England
States. The court held that an action for damages would not have
afforded the plaintiff adequate relief, and that an injunction was
proper compelling the defendant to desist from further
interference with the plaintiff's exclusive contract with the hotel
company.
In Citizens' Light, Heat & Power Co. vs. Montgomery Light &
Water Power Co. (171 Fed., 553), the court, while admitting that
there are some authorities to the contrary, held that the current
authority in the United States and England is that:
The violation of a legal right committed knowingly is a cause of
action, and that it is a violation of a legal right to interfere with
contractual relations recognized by law, if there be no sufficient
justification for the interference. (Quinn vs. Leatham, supra, 510;
Angle vs. Chicago, etc., Ry. Co., 151 U. S., 1; 14 Sup. Ct., 240; 38
L. Ed., 55; Martens vs. Reilly, 109 Wis., 464, 84 N. W., 840; Rice
vs. Manley, 66 N. Y., 82; 23 Am. Rep., 30; Bitterman vs. L. & N. R.
R. Co., 207 U. S., 205; 28 Sup. Ct., 91; 52 L. Ed., 171; Beekman
vs. Marsters, 195 Mass., 205; 80 N. E., 817; 11 L. R. A. [N. S.]
201; 122 Am. St. Rep., 232; South Wales Miners' Fed. vs.
Glamorgan Coal Co., Appeal Cases, 1905, p. 239.)
See also Nims on Unfair Business Competition, pp. 351- 371.
In 3 Elliot on Contracts, section 2511, it is said: "Injunction is the
proper remedy to prevent a wrongful interference with contract
by strangers to such contracts where the legal remedy is
insufficient and the resulting injury is irreparable. And where
there is a malicious interference with lawful and valid contracts a
permanent injunction will ordinarily issue without proof of
express malice. So, an injunction may be issued where the
complainant to break their contracts with him by agreeing to

indemnify who breaks his contracts of employment may be

adjoined from including other employees to break their contracts
and enter into new contracts with a new employer of the servant
who first broke his contract. But the remedy by injunction cannot
be used to restrain a legitimate competition, though such
competition would involve the violation of a contract. Nor will
equity ordinarily enjoin employees who have quit the service of
their employer from attempting by proper argument to persuade
others from taking their places so long as they do not resort to
force or intimidations on obstruct the public thoroughfares."
Beekman vs. Marster, supra, is practically on all fours with the
case at bar in that there was only one contract in question and
the profits of the injured person depended upon the patronage of
the public. Hamby & Toomer vs. Georgia Iron & Coal Co., supra, is
also similar to the case at bar in that there was only one
contract, the interference of which was stopped by injunction.
For the foregoing reasons the judgment is affirmed, with costs,
against the appellants.
Arellano, C.J., Torres, Carson and Araullo, JJ., concur.
Separate Opinions
MORELAND, J., concurring:
The court seems to be of the opinion that the action is one for a
permanent injunction; whereas, under my view of the case, it is
one for specific performance. The facts are simple. C. S. Gilchrist,
the plaintiff, proprietor of the Eagle Theater of Iloilo, contracted
with E. A. Cuddy, one of the defendants, of Manila, for a film
entitled "Zigomar or Eelskin, 3d series," to be exhibited in his
theater in Iloilo during the week beginning May 26, 1913. Later,
the defendants Espejo and Zaldarriaga, who were also operating
a theater in Iloilo, representing Pathe Freres, also obtained from
Cuddy a contract for the exhibition of the film aforesaid in their
theater in Iloilo during the same week.
The plaintiff commenced this action against Cuddy and the
defendants Espejo and Zaldarriaga for the specific performance
of the contract with Cuddy. The complaint prays "that the court,
by a mandatory injunction, order Cuddy to deliver, on the 24th of
May, 1913, in accordance with the aforesaid contract, the said
film 'Zigomar, 3d series, or Eelskin,' to the plaintiff Gilchrist, in
accordance with the terms of the agreement, so that plaintiff can
exhibit the same during the last week beginning May 26, 1913, in
the Eagle Theater, in Iloilo; that the court issue a preliminary

injunction against the defendants Espejo and Zaldarriaga

prohibiting them from receiving, exhibiting, or using said film in
Iloilo during the last week of May, 1913, or at any other time
prior to the delivery to the plaintiff ; that, on the trial, said
injunction be made perpetual and that Cuddy be ordered and
commanded to specifically perform his contract with the plaintiff
."
On the filing of the complaint the plaintiff made an application for
a mandatory injunction compelling the defendant Cuddy to
deliver to plaintiff the film in question by mailing it to him from
Manila on the 24th of May so that it would reach Iloilo for
exhibition on the 26th; and for a preliminary restraining order
against the order two defendants prohibiting them from receiving
or exhibiting the said film prior to its exhibition by plaintiff.
The court, on this application, entered an order which provided
that Cuddy should "not send said film 'Zigomar, 3d series, or
Eelskin,' to the defendants Espejo and Zaldarriaga and that he
should send it to the plaintiff, Gilchrist, on the 24th day of May,
1913, in the mail for Iloilo," This order was duly served on the
defendants, including Cuddy, in whose possession the film still
was, and, in compliance therewith Cuddy mailed the film to the
plaintiff at Iloilo on the 24th of May. The latter duly received it
and exhibited it without molestation during the week beginning
the 26th of May in accordance with the contract which he
claimed to have made with Cuddy.
The defendants Espejo and Zaldarriaga having received due
notice of the issuance of the mandatory injunction and
restraining order of the 22d of May, appeared before the court on
the 26th of May and moved that the court vacate so much of the
order as prohibited them from receiving and exhibiting the film.
In other words, while the order of the 22d of May was composed
of two parts, one a mandatory order for immediate specific
performance of the plaintiff's contract with the defendant Cuddy,
and the other a preliminary restraining order directed to Espejo
and Zaldarriaga prohibiting them from receiving and exhibiting
the film during the week beginning the 26th of May, their motion
of the 26th of May referred exclusively to the injunction against
them and touched in no way that portion of the order which
required the immediate performance by Cuddy of his contract
with Gilchrist. Indeed, the defendants Espejo and Zaldarriaga did
not even except to the order requiring Cuddy to specifically
perform his agreement with the plaintiff nor did they in any way

make an objection to or show their disapproval of it. It was not

excepted to or appealed from and is not before this court for
review.
The motion of Espejo and Zaldarriaga to vacate the injunction
restraining them from receiving the film was denied on the 26th
of May. After the termination of the week beginning May 26th,
and after the exhibition of the film by the plaintiff in accordance
with the alleged contract with Cuddy, the plaintiff came into
court and moved that, in view of the fact that he had already
obtained all that he desired to obtain or could obtain by his
action, namely, the exhibition of the film in question during the
week beginning May 26th, there was no reason for continuing it
and moved for its dismissal. To this motion Cuddy consented and
the action was dismissed as to him. But the other defendants
objected to the dismissal of the action on the ground that they
desired to present to the court evidence showing the damages
which they had suffered by reason of the issuance of the
preliminary injunction prohibiting them from receiving and
exhibiting the film in question during the week beginning May
26. The court sustained their objection and declined to dismiss
the action as to them, and, on the 8th of August, heard the
evidence as to damages. He denied defendants the relief asked
for and dismissed their claim for damages. They thereupon took
an appeal from that order, and that is the appeal which we have
now before us and which is the subject of the opinion of the court
with which I am concurring.
We thus have this strange condition:
An action for specific performance of a contract to deliver a film
for exhibition during a given time. A preliminary mandatory
injunction ordering the delivery of the film in accordance with the
contract. The delivery of the film in accordance with the
preliminary mandatory injunction. The actual exhibition of the
film during the time specified in the contract. No objection to the
issuance of the mandatory injunction, to the delivery of the film,
or to the ground that the plaintiff had obtained full relief by
means of the so-called preliminary remedy by virtue of which the
contract was actually specifically performed before the action
was tried. No objection or exception to the order requiring the
specific performance of the contract.
Under such conditions it is possible for the defendant Espejo and
Zaldarriaga to secure damages for the wrongful issuance of the
preliminary injunction directed against them even though it be

admitted that it was erroneously issued and that there was no

ground therefor whatever? It seems to me that it is not. At the
time this action was begun the film, as we have seen, was in the
possession of Cuddy and, while in his possession, he complied
with a command of the court to deliver it to plaintiff. In
pursuance of that command he delivered it to plaintiff, who used
it during the time specified in his contract with Cuddy; or, in
other words, he made such use of it as he desired and then
returned it to Cuddy. This order and the delivery of the film under
it were made in an action in which the defendants Espejo and
Zaldarriaga were parties, without objection on their part and
without objection or exception to the order. The film having been
delivered to defendants' competitor, the plaintiff, under a decree
of the court to which they made no objection and took no
exception and from which they have not appealed, what injury
can they show by reason of the injunction restraining them from
making use of the film? If they themselves, by their conduct,
permitted the plaintiff to make it impossible for them to gain
possession of the film and to use it, then the preliminary
injunction produced no injury for the reason that no harm can
result from restraining a party from doing a thing which, without
such restraint, it would be impossible for him to do. Moreover,
the order for the delivery of the film to plaintiff was a complete
determination of the rights of the parties to the film which, while
the court had no right to make, nevertheless, was valid and
binding on all the parties, none of them objecting or taking
exception thereto. Being a complete determination of the rights
of the parties to the action, it should have been the first point
attacked by the defendants, as it foreclosed them completely
and, if left in force, eliminating every defense. This order was
made on May 22d and was not excepted to or appealed from. On
the 8th of August following the defendants appealed from the
order dismissing their claim to damages but the order for the
delivery of the film to plaintiff was final at that time and is now
conclusive on this court.
Section 143 of the Code of Civil Procedure, providing for appeals
by bill of exceptions, provides that "upon the rendition of final
judgment disposing of the action, either party shall have the
right to perfect a bill of exceptions for a review by the Supreme
Court of all rulings, orders, and judgment made in the action, to
which the party has duly excepted at the time of making such
ruling, order, or judgment." While the order for the delivery of the

film to plaintiff was in one sense a preliminary order, it was in

reality a final determination of the rights of the parties to the
film, as it ordered the delivery thereof to plaintiff for his use. If it
had been duly excepted to, its validity could have been attacked
in an appeal from the final judgment thereafter entered in the
action. Not having been excepted to as required by the section
just referred to, it became final and conclusive on all the parties
to the action, and when, on the 8th day of August following, the
defendants presented their claim for damages based on the
alleged wrongful issuance of a temporary restraining order, the
whole foundation of their claim had disappeared by virtue of the
fact that the execution of the order of the 22d of May had left
nothing for them to litigate. The trial court, on the 8th of August,
would have been fully justified in refusing to hear the defendants
on their claim for damages. Their right thereto had been
adjudicated on the 22d of May and that adjudication had been
duly put into execution without protest, objection or exception,
and was, therefore, final and conclusive on them on the 8th of
August.
I have presented this concurring opinion in an attempt to prevent
confusion, if any, which might arise from the theory on which the
court decides this case. It seems to me impossible that the action
can be one for a permanent injunction. The very nature of the
case demonstrates that a permanent injunction is out of the
question. The only thing that plaintiff desired was to be permitted
to use the film for the week beginning the 26th of May. With the
termination of that week his rights expired. After that time Cuddy
was perfectly free to turn the film over to the defendants Espejo
and Zaldarriaga for exhibition at any time. An injunction
permanently prohibiting the defendants from exhibiting the film
in Iloilo would have been unjustifiable, as it was something that
plaintiff did not ask and did not want; and would have been an
invasion of the rights of Cuddy as, after the termination of the
week beginning May 26, he was at liberty, under his contract
with plaintiff, to rent the film to the defendants Espejo and
Zaldarriaga and permit its exhibition in Iloilo at any time. The
plaintiff never asked to have defendants permanently enjoined
from exhibiting the film in Iloilo and no party to the action has
suggested such thing.
The action is one for specific performance purely; and while the
court granted plaintiff rights which should have been granted
only after a trial of the action, nevertheless, such right having

been granted before trial and none of the defendants having

made objection or taken exception thereto, and the order
granting them having become final, such order became a final
determination of the action, by reason of the nature of the action
itself, the rights of the parties became thereby finally determined
and the defendants Espejo and Zaldarriaga, being parties to the
action, were precluded from further litigation relative to the
subject matter of the controversy.
No damages are claimed by reason of the issuance of the
mandatory injunction under which the film was delivered to
plaintiff and used by him during the week beginning the 26th of
May. While the opinion says in the first paragraph that the action
is "for damages against the plaintiff for the alleged wrongful
issuance of a mandatory and preliminary injunction," the opinion
also says in a latter portion that "It will be unnecessary for us to
inquire whether the mandatory injunction against Cuddy was
properly issued or not. No question is raised with reference to the
issuance of that injunction;" and still later it is also stated that
"as to whether or not the mandatory injunction should have been
issued, we are not, as we have said, called upon to determine." I
repeat that no objection was made by the defendants to the
issuance of the mandatory injunction, no exception was taken to
the order on which it was issued and no appeal has been taken
therefrom. That order is now final and conclusive and was at the
time this appeal was taken. That being so, the rights of the
defendants were foreclosed thereby. The defendants Espejo and
Zaldarriaga cannot now be heard to say that they were damaged
by the issuance of the preliminary restraining injunction issued
on the same day as the mandatory injunction.
From what has been said it is clear, it seems to me, that the
question of a breach of contract by inducement, which is
substantially the only question discussed and decided, is not in
the case in reality and, in my judgment, should not be touched
upon. Courts will not proceed with a litigation and discuss and
decided question which might possibly be involved in the case
when it clearly appears that there remains nothing about which
to litigate, the whole subject matter of the original action having
been settled and the parties having no real controversy to
present. At the time the defendants Espejo and Zaldarriaga
offered their claim for damages arising out of the wrongful
issuance of the restraining order, there was nothing between
them and the plaintiff to litigate, the rightfulness of plaintiff's

demand having already been finally adjudicated and determined

in the same action.

G.R. No. L-18805

August 14, 1967
THE
BOARD
OF
LIQUIDATORS1
representing
THE
GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES,
plaintiff-appellant,
vs.
HEIRS OF MAXIMO M. KALAW,2 JUAN BOCAR, ESTATE OF
THE DECEASED CASIMIRO GARCIA,3 and LEONOR MOLL,
defendants-appellees.
Simeon M. Gopengco and Solicitor General for plaintiff-appellant.
L. H. Hernandez, Emma Quisumbing, Fernando and Quisumbing,
Jr.; Ponce Enrile, Siguion Reyna, Montecillo and Belo for
defendants-appellees.
SANCHEZ, J.:
The National Coconut Corporation (NACOCO, for short) was
chartered as a non-profit governmental organization on May 7,
1940 by Commonwealth Act 518 avowedly for the protection,
preservation and development of the coconut industry in the
Philippines. On August 1, 1946, NACOCO's charter was amended
[Republic Act 5] to grant that corporation the express power "to
buy, sell, barter, export, and in any other manner deal in,
coconut, copra, and dessicated coconut, as well as their byproducts, and to act as agent, broker or commission merchant of
the producers, dealers or merchants" thereof. The charter
amendment was enacted to stabilize copra prices, to serve
coconut producers by securing advantageous prices for them, to
cut down to a minimum, if not altogether eliminate, the margin
of middlemen, mostly aliens.4
General manager and board chairman was Maximo M. Kalaw;
defendants Juan Bocar and Casimiro Garcia were members of the
Board; defendant Leonor Moll became director only on December
22, 1947.
NACOCO, after the passage of Republic Act 5, embarked on copra
trading activities. Amongst the scores of contracts executed by
general manager Kalaw are the disputed contracts, for the
delivery of copra, viz:
(a) July 30, 1947: Alexander Adamson & Co., for 2,000 long tons,
$167.00: per ton, f. o. b., delivery: August and September, 1947.
This contract was later assigned to Louis Dreyfus & Co.
(Overseas) Ltd.
(b) August 14, 1947: Alexander Adamson & Co., for 2,000 long
tons $145.00 per long ton, f.o.b., Philippine ports, to be shipped:
September-October, 1947. This contract was also assigned to

Louis Dreyfus & Co. (Overseas) Ltd.

(c) August 22, 1947: Pacific Vegetable Co., for 3,000 tons,
$137.50 per ton, delivery: September, 1947.
(d) September 5, 1947: Spencer Kellog & Sons, for 1,000 long
tons, $160.00 per ton, c.i.f., Los Angeles, California, delivery:
November, 1947.
(e) September 9, 1947: Franklin Baker Division of General Foods
Corporation, for 1,500 long tons, $164,00 per ton, c.i.f., New York,
to be shipped in November, 1947.
(f) September 12, 1947: Louis Dreyfus & Co. (Overseas) Ltd., for
3,000 long tons, $154.00 per ton, f.o.b., 3 Philippine ports,
delivery: November, 1947.
(g) September 13, 1947: Juan Cojuangco, for 2,000 tons, $175.00
per ton, delivery: November and December, 1947. This contract
was assigned to Pacific Vegetable Co.
(h) October 27, 1947: Fairwood & Co., for 1,000 tons, $210.00
per short ton, c.i.f., Pacific ports, delivery: December, 1947 and
January, 1948. This contract was assigned to Pacific Vegetable
Co.
(i) October 28, 1947: Fairwood & Co., for 1,000 tons, $210.00 per
short ton, c.i.f., Pacific ports, delivery: January, 1948. This
contract was assigned to Pacific Vegetable Co.
An unhappy chain of events conspired to deter NACOCO from
fulfilling these contracts. Nature supervened. Four devastating
typhoons visited the Philippines: the first in October, the second
and third in November, and the fourth in December, 1947.
Coconut trees throughout the country suffered extensive
damage. Copra production decreased. Prices spiralled.
Warehouses were destroyed. Cash requirements doubled.
Deprivation of export facilities increased the time necessary to
accumulate shiploads of copra. Quick turnovers became
impossible, financing a problem.
When it became clear that the contracts would be unprofitable,
Kalaw submitted them to the board for approval. It was not until
December 22, 1947 when the membership was completed.
Defendant Moll took her oath on that date. A meeting was then
held. Kalaw made a full disclosure of the situation, apprised the
board of the impending heavy losses. No action was taken on the
contracts. Neither did the board vote thereon at the meeting of
January 7, 1948 following. Then, on January 11, 1948, President
Roxas made a statement that the NACOCO head did his best to
avert the losses, emphasized that government concerns faced

the same risks that confronted private companies, that NACOCO

was recouping its losses, and that Kalaw was to remain in his
post. Not long thereafter, that is, on January 30, 1948, the board
met again with Kalaw, Bocar, Garcia and Moll in attendance.
They unanimously approved the contracts hereinbefore
enumerated.
As was to be expected, NACOCO but partially performed the
contracts, as follows:

typhoons. To project the utter unreasonableness of this

compromise, we reproduce in haec verba this finding below:
x x x However, in similar cases brought by the same claimant
[Louis Dreyfus & Co. (Overseas) Ltd.] against Santiago Syjuco for
non-delivery of copra also involving a claim of P345,654.68
wherein defendant set up same defenses as above, plaintiff
accepted a promise of P5,000.00 only (Exhs. 31 & 32 Heirs.)
Following the same proportion, the claim of Dreyfus against
NACOCO should have been compromised for only P10,000.00, if
Buyers
Tons Delivered
at all. Now, why should defendants be held liable for the large
sum paid as compromise by the Board of Liquidators? This is just
Pacific Vegetable Oil
2,386.45
a sample to show how unjust it would be to hold defendants
Spencer Kellog
None liable for the readiness with which the Board of Liquidators
disposed of the NACOCO funds, although there was much
Franklin Baker
1,000 possibility of successfully resisting the claims, or at least
settlement for nominal sums like what happened in the Syjuco
Louis Dreyfus
800
case.5
All the settlements sum up to P1,343,274.52.
Louis Dreyfus (Adamson contract of July 30, 1947)
1,150 In this suit started in February, 1949, NACOCO seeks to recover
the above sum of P1,343,274.52 from general manager and
Louis Dreyfus (Adamson Contract of August 14, 1947)
1,755 board chairman Maximo M. Kalaw, and directors Juan Bocar,
Casimiro Garcia and Leonor Moll. It charges Kalaw with
negligence under Article 1902 of the old Civil Code (now Article
TOTALS
7,091.45
2176, new Civil Code); and defendant board members, including
The buyers threatened damage suits. Some of the claims were
Kalaw, with bad faith and/or breach of trust for having approved
settled, viz: Pacific Vegetable Oil Co., in copra delivered by
the contracts. The fifth amended complaint, on which this case
NACOCO, P539,000.00; Franklin Baker Corporation, P78,210.00;
was tried, was filed on July 2, 1959. Defendants resisted the
Spencer Kellog & Sons, P159,040.00.
action upon defenses hereinafter in this opinion to be discussed.
But one buyer, Louis Dreyfus & Go. (Overseas) Ltd., did in fact
The lower court came out with a judgment dismissing the
sue before the Court of First Instance of Manila, upon claims as
complaint without costs as well as defendants' counterclaims,
follows: For the undelivered copra under the July 30 contract
except that plaintiff was ordered to pay the heirs of Maximo
(Civil Case 4459); P287,028.00; for the balance on the August 14
Kalaw the sum of P2,601.94 for unpaid salaries and cash deposit
contract (Civil Case 4398), P75,098.63; for that per the
due the deceased Kalaw from NACOCO.
September 12 contract reduced to judgment (Civil Case 4322,
Plaintiff appealed direct to this Court.
appealed to this Court in L-2829), P447,908.40. These cases
Plaintiff's brief did not, question the judgment on Kalaw's
culminated in an out-of-court amicable settlement when the
counterclaim for the sum of P2,601.94.
Kalaw management was already out. The corporation thereunder
Right at the outset, two preliminary questions raised before, but
paid Dreyfus P567,024.52 representing 70% of the total claims.
adversely decided by, the court below, arrest our attention. On
With particular reference to the Dreyfus claims, NACOCO put up
appeal, defendants renew their bid. And this, upon established
the defenses that: (1) the contracts were void because Louis
jurisprudence that an appellate court may base its decision of
Dreyfus & Co. (Overseas) Ltd. did not have license to do business
affirmance of the judgment below on a point or points ignored by
here; and (2) failure to deliver was due to force majeure, the
the trial court or in which said court was in error. 6

1. First of the threshold questions is that advanced by defendants

that plaintiff Board of Liquidators has lost its legal personality to
continue with this suit.
Accepted in this jurisdiction are three methods by which a
corporation may wind up its affairs: (1) under Section 3, Rule
104, of the Rules of Court [which superseded Section 66 of the
Corporation Law]7 whereby, upon voluntary dissolution of a
corporation, the court may direct "such disposition of its assets
as justice requires, and may appoint a receiver to collect such
assets and pay the debts of the corporation;" (2) under Section
77 of the Corporation Law, whereby a corporation whose
corporate existence is terminated, "shall nevertheless be
continued as a body corporate for three years after the time
when it would have been so dissolved, for the purpose of
prosecuting and defending suits by or against it and of enabling
it gradually to settle and close its affairs, to dispose of and
convey its property and to divide its capital stock, but not for the
purpose of continuing the business for which it was established;"
and (3) under Section 78 of the Corporation Law, by virtue of
which the corporation, within the three year period just
mentioned, "is authorized and empowered to convey all of its
property to trustees for the benefit of members, stockholders,
creditors, and others interested."8
It is defendants' pose that their case comes within the coverage
of the second method. They reason out that suit was commenced
in February, 1949; that by Executive Order 372, dated November
24, 1950, NACOCO, together with other government-owned
corporations, was abolished, and the Board of Liquidators was
entrusted with the function of settling and closing its affairs; and
that, since the three year period has elapsed, the Board of
Liquidators may not now continue with, and prosecute, the
present case to its conclusion, because Executive Order 372
provides in Section 1 thereof that
Sec.1. The National Abaca and Other Fibers Corporation, the
National Coconut Corporation, the National Tobacco Corporation,
the National Food Producer Corporation and the former enemyowned or controlled corporations or associations, . . . are hereby
abolished. The said corporations shall be liquidated in
accordance with law, the provisions of this Order, and/or in such
manner as the President of the Philippines may direct; Provided,
however, That each of the said corporations shall nevertheless
be continued as a body corporate for a period of three (3) years

from the effective date of this Executive Order for the purpose of
prosecuting and defending suits by or against it and of enabling
the Board of Liquidators gradually to settle and close its affairs,
to dispose of and, convey its property in the manner hereinafter
provided.
Citing Mr. Justice Fisher, defendants proceed to argue that even
where it may be found impossible within the 3 year period to
reduce disputed claims to judgment, nonetheless, "suits by or
against a corporation abate when it ceases to be an entity
capable of suing or being sued" (Fisher, The Philippine Law of
Stock Corporations, pp. 390-391). Corpus Juris Secundum
likewise is authority for the statement that "[t]he dissolution of a
corporation ends its existence so that there must be statutory
authority for prolongation of its life even for purposes of pending
litigation"9 and that suit "cannot be continued or revived; nor can
a valid judgment be rendered therein, and a judgment, if
rendered, is not only erroneous, but void and subject to collateral
attack." 10 So it is, that abatement of pending actions follows as a
matter of course upon the expiration of the legal period for
liquidation, 11 unless the statute merely requires a
commencement of suit within the added time. 12 For, the court
cannot extend the time alloted by statute. 13
We, however, express the view that the executive order
abolishing NACOCO and creating the Board of Liquidators should
be examined in context. The proviso in Section 1 of Executive
Order 372, whereby the corporate existence of NACOCO was
continued for a period of three years from the effectivity of the
order for "the purpose of prosecuting and defending suits by or
against it and of enabling the Board of Liquidators gradually to
settle and close its affairs, to dispose of and convey its property
in the manner hereinafter provided", is to be read not as an
isolated provision but in conjunction with the whole. So reading,
it will be readily observed that no time limit has been tacked to
the existence of the Board of Liquidators and its function of
closing the affairs of the various government owned
corporations, including NACOCO.
By Section 2 of the executive order, while the boards of directors
of the various corporations were abolished, their powers and
functions and duties under existing laws were to be assumed and
exercised by the Board of Liquidators. The President thought it
best to do away with the boards of directors of the defunct
corporations; at the same time, however, the President had

chosen to see to it that the Board of Liquidators step into the

vacuum. And nowhere in the executive order was there any
mention of the lifespan of the Board of Liquidators. A glance at
the other provisions of the executive order buttresses our
conclusion. Thus, liquidation by the Board of Liquidators may,
under section 1, proceed in accordance with law, the provisions
of the executive order, "and/or in such manner as the President
of the Philippines may direct." By Section 4, when any property,
fund, or project is transferred to any governmental
instrumentality "for administration or continuance of any
project," the necessary funds therefor shall be taken from the
corresponding special fund created in Section 5. Section 5, in
turn, talks of special funds established from the "net proceeds of
the liquidation" of the various corporations abolished. And by
Section, 7, fifty per centum of the fees collected from the copra
standardization and inspection service shall accrue "to the
special fund created in section 5 hereof for the rehabilitation and
development of the coconut industry." Implicit in all these, is that
the term of life of the Board of Liquidators is without time limit.
Contemporary history gives us the fact that the Board of
Liquidators still exists as an office with officials and numerous
employees continuing the job of liquidation and prosecution of
several court actions.
Not that our views on the power of the Board of Liquidators to
proceed to the final determination of the present case is without
jurisprudential support. The first judicial test before this Court is
National Abaca and Other Fibers Corporation vs. Pore, L-16779,
August 16, 1961. In that case, the corporation, already dissolved,
commenced suit within the three-year extended period for
liquidation. That suit was for recovery of money advanced to
defendant for the purchase of hemp in behalf of the corporation.
She failed to account for that money. Defendant moved to
dismiss, questioned the corporation's capacity to sue. The lower
court ordered plaintiff to include as co-party plaintiff, The Board
of Liquidators, to which the corporation's liquidation was
entrusted by Executive Order 372. Plaintiff failed to effect
inclusion. The lower court dismissed the suit. Plaintiff moved to
reconsider. Ground: excusable negligence, in that its counsel
prepared the amended complaint, as directed, and instructed the
board's incoming and outgoing correspondence clerk, Mrs.
Receda Vda. de Ocampo, to mail the original thereof to the court
and a copy of the same to defendant's counsel. She mailed the

copy to the latter but failed to send the original to the court. This
motion was rejected below. Plaintiff came to this Court on appeal.
We there said that "the rule appears to be well settled that, in
the absence of statutory provision to the contrary, pending
actions by or against a corporation are abated upon expiration of
the period allowed by law for the liquidation of its affairs." We
there said that "[o]ur Corporation Law contains no provision
authorizing a corporation, after three (3) years from the
expiration of its lifetime, to continue in its corporate name
actions instituted by it within said period of three (3) years." 14
However, these precepts notwithstanding, we, in effect, held in
that case that the Board of Liquidators escapes from the
operation thereof for the reason that "[o]bviously, the complete
loss of plaintiff's corporate existence after the expiration of the
period of three (3) years for the settlement of its affairs is what
impelled the President to create a Board of Liquidators, to
continue the management of such matters as may then be
pending." 15 We accordingly directed the record of said case to be
returned to the lower court, with instructions to admit plaintiff's
amended complaint to include, as party plaintiff, the Board of
Liquidators.
Defendants' position is vulnerable to attack from another
direction.
By Executive Order 372, the government, the sole stockholder,
abolished NACOCO, and placed its assets in the hands of the
Board of Liquidators. The Board of Liquidators thus became the
trustee on behalf of the government. It was an express trust. The
legal interest became vested in the trustee the Board of
Liquidators. The beneficial interest remained with the sole
stockholder the government. At no time had the government
withdrawn the property, or the authority to continue the present
suit, from the Board of Liquidators. If for this reason alone, we
cannot stay the hand of the Board of Liquidators from
prosecuting this case to its final conclusion. 16 The provisions of
Section 78 of the Corporation Law the third method of winding
up corporate affairs find application.
We, accordingly, rule that the Board of Liquidators has
personality to proceed as: party-plaintiff in this case.
2. Defendants' second poser is that the action is unenforceable
against the heirs of Kalaw.
Appellee heirs of Kalaw raised in their motion to dismiss, 17 which
was overruled, and in their nineteenth special defense, that

plaintiff's action is personal to the deceased Maximo M. Kalaw,

and may not be deemed to have survived after his death. 18 They
say that the controlling statute is Section 5, Rule 87, of the 1940
Rules of Court.19 which provides that "[a]ll claims for money
against the decedent, arising from contract, express or implied",
must be filed in the estate proceedings of the deceased. We
disagree.
The suit here revolves around the alleged negligent acts of Kalaw
for having entered into the questioned contracts without prior
approval of the board of directors, to the damage and prejudice
of plaintiff; and is against Kalaw and the other directors for
having subsequently approved the said contracts in bad faith
and/or breach of trust." Clearly then, the present case is not a
mere action for the recovery of money nor a claim for money
arising from contract. The suit involves alleged tortious acts. And
the action is embraced in suits filed "to recover damages for an
injury to person or property, real or personal", which survive. 20
The leading expositor of the law on this point is Aguas vs.
Llemos, L-18107, August 30, 1962. There, plaintiffs sought to
recover damages from defendant Llemos. The complaint averred
that Llemos had served plaintiff by registered mail with a copy of
a petition for a writ of possession in Civil Case 4824 of the Court
of First Instance at Catbalogan, Samar, with notice that the same
would be submitted to the Samar court on February 23, 1960 at
8:00 a.m.; that in view of the copy and notice served, plaintiffs
proceeded to the said court of Samar from their residence in
Manila accompanied by their lawyers, only to discover that no
such petition had been filed; and that defendant Llemos
maliciously failed to appear in court, so that plaintiffs'
expenditure and trouble turned out to be in vain, causing them
mental anguish and undue embarrassment. Defendant died
before he could answer the complaint. Upon leave of court,
plaintiffs amended their complaint to include the heirs of the
deceased. The heirs moved to dismiss. The court dismissed the
complaint on the ground that the legal representative, and not
the heirs, should have been made the party defendant; and that,
anyway, the action being for recovery of money, testate or
intestate proceedings should be initiated and the claim filed
therein. This Court, thru Mr. Justice Jose B. L. Reyes, there
declared:
Plaintiffs argue with considerable cogency that contrasting the
correlated provisions of the Rules of Court, those concerning

claims that are barred if not filed in the estate settlement

proceedings (Rule 87, sec. 5) and those defining actions that
survive and may be prosecuted against the executor or
administrator (Rule 88, sec. 1), it is apparent that actions for
damages caused by tortious conduct of a defendant (as in the
case at bar) survive the death of the latter. Under Rule 87,
section 5, the actions that are abated by death are: (1) claims for
funeral expenses and those for the last sickness of the decedent;
(2) judgments for money; and (3) "all claims for money against
the decedent, arising from contract express or implied." None of
these includes that of the plaintiffs-appellants; for it is not
enough that the claim against the deceased party be for money,
but it must arise from "contract express or implied", and these
words (also used by the Rules in connection with attachments
and derived from the common law) were construed in Leung Ben
vs. O'Brien, 38 Phil. 182, 189-194,
"to include all purely personal obligations other than those which
have their source in delict or tort."
Upon the other hand, Rule 88, section 1, enumerates actions that
survive against a decedent's executors or administrators, and
they are: (1) actions to recover real and personal property from
the estate; (2) actions to enforce a lien thereon; and (3) actions
to recover damages for an injury to person or property. The
present suit is one for damages under the last class, it having
been held that "injury to property" is not limited to injuries to
specific property, but extends to other wrongs by which personal
estate is injured or diminished (Baker vs. Crandall, 47 Am. Rep.
126; also 171 A.L.R., 1395). To maliciously cause a party to incur
unnecessary expenses, as charged in this case, is certainly injury
to that party's property (Javier vs. Araneta, L-4369, Aug. 31,
1953).
The ruling in the preceding case was hammered out of facts
comparable to those of the present. No cogent reason exists why
we should break away from the views just expressed. And, the
conclusion remains: Action against the Kalaw heirs and, for the
matter, against the Estate of Casimiro Garcia survives.
The preliminaries out of the way, we now go to the core of the
controversy.
3. Plaintiff levelled a major attack on the lower court's holding
that Kalaw justifiedly entered into the controverted contracts
without the prior approval of the corporation's directorate.
Plaintiff leans heavily on NACOCO's corporate by-laws. Article IV

(b), Chapter III thereof, recites, as amongst the duties of the

general manager, the obligation: "(b) To perform or execute on
behalf of the Corporation upon prior approval of the Board, all
contracts necessary and essential to the proper accomplishment
for which the Corporation was organized."
Not of de minimis importance in a proper approach to the
problem at hand, is the nature of a general manager's position in
the corporate structure. A rule that has gained acceptance
through the years is that a corporate officer "intrusted with the
general management and control of its business, has implied
authority to make any contract or do any other act which is
necessary or appropriate to the conduct of the ordinary business
of the corporation. 21 As such officer, "he may, without any
special authority from the Board of Directors perform all acts of
an ordinary nature, which by usage or necessity are incident to
his office, and may bind the corporation by contracts in matters
arising in the usual course of business. 22
The problem, therefore, is whether the case at bar is to be taken
out of the general concept of the powers of a general manager,
given the cited provision of the NACOCO by-laws requiring prior
directorate approval of NACOCO contracts.
The peculiar nature of copra trading, at this point, deserves
express articulation. Ordinary in this enterprise are copra sales
for future delivery. The movement of the market requires that
sales agreements be entered into, even though the goods are not
yet in the hands of the seller. Known in business parlance as
forward sales, it is concededly the practice of the trade. A certain
amount of speculation is inherent in the undertaking. NACOCO
was much more conservative than the exporters with big capital.
This short-selling was inevitable at the time in the light of other
factors such as availability of vessels, the quantity required
before being accepted for loading, the labor needed to prepare
and sack the copra for market. To NACOCO, forward sales were a
necessity. Copra could not stay long in its hands; it would lose
weight, its value decrease. Above all, NACOCO's limited funds
necessitated a quick turnover. Copra contracts then had to be
executed on short notice at times within twenty-four hours. To
be appreciated then is the difficulty of calling a formal meeting of
the board.
Such were the environmental circumstances when Kalaw went
into copra trading.
Long before the disputed contracts came into being, Kalaw

contracted by himself alone as general manager for forward

sales of copra. For the fiscal year ending June 30, 1947, Kalaw
signed some 60 such contracts for the sale of copra to divers
parties. During that period, from those copra sales, NACOCO
reaped a gross profit of P3,631,181.48. So pleased was
NACOCO's board of directors that, on December 5, 1946, in
Kalaw's absence, it voted to grant him a special bonus "in
recognition of the signal achievement rendered by him in putting
the Corporation's business on a self-sufficient basis within a few
months after assuming office, despite numerous handicaps and
difficulties."
These previous contract it should be stressed, were signed by
Kalaw without prior authority from the board. Said contracts were
known all along to the board members. Nothing was said by
them. The aforesaid contracts stand to prove one thing:
Obviously, NACOCO board met the difficulties attendant to
forward sales by leaving the adoption of means to end, to the
sound discretion of NACOCO's general manager Maximo M.
Kalaw.
Liberally spread on the record are instances of contracts
executed by NACOCO's general manager and submitted to the
board after their consummation, not before. These agreements
were not Kalaw's alone. One at least was executed by a
predecessor way back in 1940, soon after NACOCO was
chartered. It was a contract of lease executed on November 16,
1940 by the then general manager and board chairman, Maximo
Rodriguez, and A. Soriano y Cia., for the lease of a space in
Soriano Building On November 14, 1946, NACOCO, thru its
general manager Kalaw, sold 3,000 tons of copra to the Food
Ministry, London, thru Sebastian Palanca. On December 22,
1947, when the controversy over the present contract cropped
up, the board voted to approve a lease contract previously
executed between Kalaw and Fidel Isberto and Ulpiana Isberto
covering a warehouse of the latter. On the same date, the board
gave its nod to a contract for renewal of the services of Dr.
Manuel L. Roxas. In fact, also on that date, the board requested
Kalaw to report for action all copra contracts signed by him "at
the meeting immediately following the signing of the contracts."
This practice was observed in a later instance when, on January
7, 1948, the board approved two previous contracts for the sale
of 1,000 tons of copra each to a certain "SCAP" and a certain
"GNAPO".

And more. On December 19, 1946, the board resolved to ratify

the brokerage commission of 2% of Smith, Bell and Co., Ltd., in
the sale of 4,300 long tons of copra to the French Government.
Such ratification was necessary because, as stated by Kalaw in
that same meeting, "under an existing resolution he is authorized
to give a brokerage fee of only 1% on sales of copra made
through brokers." On January 15, 1947, the brokerage fee
agreements of 1-1/2% on three export contracts, and 2% on
three others, for the sale of copra were approved by the board
with a proviso authorizing the general manager to pay a
commission up to the amount of 1-1/2% "without further action
by the Board." On February 5, 1947, the brokerage fee of 2% of J.
Cojuangco & Co. on the sale of 2,000 tons of copra was favorably
acted upon by the board. On March 19, 1947, a 2% brokerage
commission was similarly approved by the board for Pacific
Trading Corporation on the sale of 2,000 tons of copra.
It is to be noted in the foregoing cases that only the brokerage
fee agreements were passed upon by the board, not the sales
contracts themselves. And even those fee agreements were
submitted only when the commission exceeded the ceiling fixed
by the board.
Knowledge by the board is also discernible from other recorded
instances.1wph1.t
When the board met on May 10, 1947, the directors discussed
the copra situation: There was a slow downward trend but belief
was entertained that the nadir might have already been reached
and an improvement in prices was expected. In view thereof,
Kalaw informed the board that "he intends to wait until he has
signed contracts to sell before starting to buy copra."23
In the board meeting of July 29, 1947, Kalaw reported on the
copra price conditions then current: The copra market appeared
to have become fairly steady; it was not expected that copra
prices would again rise very high as in the unprecedented boom
during January-April, 1947; the prices seemed to oscillate
between $140 to $150 per ton; a radical rise or decrease was not
indicated by the trends. Kalaw continued to say that "the
Corporation has been closing contracts for the sale of copra
generally with a margin of P5.00 to P7.00 per hundred kilos." 24
We now lift the following excerpts from the minutes of that same
board meeting of July 29, 1947:
521. In connection with the buying and selling of copra the Board
inquired whether it is the practice of the management to close

contracts of sale first before buying. The General Manager

replied that this practice is generally followed but that it is not
always possible to do so for two reasons:
(1) The role of the Nacoco to stabilize the prices of copra requires
that it should not cease buying even when it does not have
actual contracts of sale since the suspension of buying by the
Nacoco will result in middlemen taking advantage of the
temporary inactivity of the Corporation to lower the prices to the
detriment of the producers.
(2) The movement of the market is such that it may not be
practical always to wait for the consummation of contracts of
sale before beginning to buy copra.
The General Manager explained that in this connection a certain
amount of speculation is unavoidable. However, he said that the
Nacoco is much more conservative than the other big exporters
in this respect.25
Settled jurisprudence has it that where similar acts have been
approved by the directors as a matter of general practice,
custom, and policy, the general manager may bind the company
without formal authorization of the board of directors. 26 In
varying language, existence of such authority is established, by
proof of the course of business, the usage and practices of the
company and by the knowledge which the board of directors has,
or must be presumed to have, of acts and doings of its
subordinates in and about the affairs of the corporation. 27 So
also,
x x x authority to act for and bind a corporation may be
presumed from acts of recognition in other instances where the
power was in fact exercised. 28
x x x Thus, when, in the usual course of business of a
corporation, an officer has been allowed in his official capacity to
manage its affairs, his authority to represent the corporation may
be implied from the manner in which he has been permitted by
the directors to manage its business.29
In the case at bar, the practice of the corporation has been to
allow its general manager to negotiate and execute contracts in
its copra trading activities for and in NACOCO's behalf without
prior board approval. If the by-laws were to be literally followed,
the board should give its stamp of prior approval on all corporate
contracts. But that board itself, by its acts and through
acquiescence, practically laid aside the by-law requirement of
prior approval.

Under the given circumstances, the Kalaw contracts are valid

corporate acts.
4. But if more were required, we need but turn to the board's
ratification of the contracts in dispute on January 30, 1948,
though it is our (and the lower court's) belief that ratification
here is nothing more than a mere formality.
Authorities, great in number, are one in the idea that "ratification
by a corporation of an unauthorized act or contract by its officers
or others relates back to the time of the act or contract ratified,
and is equivalent to original authority;" and that " [t]he
corporation and the other party to the transaction are in
precisely the same position as if the act or contract had been
authorized at the time." 30 The language of one case is
expressive: "The adoption or ratification of a contract by a
corporation is nothing more or less than the making of an original
contract. The theory of corporate ratification is predicated on the
right of a corporation to contract, and any ratification or adoption
is equivalent to a grant of prior authority." 31
Indeed, our law pronounces that "[r]atification cleanses the
contract from all its defects from the moment it was constituted."
32
By corporate confirmation, the contracts executed by Kalaw
are thus purged of whatever vice or defect they may have. 33
In sum, a case is here presented whereunder, even in the face of
an express by-law requirement of prior approval, the law on
corporations is not to be held so rigid and inflexible as to fail to
recognize equitable considerations. And, the conclusion
inevitably is that the embattled contracts remain valid.
5. It would be difficult, even with hostile eyes, to read the record
in terms of "bad faith and/or breach of trust" in the board's
ratification of the contracts without prior approval of the board.
For, in reality, all that we have on the government's side of the
scale is that the board knew that the contracts so confirmed
would cause heavy losses.
As we have earlier expressed, Kalaw had authority to execute the
contracts without need of prior approval. Everybody, including
Kalaw himself, thought so, and for a long time. Doubts were first
thrown on the way only when the contracts turned out to be
unprofitable for NACOCO.
Rightfully had it been said that bad faith does not simply connote
bad judgment or negligence; it imports a dishonest purpose or
some moral obliquity and conscious doing of wrong; it means
breach of a known duty thru some motive or interest or ill will; it

partakes of the nature of fraud. 34 Applying this precept to the

given facts herein, we find that there was no "dishonest
purpose," or "some moral obliquity," or "conscious doing of
wrong," or "breach of a known duty," or "Some motive or interest
or ill will" that "partakes of the nature of fraud."
Nor was it even intimated here that the NACOCO directors acted
for personal reasons, or to serve their own private interests, or to
pocket money at the expense of the corporation. 35 We have had
occasion to affirm that 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 purposes." 36 Briggs vs.
Spaulding, 141 U.S. 132, 148-149, 35 L. ed. 662, 669, quotes
with approval from Judge Sharswood (in Spering's App., 71 Pa.
11), the following: "Upon a close examination of all the reported
cases, although there are many dicta not easily reconcilable, yet
I have found no judgment or decree which has held directors to
account, except when they have themselves been personally
guilty of some fraud on the corporation, or have known and
connived at some fraud in others, or where such fraud might
have been prevented had they given ordinary attention to their
duties. . . ." Plaintiff did not even dare charge its defendantdirectors with any of these malevolent acts.
Obviously, the board thought that to jettison Kalaw's contracts
would contravene basic dictates of fairness. They did not think of
raising their voice in protest against past contracts which
brought in enormous profits to the corporation. By the same
token, fair dealing disagrees with the idea that similar contracts,
when unprofitable, should not merit the same treatment. Profit or
loss resulting from business ventures is no justification for
turning one's back on contracts entered into. The truth, then, of
the matter is that in the words of the trial court the
ratification of the contracts was "an act of simple justice and
fairness to the general manager and the best interest of the
corporation whose prestige would have been seriously impaired
by a rejection by the board of those contracts which proved
disadvantageous." 37
The directors are not liable." 38
6. To what then may we trace the damage suffered by NACOCO.
The facts yield the answer. Four typhoons wreaked havoc then on
our copra-producing regions. Result: Copra production was
impaired, prices spiralled, warehouses destroyed. Quick
turnovers could not be expected. NACOCO was not alone in this

misfortune. The record discloses that private traders, old,

experienced, with bigger facilities, were not spared; also suffered
tremendous losses. Roughly estimated, eleven principal trading
concerns did run losses to about P10,300,000.00. Plaintiff's
witness Sisenando Barretto, head of the copra marketing
department of NACOCO, observed that from late 1947 to early
1948 "there were many who lost money in the trade." 39 NACOCO
was not immune from such usual business risk.
The typhoons were known to plaintiff. In fact, NACOCO resisted
the suits filed by Louis Dreyfus & Co. by pleading in its answers
force majeure as an affirmative defense and there vehemently
asserted that "as a result of the said typhoons, extensive
damage was caused to the coconut trees in the copra producing
regions of the Philippines and according to estimates of
competent authorities, it will take about one year until the
coconut producing regions will be able to produce their normal
coconut yield and it will take some time until the price of copra
will reach normal levels;" and that "it had never been the
intention of the contracting parties in entering into the contract
in question that, in the event of a sharp rise in the price of copra
in the Philippine market produce by force majeure or by caused
beyond defendant's control, the defendant should buy the copra
contracted for at exorbitant prices far beyond the buying price of
the plaintiff under the contract." 40
A high regard for formal judicial admissions made in court
pleadings would suffice to deter us from permitting plaintiff to
stray away therefrom, to charge now that the damage suffered
was because of Kalaw's negligence, or for that matter, by reason
of the board's ratification of the contracts. 41
Indeed, were it not for the typhoons, 42 NACOCO could have, with
ease, met its contractual obligations. Stock accessibility was no
problem. NACOCO had 90 buying agencies spread throughout
the islands. It could purchase 2,000 tons of copra a day. The
various contracts involved delivery of but 16,500 tons over a
five-month period. Despite the typhoons, NACOCO was still able
to deliver a little short of 50% of the tonnage required under the
contracts.
As the trial court correctly observed, this is a case of damnum
absque injuria. Conjunction of damage and wrong is here absent.
There cannot be an actionable wrong if either one or the other is
wanting. 43
7. On top of all these, is that no assertion is made and no proof is

presented which would link Kalaw's acts ratified by the board

to a matrix for defraudation of the government. Kalaw is clear
of the stigma of bad faith. Plaintiff's corporate counsel 44
concedes that Kalaw all along thought that he had authority to
enter into the contracts, that he did so in the best interests of the
corporation; that he entered into the contracts in pursuance of
an overall policy to stabilize prices, to free the producers from
the clutches of the middlemen. The prices for which NACOCO
contracted in the disputed agreements, were at a level
calculated to produce profits and higher than those prevailing in
the local market. Plaintiff's witness, Barretto, categorically stated
that "it would be foolish to think that one would sign (a) contract
when you are going to lose money" and that no contract was
executed "at a price unsafe for the Nacoco." 45 Really, on the
basis of prices then prevailing, NACOCO envisioned a profit of
around P752,440.00. 46
Kalaw's acts were not the result of haphazard decisions either.
Kalaw invariably consulted with NACOCO's Chief Buyer,
Sisenando Barretto, or the Assistant General Manager. The dailies
and quotations from abroad were guideposts to him.
Of course, Kalaw could not have been an insurer of profits. He
could not be expected to predict the coming of unpredictable
typhoons. And even as typhoons supervened Kalaw was not
remissed in his duty. He exerted efforts to stave off losses. He
asked the Philippine National Bank to implement its commitment
to extend a P400,000.00 loan. The bank did not release the loan,
not even the sum of P200,000.00, which, in October, 1947, was
approved by the bank's board of directors. In frustration, on
December 12, 1947, Kalaw turned to the President, complained
about the bank's short-sighted policy. In the end, nothing came
out of the negotiations with the bank. NACOCO eventually
faltered in its contractual obligations.
That Kalaw cannot be tagged with crassa negligentia or as much
as simple negligence, would seem to be supported by the fact
that even as the contracts were being questioned in Congress
and in the NACOCO board itself, President Roxas defended the
actuations of Kalaw. On December 27, 1947, President Roxas
expressed his desire "that the Board of Directors should reelect
Hon. Maximo M. Kalaw as General Manager of the National
Coconut Corporation." 47 And, on January 7, 1948, at a time when
the contracts had already been openly disputed, the board, at its
regular meeting, appointed Maximo M. Kalaw as acting general

manager of the corporation.

Well may we profit from the following passage from Montelibano
vs. Bacolod-Murcia Milling Co., Inc., L-15092, May 18, 1962:
"They (the directors) hold such office charged with the duty to
act for the corporation according to their best judgment, and in
so doing they cannot be controlled in the reasonable exercise
and performance of such duty. Whether the business of a
corporation should be operated at a loss during a business
depression, or closed down at a smaller loss, is a purely business
and economic problem to be determined by the directors of the
corporation, and not by the court. It is a well known rule of law
that questions of policy of management are left solely to the
honest decision of officers and directors of a corporation, and the
court is without authority to substitute its judgment for the
judgment of the board of directors; the board is the business
manager of the corporation, and so long as it acts in good faith
its orders are not reviewable by the courts." (Fletcher on
Corporations, Vol. 2, p. 390.) 48
Kalaw's good faith, and that of the other directors, clinch the
case for defendants. 49
Viewed in the light of the entire record, the judgment under
review must be, as it is hereby, affirmed.
Without costs. So ordered.

G.R. No. 83589

March 13, 1991
RAMON
FAROLAN
as
ACTING
COMMISSIONER
OF
CUSTOMS, and GUILLERMO PARAYNO, as CHIEF OF
CUSTOM INTELLIGENCE and INVESTIGATION DIVISION,
petitioners,
vs.
SOLMAC MARKETING CORPORATION and COURT OF
APPEALS, respondents.
Dakila F. Castro & Associates for private respondent.
SARMIENTO, J.:
This petition for review on certiorari, instituted by the Solicitor
General on behalf of the public officers-petitioners, seek the
nullification and setting aside of the Resolution 1 dated May 25,
1988 of the Court of Appeals in CA-G.R. No. SP-10509, entitled
"Solmac Marketing Corporation vs. Ramon Farolan, Acting
Commissioner of Customs, and Guillermo Parayno, Chief of
Customs Intelligence and Investigation Division," which adjudged
these public officers to pay solidarily and in their private personal
capacities respondent Solmac Marketing Corporation temperate
damages in the sum of P100,000.00, exemplary damages in the
sum of P50,000.00, and P25,000.00, as attorney's fees and
expenses of litigation. This challenged resolution of the
respondent court modified its decision 2 of July 27, 1987 by
reducing into halves the original awards of P100,000.00 and
P50,000.00 for exemplary damages and attorney's fees and
litigation expenses, respectively, keeping intact the original grant
of P100,000.00 in the concept of temperate damages.
(Strangely, the first name of petitioner Farolan stated in the
assailed resolution, as well as in the decision, of the respondent
court is "Damian" when it should be "Ramon", his correct given
name. Strictly speaking, petitioner Ramon Farolan could not be
held liable under these decision and resolution for he is not the
one adjudged to pay the huge damages but a different person.
Nonetheless, that is of no moment now considering the
disposition of this ponencia.)
The relevant facts, as culled from the records, are as follows:
At the time of the commission of the acts complained of by the
private respondent, which was the subject of the latter's petition
for mandamus and injunction filed with the Regional Trial Court
(RTC) of Manila in Civil Case No. 84-23537, petitioner Ramon
Farolan was then the Acting Commissioner of Customs while
petitioner Guillermo Parayno was then the Acting Chief, Customs

Intelligence and Investigation Division. They were thus sued in

their official capacities as officers in the government as clearly
indicated in the title of the case in the lower courts and even
here in this Court. Nevertheless, they were both held personally
liable for the awarded damages "(s)ince the detention of the
goods by the defendants (petitioners herein) was irregular and
devoid of legal basis, hence, not done in the regular performance
of official duty . . . ." 3
However, as adverted to at the outset, in the dispositive portion
of the challenged resolution, the one held personally liable is a
"Damian Farolan" and not the petitioner, Ramon Farolan. Also as
earlier mentioned, we will ignore that gross error.
Private respondent Solmac Marketing Corporation is a
corporation organized and existing under the laws of the
Philippines. It was the assignee, transferee, and owner of an
importation of Clojus Recycling Plastic Products of 202,204
kilograms of what is technically known as polypropylene film,
valued at US$69,250.05.
Polypropylene is a substance resembling polyethelyne which is
one of a group of partially crystalline lightweight thermoplastics
used chiefly in making fibers, films, and molded and extruded
products. 4
Without defect, polypropylene film is sold at a much higher price
as prime quality film. Once rejected as defective due to
blemishes, discoloration, defective winding, holes, etc.,
polypropylene film is sold at a relatively cheap price without
guarantee or return, and the buyer takes the risk as to whether
he can recover an average 30% to 50% usable matter. 5 This
latter kind of polypropylene is known as OPP film waste/scrap
and this is what respondent SOLMAC claimed the Clojus shipment
to be.
The subject importation, consisting of seventeen (17) containers,
arrived in December, 1981. Upon application for entry, the
Bureau of Customs asked respondent SOLMAC for its authority
from any government agency to import the goods described in
the bill of lading. Respondent SOLMAC presented a Board of
Investment (BOI) authority for polypropylene film scrap.
However, upon examination of the shipment by the National
Institute of Science and Technology (NIST), it turned out that the
fibers of the importation were oriented in such a way that the
materials were stronger than OPP film scrap. 6 In other words, the
Clojus shipment was not OPP film scrap, as declared by the

assignee respondent SOLMAC to the Bureau of Customs and BOI

Governor Lilia R. Bautista, but oriented polypropylene the
importation of which is restricted, if not prohibited, under Letter
of Instructions (LOI) No. 658-B. Specifically, Sections 1 and 2 of
LOI No. 658-B provide that:
xxx
xxx
xxx
1. The importation of cellophane shall be allowed only for
quantities and types of cellophane that cannot be produced by
Philippine Cellophane Film Corporation. The Board of Investments
shall issue guidelines regulating such importations.
2. The Collector of Customs shall see to the apprehension of all
illegal importations of cellophane and oriented polypropylene
(OPP) and the dumping of imported stock lots of cellophane and
OPP.
xxx
xxx
xxx
Considering that the shipment was different from what had been
authorized by the BOI and by law, petitioners Parayno and
Farolan withheld the release of the subject importation.
On June 7, 1982, petitioner Parayno, then Chief of Customs
Intelligence and Investigation Division, wrote the BOI asking for
the latter's advice on whether or no t the subject importation
may be released 7 A series of exchange of correspondence
between the BOI and the Bureau of Customs, on one hand, and
between the late Dakila Castro, counsel for the private
respondent, and the BOI and the Bureau of Customs, on the
other, ensued, to wit:
xxx
xxx
xxx
4. In a letter dated August 17, 1982, the BOI agreed that the
subject imports may be released but that holes may be drilled on
them by the Bureau of Customs prior to their release.
5. On January 20, 1983, (the late) Atty. Dakila Castro, (then)
counsel of private respondent wrote to petitioner Commissioner
Farolan of Customs asking for the release of the importation. The
importation was not released, however, on the ground that holes
had to be drilled on them first.
6. Atty. Dakila Castro then wrote a letter dated October 6, 1983,
to BOI Governor Hermenigildo Zayco stressing the reasons why
the subject importation should be released without drilling of
holes.
7. On November 8, 1983, BOI Governor H. Zayco wrote a letter to
the Bureau of Customs stating that the subject goods may be
released without drilling of holes inasmuch as the goods arrived

prior to the endorsement on August 17, 1982 to the drilling of

holes on all importations of waste/scrap films.
8. On February 1, 1984, petitioner Commissioner Farolan wrote
the BOI requesting for definite guidelines regarding the
disposition of importations of Oriented Polypropylene (OPP) and
Polypropylene (PP) then being held at the Bureau of Customs.
9. On March 12, 1984, Minister Roberto Ongpin of Trade, the BOI
Chairman, wrote his reply to petitioner Farolan . . . . 8 (This reply
of Minister Ongpin is copied in full infra.)
On March 26, 1984, respondent Solmac filed the action for
mandamus and injunction with the RTC as above mentioned. It
prayed for the unconditional release of the subject importation. It
also prayed for actual damages, exemplary damages, and
attorney's fees. As prayed for, the trial court issued a writ of
preliminary injunction.
After hearing on the merits, the RTC rendered a decision on
February 5, 1985, the dispositive portion of which reads as
follows:
Premises considered, judgment is hereby rendered ordering
defendants to release the subject importation immediately
without drilling of holes, subject only to the normal requirements
of the customs processing for such release to be done with
utmost dispatch as time is of the essence; and the preliminary
injunction hereto issued is hereby made permanent until actual
physical release of the merchandise and without pronouncement
as to costs.
SO ORDERED. 9
From the decision of the trial court, Solmac, the plaintiff below
and the private respondent herein, appealed to the Court of
Appeals only insofar as to the denial of the award of damages is
concerned. On the other hand, the petitioners did not appeal
from this decision. They did not see any need to appeal because
as far as they were concerned, they had already complied with
their duty. They had already ordered the release of the
importation "without drilling of holes," as in fact it was so
released, in compliance with the advice to effect such immediate
release contained in a letter of BOI dated October 9, 1984, to
Commissioner Farolan. Thus, to stress, even before the RTC
rendered its decision on February 5, 1984, the Clojus shipment of
OPP was released 10 to the private respondent in its capacity as
assignee of the same. Be that it may, the private respondent
filed its appeal demanding that the petitioners be held, in their

personal and private capacities, liable for damages despite the

finding of lack of bad faith on the part of the public officers.
After due proceeding, the Court of Appeals rendered a decision 11
on July 27, 1987, the dispositive portion which reads as follows:
WHEREFORE, the appealed judgment is modified by ordering the
defendants Ramon Farolan and Guillermo Parayno solidarity, in
their personal capacity, to pay the plaintiff temperate damages
in the sum of P100,000, exemplary damages in the sum of
P100,000 and P50,000 as attorney's fees and expenses of
litigation. Costs against the defendants.
SO ORDERED.
On August 14, 1987, the petitioners filed a motion for
reconsideration of the decision of the Court of Appeals.
On May 25, 1988, the Court of Appeals issued its resolution
modifying the award of damages, to wit: temperate damages in
the sum of P100,000,00, exemplary damages in the sum of
P50,000.00, and P25,000.00 as attorney's fees and expenses of
litigation. The respondent court explained the reduction of the
awards for exemplary damages and attorney's fees and
expenses of litigation in this wise:
3. In our decision of July 27, 1987, We awarded to plaintiffappellant Pl00,000 as temperate damages, Pl00,000.00 as
exemplary damages, and P50,000.00 as attorney's fees and
expenses of litigation. Under Art. 2233 of the Civil Code, recovery
of exemplary damages is not a matter of right but depends upon
the discretion of the court. Under Article 2208 of the Civil Code,
attorney's fees and expenses of litigation must always be
reasonable. In view of these provisions of the law, and since the
award of temperate damages is only P100,000.00, the amount of
exemplary damages may not be at par as temperate damages.
An award of P50,000.00, as exemplary damages may already
serve the purpose, i.e., as an example for the public good.
Likewise, the attorney's fees and expenses of litigation have to
be reduced to 25% of the amount of temperate damages, or
P25,000.00, if the same have to be reasonable. The reduction in
the amount of exemplary damages, and attorney's fees and
expenses of litigation would be in accord with justice and
fairness. 12
The petitioners now come to this Court, again by the Solicitor
General, assigning the following errors allegedly committed by
the respondent court:
I

The Court of Appeals erred in disregarding the finding of the trial

court that the defense of good faith of petitioners (defendants)
cannot be discredited.
II
The Court of Appeals erred in adjudging petitioners liable to pay
temperate damages, exemplary damages, attorney's fees and
expenses of litigation. 13
These two issues boil down to a single question, i.e., whether or
not the petitioners acted in good faith in not immediately
releasing the questioned importation, or, simply, can they be
held liable, in their personal and private capacities, for damages
to the private respondent.
We rule for the petitioners.
The respondent court committed a reversible error in overruling
the trial court's finding that:
. . . with reference to the claim of plaintiff to damages, actual and
exemplary, and attorney's fees, the Court finds it difficult to
discredit or disregard totally the defendants' defense of good
faith premised on the excuse that they were all the time awaiting
clarification of the Board of Investments on the matter. 14
We hold that this finding of the trial court is correct for good faith
is always presumed and it is upon him who alleges the contrary
that the burden of proof lies. 15 In Abando v. Lozada, 16 we
defined good faith as "refer[ring] to a state of the mind which is
manifested by the acts of the individual concerned. It consists of
the honest intention to abstain from taking an unconscionable
and unscrupulous advantage of another. It is the opposite of
fraud, and its absence should be established by convincing
evidence."
We had reviewed the evidence on record carefully and we did not
see any clear and convincing proof showing the alleged bad faith
of the petitioners. On the contrary, the record is replete with
evidence bolstering the petitioners' claim of good faith. First,
there was the report of the National Institute of Science and
Technology (NIST) dated January 25, 1982 that, contrary to what
the respondent claimed, the subject importation was not OPP film
scraps but oriented polypropylene, a plastic product of stronger
material, whose importation to the Philippines was restricted, if
not prohibited, under LOI
658-B. 17 It was on the strength of this finding that the petitioners
withheld the release of the subject importation for being contrary
to law. Second, the petitioners testified that, on many occasions,

the Bureau of Customs sought the advice of the BOI on whether

the subject importation might be released. 18 Third, petitioner
Parayno also testified during the trial that up to that time (of the
trial) there was no clear-cut policy on the part of the BOI
regarding the entry into the Philippines of oriented polypropylene
(OPP), as the letters of BOI Governors Tordesillas and Zayco of
November 8, 1983 and September 24, 1982, respectively,
ordering the release of the subject importation did not clarify the
BOI policy on the matter. He then testified on the letter of the BOI
Chairman Roberto Ongpin dated March 12, 1984, which states in
full:
Thank you for your letter of 1 February 1984, on the subject of
various importations of Oriented Polypropylene (OPP) and
Polypropylene (PP) withheld by Customs and the confusion over
the disposition of such imports.
I have discussed the matter with Vice-Chairman Tordesillas and
Governor Zayco of the Board of Investments and the following is
their explanation:
1. On 22 June 1982, the BOI ruled that importation of OPP/PP film
scraps intended for recycling or repelletizing did not fall within
the purview of LOI 658-B.
2. On 17 August l982, the BOI agreed that holes could be drilled
on subject film imports to prevent their use for other purposes.
3. For importations authorized prior to 22 June 1982, the drilling
of holes should depend on purpose for which the importations
was approved by the BOI that is, for direct packaging use or for
recycling/repelletizing into raw material. The exemption from
drilling of holes on Solmac Marketing's importation under
Certificates of Authority issued on 1 April 1982 and 5 May 1982
and on Clojus' importation authorized in 1982 were endorsed by
the BOI on the premise that these were not intended for
recycling/repelletizing.
Should your office have any doubts as to the authorized intended
use of any imported lots of OPP/PP film scraps that you have
confiscated, we have no objection to the drilling of holes to
ensure that these are indeed recycled.
I have requested Governor Zayco to contact your office in order
to offer any further assistance which you may require. 19
It can be seen from all the foregoing that even the highest
officers (Chairman Ongpin, Vice-Chairman Tordesillas, and
Governor Zayco) of the BOI themselves were not in agreement as
to what proper course to take on the subject of the various

importations of Oriented Polypropylene (OPP) and Polypropylene

(PP) withheld by the Bureau of Customs. The conflicting
recommendations of the BOI on this score prompted the
petitioners to seek final clarification from the former with regard
to its policy on these importations. This resulted in the inevitable
delay in the release of the Clojus shipment, one of the several of
such importations. The confusion over the disposition of this
particular importation obviates bad faith. Thus the trial court's
finding that the petitioners acted in good faith in not immediately
releasing the Clojus shipment pending a definitive policy of the
BOI on this matter is correct. It is supported by substantial
evidence on record, independent of the presumption of good
faith, which as stated earlier, was not successfully rebutted.
When a public officer takes his oath of office, he binds himself to
perform the duties of his office faithfully and to use reasonable
skill and diligence, and to act primarily for the benefit of the
public. Thus, in the discharge of his duties, he is to use that
prudence, caution, and attention which careful men use in the
management of their affairs. In the case at bar, prudence
dictated that petitioners first obtain from the BOI the latter's
definite guidelines regarding the disposition of the various
importations of oriented polypropylene (OPP) and polypropylene
(PP) then being withheld at the Bureau of Customs. These
cellophane/film
products
were
competing
with
locally
manufactured polypropylene and oriented polypropylene as raw
materials which were then already sufficient to meet local
demands, hence, their importation was restricted, if not
prohibited under LOI 658-B. Consequently, the petitioners can
not be said to have acted in bad faith in not immediately
releasing the import goods without first obtaining the necessary
clarificatory guidelines from the BOI. As public officers, the
petitioners had the duty to see to it that the law they were
tasked to implement, i.e., LOI 658-B, was faithfully complied with.
But even granting that the petitioners committed a mistake in
withholding the release of the subject importation because
indeed it was composed of OPP film scraps, 20 contrary to the
evidence submitted by the National Institute of Science and
Technology that the same was pure oriented OPP, nonetheless, it
is the duty of the Court to see to it that public officers are not
hampered in the performance of their duties or in making
decisions for fear of personal liability for damages due to honest
mistake.1wphi1 Whatever damage they may have caused as a

result of such an erroneous interpretation, if any at all, is in the

nature of a damnum absque injuria. Mistakes concededly
committed by public officers are not actionable absent any clear
showing that they were motivated by malice or gross negligence
amounting to bad faith. 21 After all, "even under the law of public
officers, the acts of the petitioners are protected by the
presumption of good faith. 22
In the same vein, the presumption, disputable though it may be,
that an official duty has been regularly performed 23 applies in
favor of the petitioners. Omnia praesumuntur rite et solemniter
esse acta. (All things are presumed to be correctly and solemnly
done.) It was private respondent's burden to overcome this juris
tantum presumption. We are not persuaded that it has been able
to do so.
WHEREFORE, the petition is hereby GRANTED, the assailed
Resolution of the respondent court, in CA-G.R. SP No. 10509,
dated May 25, 1988, is SET ASIDE and ANNULLED. No costs.
SO ORDERED.

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

LUIS JOSEPH, petitioner
vs.
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO
SIOSON, JACINTO PAGARIGAN, ALBERTO CARDENO and
LAZARO VILLANUEVA, respondents.
Jose M. Castillo for petitioner.
Arturo Z. Sioson for private respondent, Patrocinio Perez.
Cipriano B. Farrales for private respondents except P. Perez.
REGALAD0, J.:
Petitioner prays in this appeal by certiorari for the annulment and
setting aside of the order, dated July 8, 1975, dismissing
petitioner's complaint, as well as the order, dated August 22,
1975, denying his motion for reconsideration of said dismissal,
both issued by respondent Judge Crispin V. Bautista of the former
Court of First Instance of Bulacan, Branch III.
Petitioner herein is the plaintiff in Civil Case No. 50-V-73 entitled
"Luis Joseph vs. Patrocinio Perez, Domingo Villa y de Jesus,
Rosario Vargas, Antonio Sioson, Lazaro Villanueva and Jacinto
Pagarigan", filed before the Court of First Instance of Bulacan,
Branch III, and presided over by respondent Judge Crispin V.
Bautista; while private respondents Patrocinio Perez, Antonio
Sioson, Jacinto Pagarigan and Lazaro Villanueva are four of the
defendants in said case. Defendant Domingo Villa y de Jesus did
not answer either the original or the amended complaint, while
defendant Rosario Vargas could not be served with summons;
and respondent Alberto Cardeno is included herein as he was
impleaded by defendant Patrocinio Perez, one of respondents
herein, in her cross-claim.
The generative facts of this case, as culled from the written
submission of the parties, are as follows:
Respondent Patrocinio Perez is the owner of a cargo truck with
Plate No. 25-2 YT Phil. '73 for conveying cargoes and passengers
for a consideration from Dagupan City to Manila. On January 12,
1973, said cargo truck driven by defendant Domingo Villa was on
its way to Valenzuela, Bulacan from Pangasinan. Petitioner, with
a cargo of livestock, boarded the cargo truck at Dagupan City
after paying the sum of P 9.00 as one way fare to Valenzuela,
Bulacan. While said cargo truck was negotiating the National
Highway proceeding towards Manila, defendant Domingo Villa
tried to overtake a tricycle likewise proceeding in the same

direction. At about the same time, a pick-up truck with Plate No.
45-95 B, supposedly owned by respondents Antonio Sioson and
Jacinto Pagarigan, then driven by respondent Lazaro Villanueva,
tried to overtake the cargo truck which was then in the process
of overtaking the tricycle, thereby forcing the cargo truck to veer
towards the shoulder of the road and to ram a mango tree. As a
result, petitioner sustained a bone fracture in one of his legs. 1
The following proceedings thereafter took place: 2
Petitioner filed a complaint for damages against respondent
Patrocinio Perez, as owner of the cargo truck, based on a breach
of contract of carriage and against respondents Antonio Sioson
and Lazaro Villanueva, as owner and driver, respectively, of the
pick-up truck, based on quasi-delict.
Respondent Sioson filed his answer alleging that he is not and
never was an owner of the pick-up truck and neither would he
acquire ownership thereof in the future.
On September 24, 1973, petitioner, with prior leave of court, filed
his amended complaint impleading respondents Jacinto
Pagarigan and a certain Rosario Vargas as additional alternative
defendants. Petitioner apparently could not ascertain who the
real owner of said cargo truck was, whether respondents
Patrocinio Perez or Rosario Vargas, and who was the real owner
of said pick-up truck, whether respondents Antonio Sioson or
Jacinto Pagarigan.
Respondent Perez filed her amended answer with crossclaim
against her co-defendants for indemnity and subrogation in the
event she is ordered to pay petitioner's claim, and therein
impleaded cross-defendant Alberto Cardeno as additional
alternative defendant.
On September 27, 1974, respondents Lazaro Villanueva, Alberto
Cardeno, Antonio Sioson and Jacinto Pagarigan, thru their insurer,
Insurance Corporation of the Philippines, paid petitioner's claim
for injuries sustained in the amount of P 1,300.00. By reason
thereof, petitioner executed a release of claim releasing from
liability the following parties, viz: Insurance Corporation of the
Philippines, Alberto Cardeno, Lazaro Villanueva, Antonio Sioson
and Jacinto Pagarigan.
On December 2, 1974, respondents Lazaro Villanueva, Alberto
Cardeno and their insurer, the Insurance Corporation of the
Philippines, paid respondent Patrocinio Perez' claim for damages
to her cargo truck in the amount of P 7,420.61.
Consequently, respondents Sioson, Pagarigan, Cardeno and

Villanueva filed a "Motion to Exonerate and Exclude Defs/ Cross

defs. Alberto Cardeno, Lazaro Villanueva, Antonio Sioson and
Jacinto Pagarigan on the Instant Case", alleging that respondents
Cardeno and Villanueva already paid P 7,420.61 by way of
damages to respondent Perez, and alleging further that
respondents Cardeno, Villanueva, Sioson and Pagarigan paid P
1,300.00 to petitioner by way of amicable settlement.
Thereafter, respondent Perez filed her "Opposition to Cross-defs.'
motion dated Dec. 2, 1974 and Counter Motion" to dismiss. The
so-called counter motion to dismiss was premised on the fact
that the release of claim executed by petitioner in favor of the
other respondents inured to the benefit of respondent Perez,
considering that all the respondents are solidarity liable to herein
petitioner.
On July 8, 1975, respondent judge issued the questioned order
dismissing the case, and a motion for the reconsideration thereof
was denied. Hence, this appeal, petitioner contending that
respondent judge erred in declaring that the release of claim
executed by petitioner in favor of respondents Sioson, Villanueva
and Pagarigan inured to the benefit of respondent Perez; ergo, it
likewise erred in dismissing the case.
We find the present recourse devoid of merit.
The argument that there are two causes of action embodied in
petitioner's complaint, hence the judgment on the compromise
agreement under the cause of action based on quasi-delict is not
a bar to the cause of action for breach of contract of carriage, is
untenable.
A cause of action is understood to be the delict or wrongful act or
omission committed by the defendant in violation of the primary
rights of the plaintiff. 3 It is true that a single act or omission can
be violative of various rights at the same time, as when the act
constitutes juridically a violation of several separate and distinct
legal obligations. However where there is only one delict or
wrong, there is but a single cause of action regardless of the
number of rights that may have been violated belonging to one
person. 4
The singleness of a cause of action lies in the singleness of thedelict or wrong violating the rights of one person. Nevertheless, if
only one injury resulted from several wrongful acts, only one
cause of action arises. 5 In the case at bar, there is no question
that the petitioner sustained a single injury on his person. That
vested in him a single cause of action, albeit with the correlative

rights of action against the different respondents through the

appropriate remedies allowed by law.
The trial court was, therefore, correct in holding that there was
only one cause of action involved although the bases of recovery
invoked by petitioner against the defendants therein were not
necessarily Identical since the respondents were not identically
circumstanced. However, a recovery by the petitioner under one
remedy necessarily bars recovery under the other. This, in
essence, is the rationale for the proscription in our law against
double recovery for the same act or omission which, obviously,
stems from the fundamental rule against unjust enrichment.
There is no question that the respondents herein are solidarily
liable to petitioner. On the evidence presented in the court
below, the trial court found them to be so liable. It is undisputed
that petitioner, in his amended complaint, prayed that the trial
court hold respondents jointly and severally liable. Furthermore,
the allegations in the amended complaint clearly impleaded
respondents as solidary debtors. We cannot accept the vacuous
contention of petitioner that said allegations are intended to
apply only in the event that execution be issued in his favor.
There is nothing in law or jurisprudence which would
countenance such a procedure.
The respondents having been found to be solidarity liable to
petitioner, the full payment made by some of the solidary
debtors and their subsequent release from any and all liability to
petitioner inevitably resulted in the extinguishment and release
from liability of the other solidary debtors, including herein
respondent Patrocinio Perez.
The claim that there was an agreement entered into between the
parties during the pre-trial conference that, after such payment
made by the other respondents, the case shall proceed as
against respondent Perez is both incredible and unsubstantiated.
There is nothing in the records to show, either by way of a pretrial order, minutes or a transcript of the notes of the alleged pretrial hearing, that there was indeed such as agreement.
WHEREFORE, the challenged orders of the respondent judge are
hereby AFFIRMED.
SO ORDERED.

G.R. No. L-32055 February 26, 1988

REYNALDO BERMUDEZ, SR., and, ADONITA YABUT
BERMUDEZ petitioners-appellants,
vs.
HON. JUDGE A. MELENCIO-HERRERA, DOMINGO PONTINO y
TACORDA and CORDOVA NG SUN KWAN, respondentsappellees.
YAP, J.:
This is a direct appeal on pure questions of law from the Order of
March 10, 1970 of the Honorable Judge (now Supreme Court
Justice) Ameurfina Melencio-Herrera of the defunct Court of First
Instance of Manila, Branch XVII, dismissing plaintiffs-appellants'
complaint in Civil Case No. 77188 entitled "Reynaldo Bermudez,
Sr. and Adonita Yabut Bermudez, plaintiffs, versus Domingo
Pontino y Tacorda and Cordova Ng Sun Kwan, defendants," and
from the Order of May 7, 1970 denying plaintiffs-appellants'
Motion for Reconsideration.
The background facts of the case are as follows:
A cargo truck, driven by Domingo Pontino and owned by Cordova
Ng Sun Kwan, bumped a jeep on which Rogelio, a six-year old
son of plaintiffs-appellants, was riding. The boy sustained injuries
which caused his death. As a result, Criminal Case No.92944 for
Homicide Through Reckless Imprudence was filed against
Domingo Pontino by the Manila City Fiscal's Office. Plaintiffsappellants filed on July 27,1969 in the said criminal case "A
Reservation to File Separate Civil Action."
On July 28,1969, the plaintiffs-appellants filed a civil case for
damages with the Court of First Instance of Manila docketed as
Civil Case No. 77188, entitled "Reynaldo Bermudez, Sr. et al.,
Plaintiffs vs. Domingo Pontino y Tacorda and Cordova Ng Sun
Kwan, Defendants." Finding that the plaintiffs instituted the
action "on the assumption that defendant Pontino's negligence in
the accident of May 10, 1969 constituted a quasi-delict," the trial
court stated that plaintiffs had already elected to treat the
accident as a "crime" by reserving in the criminal case their right
to file a separate civil action. That being so, the trial court
decided to order the dismissal of the complaint against
defendant Cordova Ng Sun Kwan and to suspend the hearing of
the case against Domingo Pontino until after the criminal case for
Homicide Through Reckless Imprudence is finally terminated.
From said order, plaintiffs filed the present appeal, stating as

their main reasons the following:

I. The main issue brought before this Honorable Court is whether
the present action is based on quasi-delict under the Civil Code
and therefore could proceed independently of the criminal case
for homicide thru reckless imprudence.
II. The second question of law is whether the lower court could
properly suspend the hearing of the civil action against Domingo
Pontino and dismiss the civil case against his employer Cordova
Ng Sun Kwan by reason of the fact that a criminal case for
homicide thru reckless imprudence is pending in the lower court
against Domingo Pontino
III. The last question of law is whether the suspension of the civil
action against Domingo Pontino and the dismissal of the civil
case against his employer Cordova Ng Sun Kwan by reason of
the pending criminal case against Domingo Pontino for homicide
thru reckless imprudence in the lower court could be validly done
considering that the civil case against said defendants-appellees
also sought to recover actual damages to the jeep of plaintiffsappellants."
We find the appeal meritorious.
The heart of the issue involved in the present case is whether the
civil action filed by the plaintiffs-appellants is founded on crime
or on quasi-delict. The trial court treated the case as an action
based on a crime in view of the reservation made by the
offended party in the criminal case (Criminal Case No. 92944),
also pending before the court, to file a separate civil action. Said
the trial court:
It would appear that plaintiffs instituted this action on the
assumption that defendant Pontino's negligence in the accident
of May 10, l969 constituted a quasi-delict. The Court cannot
accept the validity of that assumption. In Criminal Case No.
92944 of this Court, plaintiffs had already appeared as
complainants. While that case was pending, the offended parties
reserved the right to institute a separate civil action. If, in a
criminal case, the right to file a separate civil action for damages
is reserved, such civil action is to be based on crime and not on
tort. That was the ruling in Joaquin vs. Aniceto, L-18719, Oct. 31,
1964."
We do not agree. The doctrine in the case cited by the trial court
is inapplicable to the instant case. In Joaquin vs. Aniceto, the
Court held:
The issue in this case is: May an employee's primary civil liability

for crime and his employer's subsidiary liability therefor be

proved in a separate civil action even while the criminal case
against the employee is still pending?
To begin with, obligations arise from law, contract, quasicontract, crime and quasi-delict. According to appellant, her
action is one to enforce the civil liability arising from crime. With
respect to obligations arising from crimes, Article 1161 of the
New Civil Code provides:
Civil obligations arising from criminal offenses shall be governed
by the penal laws, subject to the provisions of article 21 77, and
of the pertinent provisions of Chapter 2, Preliminary, Title, on
Human Relations, and of Title XVIII of this book, regulating
damages.
xxx xxx xxx
It is now settled that for an employer to be subsidiarily liable, the
following requisites must be present: (1) that an employee has
committed a crime in the discharge of his duties; (2) that said
employee is insolvent and has not satisfied his civil liability; (3)
that the employer is engaged in some kind of industry. (1 Padilla,
Criminal Law, Revised Penal Code 794 [1964])
Without the conviction of the employee, the employer cannot be
subsidiarily liable.
In cases of negligence, the injured party or his heirs has the
choice between an action to enforce the civil liability arising from
crime under Article 100 of the Revised Penal Code and an action
for quasi- delict under Article 2176-2194 of the Civil Code. If a
party chooses the latter, he may hold the employer solidarity
liable for the negligent act of his employee, subject to the
employer's defense of exercise of the diligence of a good father
of the family.
In the case at bar, the action filed b appellant was an action for
damages based on quasi-delict. 1 The fact that appellants
reserved their right in the criminal case to file an independent
civil action did not preclude them from choosing to file a civil
action for quasi-delict.
The appellants invoke the provisions of Sections 1 and 2 of Rule
111 of the Rules of Court, which provide:
Section 1. Institution of criminal and civil action. When a
criminal action is instituted, the civil action for recovery of civil
liability arising from the offense charged is impliedly instituted
with the criminal action, unless the offended party expressly
waives the civil action or reserves his right to institute it

separately.
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.
Article 2177 of the Civil Code, cited in Section 2, of Rule 111,
provides that
Article 2177. Responsibility for fault or negligence under the
preceding article is entirely separate and distinct from the civil
liability arising from negligence under the Penal Code. But the
plaintiff cannot recover damages twice for the same act or
omission of the defendant.
The appellant precisely made a reservation to file an
independent civil action in accordance with the provisions of
Section 2 of Rule 111, Rules of Court. In fact, even without such a
reservation, we have allowed the injured party in the criminal 1
case which resulted in the acquittal of the accused to recover
damages based on quasi-delict. In People vs. Ligon, G.R. No.
74041, we held:
However, it does not follow that a person who is not criminally
liable is also free from civil liability. While the guilt of the accused
in a criminal prosecution must be established beyond reasonable
doubt, only a preponderance of evidence is required in a civil
action for damages (Article 29, Civil Code). The judgment of
acquittal extinguishes the civil liability of the accused only when
it includes a declaration that the facts from which the civil
liability might arise did not exist (Padilla vs. Court of Appeals,
129 SCRA 559).
WHEREFORE, we grant the petition and annul and set aside the
appealed orders of the trial court, dated March 10, 1970 and May
7, 1970, and remand the case for further proceedings. No costs.
SO ORDERED.

G.R. No. L-24837

June 27, 1968
JULIAN C. SINGSON and RAMONA DEL CASTILLO, plaintiffs,
vs.
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO
FREIXAS, in his capacity as President of the said Bank,
defendants.
Gil B. Galang for plaintiffs.Aviado and Aranda for defendants.
CONCEPCION, C.J.:
Appeal by plaintiffs, Julian Singson and his wife, Ramona del
Castillo, from a decision of the Court of First Instance of Manila
dismissing their complaint against defendants herein, the Bank
of the Philippine Islands and Santiago Freixas.
It appears that Singson, was one of the defendants in civil case
No. 23906 of the Court of First Instance, Manila, in which
judgment had been rendered sentencing him and his codefendants therein, namely, Celso Lobregat and Villa-Abrille &
Co., to pay the sum of P105,539.56 to the plaintiff therein,
Philippine Milling Co. Singson and Lobregat had seasonably
appealed from said judgment, but not Villa-Abrille & Co., as
against which said judgment, accordingly, became final and
executory. In due course, a writ of garnishment was subsequently
served upon the Bank of the Philippine Islands in which the
Singsons had a current account insofar as Villa-Abrille's credits
against the Bank were concerned. What happened thereafter is
set forth in the decision appealed from, from which we quote:
Upon receipt of the said Writ of Garnishment, a clerk of the bank
in charge of all matters of execution and garnishment, upon
reading the name of the plaintiff herein in the title of the Writ of
Garnishment as a party defendants, without further reading the
body of the said garnishment and informing himself that said
garnishment was merely intended for the deposits of defendant
Villa-Abrille & Co., Valentin Teus, Fernando F. de Villa-Abrille and
Joaquin Bona, prepared a letter for the signature of the President
of the Bank informing the plaintiff Julian C. Singson of the
garnishment of his deposits by the plaintiff in that case. Another
letter was also prepared and signed by the said President of the
Bank for the Special Sheriff dated April 17, 1963.
Subsequently, two checks issued by the plaintiff Julian C.
Singson, one for the amount of P383 in favor of B. M. Glass
Service dated April 16, 1963 and bearing No. C-424852, and
check No. C-394996 for the amount of P100 in favor of the Lega
Corporation, and drawn against the said Bank, were deposited by

the said drawers with the said bank. Believing that the plaintiff
Singson, the drawer of the check, had no more control over the
balance of his deposits in the said bank, the checks were
dishonored and were refused payment by the said bank. After the
first check was returned by the bank to the B. M. Glass Service,
the latter wrote plaintiff Julian C. Singson a letter, dated April 19,
1963, advising him that his check for P383.00 bearing No. C424852 was not honored by the bank for the reason that his
account therein had already been garnished. The said B. M. Glass
Service further stated in the said letter that they were
constrained to close his credit account with them. In view
thereof, plaintiff Julian C. Singson wrote the defendant bank a
letter on April 19, 1963, claiming that his name was not included
in the Writ of Execution and Notice of Garnishment, which was
served upon the bank. The defendant President Santiago Freixas
of the said bank took steps to verify this information and after
having confirmed the same, apologized to the plaintiff Julian C.
Singson and wrote him a letter dated April 22, 1963, requesting
him to disregard their letter of April 17, 1963, and that the action
of garnishment from his account had already been removed. A
similar letter was written by the said official of the bank on April
22, 1963 to the Special Sheriff informing him that his letter dated
April 17, 1963 to the said Special Sheriff was considered
cancelled and that they had already removed the Notice of
Garnishment from plaintiff Singson's account. Thus, the
defendants lost no time to rectify the mistake that had been
inadvertently committed, resulting in the temporary freezing of
the account of the plaintiff with the said bank for a short time.
xxx
xxx
xxx
On May 8, 1963, the Singsong commenced the present action
against the Bank and its president, Santiago Freixas, for
damages1 in consequence of said illegal freezing of plaintiffs'
account.1wph1.t
After appropriate proceedings, the Court of First Instance of
Manila rendered judgment dismissing the complaint upon the
ground that plaintiffs cannot recover from the defendants upon
the basis of a quasi-delict, because the relation between the
parties is contractual in nature; because this case does not fall
under Article 2219 of our Civil Code, upon which plaintiffs rely;
and because plaintiffs have not established the amount of
damages allegedly sustained by them.
The lower court held that plaintiffs' claim for damages cannot be

based upon a tort or quasi-delict, their relation with the

defendants being contractual in nature. We have repeatedly
held, however, that the existence of a contract between the
parties does not bar the commission of a tort by the one against
the order and the consequent recovery of damages therefor. 2
Indeed, this view has been, in effect, reiterated in a
comparatively recent case. Thus, in Air France vs. Carrascoso,3
involving an airplane passenger who, despite his first-class ticket,
had been illegally ousted from his first-class accommodation and
compelled to take a seat in the tourist compartment, was held
entitled to recover damages from the air-carrier, upon the ground
of tort on the latter's part, for, although the relation between a
passenger and a carrier is "contractual both in origin and
nature ... the act that breaks the contract may also be a tort".
In view, however, of the facts obtaining in the case at bar, and
considering, particularly, the circumstance, that the wrong done
to the plaintiff was remedied as soon as the President of the bank
realized the mistake he and his subordinate employee had
committed, the Court finds that an award of nominal damages
the amount of which need not be proven 4 in the sum of
P1,000, in addition to attorney's fees in the sum of P500, would
suffice to vindicate plaintiff's rights.5
WHEREFORE, the judgment appealed from is hereby reversed,
and another one shall be entered sentencing the defendant Bank
of the Philippine Islands to pay to the plaintiffs said sums of
P1,000, as nominal damages, and P500, as attorney's fees, apart
from the costs. It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and
Angeles, JJ., concur.Fernando, J., took no part.

G.R. No. 129029

April 3, 2000
RAFAEL REYES TRUCKING CORPORATION, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and ROSARIO P. DY (for
herself and on behalf of the minors Maria Luisa, Francis
Edward, Francis Mark and Francis Rafael, all surnamed
Dy), respondents.
PARDO, J.:
The case is an appeal via certiorari from the amended decision 1
of the Court of Appeals2 affirming the decision and supplemental
decision of the trial court,3 as follows:
IN VIEW OF THE FOREGOING, judgment is hereby rendered
dismissing the appeals interposed by both accused and Reyes
Trucking Corporation and affirming the Decision and
Supplemental Decision dated June 6, 1992 and October 26, 1992
respectively.
SO ORDERED.4
The facts are as follows:
On October 10, 1989, Provincial Prosecutor Patricio T. Durian of
Isabela filed with the Regional Trial Court, Isabela, Branch 19,
Cauayan an amended information charging Romeo Dunca y de
Tumol with reckless imprudence resulting in double homicide and
damage to property, reading as follows:
That on or about the 20th day of June, 1989, in the Municipality
of Cauayan, Province of Isabela, Philippines, and within the
jurisdiction of this Honorable Court, the said accused being the
driver and person-in-charge of a Trailer Truck Tractor bearing
Plate No. N2A-867 registered in the name of Rafael Reyes
Trucking Corporation, with a load of 2,000 cases of empty bottles
of beer grande, willfully, unlawfully and feloniously drove and
operated the same while along the National Highway of
Barangay Tagaran, in said Municipality, in a negligent, careless
and imprudent manner, without due regard to traffic laws, rules
and ordinances and without taking the necessary precautions to
prevent injuries to persons and damage to property, causing by
such negligence, carelessness and imprudence the said trailer
truck to hit and bump a Nissan Pick-up bearing Plate No. BBG957 driven by Feliciano Balcita and Francisco Dy, Jr., @ Pacquing,
due to irreversible shock, internal and external hemorrhage and
multiple injuries, open wounds, abrasions, and further causing
damages to the heirs of Feliciano Balcita in the amount of
P100,000.00 and to the death of Francisco Dy, Jr.; @ Pacquing

and damages to his Nissan Pick-Up bearing Plate No. BBG-957 in

the total amount of P2,000,000.00.
CONTRARY TO LAW.
Cauayan, Isabela, October 10, 1989.
(Sgd.) FAUSTO C. CABANTAC
Third Assistant Provincial Prosecutor
Upon arraignment on October 23, 1989, the accused entered a
plea of not guilty. On the same occasion, the offended parties
(Rosario P. Dy and minor children and Angelina M. Balcita and
minor son Paolo) made a reservation to file a separate civil action
against the accused arising from the offense charged. 5 On
November 29, 1989, the offended parties actually filed with the
Regional Trial Court, Isabela, Branch 19, Cauayan a complaint
against petitioner Rafael Reyes Trucking Corporation, as
employer of driver Romeo Dunca y de Tumol, based on quasi
delict. The petitioner settled the claim of the heirs of Feliciano
Balcita (the driver of the other vehicle involved in the accident).
The private respondents opted to pursue the criminal action but
did not withdraw the civil case quasi ex delicto they filed against
petitioner. On December 15, 1989, private respondents withdrew
the reservation to file a separate civil action against the accused
and manifested that they would prosecute the civil aspect ex
delicto in the criminal action.6 However, they did not withdraw
the separate civil action based on quasi delict against petitioner
as employer arising from the same act or omission of the
accused driver.7
Upon agreement of the parties, the trial court consolidated both
criminal and civil cases and conducted a joint trial of the same.
The facts, as found by the trial court, which appear to be
undisputed, are as follows:
The defendant Rafael Reyes Trucking Corporation is a domestic
corporation engaged in the business of transporting beer
products for the San Miguel Corporation (SMC for Short) from the
latter's San Fernando, Pampanga plant to its various sales outlets
in Luzon. Among its fleets of vehicles for hire is the white truck
trailer described above driven by Romeo Dunca y Tumol, a duly
licensed driver. Aside from the Corporation's memorandum to all
its drivers and helpers to physically inspect their vehicles before
each trip (Exh. 15, pars. 4 & 5), the SMC's Traffic InvestigatorInspector certified the roadworthiness of this White Truck trailer
prior to June 20, 1989 (Exh. 17). In addition to a professional
driver's license, it also conducts a rigid examination of all driver

applicants before they are hired.

In the early morning of June 20, 1989, the White Truck driven by
Dunca left Tuguegarao, Cagayan bound to San Fernando,
Pampanga loaded with 2,000 cases of empty beer "Grande"
bottles. Seated at the front right seat beside him was Ferdinand
Domingo, his truck helper ("pahinante" in Pilipino). At around
4:00 o'clock that same morning while the truck was descending
at a slight downgrade along the national road at Tagaran,
Cauayan, Isabela, it approached a damaged portion of the road
covering the full width of the truck's right lane going south and
about six meters in length. These made the surface of the road
uneven because the potholes were about five to six inches deep.
The left lane parallel to this damaged portion is smooth. As
narrated by Ferdinand Domingo, before approaching the
potholes, he and Dunca saw the Nissan with its headlights on
coming from the opposite direction. They used to evade this
damaged road by taking the left lance but at that particular
moment, because of the incoming vehicle, they had to run over
it. This caused the truck to bounce wildly. Dunca lost control of
the wheels and the truck swerved to the left invading the lane of
the Nissan. As a result, Dunca's vehicle rammed the incoming
Nissan dragging it to the left shoulder of the road and climbed a
ridge above said shoulder where it finally stopped. (see Exh. A-5,
p. 8, record). The Nissan was severely damaged (Exhs. A-7, A-8,
A-9 and A-14, pp. 9-11 record), and its two passengers, namely:
Feliciano Balcita and Francisco Dy, Jr. died instantly (Exh. A-19)
from external and internal hemorrhage and multiple fractures
(pp. 15 and 16, record).
For the funeral expenses of Francisco Dy, Jr. her widow spent
P651,360.00 (Exh. I-3). At the time of his death he was 45 years
old. He was the President and Chairman of the Board of the
Dynamic Wood Products and Development Corporation (DWPC),
a wood processing establishment, from which he was receiving
an income of P10,000.00 a month. (Exh. D). In the Articles of
Incorporation of the DWPC, the spouses Francisco Dy, Jr. and
Rosario Perez Dy appear to be stockholders of 10,000 shares
each with par value of P100.00 per share out of its outstanding
and subscribed capital stock of 60,000 shares valued at
P6,000,000.00 (Exhs. K-1 & 10-B). Under its 1988 Income Tax
Returns (Exh. J) the DWPC had a taxable net income of
P78,499.30 (Exh. J). Francisco Dy, Jr. was a La Salle University
graduate in Business Administration, past president of the Pasay

Jaycees, National Treasurer and President of the Philippine

Jaycees in 1971 and 1976, respectively, and World Vice-President
of Jaycees International in 1979. He was also the recipient of
numerous awards as a civic leader (Exh. C). His children were all
studying in prestigious schools and spent about P180,000.00 for
their education in 1988 alone (Exh. H-4).
As stated earlier, the plaintiffs' procurement of a writ of
attachment of the properties of the Corporation was declared
illegal by the Court of Appeals. It was shown that on December
26, 1989, Deputy Sheriff Edgardo Zabat of the RTC at San
Fernando, Pampanga, attached six units of Truck Tractors and
trailers of the Corporation at its garage at San Fernando,
Pampanga. These vehicles were kept under PC guard by the
plaintiffs in said garage thus preventing the Corporation to
operate them. However, on December 28, 1989, the Court of
Appeals dissolved the writ (p. 30, record) and on December 29,
1989, said Sheriff reported to this Court that the attached
vehicles were taken by the defendant's representative, Melita
Manapil (Exh. O, p. 31, record). The defendant's general Manager
declared that it lost P21,000.00 per day for the non-operation of
the six units during their attachment (p. 31, t.s.n., Natividad C.
Babaran, proceedings on December 10, 1990).8
On June 6, 1992, the trial court rendered a joint decision, the
dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing considerations judgment is
hereby rendered:
1. Finding the accused Romeo Dunca y de Tumol guilty beyond
reasonable doubt of the crime of Double Homicide through
Reckless Imprudence with violation of the Motor Vehicle Law
(Rep. Act No. 4136), and appreciating in his favor the mitigating
circumstance of voluntary surrender without any aggravating
circumstance to offset the same, the Court hereby sentences him
to suffer two (2) indeterminate penalties of four months and one
day of arresto mayor as minimum to three years, six months and
twenty days as maximum; to indemnify the Heirs of Francisco Dy.
Jr. in the amount of P3,000,000.00 as compensatory damages,
P1,000,000.00 as moral damages, and P1,030,000.00 as funeral
expenses;
2. Ordering the plaintiff in Civil Case No. Br. 19-424 to pay the
defendant therein actual damages in the amount of P84,000.00;
and
3. Ordering the dismissal of the complaint in Civil Case No. Br.

19-424.
No pronouncement as to costs.
SO ORDERED.
Cauayan, Isabela, June 6, 1992.
(Sgd.) ARTEMIO R. ALIVIA
Regional Trial Judge9
On September 3, 1992, petitioner and the accused filed a notice
of appeal from the joint decision. 10
On the other hand, private respondents moved for amendment of
the dispositive portion of the joint decision so as to hold
petitioner subsidiarily liable for the damages awarded to the
private respondents in the event of insolvency of the accused. 11
On October 26, 1992, the trial court rendered a supplemental
decision amending the dispositive portion by inserting an
additional paragraph reading as follows:
2:A Ordering the defendant Reyes Trucking Corporation
subsidiarily liable for all the damages awarded to the heirs of
Francisco Dy, Jr., in the event of insolvency of the accused but
deducting therefrom the damages of P84,000.00 awarded to said
defendant in the next preceding paragraph; and . . . 12
On November 12, 1992, petitioner filed with the trial court a
supplemental notice of appeal from the supplemental decision. 13
During the pendency of the appeal, the accused jumped bail and
fled to a foreign country. By resolution dated December 29, 1994,
the Court of Appeals dismissed the appeal of the accused in the
criminal case. 14
On January 6, 1997, the Court of Appeals rendered an amended
decision affirming that of the trial court, as set out in the opening
paragraph of this decision. 15
On January 31, 1997, petitioner filed a motion for reconsideration
of the amended decision. 16
On April 21, 1997, the Court of Appeals denied petitioner's
motion for reconsideration for lack of merit 17
Hence, this petition for review. 18
On July 21, 1997, the Court required respondents to comment on
the petition within ten (10) days from notice. 19
On January 27, 1998, the Solicitor General filed his comment. 20
On April 13, 1998, the Court granted leave to petitioner to file a
reply and noted the reply it filed on March 11, 1998. 21
We now resolve to give due course to the petition and decide the
case.
Petitioner raises three (3) grounds for allowance of the petition,

which, however, boil down to two (2) basic issues, namely:

1. May petitioner as owner of the truck involved in the accident
be held subsidiarily liable for the damages awarded to the
offended parties in the criminal action against the truck driver
despite the filing of a separate civil action by the offended
parties against the employer of the truck driver?
2. May the Court award damages to the offended parties in the
criminal case despite the filing of a civil action against the
employer of the truck driver; and in amounts exceeding that
alleged in the information for reckless imprudence resulting in
homicide and damage to property? 22
We grant the petition, resolving under the circumstances pro hac
vice to remand the cases to the trial court for determination of
the civil liability of petitioner as employer of the accused driver in
the civil action quasi ex delicto re-opened for the purpose.
In negligence cases, the aggrieved party has the choice between
(1) an action to enforce civil liability arising from crime under
Article 100 of the Revised Penal Code; and (2) a separate action
for quasi delict under Article 2176 of the Civil Code of the
Philippines. Once the choice is made, the injured party can not
avail himself of any other remedy because he may not recover
damages twice for the same negligent act or omission of the
accused. 23 This is the rule against double recovery.1wphi1.nt
In other words, "the same act or omission can create two kinds of
liability on the part of the offender, that is, civil liability ex
delicto, and civil liability quasi delicto" either of which "may be
enforced against the culprit, subject to the caveat under Article
2177 of the Civil Code that the offended party can not recover
damages under both types of liability." 24
In the instant case, the offended parties elected to file a separate
civil action for damages against petitioner as employer of the
accused, based on quasi delict, under Article 2176 of the Civil
Code of the Philippines. Private respondents sued petitioner
Rafael Reyes Trucking Corporation, as the employer of the
accused, to be vicariously liable for the fault or negligence of the
latter. Under the law, this vicarious liability of the employer is
founded on at least two specific provisions of law.
The first is expressed in Article 2176 in relation to Article 2180 of
the Civil Code, which would allow an action predicated on quasidelict to be instituted by the injured party against the employer
for an act or omission of the employee and would necessitate
only a preponderance of evidence to prevail. Here, the liability of

the employer for the negligent conduct of the subordinate is

direct and primary, subject to the defense of due diligence in the
selection and supervision of the employee. The enforcement of
the judgment against the employer in an action based on Article
2176 does not require the employee to be insolvent since the
nature of the liability of the employer with that of the employee,
the two being statutorily considered joint tortfeasors, is solidary.
25
The second, predicated on Article 103 of the Revised Penal
Code, provides that an employer may be held subsidiarily civilly
liable for a felony committed by his employee in the discharge of
his duty. This liability attaches when the employee is convicted of
a crime done in the performance of his work and is found to be
insolvent that renders him unable to properly respond to the civil
liability adjudged. 26
As regards the first issue, the answer is in the negative. Rafael
Reyes Trucking Corporation, as employer of the accused who has
been adjudged guilty in the criminal case for reckless
imprudence, can not be held subsidiarily liable because of the
filing of the separate civil action based on quasi delict against it.
In view of the reservation to file, and the subsequent filing of the
civil action for recovery of civil liability, the same was not
instituted with the criminal action. Such separate civil action was
for recovery of damages under Article 2176 of the Civil Code,
arising from the same act or omission of the accused. 27
Pursuant to the provision of Rule 111, Section 1, paragraph 3 of
the 1985 Rules of Criminal Procedure, when private respondents,
as complainants in the criminal action, reserved the right to file
the separate civil action, they waived other available civil actions
predicated on the same act or omission of the accused-driver.
Such civil action includes the recovery of indemnity under the
Revised Penal Code, and damages under Articles 32, 33, and 34
of the Civil Code of the Philippines arising from the same act or
omission of the accused. 28
The intention of private respondents to proceed primarily and
directly against petitioner as employer of accused truck driver
became clearer when they did not ask for the dismissal of the
civil action against the latter based on quasi delict.
Consequently, the Court of Appeals and the trial court erred in
holding the accused civilly liable, and petitioner-employer of the
accused subsidiarily liable for damages arising from crime (ex
delicto) in the criminal action as the offended parties in fact filed
a separate civil action against the employer based on quasi

delict resulting in the waiver of the civil action ex delicto.

It might be argued that private respondents as complainants in
the criminal case withdrew the reservation to file a civil action
against the driver (accused) and manifested that they would
pursue the civil liability of the driver in the criminal action.
However, the withdrawal is ineffective to reverse the effect of the
reservation earlier made because private respondents did not
withdraw the civil action against petitioner based on quasi delict.
In such a case, the provision of Rule 111, Section 1, paragraph 3
of the 1985 Rules on Criminal Procedure is clear that the
reservation to file or the filing of a separate civil action results in
a waiver of other available civil actions arising from the same act
or omission of the accused. Rule 111, Section 1, paragraph 2
enumerated what are the civil actions deemed waived upon such
reservation or filing, and one of which is the civil indemnity under
the Revised Penal Code. Rule 111, Section 1, paragraph 3 of the
1985 Rules on Criminal Procedure specifically provides:
A waiver of any of the civil actions extinguishes the others. The
institution of, or the reservation of the right to file, any of said
civil actions separately waives the others.
The rationale behind this rule is the avoidance of multiple suits
between the same litigants arising out of the same act or
omission of the offender. The restrictive phraseology of the
section under consideration is meant to cover all kinds of civil
actions, regardless of their source in law, provided that the action
has for its basis the same act or omission of the offender. 29
However, petitioner as defendant in the separate civil action for
damages filed against it, based on quasi delict, may be held
liable thereon. Thus, the trial court grievously erred in dismissing
plaintiff's civil complaint. And the Court of Appeals erred in
affirming the trial court's decision. Unfortunately private
respondents did not appeal from such dismissal and could not be
granted affirmative relief. 30
The Court, however, in exceptional cases has relaxed the rules
"in order to promote their objectives and assist the parties in
obtaining just, speedy, and inexpensive determination of every
action or proceeding" 31 or exempted "a particular case from the
operation of the rules." 32
Invoking this principle, we rule that the trial court erred in
awarding civil damages in the criminal case and in dismissing the
civil action. Apparently satisfied with such award, private
respondent did not appeal from the dismissal of the civil case.

However, petitioner did appeal. Hence, this case should be

remanded to the trial court so that it may render decision in the
civil case awarding damages as may be warranted by the
evidence. 33
With regard to the second issue, the award of damages in the
criminal case was improper because the civil action for the
recovery of civil liability was waived in the criminal action by the
filing of a separate civil action against the employer. As
enunciated in Ramos vs. Gonong, 34 "civil indemnity is not part of
the penalty for the crime committed." The only issue brought
before the trial court in the criminal action is whether accused
Romeo Dunca y de Tumol is guilty of reckless imprudence
resulting in homicide and damage to property. The action for
recovery of civil liability is not included therein, but is covered by
the separate civil action filed against the petitioner as employer
of the accused truck-driver.
In this case, accused-driver jumped bail pending his appeal from
his conviction. Thus, the judgment convicting the accused
became final and executory, but only insofar as the penalty in
the criminal action is concerned. The damages awarded in the
criminal action was invalid because of its effective waiver. The
pronouncement was void because the action for recovery of the
civil liability arising from the crime has been waived in said
criminal action.
With respect to the issue that the award of damages in the
criminal action exceeded the amount of damages alleged in the
amended information, the issue is de minimis. At any rate, the
trial court erred in awarding damages in the criminal case
because by virtue of the reservation of the right to bring a
separate civil action or the filing thereof, "there would be no
possibility that the employer would be held liable because in
such a case there would be no pronouncement as to the civil
liability of the accused. 35
As a final note, we reiterate that "the policy against double
recovery requires that only one action be maintained for the
same act or omission whether the action is brought against the
employee or against his employer. 36 The injured party must
choose which of the available causes of action for damages he
will bring. 37
Parenthetically, the trial court found the accused "guilty beyond
reasonable doubt of the crime of Double Homicide Through
Reckless Imprudence with violation of the Motor Vehicle Law

(Rep. Act No. 4136)". There is no such nomenclature of an

offense under the Revised Penal Code. Thus, the trial court was
misled to sentence the accused "to suffer two (2) indeterminate
penalties of four (4) months and one (1) day of arresto mayor, as
minimum, to three (3) years, six (6) months and twenty (20) days
of prision correccional, as maximum." This is erroneous because
in reckless imprudence cases, the actual penalty for criminal
negligence bears no relation to the individual willfull crime or
crimes committed, but is set in relation to a whole class, or series
of crimes. 38
Unfortunately, we can no longer correct this judgment even if
erroneous, as it is, because it has become final and executory.
Under Article 365 of the Revised Penal Code, criminal negligence
"is treated as a mere quasi offense, and dealt with separately
from willful offenses. It is not a question of classification or
terminology. In intentional crimes, the act itself is punished; in
negligence or imprudence, what is principally penalized is the
mental attitude or condition behind the act, the dangerous
recklessness, lack of care or foresight, the imprudencia punible.
Much of the confusion has arisen from the common use of such
descriptive phrase as "homicide through reckless imprudence",
and the like; when the strict technical sense is, more accurately,
"reckless imprudence resulting in homicide"; or "simple
imprudence causing damages to property"." 39
There is need, therefore, to rectify the designation of the offense
without disturbing the imposed penalty for the guidance of bench
and bar in strict adherence to precedent.
WHEREFORE, the Court GRANTS the petition and SETS ASIDE the
amended decision and resolution of the Court of Appeals in CAG.R. CR No. 14448, promulgated on January 6, 1997, and the
joint decision of the Regional Trial Court, Isabela, Branch 19,
Cauayan, in Criminal Case No. Br. 19-311 and Civil Case No. Br.
19-424, dated June 6, 1992.
IN LIEU THEREOF, the Court renders judgment as follows:
(1) In Criminal Case No. Br. 19-311, the Court declares the
accused Romeo Dunca y de Tumol guilty beyond reasonable
doubt of reckless imprudence resulting in homicide and damage
to property, defined and penalized under Article 365, paragraph
2 of the Revised Penal Code, with violation of the automobile law
(R.A. No. 4136, as amended), and sentences him to suffer two (2)
indeterminate penalties of four (4) months and one (1) day of
arresto mayor, as minimum, to three (3) years, six (6) months

and twenty (20) days of prision

without indemnity, and to pay the
(2) In Civil Case No. Br. 19-424,
opened to determine the liability

correccional, as maximum, 40
costs, and
the Court orders the case reof the defendant Rafael Reyes

Trucking Corporation to plaintiffs and that of plaintiffs on

defendant's counterclaim.
No costs in this instance.
SO ORDERED.