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Pacao, Irene G.

Torts and Damages


Republic of the Philippines
SUPREME COURT
Manila

Thereafter, acting on a motion to dismiss of therein defendant, the trial court issued on April 3,
1975 an order of denial, with the suggestion that "(t)o enrich our jurisprudence, it is suggested
that the defendant brings (sic) this ruling to the Supreme Court by certiorari or other appropriate
remedy, to review the ruling of the court". 9

SECOND DIVISION
G.R. No. 80194 March 21, 1989
EDGAR JARANTILLA, petitioner,
vs.
COURT OF APPEALS and JOSE KUAN SING, respondents.
Corazon Miraflores and Vicente P. Billena for petitioner.

On June 17, 1975, petitioner filed in this Court a petition for certiorari, prohibition and
mandamus, which was docketed as G.R. No. L-40992, 10 assailing the aforesaid order of the
trial court. Said petition was dismissed for lack of merit in the Court's resolution of July 23, 1975,
and a motion for reconsideration thereof was denied for the same reason in a resolution of
October 28, 1975. 11
After trial, the court below rendered judgment on May 23, 1977 in favor of the herein private
respondent and ordering herein petitioner to pay the former the sum of P 6,920.00 for
hospitalization, medicines and so forth, P2,000.00 for other actual expenses, P25,000.00 for
moral damages, P5,000.00 for attorney's fees, and costs. 12

Manuel S. Gemarino for private respondent.


On July 29, 1987, the respondent Court of Appeals 13 affirmed the decision of the lower court
except as to the award for moral damages which it reduced from P25,000.00 to P18,000.00. A
motion for reconsideration was denied by respondent court on September 18, 1987. 14
REGALADO, J.:
The records show that private respondent Jose Kuan Sing was "side-swiped by a vehicle in the
evening of July 7, 1971 in lznart Street, Iloilo City" 1 The respondent Court of Appeals concurred
in the findings of the court a quo that the said vehicle which figured in the mishap, a Volkswagen
(Beetle type) car, was then driven by petitioner Edgar Jarantilla along said street toward the
direction of the provincial capitol, and that private respondent sustained physical injuries as a
consequence. 2
Petitioner was accordingly charged before the then City Court of Iloilo for serious physical
injuries thru reckless imprudence in Criminal Case No. 47207 thereof. 3 Private respondent, as
the complaining witness therein, did not reserve his right to institute a separate civil action and
he intervened in the prosecution of said criminal case through a private prosecutor. 4 Petitioner
was acquitted in said criminal case "on reasonable doubt".5
On October 30, 1974, private respondent filed a complaint against the petitioner in the former
Court of First Instance of Iloilo, Branch IV, 6 docketed therein as Civil Case No. 9976, and which
civil action involved the same subject matter and act complained of in Criminal Case No.
47027. 7 In his answer filed therein, the petitioner alleged as special and affirmative detenses
that the private respondent had no cause of action and, additionally, that the latter's cause of
action, if any, is barred by the prior judgment in Criminal Case No. 47207 inasmuch as when
said criminal case was instituted the civil liability was also deemed instituted since therein
plaintiff failed to reserve the civil aspect and actively participated in the criminal case. 8

The main issue for resolution by Us in the present recourse is whether the private respondent,
who was the complainant in the criminal action for physical injuries thru reckless imprudence
and who participated in the prosecution thereof without reserving the civil action arising from the
act or omission complained of, can file a separate action for civil liability arising from the same
act or omission where the herein petitioner was acquitted in the criminal action on reasonable
doubt and no civil liability was adjudicated or awarded in the judgment of acquittal.
Prefatorily, We note that petitioner raises a collateral issue by faulting the respondent court for
refusing to resolve an assignment of error in his appeal therein, said respondent court holding
that the main issue had been passed upon by this Court in G.R. No. L-40992 hereinbefore
mentioned. It is petitioner's position that the aforesaid two resolutions of the Court in said case,
the first dismissing the petition and the second denying the motion for reconsideration, do not
constitute the "law of the case' which would control the subsequent proceed ings in this
controversy.
1. We incline favorably to petitioner's submission on this score.
The "doctrine of the law of the case" has no application at the aforesaid posture of the
proceedings when the two resolutions were handed down. While it may be true that G.R. No. L40992 may have involved some of the issues which were thereafter submitted for resolution on
the merits by the two lower courts, the proceedings involved there was one for certiorari,
prohibition and mandamus assailing an interlocutory order of the court a quo, specifically, its
order denying therein defendants motion to dismiss. This Court, without rendering a specific
opinion or explanation as to the legal and factual bases on which its two resolutions were
predicated, simply dismissed the special civil action on that incident for lack of merit. It may very

Pacao, Irene G.
Torts and Damages
well be that such resolution was premised on the fact that the Court, at that stage and on the
basis of the facts then presented, did not consider that the denial order of the court a quo was
tainted with grave abuse of discretion. 15 To repeat, no rationale for such resolutions having
been expounded on the merits of that action, no law of the case may be said to have been laid
down in G.R. No. L-40992 to justify the respondent court's refusal to consider petitioner's claim
that his former acquittal barred the separate action.
'Law of the case' has been defined as the opinion delivered on a former
appeal. More specifically, it means that whatever is once irrevocably
established, as the controlling legal rule of decision between the same
parties in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case before the court
(21 C.J.S. 330). (Emphasis supplied). 16
It need not be stated that the Supreme Court being the court of last resort, is
the final arbiter of all legal questions properly brought before it and that
its decision in any given case constitutes the law of that particular case . . .
(Emphasis supplied). 17
It is a rule of general application that the decision of an appellate court in a
case is the law of the case on the points presented throughout all the
subsequent proceedings in the case in both the trial and the appellate
courts, and no question necessarily involved and decided on that appeal will
be considered on a second appeal or writ of error in the same case,
provided the facts and issues are substantially the same as those on which
the first question rested and, according to some authorities, provided the
decision is on the merits . . . 18
2. With the foregoing ancillary issue out of the way, We now consider the principal plaint of
petitioner.
Apropos to such resolution is the settled rule that the same act or omission (in this case, the
negligent sideswiping of private respondent) can create two kinds of liability on the part of the
offender, that is, civil liability ex delicto and civil liability ex quasi delicto. Since the same
negligence can give rise either to a delict or crime or to a quasi-delict or tort, either of these two
types of civil liability may be enforced against the culprit, subject to the caveat under Article 2177
of the Civil Code that the offended party cannot recover damages under both types of liability. 19
We also note the reminder of petitioner that in Roa vs. De la Cruz, et al., 20 it was held that
where the offended party elected to claim damages arising from the offense charged in the
criminal case through her intervention as a private prosecutor, the final judgment rendered
therein constituted a bar to the subsequent civil action based upon the same cause. It is meet,
however, not to lose sight of the fact that the criminal action involved therein was for serious oral
defamation which, while within the contemplation of an independent civil action under Article 33
of the Civil Code, constitutes only a penal omen and cannot otherwise be considered as a quasidelict or culpa aquiliana under Articles 2176 and 2177 of the Civil Code. And while petitioner

draws attention to the supposed reiteration of the Roa doctrine in the later case of Azucena vs.
Potenciano, et al., 21 this time involving damage to property through negligence as to make out
a case of quasi-delict under Articles 2176 and 2180 of the Civil Code, such secondary reliance is
misplaced since the therein plaintiff Azucena did not intervene in the criminal action against
defendant Potenciano. The citation of Roa in the later case ofAzucena was, therefore,
clearly obiter and affords no comfort to petitioner.
These are aside from the fact that there have been doctrinal, and even statutory, 22 changes on
the matter of civil actions arising from criminal offenses and quasi-delicts. We will reserve our
discussion on the statutory aspects for another case and time and, for the nonce, We will
consider the doctrinal developments on this issue.
In the case under consideration, private respondent participated and intervened in the
prosecution of the criminal suit against petitioner. Under the present jurisprudential milieu, where
the trial court acquits the accused on reasonable doubt, it could very well make a pronounce
ment on the civil liability of the accused 23 and the complainant could file a petition for
mandamus to compel the trial court to include such civil liability in the judgment of acquittal. 24
Private respondent, as already stated, filed a separate civil aciton after such acquittal. This is
allowed under Article 29 of the Civil Code. We have ruled in the relatively recent case of Lontoc
vs. MD Transit & Taxi Co., Inc., et al. 25 that:
In view of the fact that the defendant-appellee de la Cruz was acquitted on
the ground that 'his guilt was not proven beyond reasonable doubt' the
plaintiff-appellant has the right to institute a separate civil action to recover
damages from the defendants-appellants (See Mendoza vs. Arrieta, 91
SCRA 113). The well-settled doctrine is that a person, while not criminally
liable may still be civilly liable. '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 558 cited in People vs. Rogelio Ligon y Tria, et al., G.R.
No. 74041, July 29, 1987; Filomeno Urbano vs. Intermediate Appellate
Court, G.R. No. 72964, January 7, 1988). The ruling is based on Article 29
of the Civil Code which provides:
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 ...26
Another consideration in favor of private respondent is the doctrine that the failure of the court to
make any pronouncement, favorable or unfavorable, as to the civil liability of the accused
amounts to a reservation of the right to have the civil liability litigated and determined in a
separate action. The rules nowhere provide that if the court fails to determine the civil liability it
becomes no longer enforceable. 27

Pacao, Irene G.
Torts and Damages
Furthermore, in the present case the civil liability sought to be recovered through the application
of Article 29 is no longer that based on or arising from the criminal offense. There is persuasive
logic in the view that, under such circumstances, the acquittal of the accused foreclosed the civil
liability based on Article 100 of the Revised Penal Code which presupposes the existence of
criminal liability or requires a conviction of the offense charged. Divested of its penal element by
such acquittal, the causative act or omission becomes in effect a quasi-delict, hence only a civil
action based thereon may be instituted or prosecuted thereafter, which action can be proved by
mere preponderance of evidence. 28 Complementary to such considerations, Article 29
enunciates the rule, as already stated, that a civil action for damages is not precluded by an
acquittal on reasonable doubt for the same criminal act or omission.
The allegations of the complaint filed by the private respondent supports and is constitutive of a
case for a quasi-delict committed by the petitioner, thus:
3. That in the evening of July 7, 197l at about 7:00
o'clock, the plaintiff crossed Iznart Street from his
restaurant situated at 220 lznart St., Iloilo City,
Philippines, on his way to a meeting of the Cantonese
Club at Aldeguer Street, Iloilo City and while he was
standing on the middle of the street as there were
vehicles coming from the Provincial Building towards
Plazoleta Gay, Iloilo City, he was bumped and
sideswiped by Volkswagen car with plate No. B-2508 W
which was on its way from Plazoleta Gay towards the
Provincial Capitol, Iloilo City, which car was being
driven by the defendant in a reckless and negligent
manner, at an excessive rate of speed and in violation
of the provisions of the Revised Motor Vehicle (sic) as
amended, in relation to the Land Transportation and
Traffic Code as well as in violation of existing city
ordinances, and by reason of his inexcusable lack of
precaution and failure to act with due negligence and by
failing to take into consideration (sic) his degree of
intelligence, the atmospheric conditions of the place as
well as the width, traffic, visibility and other conditions of
lznart Street; 29
Since this action is based on a quasi-delict, the failure of the respondent to reserve his right to
file a separate civil case and his intervention in the criminal case did not bar him from filing such
separate civil action for damages. 30The Court has also heretofore ruled in Elcano vs.
Hill 31 that

in the two cases vary. In other words, the extinction of civil liability referred
to in Par. (c) of Sec. 3 Rule 111, refers exclusively to civil liability founded on
Article 100 of the Revised Penal Code; whereas the civil liability for the
same act considered as a quasi-delict only and not as a crime is not
extinguished even by a declaration in the criminal case that the criminal act
charged has not happened or has not been committed by the accused . . .
The aforecited case of Lontoc vs. MD Transit & Taxi Co., Inc., et al. involved virtually the same
factual situation. The Court, in arriving at the conclusion hereinbefore quoted, expressly declared
that the failure of the therein plaintiff to reserve his right to file a separate civil case is not fatal;
that his intervention in the criminal case did not bar him from filing a separate civil action for
damages, especially considering that the accused therein was acquitted because his guilt was
not proved beyond reasonable doubt; that the two cases were anchored on two different causes
of action, the criminal case being on a violation of Article 365 of the Revised Penal Code while
the subsequent complaint for damages was based on a quasi-delict; and that in the judgment in
the criminal case the aspect of civil liability was not passed upon and resolved. Consequently,
said civil case may proceed as authorized by Article 29 of the Civil Code.
Our initial adverse observation on a portion of the decision of respondent court aside, We hold
that on the issues decisive of this case it did not err in sustaining the decision a quo.
WHEREFORE, the writ prayed for is hereby DENIED and the decision of the respondent Court
of Appeals is AFFIRMED, without costs.
SO ORDERED.
Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.

Footnotes
1 Rollo, 24.
2 Ibid 22-23.
3 Ibid., 41.
4 Ibid., 23-24.

... a separate civil action lies against the offender in a criminal act whether
or not he is criminally prosecuted and found guilty or acquitted, provided
that the offended party is not allowed, if he is also actually charged
criminally, to recover damages on both scores; and would be entitled in such
eventuality only to the bigger award of the two, assuming the awards made

5 Ibid., 49.
6 Presided over by Judge Valerie V. Rovira.

Pacao, Irene G.
Torts and Damages
7 Rollo, 5-6, 50.

23 Padilla vs. Court of Appeals, et al., supra, People vs. Jalandoni, 131
SCRA 454 (1984);

8 Ibid., 6, 51.
9 Ibid., 51.
10 Edgar Jarantilla, Petitioner vs. Honorable Valerio v. Rovira, et al.,
Respondents.
11 Rollo, 52.
12 Ibid., 57.
13 Fourteenth Division, Justice Jesus M. Elbinias, ponente, Justices Fidel P.
Purisima and Emeterio C. Cui, concurring.
14 Rollo, 32, 34-36.
15 See Moreno vs. Macadaeg, 7 SCRA 700 (1963); Espiritu, et al. vs.
Solidum, et al., 52 SCRA 131 (1973).
16 People vs. Olarte 19 SCRA 494 (1967), citing People vs. Pinuila, 55 O.G.
4228 (1958).

24 Maximo vs. Gerochi Jr., 144 SCRA 325 (1986). 24 Maximo vs. Gerochi
Jr., supra; see also Sec. 2, Rule 120, Rules of Court.
25 G.R. No. L-48949, April 15, 1988.
26 The same rule was provided in Sec. 3(c) Rule 111 of the 1964 Rules of
Court, reproduced in Sec. 3(b), Rule 111 of the 1985 Rules on Criminal
Procedure, and is now found in Sec. 2(b), Rule 111, under the amendments
last approved in the resolution of the Court on July 7, 1988.
27 Bachrach Motors Co. vs. Gamboa, 101 Phil. 1219 (1957); Bernaldez vs.
Bohol Land Transportation Co., 7 SCRA 276 (1963).
28 See Sangco, Philippine Law on Torts and Damages, 1984 Ed, 555.
29 Record on Appeal, 1-2.
30 Dula, et al. vs. Dianala et al., 132 SCRA 245 (1984).
31 77 SCRA 98 (1977).

17 Kabigting vs. Acting Director of Prisons, G.R. No. L-15548, Oct. 20,
1962, cited in Gokongwei, Jr. vs. Securities and Exchange Commission, et
al., 89 SCRA 336 (1979).
18 Trinidad vs. Roman Catholic Archbishop of Manila, 63 Phil. 881, 913
(1924), citing 4 C.J. 1093-1096, sec. 8075.
19 Barredo vs. Garcia, et al., 73 Phil. 607 (1942); Mendoza vs. Arrieta, 91
SCRA 113 (1979); Padilla vs. Court of Appeals, et al. 129 SCRA 558 (1984).
20 107 Phil. 8 (1960).
21 5 SCRA 468 (1962).
22 The original provisions thereon in Sec. 1, Rule 107 of the 1940 Rules of
Court were revised in Secs. 1 to 5, Rule 111 of the 1964 Rules of Court.
Amendments were thereafter introduced by Secs. 1 to 6, Rule 111 of the
1985 Rules on Criminal Procedure which were further amended in 1988
(see Footnote 26, infra).

Pacao, Irene G.
Torts and Damages

Pacao, Irene G.
Torts and Damages

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 72990 November 21, 1991
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
MANUEL BADEO, ESPERIDION BADEO, ROGELIO BADEO (at large) and BONIFACIO
TANGPUS (at large), defendants. MANUEL BADEO and ESPERIDION BADEO, defendantsappellants.
The Solicitor General for plaintiff-appellee.
Public Attorney's Office for Manuel Badeo.

FERNAN, C.J.:p

Pacao, Irene G.
Torts and Damages
In this appeal, father and son Esperidion and Manuel Badeo, seek the reversal of the July 5,
1985 decision of the Regional Trial Court of Leyte, Branch XV at Palo, 1 the dispositive portion
of which reads:
WHEREFORE, judgment is hereby rendered, finding the two accused
Manuel Badeo and Esperidion Badeo guilty beyond reasonable doubt of
Murder and hereby sentences said two accused to the penalty
of RECLUSION PERPETUA, to indemnify the heirs of Cresenciano
Germanes the sum of P30,000.00 without subsidiary imprisonment in case
of insolvency, and to pay each half of the costs.

2. Hacking wound, left supraclavicular area, 2.5 inches long, .5 inch wide, .5
ench deep
3. Hacking wound, extending from left subcostal area to the level of the third
rib, 9.5 inches long, 2 inches wide, 1 inch deep
4. Stab wounds at the inframammary area, left
a) 2 inches long, .5 inch wide, 2 inches deep
b) .5 inch long, .5 inch wide, 2 inches deep

It appearing that the two accused Manuel Badeo and Esperidion Badeo
were detained since December 4, 1984, when they were arrested by the
police authorities of Tanauan, Leyte, they should be credited with the full
time during which they have undergone preventive imprisonment, if they
agreed voluntarily in writing to abide by the same disciplinary rules imposed
upon convicted prisoners; other wise, they shall be credited with 4/5 only of
the time during which they have undergone preventive imprisonment.

5. Stab wound, right iliac region, level of the umbilicus, 2.5 inches long, 2
inches wide, 1 inch deep

SO ORDERED.

6. Longitudinal, oblique, abrasion at left iliac region, 2.5 inches long

According to the sole prosecution eyewitness Eega Abrio (Iega Abreo), at around six o'clock in
the evening of March 21, 1981, she was walking on her way home. Cresenciano Germanes was
walking ahead of her. Near the house of Esperidion Badeo, four men attacked Cresenciano.
Being about ten arms length away, she saw Manuel Badeo hack Cresenciano at the back with a
bolo measuring around fifty-five centimeters in length. Rogelio Badeo then hacked Cresenciano
with another long bolo also at the back. Bonifacio Tangpus followed with a stab at the right
portion of Cresenciano's stomach, after which Esperidion Badeo hacked Cresenciano's back.
Cresenciano fell down on his back. 2

c) .5 inchlong, .5 inch wide, 2 inches deep

7. Hacking wound, extending from right to left lumbar areas crossing the
vertebral column, 7 inches long, 1 inch wide, 2 inches deep
8. Hacking wound, left suprascapular region, 5 inches long, 2 inches wide,
1.5 inches deep
9. Hacking wound, left shoulder area (deltoid portion), 7 inches long, 3
inches wide, 2 inches deep.

Cresenciano shouted after he had fallen. Noticing that Cresenciano was still alive, Rogelio came
back and "finished him off." 3 During the attack, Eega was as near to the group at seven arms
length. 4 She did not go nearer because she was afraid. 5Instead, she ran home taking a
shortcut through the property of a certain Adriano. She immediately informed her husband,
Gregorio, about the incident. She told him, however, not to go out anymore to inform
Cresenciano's relatives about the hacking incident, as it was already dark. She eventually told
Cresenciano's relatives about his fate in the morning of the following day, Sunday. 6

Uldarico Germanes, a nephew of Cresenciano, believed that his uncle was killed by the four
because Cresenciano was instrumental in dividing the land being tenanted by Manuel two
portions. One portion was to be retained by Manuel while the other half would be tenanted by
him (Uldarico). He accompanied Cresenciano when the latter told Manuel of the new
arrangement. Manuel did not like the arrangement because according to him, he could still work
on the whole area. 7

The body of Cresenciano, who was single and 42 years old when he died, was autopsied on
March 23, 1981 by Dr. Lesmes C. Lumen, the municipal health officer of Dagami, Leyte. The
following findings appear on the medical certificate (Exh. A) issued by Dr. Lumen:

Manuel Badeo admitted having hacked Cresenciano but averred that he did so in self-defense.
According to him, he was at home in the afternoon of March 21, 1981 as he was cutting the
grass in his home in barangay Katipunan. Later in the afternoon, he went to barangay Hilabago
to ask for kerosene from his mother arriving there at past six o'clock in the evening.

1. Hacking wound on the skull, from vertex to left temporal area, 10 inches
long, 1 inch wide, 2 inches deep with exposure of brain substance

While he was at his mother's house, his brother-in-law, Rosito Dumpang and. the latter's nephew
Gabriel, passed by. They invited him to go home with them. As they were walking, they met
Cresenciano Germanes behind the copra drier of Manuel's mother. Cresenciano asked him
where he was going. When Manuel answered that he was going home, Cresenciano held him by

Pacao, Irene G.
Torts and Damages
his shirt and pointed a gun at him. As Manuel was about an arm's length away, he noticed that
Cresenciano was reeking with the smell of tuba.
While pointing the gun at him, Cresenciano threatened to kill Manuel. After telling Cresenciano
that they had nothing to fight about, Manuel retreated to a coconut tree, went around it, drew a
bolo and hacked Cresenciano hitting him on the head. Then he stabbed Cresenciano's stomach.
Manuel ran towards Rosito and Gabriel Dumpang who, in turn, "castigated" Cresenciano.
Manuel told them to stop punishing Cresenciano but the two did not heed his advice.
Manuel did not see Eega Abreo when he hacked Cresenciano. Neither was his father,
Esperidion, around. But he noticed that when Rosito hacked Cresenciano, the latter's pistol fell
from his hand. Manuel picked it up and later surrendered it to barangay captain Andrea
Olimberio. When Manuel surrendered to the police authorities, he did not implicate Rosito and
Gabriel Dumpang because they had threatened that should he mention their names, they would
kill him. That threat was also the reason why, together with Esperidion, he transferred his
residence to Tanauan, Leyte.
Manuel stated in court that Eega Abreo testified against him because her husband, Sabino
(sic), was the first suspect in the killing of Cresenciano as there was "bad blood" between
Sabino and Cresenciano. 8
Andrea Olimberio, who was the barangay captain of barangay Katipunan when the incident
occurred, corroborated Manuel's claim that he surrendered to her. According to Andrea, at about
eleven o'clock in the evening of March 21, 1981, Manuel, accompanied by his wife and sister,
came to her house and told her that he had killed Cresenciano Germanes. Manuel surrendered
to her a pistol which he had taken from the victim. Andrea knew that the pistol belonged to
Cresenciano because the latter had shown it to her when he drank liquor at
store. 9
Esperidion Badeo, on the other hand, denied being at the scene when the killing occurred. He
was then in the mountain in Saransang making a kaingin on the land owned by Estelita Tangpus.
Saransang was more than seven kilometers from barangay Hilabago and the distance could
only be negotiated by foot through a trail used by sled-drawing carabaos. With him in the
mountain were Estelita, Rogelio Badeo and Bonifacio Tangpus. He left the place only on March
22, 1981 when his wife fetched him because his son Manuel had wounded somebody. He went
to Hilabago but he immediately left for the mountain because he was afraid that revenge might
be taken on him. 10 Estelita Rubo corroborated Esperidion's alibi claiming that Esperidion did
not leave the kaingin area even after work.11
Sometime in Jurte, 1981, Esperidion and Rogelio Badeo executed a joint affidavit denying
participation in the killing Cresenciano. They affirmed therein that they had been in the
homestead owned by Bonifacio Tangpus since March 14, 1981 when the crime
transpired. 12 Bonifacio Tangpus did not execute any affidavit nor surrender to the authorities.
Neither was he apprehended.

For his part, Manuel executed a counter-affidavit dated June 1, 1981 stating that in the afternoon
of March 21, 1981, as he was cutting the grass in his lawn, Sagino Abrio (sic), the husband of
Iiga (Eega), approached him and intimated to him that he had a big problem because Iiga
and Cresenciano were having an illicit relationship. Sagino said that the relationship downgraded
his honor because it was known to everyone their place. Sagino vowed that something would
happen to Cresenciano.
According to the same affidavit, when Manuel arrived at his mother's house to get kerosene, his
mother, Maria Badeo, Estelita Tangpuz (sic), Elena Borja, Cresencio (sic) Germanes and Sagino
Abrio were drinking liquor. As Manuel was about to leave, Germanes forced him to drink liquor.
After taking one glass, Manuel turned to leave but Germanes grabbed his shirt. Sagino then
followed Germanes, hacked him "many times" while telling Manuel that it was a problem he
could handle. Upon seeing that Germanes had a firearm tucked in his waist, Sagino ordered
Manuel to get it. Manuel and Germanes grappled for possession of the firearm and as soon as
Manuel took hold of it, Sagino told him to surrender it to the police. 13
The contents of said counter-affidavit as well as Manuel's insistence at the preliminary
investigation that it was Eega Abrio's husband who was responsible for Cresenciano
Germanes' killing were totally discredited by the investigating fiscal who noted that during
Manuel's 20-day detention, he never mentioned to the police Sagino's involvement in the crime.
The investigating fiscal concluded that the rather belated facts revealed by Manuel were
designed "to coerce or force Eega Abrio from becoming a witness for the complainant." 14
On February 8, 1982, an information for murder was filed against Manuel, Esperidion and
Rogelio Badeo and Bonifacio Tangpus. 15 They were charged with having conspired to kill and
treacherously killing Cresenciano.
On September 24,1984, the assistant provincial fiscal filed a motion for the issuance of
an alias warrant of arrest.16 Through the alias warrant of arrest issued by the court, on
December 4, 1984, Manuel Badeo and Esperidion Badeo were apprehended by the police.17
On arraignment, Manuel pleaded guilty to the lesser offense of homicide while Esperidion
pleaded not guilty to the crime charged. Manuel invoked the mitigating circumstances of
voluntary plea of guilty 18 and voluntary surrender. However, the court ruled that a plea of guilty
to a lesser offense demanded the conformity of the offended party. 19 Inasmuch as Catalina
Germanes, the mother of the victim, was not agreeable to the plea entered by Manuel, the court
considered the plea as one of not guilty.
After trial, the court rendered the aforementioned decision. Manuel and Esperidion appealed to
this Court contending that the trial court erred in not appreciating the justifying circumstance of
self-defense and the mitigating circumstance of voluntary surrender in favor of Manuel, and in
not giving weight and credence to the alibi of Esperidion.

Pacao, Irene G.
Torts and Damages
On August 10, 1990, Esperidion died of cardio-respiratory arrest secondary to pulmonary
tuberculosis at the prison hospital in Muntinlupa, Metro Manila. 20 Inasmuch as no final
judgment had as yet been rendered, in the resolution of August 21, 1991, the case against
Esperidion was dismissed with costs de oficio and entry of judgment was made on August 22,
1991. 21
On September 17, 1991, the Solicitor General filed a motion for the reconsideration of said
resolution alleging that while the criminal liability of appellant Esperidion Badeo had been
extinguished by his death pursuant to Article 89 of the Revised Penal Code, his civil liability
arising from the criminal offense subsisted in accordance with Articles 1231 and 1161 of the Civil
Code in relation to Article 112 of the Revised Penal Code and the ruling in People vs.Pancho,
145 SCRA 323. Hence, as provided for in Section 17, Rule 3 of the Rules of Court, upon proper
notice, the legal representatives of the deceased appellant should appear as substitute parties
herein insofar as the deceased's civil liability for the crime is concerned. 22
We find merit in the motion for reconsideration. Article 89 of the Revised Penal Code provides
that criminal liability is totally extinguished "by the death of the convict, as to the personal
penalties; and as to pecuniary penalties, liability therefor is extinguished only when the death of
the offender occurs before final judgment." In People vs.Alison, 23 the Court, upon the
recommendation of the then Solicitor General who was required to comment on the information
that appellant Alison had died at the prison hospital, resolved that, there being no final judgment
as yet, "the criminal and civil liability (sic) of Alison was extinguished by his death."
The Alison resolution was the basis of the resolution in People vs. Satorre 24 similarly
dismissing the case against the deceased appellant. In a separate opinion in the resolution, then
Associate Justice Ramon C. Aquino stated that as to the personal penalties, criminal liability
therefor is extinguished only when the death of the offender occurs before final judgment.
According to Justice Aquino, the term " pecuniary penalties" (las pecuniarias) in Article 89 refers
to fine and costs as distinguished from " pecuniary liability" (responsabilidades pecunarias) in
Article 38 which include reparation and indemnity.
As every crime gives rise to a penal or criminal action for the punishment of the guilty party, and
also to a civil action for the restitution of the thing, repair of the damage and indemnification for
the losses 25 whether the particular act or omission is done intentionally or negligently or
whether or not punishable by law, 26 subsequent decisions of the Court held that while the
criminal liability of an appellant is extinguished by his death, his civil liability subsists. 27 In such
case, the heirs of the deceased appellant are substituted as parties in the criminal case and his
estate shall answer for his civil liability. 28
In the light of the foregoing, we reconsider the resolution August 21, 1991 insofar as it considers
as extinguished Esperidion Badeo's civil liability, in order to determine whether or not such
liability exist. 29
Well-settled is the rule that where the accused admits having authored the death of the victim
and his defense is anchored on self-defense, he must rely on the strength of his own evidence
and not on the weakness of that of the prosecution. 30 Otherwise his conviction is
inescapable.31

Of the three requisites of self-defense as stated in Article 11 (1) of the Revised Penal Code,
namely: (a) unlawful aggression; (b) reasonable necessity of the means employed to prevent or
repel it, and (c) lack of sufficient provocation on the part of person defending himself, the first
requisite is indispensable 32 for without it, there is nothing to prevent or repel. After a close
scrutiny of the records, the Court finds that appellant Manuel Badeo failed to prove unlawful
aggression.
Manuel contends that he was the object of Cresenciano's unlawful aggression because the latter
held his shirt and points a gun at him. His testimony, however, was completely uncorroborated.
He failed even to present Cresenciano's gun in evidence notwithstanding his claim that he
surrendered it to the barangay captain and later, to the police. 33 Indeed, we agree with the trial
court that if there really was a gun, Cresenciano would have used it not only against Manuel but
also against Rosito and Gabriel Dumpang. 34
Moreover, the location, number and seriousness of the wounds sustained by Cresenciano belie
the claim of self-defense. 35 Of the nine wounds found on Cresenciano's body, Manuel admitted
having inflicted the two wounds which the physician performed the autopsy considered as fatal:
the hacking wound on the skull and the stabbing wound on the stomach.36 As such, even
without the concerted assistance of the other accused, Manuel could have nonetheless
produced the lethal consequence: the death of Cresenciano.
Manuel's assertion that the credibility of the sole prosecution eyewitness is questionable is
belated if not baseless. He insists that Eega had an illicit relationship with the victim and that if
her testimony were true, she would not have lost time in reporting the murder to Cresenciano's
relatives. On the issue of credibility, we find no reason to depart from the settled rule that the
findings of the trial court on the credibility of witnesses should be accorded the highest respect
because it had the advantage of observing the demeanor of witnesses and to discern if a
witness was telling the truth. 37 The imputation of an illicit relationship between the prosecution
witness and the victim which was not shown other than by the counter-affidavit of Manuel and
which the investigating fiscal had even discredited, is not an acceptable evidence insofar as
proof of improper motive on the part of Eega is concerned. 38 Neither may Eega's initial
reluctance to denounce Manuel and his other co-accused as the killers immediately after the
commission of the crime, affect the probative value of her testimony, specifically her positive
identification of Manuel as one of the perpetrators of the crime. Usually triggered by fear, such
reluctance is common and has been judicially declared not to affect credibility. 39
However, we agree with the Solicitor General that the mitigating circumstance of voluntary
surrender should be appreciated in favor of Manuel. Ordinarily, where there has been actual
arrest, the mitigating circumstance of voluntary surrender cannot be invoked. 40 While it is true
that Manuel was arrested with his father on December 4, 1981, the records show that Manuel
did surrender: first, to the barangay captain and, in the morning of March 22, 1981, to the police
of Dagami. 41 In fact, after his surrender, Manuel was detained for twenty days. 42
The killing of Crecenciano is qualified by treachery which is shown by the suddenness by which
he was attacked. Under Article 248 of the Revised Penal Code, the penalty for murder
is reclusion temporal maximum to death. There being one mitigating circumstance, the penalty
imposable shall be the minimum period. 43 Applying the indeterminate sentence law, proper

Pacao, Irene G.
Torts and Damages
penalty is ten (10) years and one (1) day of prision mayor maximum as minimum to seventeen
(17) years, four (4) months and one (1) day of reclusion temporal maximum as maximum
penalty.
Anent Esperidion Badeo's civil liability, we find that there is no basis for its imposition in view of
the absence of a clear showing that he committed the crime imputed to him. 44 Esperidion could
not have been at the scene of the crime because thekaingin area where he had been staying
since January 7, 1983 until he was fetched by his wife on March 22, 1985 45 was a good fivehour hike away through a trail.46 Alibi is generally considered a weak defense but it assumes
importance where the evidence for the prosecution is weak and betrays concretenes on the
question of whether or not the accused committed the
crime. 47
In this case, Esperidion was implicated by the uncorroborated testimony of sole prosecution
eyewitness Iego Abrio. Her identification of Esperidion as one of the perpetrators of the crime
is, however, short of the positiveness and reliability essential for conviction. 48 As several people
committed the crime, it is probable that Abrio mistook Esperidion for another person considering
that according to her, the attack was perpetrated when it was already getting dark. This does not
however, totally discredit her entire testimony especially the portion thereof which imputes on
Manuel the authorship of the fatal hacking blows on Cresenciano. Court may believe one part of
a testimony and disbelieve another part. 49
WHEREFORE, the decision of the lower court is hereby affirmed insofar as appellant Manuel
Badeo is concerned subject to the modifications that he shall serve the penalty of ten (10) years
and one (1) day of prision mayormaximum to seventeen (17) years, four (4) months and one (1)
day of reclusion temporal maximum and indemnify the heirs of Cresenciano Germanes in the
amount of fifty thousand pesos (P50,000).
The resolution of August 21, 1991 is hereby reconsidered insofar as it considers as extinguished
Esperidion Badeo's civil liability. However, finding that Esperidion Badeo should be acquitted as
he did not commit the crime imputed to him, no civil liability is hereby imposed on him. No costs.
SO ORDERED.
Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur.

4 Ibid., p. 8.
5 Ibid., p. 9.
6 Ibid., p. 7.
7 TSN, April 10, 1985, pp. 12-14.
8 TSN, June 10, 1985, pp. 13-21.
9 TSN, May 29, 1985, pp. 22-23.
10 TSN, May 19, 1985, pp. 2-6.
11 TSN, May 10, 1985, p. 13.
12 Record, p. 20.
13 Record, p. 19.
14 Record, pp. 3, 9-10.
15 Criminal Case No. BN-1880.
16 Record, p. 25.
17 Record, back of p. 30.
18 Plea of guilty may be considered as a mitigating circcumstance only if it
is made unconditionally. Hence, it may not be appreciated in favor of a
defendant who pleads to the lesser crime of homicide and not to the charge
of murder (People vs. Saturnino, 96 Phil. 868 [1955]).
19 Record, pp. 40 & 43.

# Footnotes

20 Rollo, p. 97.
1 Hon. Fortunato B. Cuna, presiding judge.

21 Ibid., pp. 98-99.

2 TSN, February 18, 1985, pp. 3-7.

22 Rollo, p. 104.

3 Ibid., pp. 9-1 0.

10

Pacao, Irene G.
Torts and Damages
23 L-30612, April 27, 1972, 44 SCRA 523.

39 People vs. Baysa, G.R. No. 76391-92, April 25, 1989, 172 SCRA 706.

24 L-26282, August 27, 1976, 72 SCRA 439.

40 People vs. Saturnino, supra, p. 871 citing People vs. Adlawan, 83 Phil.
194.

25 Banal vs. Tadeo, Jr., G.R. Nos. 78911-25, December 11, 1987, 156
SCRA 325 citing U.S. vs. Bernardo, 19 Phil. 265.

41 Record, p. 16.

26 Occena vs. Icamina, G.R. No. 82146, January 22, 1990, 181 SCRA 329.

42 Ibid, p. 9.

27 People vs. Tirol, L-30538, January 31, 1981, 102 SCRA 558; People vs.
Asibar, L-37255, October 23, 1982, 117 SCRA 856; People vs. Pancho, L32507, November 4, 1986, 145 SCRA 323; People vs. Salcedo, L-48642,
June 22, 1987, 151 SCRA 220, among others.

43 Art. 64, Revised Penal Code.

28 People vs. Sendaydiego, L-33252, January 20, 1978, 81 SCRA 120.


29 People vs. Ampo-an, G.R. No. 75366, July 4, 1990, 187 SCRA 173.
30 People vs. Sazon, G.R. No. 89684, September 18, 1990, 189 SCRA 700;
Araneta, Jr. vs. Court of Appeals, G.R. No. 43537, July 3, 1990, 187 SCRA
123; People vs. Lamosa, G.R. Nos. 74291-93, May 23, 1989, 173 SCRA
518.
31 Ortega vs. Sandiganbayan, G.R. No. 57664, February 8, 1989, 170
SCRA 38.
32 People vs. Batas, G.R. Nos. 84277-78, August 2, 1989, 176 SCRA 46.

44 Padilla vs. Court of Appeals, L-39999, May 31, 1984, 129 SCRA 558,
570.
45 TSN, May 19, 1985, pp. 4-5.
46 TSN, May 10, 1985, pp. 14-15.
47 People vs. Padilla, G.R. No. 72709, August 31, 1989, 177 SCRA
129 citing People vs. Delmendo, L-32146, November 23, 1981, 109 SCRA
350; People vs. Hizon, G.R. No. 71273, July 29, 1988, 163 SCRA 760.
48 People vs. Domingo, G.R. No. 68993, September 26, 1988, 165 SCRA
620.
49 People vs. Bombesa, L-41133, June 22, 1988, 162 SCRA 402.

33 See: People vs. Saturnino, 96 Phil. 868, 870 [1955].


34 Decision, p. 14.
35 People vs. Maralit, G.R. No. 71142, September 19, 1988, 165 SCRA
425 citing People vs. Abubakar, G.R. No. 32102, February 10, 1986, 141
SCRA 286.
36 TSN, June 10, 1985, pp. 16-17; March 20, 1985, pp. 5 & 7.
37 People vs. Orita, G.R. No. 88724, April 3, 1990, 184 SCRA 105.
38 See: People vs. Claro, Jr., G.R. No. 76132, September 26, 1988, 165
SCRA 695.

11

Pacao, Irene G.
Torts and Damages

HUN HYUNG PARK, Petitioner,


vs.
EUNG WON CHOI, Respondent.
DECISION
CARPIO MORALES, J.:
Petitioner, Hun Hyung Park, assails the Court of Appeals (CA) Resolutions
dated May 20, 20041 and September 28, 20042 in CA G.R. CR No. 28344
dismissing his petition and denying reconsideration thereof, respectively.
In an Information3 dated August 31, 2000, respondent, Eung Won Choi,
was charged for violation of Batas Pambansa Blg. 22, otherwise known as
the Bouncing Checks Law, for issuing on June 28, 1999 Philippine National
Bank Check No. 0077133 postdated August 28, 1999 in the amount of
P1,875,000 which was dishonored for having been drawn against
insufficient funds.
Upon arraignment, respondent, with the assistance of counsel, pleaded "not
guilty" to the offense charged. Following the pre-trial conference, the
prosecution presented its evidence-in-chief.
After the prosecution rested its case, respondent filed a Motion for Leave of
Court to File Demurrer to Evidence to which he attached his Demurrer,
asserting that the prosecution failed to prove that he received the notice of
dishonor, hence, the presumption of the element of knowledge of
insufficiency of funds did not arise.4
By Order5 of February 27, 2003, the Metropolitan Trial Court (MeTC) of
Makati, Branch 65 granted the Demurrer and dismissed the case. The
prosecutions Motion for Reconsideration was denied.6
Petitioner appealed the civil aspect7 of the case to the Regional Trial Court
(RTC) of Makati, contending that the dismissal of the criminal case should
not include its civil aspect.
By Decision of September 11, 2003, Branch 60 of the RTC held that while
the evidence presented was insufficient to prove respondents criminal
liability, it did not altogether extinguish his civil liability. It accordingly granted
the appeal of petitioner and ordered respondent to pay him the amount of
P1,875,000 with legal interest.8
Upon respondents motion for reconsideration, however, the RTC set aside
its decision and ordered the remand of the case to the MeTC "for further

proceedings, so that the defendant [-respondent herein] may adduce


evidence on the civil aspect of the case."9 Petitioners motion for
reconsideration of the remand of the case having been denied, he elevated
the case to the CA which, by the assailed resolutions, dismissed his petition
for the following reasons:
1. The verification and certification of non-forum shopping attached to the
petition does not fully comply with Section 4, as amended by A.M. No. 00-210-SC, Rule 7, 1997 Rules of Court, because it does not give the assurance
that the allegations of the petition are true and correct based on authentic
records.
2. The petition is not accompanied by copies of certain pleadings and other
material portions of the record, (i.e., motion for leave to file demurrer to
evidence, demurrer to evidence and the opposition thereto, and the
Municipal [sic] Trial Courts Order dismissing Criminal Case No. 294690) as
would support the allegations of the petition (Sec. 2, Rule 42, ibid.).
3. The Decision dated September 11, 2003 of the Regional Trial Court
attached to the petition is an uncertified and illegible mere machine copy of
the original (Sec. 2, Rule 42, ibid.).
4. Petitioners failed to implead the People of the Philippines as partyrespondent in the petition.10
In his present petition, petitioner assails the above-stated reasons of the
appellate court in dismissing his petition.
The manner of verification for pleadings which are required to be verified,
such as a petition for review before the CA of an appellate judgment of the
RTC,11 is prescribed by Section 4 of Rule 7 of the Rules of Court:
Sec. 4. Verification. Except when otherwise specifically required by law or
rule, pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading
and that the allegations therein are true and correct of his personal
knowledge or based on authentic records.
A pleading required to be verified which contains a verification based on
"information and belief," or upon "knowledge, information and belief," or
lacks a proper verification shall be treated as an unsigned pleading.12
(Emphasis and underscoring supplied)
Petitioner argues that the word "or" is a disjunctive term signifying
disassociation and independence, hence, he chose to affirm in his petition
he filed before the court a quo that its contents are "true and correct of my
own personal knowledge,"13 and not on the basis of authentic documents.
On the other hand, respondent counters that the word "or" may be
interpreted in a conjunctive sense and construed to mean as "and," or vice
versa, when the context of the law so warrants.
A reading of the above-quoted Section 4 of Rule 7 indicates that a pleading
may be verified under either of the two given modes or under both. The
veracity of the allegations in a pleading may be affirmed based on either
ones own personal knowledge or on authentic records, or both, as
warranted. The use of the preposition "or" connotes that either source
qualifies as a sufficient basis for verification and, needless to state, the
concurrence of both sources is more than sufficient.14 Bearing both a

12

Pacao, Irene G.
Torts and Damages
disjunctive and conjunctive sense, this parallel legal signification avoids a
construction that will exclude the combination of the alternatives or bar the
efficacy of any one of the alternatives standing alone.15
Contrary to petitioners position, the range of permutation is not left to the
pleaders liking, but is dependent on the surrounding nature of the
allegations which may warrant that a verification be based either purely on
personal knowledge, or entirely on authentic records, or on both sources.
As pointed out by respondent, "authentic records" as a basis for verification
bear significance in petitions wherein the greater portions of the allegations
are based on the records of the proceedings in the court of origin and/or the
court a quo, and not solely on the personal knowledge of the petitioner. To
illustrate, petitioner himself could not have affirmed, based on his personal
knowledge, the truthfulness of the statement in his petition16 before the CA
that at the pre-trial conference respondent admitted having received the
letter of demand, because he (petitioner) was not present during the
conference.17 Hence, petitioner needed to rely on the records to confirm its
veracity.
Verification is not an empty ritual or a meaningless formality. Its import must
never be sacrificed in the name of mere expedience or sheer caprice. For
what is at stake is the matter of verity attested by the sanctity of an oath18
to secure an assurance that the allegations in the pleading have been made
in good faith, or are true and correct and not merely speculative.19
This Court has strictly been enforcing the requirement of verification and
certification and enunciating that obedience to the requirements of
procedural rules is needed if fair results are to be expected therefrom. Utter
disregard of the rules cannot just be rationalized by harking on the policy of
liberal construction.20 While the requirement is not jurisdictional in nature, it
does not make it less a rule. A relaxed application of the rule can only be
justified by the attending circumstances of the case.21
To sustain petitioners explanation that the basis of verification is a matter of
simple preference would trivialize the rationale and diminish the
resoluteness of the rule. It would play on predilection and pay no heed in
providing enough assurance of the correctness of the allegations.
On the second reason of the CA in dismissing the petition that the petition
was not accompanied by copies of certain pleadings and other material
portions of the record as would support the allegations of the petition (i.e.,
Motion for Leave to File Demurrer to Evidence, Demurrer to Evidence and
the Opposition thereto, and the MeTC February 27, 2003 Order dismissing
the case) petitioner contends that these documents are immaterial to his
appeal.
Contrary to petitioners contention, however, the materiality of those
documents is very apparent since the civil aspect of the case, from which he
is appealing, was likewise dismissed by the trial court on account of the
same Demurrer.
Petitioner, nonetheless, posits that he subsequently submitted to the CA
copies of the enumerated documents, save for the MeTC February 27, 2003
Order, as attachments to his Motion for Reconsideration.

The Rules, however, require that the petition must "be accompanied by
clearly legible duplicate original or true copies of the judgments or final
orders of both lower courts, certified correct by the clerk of court."
A perusal of the petition filed before the CA shows that the only duplicate
original or certified true copies attached as annexes thereto are the January
14, 2004 RTC Order granting respondents Motion for Reconsideration and
the March 29, 2004 RTC Order denying petitioners Motion for
Reconsideration. The copy of the September 11, 2003 RTC Decision, which
petitioner prayed to be reinstated, is not a certified true copy and is not even
legible. Petitioner later recompensed though by appending to his Motion for
Reconsideration a duplicate original copy.
While petitioner averred before the CA in his Motion for Reconsideration that
the February 27, 2003 MeTC Order was already attached to his petition as
Annex "G," Annex "G" bares a replicate copy of a different order, however. It
was to this Court that petitioner belatedly submitted an uncertified true copy
of the said MeTC Order as an annex to his Reply to respondents Comment.
This Court in fact observes that the copy of the other MeTC Order, that
dated May 5, 2003, which petitioner attached to his petition before the CA is
similarly uncertified as true.
Since both Orders of the MeTC were adverse to him even with respect to
the civil aspect of the case, petitioner was mandated to submit them in the
required form.23
In fine, petitioner fell short in his compliance with Section 2 (d) of Rule 42,
the mandatory tenor of which is discernible thereunder and is well settled.24
He has not, however, advanced any strong compelling reasons to warrant a
relaxation of the Rules, hence, his petition before the CA was correctly
dismissed.
Procedural rules are tools designed to facilitate the adjudication of cases.
Courts and litigants alike are thus enjoined to abide strictly by the rules. And
while the Court, in some instances, allows a relaxation in the application of
the rules, this we stress, was never intended to forge a bastion for erring
litigants to violate the rules with impunity. The liberality in the interpretation
and application of the rules applies only in proper cases and under
justifiable causes and circumstances. While it is true that litigation is not a
game of technicalities, it is equally true that every case must be prosecuted
in accordance with the prescribed procedure to insure an orderly and
speedy administration of justice.25 (Emphasis supplied)
As to the third reason for the appellate courts dismissal of his petition
failure to implead the People of the Philippines as a party in the petition
indeed, as petitioner contends, the same is of no moment, he having
appealed only the civil aspect of the case. Passing on the dual purpose of a
criminal action, this Court ruled:
Unless the offended party waives the civil action or reserves the right to
institute it separately or institutes the civil action prior to the criminal action,
there are two actions involved in a criminal case. The first is the criminal
action for the punishment of the offender. The parties are the People of the
Philippines as the plaintiff and the accused. In a criminal action, the private
complainant is merely a witness for the State on the criminal aspect of the

13

Pacao, Irene G.
Torts and Damages
action. The second is the civil action arising from the delict. The private
complainant is the plaintiff and the accused is the defendant. There is a
merger of the trial of the two cases to avoid multiplicity of suits.26
(Underscoring supplied)
It bears recalling that the MeTC acquitted respondent.27 As a rule, a
judgment of acquittal is immediately final and executory and the prosecution
cannot appeal the acquittal because of the constitutional prohibition against
double jeopardy.
Either the offended party or the accused may, however, appeal the civil
aspect of the judgment despite the acquittal of the accused. The public
prosecutor has generally no interest in appealing the civil aspect of a
decision acquitting the accused. The acquittal ends his work. The case is
terminated as far as he is concerned. The real parties in interest in the civil
aspect of a decision are the offended party and the accused.28
Technicality aside, the petition is devoid of merit.
When a demurrer to evidence is filed without leave of court, the whole case
is submitted for judgment on the basis of the evidence for the prosecution
as the accused is deemed to have waived the right to present evidence.29
At that juncture, the court is called upon to decide the case including its civil
aspect, unless the enforcement of the civil liability by a separate civil action
has been waived or reserved.30
If the filing of a separate civil action has not been reserved or priorly
instituted or the enforcement of civil liability is not waived, the trial court
should, in case of conviction, state the civil liability or damages caused by
the wrongful act or omission to be recovered from the accused by the
offended party, if there is any.31
For, in case of acquittal, the accused may still be adjudged civilly liable. The
extinction of the penal action does not carry with it the extinction of the civil
action where (a) the acquittal is based on reasonable doubt as only
preponderance of evidence is required; (b) the court declares that the
liability of the accused is only civil; and (c) the civil liability of the accused
does not arise from or is not based upon the crime of which the accused
was acquitted.32
The civil action based on delict may, however, be deemed extinguished if
there is a finding on the final judgment in the criminal action that the act or
omission from which the civil liability may arise did not exist.33
In case of a demurrer to evidence filed with leave of court, the accused may
adduce countervailing evidence if the court denies the demurrer.34 Such
denial bears no distinction as to the two aspects of the case because there
is a disparity of evidentiary value between the quanta of evidence in such
aspects of the case. In other words, a court may not deny the demurrer as
to the criminal aspect and at the same time grant the demurrer as to the civil
aspect, for if the evidence so far presented is not insufficient to prove the
crime beyond reasonable doubt, then the same evidence is likewise not
insufficient to establish civil liability by mere preponderance of evidence.

On the other hand, if the evidence so far presented is insufficient as proof


beyond reasonable doubt, it does not follow that the same evidence is
insufficient to establish a preponderance of evidence. For if the court grants
the demurrer, proceedings on the civil aspect of the case generally
proceeds. The only recognized instance when an acquittal on demurrer
carries with it the dismissal of the civil aspect is when there is a finding that
the act or omission from which the civil liability may arise did not exist.
Absent such determination, trial as to the civil aspect of the case must
perforce continue. Thus this Court, in Salazar v. People,35 held:
If demurrer is granted and the accused is acquitted by the court, the
accused has the right to adduce evidence on the civil aspect of the case
unless the court also declares that the act or omission from which the civil
liability may arise did not exist.36
In the instant case, the MeTC granted the demurrer and dismissed the case
without any finding that the act or omission from which the civil liability may
arise did not exist.
Respondent did not assail the RTC order of remand. He thereby recognized
that there is basis for a remand.
Indicatively, respondent stands by his defense that he merely borrowed
P1,500,000 with the remainder representing the interest, and that he
already made a partial payment of P1,590,000. Petitioner counters,
however, that the payments made by respondent pertained to other
transactions.37 Given these conflicting claims which are factual, a remand
of the case would afford the fullest opportunity for the parties to ventilate,
and for the trial court to resolve the same.
Petitioner finally posits that respondent waived his right to present evidence
on the civil aspect of the case (1) when the grant of the demurrer was
reversed on appeal, citing Section 1 of Rule 33,38 and (2) when respondent
orally opposed petitioners motion for reconsideration pleading that
proceedings with respect to the civil aspect of the case continue.
Petitioners position is tenuous.
Petitioners citation of Section 1 of Rule 33 is incorrect.1awphi1.net Where a
court has jurisdiction over the subject matter and over the person of the
accused, and the crime was committed within its territorial jurisdiction, the
court necessarily exercises jurisdiction over all issues that the law requires it
to resolve.
One of the issues in a criminal case being the civil liability of the accused
arising from the crime, the governing law is the Rules of Criminal Procedure,
not the Rules of Civil Procedure which pertains to a civil action arising from
the initiatory pleading that gives rise to the suit.39
As for petitioners attribution of waiver to respondent, it cannot be
determined with certainty from the records the nature of the alleged oral
objections of respondent to petitioners motion for reconsideration of the
grant of the demurrer to evidence. Any waiver of the right to present
evidence must be positively demonstrated. Any ambiguity in the

14

Pacao, Irene G.
Torts and Damages
voluntariness of the waiver is frowned upon,40 hence, courts must indulge
every reasonable presumption against it.41
This Court therefore upholds respondents right to present evidence as
reserved by his filing of leave of court to file the demurrer.
WHEREFORE, the petition is, in light of the foregoing discussions, DENIED.
The case is REMANDED to the court of origin, Metropolitan Trial Court of
Makati City, Branch 65 which is DIRECTED to forthwith set Criminal Case
No. 294690 for further proceedings only for the purpose of receiving
evidence on the civil aspect of the case.
Costs against petitioner
SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice
Pursuant to Article VIII, Section 13 of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was assigned
to the writer of the Courts Division.
REYNATO S. PUNO
Chief Justice
The appellate court found the verification in petitioners petition to have
failed to comply with the rules "because it does not give the assurance that
the allegations of the petition are true and correct based on authentic
records." It appears that A verification anchored on such flawed reasoning42
The appeal of the offended party from the civil aspect shall not affect the
criminal aspect of the judgment or order appealed from.43
23 Cf. Ramos v. Court of Appeals, 341 Phil. 157 (1997), which ruled that a
petitioner is not required to attach to the petition before the Court of Appeals
a certified true copy but only a true or plain copy of the MeTC Decision
since petitioner is not appealing therefrom as it was rendered in her favor.
27 From the MeTCs order, the Office of the City Prosecutor of Makati
instituted a special civil action for certiorari with the Regional Trial Court of
Makati City, Branch 147. Docketed as SCA No. 03-712 entitled "People of
the Philippines v. Hon Rommel O. Baybay and Eung Won Choi," the petition
was dismissed on October 28, 2003 for being improper and for lack of merit,
which order eventually attained finality (vide records, pp. 335-341, 564-565,
676) 38 "After the plaintiff has completed the presentation of his evidence,
the defendant may move for dismissal on the ground that upon the facts and
the law the plaintiff has shown no right to relief. If his motion is denied, he
shall have the right to present evidence. If the motion is granted but on
appeal the order of dismissal is reversed he shall be deemed to have
waived the right to present evidence."

ROLITO CALANG and PHILTRANCO SERVICE ENTERPRISES,


INC.,Petitioners,

versus
PEOPLE OF THE PHILIPPINES,Respondent. -- G.R. No. 190696
Present:
CARPIO MORALES, J., Chairperson,
BRION,
BERSAMIN,
*ABAD, and
VILLARAMA, JR., JJ.
Promulgated:
August 3, 2010
x-----------------------------------------------------------------------------------------x
RESOLUTIOn
BRION, J.:
We resolve the motion for reconsideration filed by the petitioners, Philtranco
Service Enterprises, Inc. (Philtranco) and Rolito Calang, to challenge our
Resolution of February 17, 2010. Our assailed Resolution denied the
petition for review on certiorari for failure to show any reversible error
sufficient to warrant the exercise of this Courts discretionary appellate
jurisdiction.
Antecedent Facts
At around 2:00 p.m. of April 22, 1989, Rolito Calang was driving Philtranco
Bus No. 7001, owned by Philtranco along Daang Maharlika Highway in
Barangay Lambao, Sta. Margarita, Samar when its rear left side hit the front
left portion of a Sarao jeep coming from the opposite direction. As a result of
the collision, Cresencio Pinohermoso, the jeeps driver, lost control of the
vehicle, and bumped and killed Jose Mabansag, a bystander who was
standing along the highways shoulder. The jeep turned turtle three (3) times
before finally stopping at about 25 meters from the point of impact. Two of
the jeeps passengers, Armando Nablo and an unidentified woman, were
instantly killed, while the other passengers sustained serious physical
injuries.
The prosecution charged Calang with multiple homicide, multiple serious
physical injuries and damage to property thru reckless imprudence before
the Regional Trial Court (RTC), Branch 31, Calbayog City. The RTC, in its
decision dated May 21, 2001, found Calang guilty beyond reasonable doubt
of reckless imprudence resulting to multiple homicide, multiple physical
injuries and damage to property, and sentenced him to suffer an
indeterminate penalty of thirty days of arresto menor, as minimum, to four
years and two months of prision correccional, as maximum. The RTC
ordered Calang and Philtranco, jointly and severally, to pay P50,000.00 as
death indemnity to the heirs of Armando; P50,000.00 as death indemnity to
the heirs of Mabansag; and P90,083.93 as actual damages to the private
complainants.
The petitioners appealed the RTC decision to the Court of Appeals (CA),
docketed as CA-G.R. CR No. 25522. The CA, in its decision dated
November 20, 2009, affirmed the RTC decision in toto. The CA ruled that
petitioner Calang failed to exercise due care and precaution in driving the
Philtranco bus. According to the CA, various eyewitnesses testified that the

15

Pacao, Irene G.
Torts and Damages
bus was traveling fast and encroached into the opposite lane when it
evaded a pushcart that was on the side of the road. In addition, he failed to
slacken his speed, despite admitting that he had already seen the jeep
coming from the opposite direction when it was still half a kilometer away.
The CA further ruled that Calang demonstrated a reckless attitude when he
drove the bus, despite knowing that it was suffering from loose
compression, hence, not roadworthy.
The CA added that the RTC correctly held Philtranco jointly and severally
liable with petitioner Calang, for failing to prove that it had exercised the
diligence of a good father of the family to prevent the accident.
The petitioners filed with this Court a petition for review on certiorari. In our
Resolution dated February 17, 2010, we denied the petition for failure to
sufficiently show any reversible error in the assailed decision to warrant the
exercise of this Courts discretionary appellate jurisdiction.
The Motion for Reconsideration
In the present motion for reconsideration, the petitioners claim that there
was no basis to hold Philtranco jointly and severally liable with Calang
because the former was not a party in the criminal case (for multiple
homicide with multiple serious physical injuries and damage to property thru
reckless imprudence) before the RTC.
The petitioners likewise maintain that the courts below overlooked several
relevant facts, supported by documentary exhibits, which, if considered,
would have shown that Calang was not negligent, such as the affidavit and
testimony of witness Celestina Cabriga; the testimony of witness Rodrigo
Bocaycay; the traffic accident sketch and report; and the jeepneys
registration receipt. The petitioners also insist that the jeeps driver had the
last clear chance to avoid the collision.
We partly grant the motion.
Liability of Calang
We see no reason to overturn the lower courts finding on Calangs
culpability. The finding of negligence on his part by the trial court, affirmed
by the CA, is a question of fact that we cannot pass upon without going into
factual matters touching on the finding of negligence. In petitions for review
on certiorari under Rule 45 of the Revised Rules of Court, this Court is
limited to reviewing only errors of law, not of fact, unless the factual findings
complained of are devoid of support by the evidence on record, or the
assailed judgment is based on a misapprehension of facts.
Liability of Philtranco
We, however, hold that the RTC and the CA both erred in holding Philtranco
jointly and severally liable with Calang. We emphasize that Calang was
charged criminally before the RTC. Undisputedly, Philtranco was not a direct
party in this case. Since the cause of action against Calang was based on
delict, both the RTC and the CA erred in holding Philtranco jointly and
severally liable with Calang, based on quasi-delict under Articles 2176[1]
and 2180[2] of the Civil Code. Articles 2176 and 2180 of the Civil Code

pertain to the vicarious liability of an employer for quasi-delicts that an


employee has committed. Such provision of law does not apply to civil
liability arising from delict.
If at all, Philtrancos liability may only be subsidiary. Article 102 of the
Revised Penal Code states the subsidiary civil liabilities of innkeepers,
tavernkeepers and proprietors of establishments, as follows:
In default of the persons criminally liable, innkeepers, tavernkeepers, and
any other persons or corporations shall be civilly liable for crimes committed
in their establishments, in all cases where a violation of municipal
ordinances or some general or special police regulations shall have been
committed by them or their employees.
Innkeepers are also subsidiary liable for the restitution of goods taken by
robbery or theft within their houses from guests lodging therein, or for the
payment of the value thereof, provided that such guests shall have notified
in advance the innkeeper himself, or the person representing him, of the
deposit of such goods within the inn; and shall furthermore have followed
the directions which such innkeeper or his representative may have given
them with respect to the care of and vigilance over such goods. No liability
shall attach in case of robbery with violence against or intimidation of
persons unless committed by the innkeepers employees.
The foregoing subsidiary liability applies to employers, according to Article
103 of the Revised Penal Code, which reads:
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.
The provisions of the Revised Penal Code on subsidiary liability Articles 102
and 103 are deemed written into the judgments in cases to which they are
applicable. Thus, in the dispositive portion of its decision, the trial court need
not expressly pronounce the subsidiary liability of the employer.[3]
Nonetheless, before the employers subsidiary liability is enforced, adequate
evidence must exist establishing that (1) they are indeed the employers of
the convicted employees; (2) they are engaged in some kind of industry; (3)
the crime was committed by the employees in the discharge of their duties;
and (4) the execution against the latter has not been satisfied due to
insolvency. The determination of these conditions may be done in the same
criminal action in which the employees liability, criminal and civil, has been
pronounced, in a hearing set for that precise purpose, with due notice to the
employer, as part of the proceedings for the execution of the judgment.[4]

16

Pacao, Irene G.
Torts and Damages
WHEREFORE, we PARTLY GRANT the present motion. The Court of
Appeals decision that affirmed in toto the RTC decision, finding Rolito
Calang guilty beyond reasonable doubt of reckless imprudence resulting in
multiple homicide, multiple serious physical injuries and damage to property,
is AFFIRMED, with the MODIFICATION that Philtrancos liability should only
be subsidiary. No costs.

Dragged fifteen (15) meters from the point of impact (midway the length of
the parked truck with trailer), the mini bus landed right side down facing
south in the canal of the highway, a total wreck. The Franco Bus was also
damaged but not as severely. The collision resulted in the deaths of the two
(2) drivers, Macario Yuro and Magdaleno Lugue, and two (2) passengers of
the mini bus, Romeo Bue and Fernando Chuay.

SO ORDERED.

Consequently, Antonio Reyes, the registered owner of the Isuzu Mini Bus,
Mrs. Susan Chuay, the wife of victim Fernando Chuay, and Mrs. Lolita
Lugue, the wife of driver-victim Magdaleno Lugue, filed an action for
damages through reckless imprudence before the Court of First Instance of
Pampanga in Angeles City, Branch IV, docketed as Civil Case No. 2154
against Mr. & Mrs. Federico Franco, the owners and operators of the Franco
Transportation Company. The complaint alleged that: (a) the recklessness
and imprudence of the Franco Bus driver caused the collision which
resulted in his own death and that of the mini bus driver and two (2) other
passengers thereof; (b) that as a consequence of the vehicular mishap, the
Isuzu Mini Bus became a total wreck resulting in actual damages amounting
to P50,000.00 and the loss of an average net income of P120.00 daily or
P3,600.00 monthly multiplied by a minimum of one more year of
serviceability of said mini bus or P40,200.00; and, (c) that in view of the
death of the three (3) passengers aforementioned, the heirs of each should
be awarded a minimum of P12,000.00 and the expected average income of
P6,000.00 each of the driver and one of the passengers and P12,000.00 of
the Chinese businessman passenger.

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 71137

October 5, 1989

SPOUSES FEDERICO FRANCO and FELICISIMA R. FRANCO, petitioners,


vs.
INTERMEDIATE APPELLATE COURT, ANTONIO REYES, MRS. SUSAN
CHUAY and LOLITA LUGUE respondents.

In answer to the complaint, defendants set up, among others, the affirmative
defense that as owners and operators of the Franco Transportation
Company, they exercised due diligence in the selection and supervision of
all their employees, including the deceased driver Macario Yuro.

FERNAN, C.J.:
The instant petition for review of a decision of the Court of Appeals deals
mainly with the nature of an employer's liability for his employee's negligent
act.
At about 7:30 in the evening of October 18, 1974, Macario Yuro swerved the
northbound Franco Bus with Plate No. XY320-PUB he was driving to the left
to avoid hitting a truck with a trailer parked facing north along the cemented
pavement of the MacArthur Highway at Barrio Talaga, Capas Tarlac, thereby
taking the lane of an incoming Isuzu Mini Bus bearing Plate No. YL-735
being driven by one Magdaleno Lugue and making a collision between the
two (2) vehicles an unavoidable and disastrous eventuality.

Said defense was, however, rejected by the trial court in its decision 1 dated
May 17, 1978, for the reason that the act of the Franco Bus driver was a
negligent act punishable by law resulting in a civil obligation arising from
Article 103 of the Revised Penal Code and not from Article 2180 of the Civil
Code. It said: "This is a case of criminal negligence out of which civil liability
arises, and not a case of civil negligence and the defense of having acted
like a good father of a family or having trained or selected the drivers of his
truck is no defense to avoid civil liability." 2 On this premise, the trial court
ruled as follows:

17

Pacao, Irene G.
Torts and Damages
WHEREFORE, premises considered, judgment is hereby rendered in favor
of the plaintiffs, Antonio Reyes, Lolita Lugue, and Susan Chuay, and against
the defendants Mr. and Mrs. Federico Franco, ordering the latter:
(1)
To pay Antonio Reyes, actual and compensatory damages in the
amount of P90,000.00 for the Isuzu Mini Bus;
(2)
To pay Lolita Lugue, the widow of Magdaleno Lugue, actual and
compensatory damages in the total sum of P18,000.00;
(3)
To pay Susan Chuay, the widow of Fernando Chuay, actual and
compensatory damages in the total sum of P24,000.00; and
(4)

To pay attorney's fee in the amount of P5.000.00;

All with legal interests from the filing of this suit on November 11, 1974 until
paid; and the costs of this suit.
SO ORDERED. 3

On appeal by herein petitioners as defendants-appellants, respondent


appellate court, agreeing with the lower court, held that defendantsappellants' driver who died instantly in the vehicular collision, was guilty of
reckless or criminal imprudence punishable by law in driving appellants' bus;
that the civil obligation of the appellants arises from Article 103 of the
Revised Penal Code resulting in the subsidiary liability of the appellants
under the said provisions, 4 that the case subject of appeal is one involving
culpable negligence out of which civil liability arises and is not one of civil
negligence; 5 and that there is nothing in Articles 102 and 103 of the
Revised Penal Code which requires a prior judgment of conviction of the
erring vehicle driver and his obligation to pay his civil liability before the said
provisions can be applied. 6 Respondent appellate court increased the
award of damages granted by the lower court as follows:
WHEREFORE, the decision appealed from is hereby modified as follows:
1.
To pay Susan Chuay, widow of Fernando Chuay, the sum of
P30,000.00 for the latter's death and P112,000.00 for loss of earning
capacity;

2.
To pay Lolita Lugue, widow of Magdaleno Lugue, the sum of
P30,000.00 for the latter's death and P62,000.00 for loss of earning
capacity. The rest of the judgment appealed from is affirmed. Costs against
defendants-appellants.
SO ORDERED. 7
On April 1, 1985, petitioners filed a motion for reconsideration of the
aforesaid respondent appellate court's decision dated January 2, 1985 but
the same was denied on May 13, 1985.
Hence, the instant petition raising two (2) legal questions: first, whether the
action for recovery of damages instituted by herein private respondents was
predicated upon crime or quasi-delict; and second, whether respondent
appellate court in an appeal filed by the defeated parties, herein petitioners,
may properly increase the award of damages in favor of the private
respondents Chuay and Lugue, prevailing parties in the lower court, who did
not appeal said court's decision.
Petitioners contend that the allegations in paragraph 9 of the Amended
Complaint 8 of herein private respondents as plaintiffs in Civil Case No.
2154 unequivocally claim that the former as the employers of Macario Yuro,
the driver of the Franco Bus who caused the vehicular mishap, are jointly
and severally liable to the latter for the damages suffered by them which
thus makes Civil Case No. 2154 an action predicated upon a quasi-delict
under the Civil Code subject to the defense that the employer exercised all
the diligence of a good father of a family in the selection and supervision of
their employees.
We find merit in this contention. Distinction should be made between the
subsidiary liability of the employer under the Revised Penal Code and the
employer's primary liability under the Civil Code which is quasi-delictual or
tortious in character. The first type of liability is governed by Articles 102 and
103 of the Revised Penal Code which provide as follows:

Art. 102. Subsidiary civil liability of innkeepers, tavern-keepers and


proprietors of establishments. In default of the persons criminally liable,
innkeepers, tavern-keepers, and any other persons or corporations shall be
civilly liable for crimes committed in their establishments, in all cases where
a violation of municipal ordinances or some general or special police
regulations 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 from guests lodging therein, or for the
payment of the value thereof, provided that such guests shall have notified

18

Pacao, Irene G.
Torts and Damages
in advance the innkeeper himself, or the person representing him, of the
deposits 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 and vigilance over such goods. No liability
shall attach in case of robbery with violence against or intimidation of
persons unless committed by the innkeeper's employees.
Art. 103. Subsidiary civil liability of other persons. The 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 the servants, pupils, workmen, apprentices, or
employees in the discharge of their duties;
while the second kind is governed by the following provisions of the Civil
Code:
Art. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties is called a quasi-delict and is governed by the provisions of this
Chapter.
Art. 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence
under the Penal Code. But the plaintiff cannot recover damages twice for
the same act or omission of the defendant.
Art. 2180. The obligations imposed by article 2176 is demandable not only
for one's own acts or omissions, but also for those of persons for whom one
is responsible.
xxx
xxx
xxx
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry,
xxx
xxx
xxx
The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damage.
Under Article 103 of the Revised Penal Code, liability originates from a delict
committed by the employee who is primarily liable therefor and upon whose
primary liability his employer's subsidiary liability is to be based. Before the
employer's subsidiary liability may be proceeded against, it is imperative
that there should be a criminal action whereby the employee's criminal
negligence or delict and corresponding liability therefor are proved. If no
criminal action was instituted, the employer's liability would not be
predicated under Article 103. 9
In the case at bar, no criminal action was instituted because the person who
should stand as the accused and the party supposed to be primarily liable
for the damages suffered by private respondents as a consequence of the
vehicular mishap died. Thus, petitioners' subsidiary liability has no leg to
stand on considering that their liability is merely secondary to their
employee's primary liability. Logically therefore, recourse under this remedy
is not possible.

On the other hand, under Articles 2176 and 2180 of the Civil Code, liability
is based on culpa aquiliana which holds the employer primarily liable for
tortious acts of its employees subject, however, to the defense that the
former exercised all the diligence of a good father of a family in the selection
and supervision of his employees.
Respondent appellate court relies on the case of Arambulo, supra, where it
was held that the defense of observance of due diligence of a good father of
a family in the selection and supervision of employees is not applicable to
the subsidiary liability provided in Article 20 of the Penal Code (now Article
103 of the Revised Penal Code). By such reliance, it would seem that
respondent appellate court seeks to enforce the subsidiary civil liability of
the employer without a criminal conviction of the party primarily liable
therefor. This is not only erroneous and absurd but is also fraught with
dangerous consequences. It is erroneous because the conviction of the
employee primarily liable is a condition sine qua non for the employer's
subsidiary liability 10 and, at the same time, absurd because we will be
faced with a situation where the employer is held subsidiarily liable even
without a primary liability being previously established. It is likewise
dangerous because, in effect, the employer's subsidiary liability would
partake of a solidary obligation resulting in the law's amendment without
legislative sanction.
The Court in the aforecited M.D. Transit case went further to say that there
can be no automatic subsidiary liability of defendant employer under Article
103 of the Revised Penal Code where his employee has not been
previously criminally convicted.
Having thus established that Civil Case No. 2154 is a civil action to impose
the primary liability of the employer as a result of the tortious act of its
alleged reckless driver, we confront ourselves with the plausibility of
defendants-petitioners' defense that they observed due diligence of a good
father of a family in the selection and supervision of their employees.
On this point, the appellate court has unequivocally spoken in affirmation of
the lower court's findings, to wit:
Anyway, a perusal of the record shows that the appellants were not able to
establish the defense of a good father of a family in the supervision of their
bus driver. The evidence presented by the appellants in this regard is purely
self-serving. No independent evidence was presented as to the alleged
supervision of appellants' bus drivers, especially with regard to driving
habits and reaction to actual traffic conditions. The appellants in fact
admitted that the only kind of supervision given the drivers referred to the
running time between the terminal points of the line (t.s.n., September 16,
1976, p. 21). Moreover, the appellants who ran a fleet of 12 buses plying the
Manila-Laoag line, have only two inspectors whose duties were only ticket
inspection. There is no evidence that they are really safety inspectors. 11
Basically, the Court finds that these determinations are factual in nature. As
a painstaking review of the evidence presented in the case at bar fails to
disclose any evidence or circumstance of note sufficient to overrule said
factual findings and conclusions, the Court is inclined to likewise reject
petitioners' affirmative defense of due diligence. The wisdom of this stance
is made more apparent by the fact that the appellate court's conclusions are

19

Pacao, Irene G.
Torts and Damages
based on the findings of the lower court which is in a better position to
evaluate the testimonies of the witnesses during trial. As a rule, this Court
respects the factual findings of the appellate and trial courts and accord
them a certain measure of finality. 12 Consequently, therefore, we find
petitioners liable for the damages claimed pursuant to their primary liability
under the Civil Code.
On the second legal issue raised in the instant petition, we agree with
petitioners' contention that the Intermediate Appellate Court (later Court of
Appeals) is without jurisdiction to increase the amount of damages awarded
to private respondents Chuay and Lugue, neither of whom appealed the
decision of the lower court. While an appellee who is not also an appellant
may assign error in his brief if his purpose is to maintain the judgment on
other grounds, he cannot ask for modification or reversal of the judgment or
affirmative relief unless he has also appealed. 13 For failure of plaintiffsappellees, herein private respondents, to appeal the lower court's judgment,
the amount of actual damages cannot exceed that awarded by it. 14
Furthermore, the records 15 show that plaintiffs-private respondents limited
their claim for actual and compensatory damages to the supposed average
income for a period of one (1) year of P6,000.00 for the driver Magdaleno
Lugue and P12,000.00 for the Chinese businessman Fernando Chuay. We
feel that our award should not exceed the said amounts . 16
However, the increase in awards for indemnity arising from death to
P30,000.00 each remains, the same having been made in accordance with
prevailing jurisprudence decreeing such increase in view of the depreciated
Philippine currency. 17
WHEREFORE, the decision of the Court of Appeals is hereby modified
decreasing the award to private respondents of actual and compensatory
damages for loss of average income for the period of one year to P6,000.00
for the deceased Magdaleno Lugue and P12,000.00 for the deceased
Fernando Chuay. The rest of the judgment appealed from is hereby
affirmed. Costs against the private respondents. This decision is
immediately executory.
SO ORDERED.
Jose Cangco vs Manila Railroad Co.
30 Phil 768 Civil Law Torts and Damages Distinction of Liability of
Employers Under Article 2180 and Their Liability for Breach of Contract
On January 20, 1915, Cangco was riding the train of Manila Railroad Co
(MRC). He was an employee of the latter and he was given a pass so that
he could ride the train for free. When he was nearing his destination at
about 7pm, he arose from his seat even though the train was not at full stop.
When he was about to alight from the train (which was still slightly moving)
he accidentally stepped on a sack of watermelons which he failed to notice
due to the fact that it was dim. This caused him to lose his balance at the
door and he fell and his arm was crushed by the train and he suffered other
serious injuries. He was dragged a few meters more as the train slowed
down.
It was established that the employees of MRC were negligent in piling the
sacks of watermelons. MRC raised as a defense the fact that Cangco was

also negligent as he failed to exercise diligence in alighting from the train as


he did not wait for it to stop.
ISSUE: Whether or not Manila Railroad Co is liable for damages.
HELD: Yes. Alighting from a moving train while it is slowing down is a
common practice and a lot of people are doing so every day without
suffering injury. Cangco has 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. He was also
ignorant of the fact that sacks of watermelons were there as there were no
appropriate warnings and the place was dimly lit.
The Court also elucidated on the distinction between the liability of
employers under Article 2180 and their liability for breach of contract [of
carriage]:

NOTES: 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.
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.
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.
Manresa: Whether negligence occurs an incident in the course of the
performance of a contractual undertaking or in itself the source of an extracontractual undertaking obligation, its essential characteristics are identical.
Vinculum Juris: (def) It means an obligation of law, or the right of the
obligee to enforce a civil matter in a court of law.

20

Pacao, Irene G.
Torts and Damages
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 BangkokRome, 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;

21

Pacao, Irene G.
Torts and Damages
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 firstclass 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", "A1", "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

22

Pacao, Irene G.
Torts and Damages
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 copassenger. 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

23

Pacao, Irene G.
Torts and Damages
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,

24

Pacao, Irene G.
Torts and Damages
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

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 quasicontracts. 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

I will allow that as part of his testimony. 49

25

Pacao, Irene G.
Torts and Damages
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.

18Goduco vs. Court of Appeals, et al., L-17647, February 28, 1964.


19Section 2, Rule 45, Rules of Court, formerly Section 2, Rule 46 of the
Rules of Court.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal,


Zaldivar and Castro, JJ., concur.
Bengzon, J.P., J., took no part.

20Medel, et al. vs. Calasanz, et al. L-14835, August 31, 1960; Astraquillo, et
al. vs. Javier, et al., L-20034, January 30, 1965.

Footnotes

21Petitioner's brief in the Court of Appeals, pp. 82-98.

1Civil Case No. 38810, "Rafael Carrascoso, plaintiff, vs. Air France,
defendant," R.A., pp. 79-80.

22Decision of the Court of Appeals, Appendix A, petitioner's brief, pp. 148149.

2C.A.-G.R. No. 26522-R, "Rafael Carrascoso, plaintiff-appellee, vs. Air


France, defendant-appellant."

23R.A., pp. 67, 73.


245 B C.J.S., p. 295; 3 Am. Jur. p. 678.

3Appendix A, petitioner's brief, pp 146-147. See also R.A., pp. 66-67.


253 Am. Jur., pp. 677-678.
4Petitioner's brief, p. 142.
26See Garcia Valdez vs. Seterana Tuason, 40 Phil, 943, 951.
5Section 12, Article VIII, Constitution.
27Carrascoso's ticket, according to petitioner (brief, pp. 7-8), shows:
6Section 1, Rule 36, Rules of Court. See also Section 2, Rule 120, in
reference to judgments in criminal cases.
7Sec. 4. Rule 51; Sec. 33(2), Judiciary Act of 1948, as amended.
8Edwards vs. McCoy, 22 Phil. 598, 601; Yangco vs. Court of First Instance
of Manila, et al., 29 Phil. 183, 191.

Segment or leg
Carrier Flight No. Date of Departure
1. Manila to Hongkong
PAL
300A
March 30
2. Hongkong to Saigon
VN(Air Vietnam)
693
March 31
3. Saigon to Beirut AF(Air France)
245
March 31
28Petitioner's brief, p. 50; see also id., pp. 37 and 46.
29Id., p. 103.

9Braga vs. Millora, 3 Phil. 458, 465.


30Ibid., p. 102.
10Id.
11Aringo vs. Arena 14 Phil. 263, 266; emphasis supplied.
12Reyes vs. People. 71 Phil. 598, 600.
13People vs. Manigque 35 O.G., No. 94, pp. 1682, 1683, citing Section 133
of the Code of Civil Procedure and Section 12, Art. VIII, Constitution, supra.

31Article 2220, Civil Code reads: "Willful injury to property may be a legal
ground for awarding moral damages if the court should find that, under the
circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith."
32R.A., p. 2-4; emphasis supplied.
33R.A., P. 5; second cause of action.

14Badger et al. vs. Boyd, 65 S.W. (2d), pp. 601, 610.


15Section 5, (m) and (o), Rule 131, Rules of Court.
16In re Good's Estate, 266 P. (2d), pp. 719, 729.

34Copeland vs. Dunehoo et al., 138 S.E., 267, 270. See also 25 C.J.S., pp.
758-759; 15 Am. Jur., pp. 766-767.
35Statement of Attorney Villegas for respondent Carrascoso in open court.
Respondent's brief, p. 33.

17Badger et al. vs. Boyd, supra.

26

Pacao, Irene G.
Torts and Damages
36Section 5, Rule 10, Rules of Court, in part reads: "SEC. 5. Amendment to
conform to or authorize presentation of evidence.When issues not raised
by the pleadings are tried by express or implied consent of the parties, they
shall be treated in all respects, as if they had been raised in the pleadings.
Such amendment of the pleadings as may be necessary to cause them to
conform to the evidence and to raise these issues may be made upon
motion of any party at any time, even after judgment; but failure so to
amend does not affect the result of the trial of these issues ..."; Co Tiamco
vs. Diaz, etc., et al., 75 Phil. 672, 679; J.M. Tuason & Co., Inc., etc. vs.
Bolanos, 95 Phil. 106, 110.

53Article 2232, Civil Code.


54Article 2229, Civil Code.
55Article 2208, (1) and (11), Civil Code.
56Coleongco vs. Claparols, L-18616, March 31, 1964; Corpus vs.
Cuaderno, et al., L-23721, March 31, 1965.

39Words & Phrases, Perm. Ed., Vol. 5, p. 13, citing Warfield Natural Gas
Co. vs. Allen, 59 S.W. (2d) 534, 538.

57Cf. Yutuk vs. Manila Electric Company, L-13016, May 31, 1961; Lopez et
al. vs. Pan American World Airways, L-22415, March 30, 1966.
=========================================================
=========================================================
======================
Republic of the Philippines
SUPREME COURT
Manila

40R.A., p.74; emphasis supplied.

SECOND DIVISION

37Decision, Court of Appeals, Appendix A of petitioner's brief, pp. 147-148.


38Decision of the Court of Appeals, Appendix A of petitioner's brief, pp. 147151.

41Article 2180, Civil Code.


42Philippine Refining Co. vs. Garcia, et al., L-21871 and L-21962,
September 27, 1966.
43See Section 4, Chapter 3, Title VIII, Civil Code.
444 R.C.L., pp. 1174-1175.

G.R. No. 120554

September 21, 1999

SO PING BUN, petitioner,


vs.
COURT OF APPEALS, TEK HUA ENTERPRISES CORP. and MANUEL C.
TIONG, respondents.

45An air carrier is a common carrier; and air transportation is similar or


analogous to land and water transportation. Mendoza vs. Philippine Air
Lines, Inc., 90 Phil. 836, 841-842.
QUISUMBING, J.:
46Austro-American S.S. Co. vs. Thomas, 248 F. 231.
47Id., p. 233.
48Lipman vs. Atlantic Coast Line R. Co., 93 S.E. 714, 716.

This petition for certiorari challenges the Decision 1 of the Court of Appeals
dated October 10, 1994, and the Resolution 2 dated June 5, 1995, in CAG.R. CV No. 38784. The appellate court affirmed the decision of the
Regional Trial Court of Manila, Branch 35, except for the award of attorney's
fees, as follows:

49Petitioner's brief, pp, 104-105.


49aV Moran, Comments on the Rules of Court, 1963 ed., p. 76.
50Section 36, Rule 130, Rules of Court.

WHEREFORE, foregoing considered, the appeal of respondent-appellant


So Ping Bun for lack of merit is DISMISSED. The appealed decision dated
April 20, 1992 of the court a quo is modified by reducing the attorney's fees
awarded to plaintiff Tek Hua Enterprising Corporation from P500,000.00 to
P200,000.00. 3

51IV Martin, Rules of Court in the Philippines, 1963 ed., p. 324.


The facts are as follows:
52Ibid.

27

Pacao, Irene G.
Torts and Damages
In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok,
entered into lease agreements with lessor Dee C. Chuan & Sons Inc.
(DCCSI). Subjects of four (4) lease contracts were premises located at Nos.
930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila. Tek Hua
used the areas to store its textiles. The contracts each had a one-year term.
They provided that should the lessee continue to occupy the premises after
the term, the lease shall be on a month-to-month basis.

days to vacate the premises unless you have good reasons that you have
the right to stay. Otherwise, I will be constrained to take measure to protect
my interest.
Please give this urgent matter your preferential attention to avoid
inconvenience on your part.
Very truly yours,

When the contracts expired, the parties did not renew the contracts, but Tek
Hua continued to occupy the premises. In 1976, Tek Hua Trading Co. was
dissolved. Later, the original members of Tek Hua Trading Co. including
Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein respondent
corporation.

(Sgd) Manuel C. Tiong


MANUEL C. TIONG
President 4

So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek
Giok's grandson, petitioner So Ping Bun, occupied the warehouse for his
own textile business, Trendsetter Marketing.
On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua
Enterprises, informing the latter of the 25% increase in rent effective
September 1, 1989. The rent increase was later on reduced to 20% effective
January 1, 1990, upon other lessees' demand. Again on December 1, 1990,
the lessor implemented a 30% rent increase. Enclosed in these letters were
new lease contracts for signing. DCCSI warned that failure of the lessee to
accomplish the contracts shall be deemed as lack of interest on the lessee's
part, and agreement to the termination of the lease. Private respondents did
not answer any of these letters. Still, the lease contracts were not rescinded.
On March 1, 1991, private respondent Tiong sent a letter to petitioner which
reads as follows:
March 1, 1991
Mr. So Ping Bun

Petitioner refused to vacate. On March 4, 1992, petitioner requested formal


contracts of lease with DCCSI in favor Trendsetter Marketing. So Ping Bun
claimed that after the death of his grandfather, So Pek Giok, he had been
occupying the premises for his textile business and religiously paid rent.
DCCSI acceded to petitioner's request. The lease contracts in favor of
Trendsetter were executed.
In the suit for injunction, private respondents pressed for the nullification of
the lease contracts between DCCSI and petitioner. They also claimed
damages.
After trial, the trial court ruled:
WHEREFORE, judgment is rendered:
1.
Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3,
inclusive) all dated March 11, 1991, between defendant So Ping Bun, doing
business under the name and style of "Trendsetter Marketing", and
defendant Dee C. Chuan & Sons, Inc. over the premises located at Nos.
924-B, 924-C, 930 and 930, Int., respectively, Soler Street, Binondo Manila;

930 Soler Street


Binondo, Manila
Dear Mr. So,
Due to my closed (sic) business associate (sic) for three decades with your
late grandfather Mr. So Pek Giok and late father, Mr. So Chong Bon, I
allowed you temporarily to use the warehouse of Tek Hua Enterprising Corp.
for several years to generate your personal business.
Since I decided to go back into textile business, I need a warehouse
immediately for my stocks. Therefore, please be advised to vacate all your
stocks in Tek Hua Enterprising Corp. Warehouse. You are hereby given 14

2.
Making permanent the writ of preliminary injunction issued by this
Court on June 21, 1991;
3.
Ordering defendant So Ping Bun to pay the aggrieved party,
plaintiff Tek Hua Enterprising Corporation, the sum of P500,000.00, for
attorney's fees;
4.
Dismissing the complaint, insofar as plaintiff Manuel C. Tiong is
concerned, and the respective counterclaims of the defendant;
5.

Ordering defendant So Ping Bun to pay the costs of this lawsuit;

28

Pacao, Irene G.
Torts and Damages
This judgment is without prejudice to the rights of plaintiff Tek Hua
Enterprising Corporation and defendant Dee C. Chuan & Sons, Inc. to
negotiate for the renewal of their lease contracts over the premises located
at Nos. 930, 930-Int., 924-B and 924-C Soler Street, Binondo, Manila, under
such terms and conditions as they agree upon, provided they are not
contrary to law, public policy, public order, and morals.

property. 9 This may pertain to a situation where a third person induces a


party to renege on or violate his undertaking under a contract. In the case
before us, petitioner's Trendsetter Marketing asked DCCSI to execute lease
contracts in its favor, and as a result petitioner deprived respondent
corporation of the latter's property right. Clearly, and as correctly viewed by
the appellate court, the three elements of tort interference above-mentioned
are present in the instant case.

SO ORDERED. 5
Petitioner's motion for reconsideration of the above decision was denied.
On appeal by So Ping Bun, the Court of Appeals upheld the trial court. On
motion for reconsideration, the appellate court modified the decision by
reducing the award of attorney's fees from five hundred thousand
(P500,000.00) pesos to two hundred thousand (P200,000.00) pesos.
Petitioner is now before the Court raising the following issues:
I.
WHETHER THE APPELLATE COURT ERRED IN AFFIRMING
THE TRIAL COURT'S DECISION FINDING SO PING BUN GUILTY OF
TORTUOUS INTERFERENCE OF CONTRACT?
II.
WHETHER THE APPELLATE COURT ERRED IN AWARDING
ATTORNEY'S FEES OF P200,000.00 IN FAVOR OF PRIVATE
RESPONDENTS.
The foregoing issues involve, essentially, the correct interpretation of the
applicable law on tortuous conduct, particularly unlawful interference with
contract. We have to begin, obviously, with certain fundamental principles
on torts and damages.
Damage is the loss, hurt, or harm which results from injury, and damages
are the recompense or compensation awarded for the damage suffered. 6
One becomes liable in an action for damages for a nontrespassory invasion
of another's interest in the private use and enjoyment of asset if (a) the other
has property rights and privileges with respect to the use or enjoyment
interfered with, (b) the invasion is substantial, (c) the defendant's conduct is
a legal cause of the invasion, and (d) the invasion is either intentional and
unreasonable or unintentional and actionable under general negligence
rules. 7
The elements of tort interference are: (1) existence of a valid contract; (2)
knowledge on the part of the third person of the existence of contract; and
(3) interference of the third person is without legal justification or excuse. 8
A duty which the law of torts is concerned with is respect for the property of
others, and a cause of action ex delicto may be predicated upon an unlawful
interference by one person of the enjoyment by the other of his private

Authorities debate on whether interference may be justified where the


defendant acts for the sole purpose of furthering his own financial or
economic interest. 10 One view is that, as a general rule, justification for
interfering with the business relations of another exists where the actor's
motive is to benefit himself. Such justification does not exist where his sole
motive is to cause harm to the other. Added to this, some authorities believe
that it is not necessary that the interferer's interest outweigh that of the party
whose rights are invaded, and that an individual acts under an economic
interest that is substantial, not merely de minimis, such that wrongful and
malicious motives are negatived, for he acts in self-protection. 11 Moreover
justification for protecting one's financial position should not be made to
depend on a comparison of his economic interest in the subject matter with
that of others. 12 It is sufficient if the impetus of his conduct lies in a proper
business interest rather than in wrongful motives. 13
As early as Gilchrist vs. Cuddy, 14 we held that where there was no malice
in the interference of a contract, and the impulse behind one's conduct lies
in a proper business interest rather than in wrongful motives, a party cannot
be a malicious interferer. Where the alleged interferer is financially
interested, and such interest motivates his conduct, it cannot be said that he
is an officious or malicious intermeddler. 15
In the instant case, it is clear that petitioner So Ping Bun prevailed upon
DCCSI to lease the warehouse to his enterprise at the expense of
respondent corporation. Though petitioner took interest in the property of
respondent corporation and benefited from it, nothing on record imputes
deliberate wrongful motives or malice on him.
Sec. 1314 of the Civil Code categorically provides also that, "Any third
person who induces another to violate his contract shall be liable for
damages to the other contracting party." Petitioner argues that damage is an
essential element of tort interference, and since the trial court and the
appellate court ruled that private respondents were not entitled to actual,
moral or exemplary damages, it follows that he ought to be absolved of any
liability, including attorney's fees.
It is true that the lower courts did not award damages, but this was only
because the extent of damages was not quantifiable. We had a similar
situation in Gilchrist, where it was difficult or impossible to determine the
extent of damage and there was nothing on record to serve as basis

29

Pacao, Irene G.
Torts and Damages
thereof. In that case we refrained from awarding damages. We believe the
same conclusion applies in this case.
While we do not encourage tort interferers seeking their economic interest
to intrude into existing contracts at the expense of others, however, we find
that the conduct herein complained of did not transcend the limits forbidding
an obligatory award for damages in the absence of any malice. The
business desire is there to make some gain to the detriment of the
contracting parties. Lack of malice, however, precludes damages. But it
does not relieve petitioner of the legal liability for entering into contracts and
causing breach of existing ones. The respondent appellate court correctly
confirmed the permanent injunction and nullification of the lease contracts
between DCCSI and Trendsetter Marketing, without awarding damages.
The injunction saved the respondents from further damage or injury caused
by petitioner's interference.
Lastly, the recovery of attorney's fees in the concept of actual or
compensatory damages, is allowed under the circumstances provided for in
Article 2208 of the Civil Code. 16 One such occasion is when the
defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest. 17 But we have
consistently held that the award of considerable damages should have clear
factual and legal bases. 18 In connection with attorney's fees, the award
should be commensurate to the benefits that would have been derived from
a favorable judgment. Settled is the rule that fairness of the award of
damages by the trial court calls for appellate review such that the award if
far too excessive can be reduced. 19 This ruling applies with equal force on
the award of attorney's fees. In a long line of cases we said, "It is not sound
policy to place in penalty on the right to litigate. To compel the defeated
party to pay the fees of counsel for his successful opponent would throw
wide open the door of temptation to the opposing party and his counsel to
swell the fees to undue proportions." 20

Bellosillo, Mendoza and Buena, JJ., concur.


Footnotes
1

Rollo, pp. 41-55.

Id. at 57-58.

Ibid.

Rollo, pp. 45-46.

Id. at 41-42.

Custodio vs. Court of Appeals, 253 SCRA 483, 490 (1996).

Restatement of the Law, Torts 2d, Sec. 822.

8
30 Am Jur., Section 19, pp. 71-72; Sampaguita Pictures Inc. vs.
Varquez, et al. (Court of Appeals, 68 O.G. 7666).
9
p. 631.

74 Am Jur 2d Torts, Section 34. Interference with property rights,

10
45 Am Jur 2nd Interference, Justification, Privilege Section 30.
Furtherance of one's own interests, p. 307.
11
Zoby vs. American Fidelity Co. 242 Federal Reporter, 2d Series,
76, 80 (1957).
12

Ibid.

Considering that the respondent corporation's lease contract, at the time


when the cause of action accrued, ran only on a month-to-month basis
whence before it was on a yearly basis, we find even the reduced amount of
attorney's fees ordered by the Court of Appeals still exorbitant in the light of
prevailing jurisprudence. 21 Consequently, the amount of two hundred
thousand (P200,000.00) awarded by respondent appellate court should be
reduced to one hundred thousand (P100,000.00) pesos as the reasonable
award or attorney's fees in favor of private respondent corporation.

13

Ibid.

14

29 Phil 542, 549 (1915).

16

People vs. Bergante, 286 SCRA 629, 645 (1998).

WHEREFORE, the petition is hereby DENIED. The assailed Decision and


Resolution of the Court of Appeals in CA-G.R. CV No. 38784 are hereby
AFFIRMED, with MODIFICATION that the award of attorney's fees is
reduced from two hundred thousand (P200,000.00) to one hundred
thousand (P100,000.00) pesos. No pronouncement as to costs.1wphi1.nt

17

Art. 2208 (2), Civil Code of the Philippines.

15
Kurtz vs. Oremland, 33 N.J. Super. 443, 111 A.2d 100;
Restatement of the Law, Torts, 2d, Sec. 769.

18
De la Paz Jr. vs. Intermediate Appellate Court, 154 SCRA 65, 76
(1987); Rubio vs. Court of Appeals, 141 SCRA 488 (1986).
19

Danao vs. Court of Appeals, 154 SCRA 446, 460 (1987).

SO ORDERED.

30

Pacao, Irene G.
Torts and Damages
20
Philippine National Bank vs. Court of Appeals, 159 SCRA 433,
442 (1988).
21
Mayer Steel Pipe Corp. vs. CA, 274 SCRA 432 (1997); Fortune
Express vs. CA, G.R. 119756, March 18, 1999; RCBC vs. CA, G.R. 133107,
March 25, 1999; Urquiaga vs. CA, G.R. 127833, January March 22, 1999.
=========================================================
=========================================================
======================
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
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.

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;

DECISION
"b) Moral damages of P50,000.00;
VITUG, J.:
"c) Attorneys fees of P20,000;
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.

"d) Costs of suit.


"The complaint against defendants LRTA and Rodolfo Roman are dismissed
for lack of merit.
"The compulsory counterclaim of LRTA and Roman are likewise
dismissed."1
Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate
court promulgated its now assailed decision exonerating Prudent from any
liability for the death of Nicanor Navidad and, instead, holding the LRTA and
Roman jointly and severally liable thusly:
"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating
the appellants from any liability for the death of Nicanor Navidad, Jr.
Instead, appellees Rodolfo Roman and the Light Rail Transit Authority
(LRTA) are held liable for his death and are hereby directed to pay jointly
and severally to the plaintiffs-appellees, the following amounts:
a) P44,830.00 as actual damages;

31

Pacao, Irene G.
Torts and Damages
b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;

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.

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:

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."

"I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY
DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT

"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.

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

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

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING


THAT RODOLFO ROMAN IS AN EMPLOYEE OF LRTA."3

"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."

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

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

"III.

32

Pacao, Irene G.
Torts and Damages
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.

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

Should Prudent be made likewise liable? If at all, that liability could only be
for tort under the provisions of Article 217612 and related provisions, in
conjunction with Article 2180,13 of the Civil Code. The premise, however, for
the 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,

Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ.,


concur.

Footnotes
1 Rollo, p. 16.
2 Rollo, pp. 46-47.
3 Rollo, pp. 18-19.
4 Arada vs. Court of Appeals, 210 SCRA 624.
5 Philippine Airlines, Inc. vs. Court of Appeals, 226 SCRA 423.
6 Dangwa Transportation Co., Inc. vs. Court of Appeals, 202 SCRA 575.
7 Article 1763, Civil Code.
8 Gatchalian vs. Delim, 203 SCRA 126; Yobido vs. Court of Appeals, 281
SCRA 1; Landingin vs. Pangasinan Transportation Co., 33 SCRA 284.
9 Mercado vs. Lira, 3 SCRA 124.

33

Pacao, Irene G.
Torts and Damages
10 Article 1756, Civil Code.
11 Vda. De Abeto vs. Phil. Air Lines, Inc., 30 July 1982.
12 Art. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
Chapter.
13 Art. 2180. The obligation imposed by Article 2176 is demandable not only
for ones own acts or omissions, but also for those of persons for whom one
is responsible.
The father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in their
company.
Guardians are liable for damages caused by the minors or incapacitated
persons who are under their authority and live in their company.
The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their
functions.
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry.
The State is responsible in like manner when it acts through a special agent,
but not when the damage has been caused by the official to whom the task
done properly pertains, in which case what is provided in article 2176 shall
be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable
for damages caused by their pupils and students or apprentices, so long as
they remain in their custody.
The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damage.
14 Art. 2194. The responsibility of two or more persons who are liable for a
quasi-delict is solidary.
15 Air France vs. Carrascoso, 124 Phil. 722.
16 PSBA vs. CA, 205 SCRA 729.

17 Cangco vs. Manila Railroad, 38 Phil. 768; Manila Railroad vs. Compania
Transatlantica, 38 Phil. 875.
18 Article 2221, Civil Code.
19 Medina, et al. vs. Cresencia, 99 Phil. 506.
=========================================================
=========================================================
=======================
FIRST DIVISION
[G.R. No. 138569. September 11, 2003]
THE CONSOLIDATED BANK and TRUST CORPORATION, petitioner, vs.
COURT OF APPEALS and L.C. DIAZ and COMPANY, CPAs, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review of the Decision[1] of the Court of Appeals
dated 27 October 1998 and its Resolution dated 11 May 1999. The assailed
decision reversed the Decision[2] of the Regional Trial Court of Manila,
Branch 8, absolving petitioner Consolidated Bank and Trust Corporation,
now known as Solidbank Corporation (Solidbank), of any liability. The
questioned resolution of the appellate court denied the motion for
reconsideration of Solidbank but modified the decision by deleting the award
of exemplary damages, attorneys fees, expenses of litigation and cost of
suit.
The Facts
Solidbank is a domestic banking corporation organized and existing under
Philippine laws. Private respondent L.C. Diaz and Company, CPAs (L.C.
Diaz), is a professional partnership engaged in the practice of accounting.
Sometime in March 1976, L.C. Diaz opened a savings account with
Solidbank, designated as Savings Account No. S/A 200-16872-6.
On 14 August 1991, L.C. Diaz through its cashier, Mercedes Macaraya
(Macaraya), filled up a savings (cash) deposit slip for P990 and a savings
(checks) deposit slip for P50. Macaraya instructed the messenger of L.C.
Diaz, Ismael Calapre (Calapre), to deposit the money with Solidbank.
Macaraya also gave Calapre the Solidbank passbook.
Calapre went to Solidbank and presented to Teller No. 6 the two deposit
slips and the passbook. The teller acknowledged receipt of the deposit by
returning to Calapre the duplicate copies of the two deposit slips. Teller No.
6 stamped the deposit slips with the words DUPLICATE and SAVING

34

Pacao, Irene G.
Torts and Damages
TELLER 6 SOLIDBANK HEAD OFFICE. Since the transaction took time
and Calapre had to make another deposit for L.C. Diaz with Allied Bank, he
left the passbook with Solidbank. Calapre then went to Allied Bank. When
Calapre returned to Solidbank to retrieve the passbook, Teller No. 6
informed him that somebody got the passbook.[3] Calapre went back to L.C.
Diaz and reported the incident to Macaraya.

After trial, the trial court rendered on 28 December 1994 a decision


absolving Solidbank and dismissing the complaint.

Macaraya immediately prepared a deposit slip in duplicate copies with a


check of P200,000. Macaraya, together with Calapre, went to Solidbank and
presented to Teller No. 6 the deposit slip and check. The teller stamped the
words DUPLICATE and SAVING TELLER 6 SOLIDBANK HEAD OFFICE on
the duplicate copy of the deposit slip. When Macaraya asked for the
passbook, Teller No. 6 told Macaraya that someone got the passbook but
she could not remember to whom she gave the passbook. When Macaraya
asked Teller No. 6 if Calapre got the passbook, Teller No. 6 answered that
someone shorter than Calapre got the passbook. Calapre was then
standing beside Macaraya.

On 11 May 1999, the Court of Appeals issued its Resolution denying the
motion for reconsideration of Solidbank. The appellate court, however,
modified its decision by deleting the award of exemplary damages and
attorneys fees.

Teller No. 6 handed to Macaraya a deposit slip dated 14 August 1991 for the
deposit of a check for P90,000 drawn on Philippine Banking Corporation
(PBC). This PBC check of L.C. Diaz was a check that it had long closed.[4]
PBC subsequently dishonored the check because of insufficient funds and
because the signature in the check differed from PBCs specimen signature.
Failing to get back the passbook, Macaraya went back to her office and
reported the matter to the Personnel Manager of L.C. Diaz, Emmanuel
Alvarez.
The following day, 15 August 1991, L.C. Diaz through its Chief Executive
Officer, Luis C. Diaz (Diaz), called up Solidbank to stop any transaction
using the same passbook until L.C. Diaz could open a new account.[5] On
the same day, Diaz formally wrote Solidbank to make the same request. It
was also on the same day that L.C. Diaz learned of the unauthorized
withdrawal the day before, 14 August 1991, of P300,000 from its savings
account. The withdrawal slip for the P300,000 bore the signatures of the
authorized signatories of L.C. Diaz, namely Diaz and Rustico L. Murillo. The
signatories, however, denied signing the withdrawal slip. A certain Noel
Tamayo received the P300,000.
In an Information[6] dated 5 September 1991, L.C. Diaz charged its
messenger, Emerano Ilagan (Ilagan) and one Roscon Verdazola with Estafa
through Falsification of Commercial Document. The Regional Trial Court of
Manila dismissed the criminal case after the City Prosecutor filed a Motion
to Dismiss on 4 August 1992.
On 24 August 1992, L.C. Diaz through its counsel demanded from
Solidbank the return of its money. Solidbank refused.
On 25 August 1992, L.C. Diaz filed a Complaint[7] for Recovery of a Sum of
Money against Solidbank with the Regional Trial Court of Manila, Branch 8.

L.C. Diaz then appealed[8] to the Court of Appeals. On 27 October 1998,


the Court of Appeals issued its Decision reversing the decision of the trial
court.

The Ruling of the Trial Court


In absolving Solidbank, the trial court applied the rules on savings account
written on the passbook. The rules state that possession of this book shall
raise the presumption of ownership and any payment or payments made by
the bank upon the production of the said book and entry therein of the
withdrawal shall have the same effect as if made to the depositor personally.
[9]
At the time of the withdrawal, a certain Noel Tamayo was not only in
possession of the passbook, he also presented a withdrawal slip with the
signatures of the authorized signatories of L.C. Diaz. The specimen
signatures of these persons were in the signature cards. The teller stamped
the withdrawal slip with the words Saving Teller No. 5. The teller then
passed on the withdrawal slip to Genere Manuel (Manuel) for
authentication. Manuel verified the signatures on the withdrawal slip. The
withdrawal slip was then given to another officer who compared the
signatures on the withdrawal slip with the specimen on the signature cards.
The trial court concluded that Solidbank acted with care and observed the
rules on savings account when it allowed the withdrawal of P300,000 from
the savings account of L.C. Diaz.
The trial court pointed out that the burden of proof now shifted to L.C. Diaz
to prove that the signatures on the withdrawal slip were forged. The trial
court admonished L.C. Diaz for not offering in evidence the National Bureau
of Investigation (NBI) report on the authenticity of the signatures on the
withdrawal slip for P300,000. The trial court believed that L.C. Diaz did not
offer this evidence because it is derogatory to its action.
Another provision of the rules on savings account states that the depositor
must keep the passbook under lock and key.[10] When another person
presents the passbook for withdrawal prior to Solidbanks receipt of the
notice of loss of the passbook, that person is considered as the owner of the
passbook. The trial court ruled that the passbook presented during the
questioned transaction was now out of the lock and key and presumptively
ready for a business transaction.[11]

35

Pacao, Irene G.
Torts and Damages
Solidbank did not have any participation in the custody and care of the
passbook. The trial court believed that Solidbanks act of allowing the
withdrawal of P300,000 was not the direct and proximate cause of the loss.
The trial court held that L.C. Diazs negligence caused the unauthorized
withdrawal. Three facts establish L.C. Diazs negligence: (1) the possession
of the passbook by a person other than the depositor L.C. Diaz; (2) the
presentation of a signed withdrawal receipt by an unauthorized person; and
(3) the possession by an unauthorized person of a PBC check long closed
by L.C. Diaz, which check was deposited on the day of the fraudulent
withdrawal.
The trial court debunked L.C. Diazs contention that Solidbank did not follow
the precautionary procedures observed by the two parties whenever L.C.
Diaz withdrew significant amounts from its account. L.C. Diaz claimed that a
letter must accompany withdrawals of more than P20,000. The letter must
request Solidbank to allow the withdrawal and convert the amount to a
managers check. The bearer must also have a letter authorizing him to
withdraw the same amount. Another person driving a car must accompany
the bearer so that he would not walk from Solidbank to the office in making
the withdrawal. The trial court pointed out that L.C. Diaz disregarded these
precautions in its past withdrawal. On 16 July 1991, L.C. Diaz withdrew
P82,554 without any separate letter of authorization or any communication
with Solidbank that the money be converted into a managers check.
The trial court further justified the dismissal of the complaint by holding that
the case was a last ditch effort of L.C. Diaz to recover P300,000 after the
dismissal of the criminal case against Ilagan.
The dispositive portion of the decision of the trial court reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered DISMISSING
the complaint.
The Court further renders judgment in favor of defendant bank pursuant to
its counterclaim the amount of Thirty Thousand Pesos (P30,000.00) as
attorneys fees.

Article 2176. Whoever by act or omission causes damage to another, there


being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
chapter.
The appellate court held that the three elements of a quasi-delict are
present in this case, namely: (a) damages suffered by the plaintiff; (b) fault
or negligence of the defendant, or some other person for whose acts he
must respond; and (c) the connection of cause and effect between the fault
or negligence of the defendant and the damage incurred by the plaintiff.
The Court of Appeals pointed out that the teller of Solidbank who received
the withdrawal slip for P300,000 allowed the withdrawal without making the
necessary inquiry. The appellate court stated that the teller, who was not
presented by Solidbank during trial, should have called up the depositor
because the money to be withdrawn was a significant amount. Had the teller
called up L.C. Diaz, Solidbank would have known that the withdrawal was
unauthorized. The teller did not even verify the identity of the impostor who
made the withdrawal. Thus, the appellate court found Solidbank liable for its
negligence in the selection and supervision of its employees.
The appellate court ruled that while L.C. Diaz was also negligent in
entrusting its deposits to its messenger and its messenger in leaving the
passbook with the teller, Solidbank could not escape liability because of the
doctrine of last clear chance. Solidbank could have averted the injury
suffered by L.C. Diaz had it called up L.C. Diaz to verify the withdrawal.
The appellate court ruled that the degree of diligence required from
Solidbank is more than that of a good father of a family. The business and
functions of banks are affected with public interest. Banks are obligated to
treat the accounts of their depositors with meticulous care, always having in
mind the fiduciary nature of their relationship with their clients. The Court of
Appeals found Solidbank remiss in its duty, violating its fiduciary relationship
with L.C. Diaz.
The dispositive portion of the decision of the Court of Appeals reads:

With costs against plaintiff.


SO ORDERED.[12]
The Ruling of the Court of Appeals
The Court of Appeals ruled that Solidbanks negligence was the proximate
cause of the unauthorized withdrawal of P300,000 from the savings account
of L.C. Diaz. The appellate court reached this conclusion after applying the
provision of the Civil Code on quasi-delict, to wit:

WHEREFORE, premises considered, the decision appealed from is hereby


REVERSED and a new one entered.
1. Ordering defendant-appellee Consolidated Bank and Trust Corporation to
pay plaintiff-appellant the sum of Three Hundred Thousand Pesos
(P300,000.00), with interest thereon at the rate of 12% per annum from the
date of filing of the complaint until paid, the sum of P20,000.00 as
exemplary damages, and P20,000.00 as attorneys fees and expenses of
litigation as well as the cost of suit; and

36

Pacao, Irene G.
Torts and Damages
2. Ordering the dismissal of defendant-appellees counterclaim in the
amount of P30,000.00 as attorneys fees.

THE SAFEKEEPING OF ITS CHECKS AND OTHER FINANCIAL


DOCUMENTS.

SO ORDERED.[13]

III. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE


INSTANT CASE IS A LAST DITCH EFFORT OF PRIVATE RESPONDENT
TO RECOVER ITS P300,000.00 AFTER FAILING IN ITS EFFORTS TO
RECOVER THE SAME FROM ITS EMPLOYEE EMERANO ILAGAN.

Acting on the motion for reconsideration of Solidbank, the appellate court


affirmed its decision but modified the award of damages. The appellate
court deleted the award of exemplary damages and attorneys fees. Invoking
Article 2231[14] of the Civil Code, the appellate court ruled that exemplary
damages could be granted if the defendant acted with gross negligence.
Since Solidbank was guilty of simple negligence only, the award of
exemplary damages was not justified. Consequently, the award of attorneys
fees was also disallowed pursuant to Article 2208 of the Civil Code. The
expenses of litigation and cost of suit were also not imposed on Solidbank.

IV. THE COURT OF APPEALS ERRED IN NOT MITIGATING THE


DAMAGES AWARDED AGAINST PETITIONER UNDER ARTICLE 2197 OF
THE CIVIL CODE, NOTWITHSTANDING ITS FINDING THAT PETITIONER
BANKS NEGLIGENCE WAS ONLY CONTRIBUTORY.[16]
The Ruling of the Court

The dispositive portion of the Resolution reads as follows:

The petition is partly meritorious.

WHEREFORE, foregoing considered, our decision dated October 27, 1998


is affirmed with modification by deleting the award of exemplary damages
and attorneys fees, expenses of litigation and cost of suit.

Solidbanks Fiduciary Duty under the Law

SO ORDERED.[15]
Hence, this petition.
The Issues
Solidbank seeks the review of the decision and resolution of the Court of
Appeals on these grounds:
I. THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER
BANK SHOULD SUFFER THE LOSS BECAUSE ITS TELLER SHOULD
HAVE FIRST CALLED PRIVATE RESPONDENT BY TELEPHONE
BEFORE IT ALLOWED THE WITHDRAWAL OF P300,000.00 TO
RESPONDENTS MESSENGER EMERANO ILAGAN, SINCE THERE IS
NO AGREEMENT BETWEEN THE PARTIES IN THE OPERATION OF THE
SAVINGS ACCOUNT, NOR IS THERE ANY BANKING LAW, WHICH
MANDATES THAT A BANK TELLER SHOULD FIRST CALL UP THE
DEPOSITOR BEFORE ALLOWING A WITHDRAWAL OF A BIG AMOUNT
IN A SAVINGS ACCOUNT.
II. THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF
LAST CLEAR CHANCE AND IN HOLDING THAT PETITIONER BANKS
TELLER HAD THE LAST OPPORTUNITY TO WITHHOLD THE
WITHDRAWAL WHEN IT IS UNDISPUTED THAT THE TWO SIGNATURES
OF RESPONDENT ON THE WITHDRAWAL SLIP ARE GENUINE AND
PRIVATE RESPONDENTS PASSBOOK WAS DULY PRESENTED, AND
CONTRARIWISE RESPONDENT WAS NEGLIGENT IN THE SELECTION
AND SUPERVISION OF ITS MESSENGER EMERANO ILAGAN, AND IN

The rulings of the trial court and the Court of Appeals conflict on the
application of the law. The trial court pinned the liability on L.C. Diaz based
on the provisions of the rules on savings account, a recognition of the
contractual relationship between Solidbank and L.C. Diaz, the latter being a
depositor of the former. On the other hand, the Court of Appeals applied the
law on quasi-delict to determine who between the two parties was ultimately
negligent. The law on quasi-delict or culpa aquiliana is generally applicable
when there is no pre-existing contractual relationship between the parties.
We hold that Solidbank is liable for breach of contract due to negligence, or
culpa contractual.
The contract between the bank and its depositor is governed by the
provisions of the Civil Code on simple loan.[17] Article 1980 of the Civil
Code expressly provides that x x x savings x x x deposits of money in banks
and similar institutions shall be governed by the provisions concerning
simple loan. There is a debtor-creditor relationship between the bank and its
depositor. The bank is the debtor and the depositor is the creditor. The
depositor lends the bank money and the bank agrees to pay the depositor
on demand. The savings deposit agreement between the bank and the
depositor is the contract that determines the rights and obligations of the
parties.
The law imposes on banks high standards in view of the fiduciary nature of
banking. Section 2 of Republic Act No. 8791 (RA 8791),[18] which took
effect on 13 June 2000, declares that the State recognizes the fiduciary
nature of banking that requires high standards of integrity and performance.
[19] This new provision in the general banking law, introduced in 2000, is a
statutory affirmation of Supreme Court decisions, starting with the 1990
case of Simex International v. Court of Appeals,[20] holding that the bank is

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Pacao, Irene G.
Torts and Damages
under obligation to treat the accounts of its depositors with meticulous care,
always having in mind the fiduciary nature of their relationship.[21]
This fiduciary relationship means that the banks obligation to observe high
standards of integrity and performance is deemed written into every deposit
agreement between a bank and its depositor. The fiduciary nature of
banking requires banks to assume a degree of diligence higher than that of
a good father of a family. Article 1172 of the Civil Code states that the
degree of diligence required of an obligor is that prescribed by law or
contract, and absent such stipulation then the diligence of a good father of a
family.[22] Section 2 of RA 8791 prescribes the statutory diligence required
from banks that banks must observe high standards of integrity and
performance in servicing their depositors. Although RA 8791 took effect
almost nine years after the unauthorized withdrawal of the P300,000 from
L.C. Diazs savings account, jurisprudence[23] at the time of the withdrawal
already imposed on banks the same high standard of diligence required
under RA No. 8791.
However, the fiduciary nature of a bank-depositor relationship does not
convert the contract between the bank and its depositors from a simple loan
to a trust agreement, whether express or implied. Failure by the bank to pay
the depositor is failure to pay a simple loan, and not a breach of trust.[24]
The law simply imposes on the bank a higher standard of integrity and
performance in complying with its obligations under the contract of simple
loan, beyond those required of non-bank debtors under a similar contract of
simple loan.
The fiduciary nature of banking does not convert a simple loan into a trust
agreement because banks do not accept deposits to enrich depositors but
to earn money for themselves. The law allows banks to offer the lowest
possible interest rate to depositors while charging the highest possible
interest rate on their own borrowers. The interest spread or differential
belongs to the bank and not to the depositors who are not cestui que trust of
banks. If depositors are cestui que trust of banks, then the interest spread or
income belongs to the depositors, a situation that Congress certainly did not
intend in enacting Section 2 of RA 8791.
Solidbanks Breach of its Contractual Obligation
Article 1172 of the Civil Code provides that responsibility arising from
negligence in the performance of every kind of obligation is demandable.
For breach of the savings deposit agreement due to negligence, or culpa
contractual, the bank is liable to its depositor.
Calapre left the passbook with Solidbank because the transaction took time
and he had to go to Allied Bank for another transaction. The passbook was
still in the hands of the employees of Solidbank for the processing of the
deposit when Calapre left Solidbank. Solidbanks rules on savings account
require that the deposit book should be carefully guarded by the depositor

and kept under lock and key, if possible. When the passbook is in the
possession of Solidbanks tellers during withdrawals, the law imposes on
Solidbank and its tellers an even higher degree of diligence in safeguarding
the passbook.
Likewise, Solidbanks tellers must exercise a high degree of diligence in
insuring that they return the passbook only to the depositor or his authorized
representative. The tellers know, or should know, that the rules on savings
account provide that any person in possession of the passbook is
presumptively its owner. If the tellers give the passbook to the wrong
person, they would be clothing that person presumptive ownership of the
passbook, facilitating unauthorized withdrawals by that person. For failing to
return the passbook to Calapre, the authorized representative of L.C. Diaz,
Solidbank and Teller No. 6 presumptively failed to observe such high degree
of diligence in safeguarding the passbook, and in insuring its return to the
party authorized to receive the same.
In culpa contractual, once the plaintiff proves a breach of contract, there is a
presumption that the defendant was at fault or negligent. The burden is on
the defendant to prove that he was not at fault or negligent. In contrast, in
culpa aquiliana the plaintiff has the burden of proving that the defendant
was negligent. In the present case, L.C. Diaz has established that Solidbank
breached its contractual obligation to return the passbook only to the
authorized representative of L.C. Diaz. There is thus a presumption that
Solidbank was at fault and its teller was negligent in not returning the
passbook to Calapre. The burden was on Solidbank to prove that there was
no negligence on its part or its employees.
Solidbank failed to discharge its burden. Solidbank did not present to the
trial court Teller No. 6, the teller with whom Calapre left the passbook and
who was supposed to return the passbook to him. The record does not
indicate that Teller No. 6 verified the identity of the person who retrieved the
passbook. Solidbank also failed to adduce in evidence its standard
procedure in verifying the identity of the person retrieving the passbook, if
there is such a procedure, and that Teller No. 6 implemented this procedure
in the present case.
Solidbank is bound by the negligence of its employees under the principle of
respondeat superior or command responsibility. The defense of exercising
the required diligence in the selection and supervision of employees is not a
complete defense in culpa contractual, unlike in culpa aquiliana.[25]
The bank must not only exercise high standards of integrity and
performance, it must also insure that its employees do likewise because this
is the only way to insure that the bank will comply with its fiduciary duty.
Solidbank failed to present the teller who had the duty to return to Calapre
the passbook, and thus failed to prove that this teller exercised the high
standards of integrity and performance required of Solidbanks employees.

38

Pacao, Irene G.
Torts and Damages
Proximate Cause of the Unauthorized Withdrawal
Another point of disagreement between the trial and appellate courts is the
proximate cause of the unauthorized withdrawal. The trial court believed that
L.C. Diazs negligence in not securing its passbook under lock and key was
the proximate cause that allowed the impostor to withdraw the P300,000.
For the appellate court, the proximate cause was the tellers negligence in
processing the withdrawal without first verifying with L.C. Diaz. We do not
agree with either court.
Proximate cause is that cause which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury and without
which the result would not have occurred.[26] Proximate cause is
determined by the facts of each case upon mixed considerations of logic,
common sense, policy and precedent.[27]
L.C. Diaz was not at fault that the passbook landed in the hands of the
impostor. Solidbank was in possession of the passbook while it was
processing the deposit. After completion of the transaction, Solidbank had
the contractual obligation to return the passbook only to Calapre, the
authorized representative of L.C. Diaz. Solidbank failed to fulfill its
contractual obligation because it gave the passbook to another person.
Solidbanks failure to return the passbook to Calapre made possible the
withdrawal of the P300,000 by the impostor who took possession of the
passbook. Under Solidbanks rules on savings account, mere possession of
the passbook raises the presumption of ownership. It was the negligent act
of Solidbanks Teller No. 6 that gave the impostor presumptive ownership of
the passbook. Had the passbook not fallen into the hands of the impostor,
the loss of P300,000 would not have happened. Thus, the proximate cause
of the unauthorized withdrawal was Solidbanks negligence in not returning
the passbook to Calapre.
We do not subscribe to the appellate courts theory that the proximate cause
of the unauthorized withdrawal was the tellers failure to call up L.C. Diaz to
verify the withdrawal. Solidbank did not have the duty to call up L.C. Diaz to
confirm the withdrawal. There is no arrangement between Solidbank and
L.C. Diaz to this effect. Even the agreement between Solidbank and L.C.
Diaz pertaining to measures that the parties must observe whenever
withdrawals of large amounts are made does not direct Solidbank to call up
L.C. Diaz.
There is no law mandating banks to call up their clients whenever their
representatives withdraw significant amounts from their accounts. L.C. Diaz
therefore had the burden to prove that it is the usual practice of Solidbank to
call up its clients to verify a withdrawal of a large amount of money. L.C.
Diaz failed to do so.

Teller No. 5 who processed the withdrawal could not have been put on
guard to verify the withdrawal. Prior to the withdrawal of P300,000, the
impostor deposited with Teller No. 6 the P90,000 PBC check, which later
bounced. The impostor apparently deposited a large amount of money to
deflect suspicion from the withdrawal of a much bigger amount of money.
The appellate court thus erred when it imposed on Solidbank the duty to call
up L.C. Diaz to confirm the withdrawal when no law requires this from banks
and when the teller had no reason to be suspicious of the transaction.
Solidbank continues to foist the defense that Ilagan made the withdrawal.
Solidbank claims that since Ilagan was also a messenger of L.C. Diaz, he
was familiar with its teller so that there was no more need for the teller to
verify the withdrawal. Solidbank relies on the following statements in the
Booking and Information Sheet of Emerano Ilagan:
xxx Ilagan also had with him (before the withdrawal) a forged check of PBC
and indicated the amount of P90,000 which he deposited in favor of L.C.
Diaz and Company. After successfully withdrawing this large sum of money,
accused Ilagan gave alias Rey (Noel Tamayo) his share of the loot. Ilagan
then hired a taxicab in the amount of P1,000 to transport him (Ilagan) to his
home province at Bauan, Batangas. Ilagan extravagantly and lavishly spent
his money but a big part of his loot was wasted in cockfight and horse
racing. Ilagan was apprehended and meekly admitted his guilt.[28]
(Emphasis supplied.)
L.C. Diaz refutes Solidbanks contention by pointing out that the person who
withdrew the P300,000 was a certain Noel Tamayo. Both the trial and
appellate courts stated that this Noel Tamayo presented the passbook with
the withdrawal slip.
We uphold the finding of the trial and appellate courts that a certain Noel
Tamayo withdrew the P300,000. The Court is not a trier of facts. We find no
justifiable reason to reverse the factual finding of the trial court and the
Court of Appeals. The tellers who processed the deposit of the P90,000
check and the withdrawal of the P300,000 were not presented during trial to
substantiate Solidbanks claim that Ilagan deposited the check and made the
questioned withdrawal. Moreover, the entry quoted by Solidbank does not
categorically state that Ilagan presented the withdrawal slip and the
passbook.
Doctrine of Last Clear Chance
The doctrine of last clear chance states that where both parties are
negligent but the negligent act of one is appreciably later than that of the
other, or where it is impossible to determine whose fault or negligence
caused the loss, the one who had the last clear opportunity to avoid the loss
but failed to do so, is chargeable with the loss.[29] Stated differently, the
antecedent negligence of the plaintiff does not preclude him from recovering
damages caused by the supervening negligence of the defendant, who had

39

Pacao, Irene G.
Torts and Damages
the last fair chance to prevent the impending harm by the exercise of due
diligence.[30]

[3] Rollo, p. 119.


[4] Ibid., p. 229. The account must have been long dormant.

We do not apply the doctrine of last clear chance to the present case.
Solidbank is liable for breach of contract due to negligence in the
performance of its contractual obligation to L.C. Diaz. This is a case of culpa
contractual, where neither the contributory negligence of the plaintiff nor his
last clear chance to avoid the loss, would exonerate the defendant from
liability.[31] Such contributory negligence or last clear chance by the plaintiff
merely serves to reduce the recovery of damages by the plaintiff but does
not exculpate the defendant from his breach of contract.[32]

[5] Records, p. 9.
[6] Ibid., p. 34.
[7] Docketed as Civil Case No. 92-62384.
[8] Docketed as CA-G.R. CV No. 49243.

Mitigated Damages

[9] Rollo, p. 231.

Under Article 1172, liability (for culpa contractual) may be regulated by the
courts, according to the circumstances. This means that if the defendant
exercised the proper diligence in the selection and supervision of its
employee, or if the plaintiff was guilty of contributory negligence, then the
courts may reduce the award of damages. In this case, L.C. Diaz was guilty
of contributory negligence in allowing a withdrawal slip signed by its
authorized signatories to fall into the hands of an impostor. Thus, the liability
of Solidbank should be reduced.

[10] Ibid., p. 233.

In Philippine Bank of Commerce v. Court of Appeals,[33] where the Court


held the depositor guilty of contributory negligence, we allocated the
damages between the depositor and the bank on a 40-60 ratio. Applying the
same ruling to this case, we hold that L.C. Diaz must shoulder 40% of the
actual damages awarded by the appellate court. Solidbank must pay the
other 60% of the actual damages.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with
MODIFICATION. Petitioner Solidbank Corporation shall pay private
respondent L.C. Diaz and Company, CPAs only 60% of the actual damages
awarded by the Court of Appeals. The remaining 40% of the actual
damages shall be borne by private respondent L.C. Diaz and Company,
CPAs. Proportionate costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, and Ynares-Santiago, JJ., concur.
Azcuna, J., on official leave.
[1] Penned by Associate Justice Eugenio S. Labitoria with Associate
Justices Jesus M. Elbinias, Marina L. Buzon, Godardo A. Jacinto and
Candido V. Rivera, concurring, Fourth Division (Special Division of Five
Justices).

[11] Ibid., p. 60.


[12] Ibid., p. 66.
[13] Rollo, pp. 49-50.
[14] Art. 2231. In quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence.
[15] Rollo, p. 43.
[16] Ibid., pp. 33-34.
[17] Article 1953 of the Civil Code provides: A person who receives a loan of
money or any other fungible thing acquires the ownership thereof, and is
bound to pay the creditor an equal amount of the same kind and quality.
[18] The General Banking Law of 2000.
[19] In the United States, the prevailing rule, as enunciated by the U.S.
Supreme Court in Bank of Marin v. England, 385 U.S. 99 (1966), is that the
bank-depositor relationship is governed by contract, and the bankruptcy of
the depositor does not alter the relationship unless the bank receives notice
of the bankruptcy. However, the Supreme Court of some states, like Arizona,
have held that banks have more than a contractual duty to depositors, and
that a special relationship may create a fiduciary obligation on banks outside
of their contract with depositors. See Stewart v. Phoenix National Bank, 49
Ariz. 34, 64 P. 2d 101 (1937); Klein v. First Edina National Bank, 293 Minn.
418, 196 N.W. 2d 619 (1972).
[20] G.R. No. 88013, 19 March 1990, 183 SCRA 360.

[2] Penned by Judge Felixberto T. Olalia, Jr.

40

Pacao, Irene G.
Torts and Damages
[21] The ruling in Simex International was followed in the following cases:
Bank of the Philippine Islands v. Intermediate Appellate Court, G.R. No.
69162, 21 February 1992, 206 SCRA 408; Citytrust Banking Corporation v.
Intermediate Appellate Court, G.R. No. 84281, 27 May 1994, 232 SCRA
559; Tan v. Court of Appeals, G.R. No. 108555, 20 December 1994, 239
SCRA 310; Metropolitan Bank & Trust Co. v. Court of Appeals, G.R. No.
112576, 26 October 1994, 237 SCRA 761; Philippine Bank of Commerce v.
Court of Appeals, 336 Phil. 667 (1997); Firestone v. Court of Appeals, G.R.
No. 113236, 5 March 2001, 353 SCRA 601.
[22] The second paragraph of Article 1172 of the Civil Code provides: If the
law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be
required.

In May 1991, petitioner Estela L. Crisostomo contracted the services of


respondent Caravan Travel and Tours International, Inc. to arrange and
facilitate her booking, ticketing and accommodation in a tour dubbed Jewels
of Europe. The package tour included the countries of England, Holland,
Germany, Austria, Liechstenstein, Switzerland and France at a total cost of
P74,322.70. Petitioner was given a 5% discount on the amount, which
included airfare, and the booking fee was also waived because petitioners
niece, Meriam Menor, was respondent companys ticketing manager.
Pursuant to said contract, Menor went to her aunts residence on June 12,
1991 a Wednesday to deliver petitioners travel documents and plane tickets.
Petitioner, in turn, gave Menor the full payment for the package tour. Menor
then told her to be at the Ninoy Aquino International Airport (NAIA) on
Saturday, two hours before her flight on board British Airways.

[23] See notes 20 and 21.


[24] Serrano v. Central Bank, G.R. L-30511, 14 February 1980, 96 SCRA
96.
[25] Cangco v. Manila Railroad Co., 38 Phil. 769 (1918); De Guia v. Meralco,
40 Phil. 706 (1920).
[26] Philippine Bank of Commerce v. Court of Appeals, supra note 21, citing
Vda. de Bataclan v. Medina, 102 Phil. 181 (1957).
[27] Ibid.
[28] Rollo, p. 35.
[29] Philippine Bank of Commerce v. Court of Appeals, supra note 21.
[30] Ibid.
[31] See note 23.
[32] Del Prado v. Manila Electric Co., 52 Phil. 900 (1928-1929).
[33] See note 21.
=========================================================
=========================================================
=======================
FIRST DIVISION
[G.R. No. 138334. August 25, 2003]
ESTELA L. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS and
CARAVAN TRAVEL & TOURS INTERNATIONAL, INC., respondents.
DECISION
YNARES-SANTIAGO, J.:

Without checking her travel documents, petitioner went to NAIA on


Saturday, June 15, 1991, to take the flight for the first leg of her journey from
Manila to Hongkong. To petitioners dismay, she discovered that the flight
she was supposed to take had already departed the previous day. She
learned that her plane ticket was for the flight scheduled on June 14, 1991.
She thus called up Menor to complain.
Subsequently, Menor prevailed upon petitioner to take another tour the
British Pageant which included England, Scotland and Wales in its itinerary.
For this tour package, petitioner was asked anew to pay US$785.00 or
P20,881.00 (at the then prevailing exchange rate of P26.60). She gave
respondent US$300 or P7,980.00 as partial payment and commenced the
trip in July 1991.
Upon petitioners return from Europe, she demanded from respondent the
reimbursement of P61,421.70, representing the difference between the sum
she paid for Jewels of Europe and the amount she owed respondent for the
British Pageant tour. Despite several demands, respondent company
refused to reimburse the amount, contending that the same was nonrefundable.[1] Petitioner was thus constrained to file a complaint against
respondent for breach of contract of carriage and damages, which was
docketed as Civil Case No. 92-133 and raffled to Branch 59 of the Regional
Trial Court of Makati City.
In her complaint,[2] petitioner alleged that her failure to join Jewels of
Europe was due to respondents fault since it did not clearly indicate the
departure date on the plane ticket. Respondent was also negligent in
informing her of the wrong flight schedule through its employee Menor. She
insisted that the British Pageant was merely a substitute for the Jewels of
Europe tour, such that the cost of the former should be properly set-off
against the sum paid for the latter.

41

Pacao, Irene G.
Torts and Damages
For its part, respondent company, through its Operations Manager,
Concepcion Chipeco, denied responsibility for petitioners failure to join the
first tour. Chipeco insisted that petitioner was informed of the correct
departure date, which was clearly and legibly printed on the plane ticket.
The travel documents were given to petitioner two days ahead of the
scheduled trip. Petitioner had only herself to blame for missing the flight, as
she did not bother to read or confirm her flight schedule as printed on the
ticket.

The trial court held that respondent was negligent in erroneously advising
petitioner of her departure date through its employee, Menor, who was not
presented as witness to rebut petitioners testimony. However, petitioner
should have verified the exact date and time of departure by looking at her
ticket and should have simply not relied on Menors verbal representation.
The trial court thus declared that petitioner was guilty of contributory
negligence and accordingly, deducted 10% from the amount being claimed
as refund.

Respondent explained that it can no longer reimburse the amount paid for
Jewels of Europe, considering that the same had already been remitted to
its principal in Singapore, Lotus Travel Ltd., which had already billed the
same even if petitioner did not join the tour. Lotus European tour organizer,
Insight International Tours Ltd., determines the cost of a package tour based
on a minimum number of projected participants. For this reason, it is
accepted industry practice to disallow refund for individuals who failed to
take a booked tour.[3]

Respondent appealed to the Court of Appeals, which likewise found both


parties to be at fault. However, the appellate court held that petitioner is
more negligent than respondent because as a lawyer and well-traveled
person, she should have known better than to simply rely on what was told
to her. This being so, she is not entitled to any form of damages. Petitioner
also forfeited her right to the Jewels of Europe tour and must therefore pay
respondent the balance of the price for the British Pageant tour. The
dispositive portion of the judgment appealed from reads as follows:

Lastly, respondent maintained that the British Pageant was not a substitute
for the package tour that petitioner missed. This tour was independently
procured by petitioner after realizing that she made a mistake in missing her
flight for Jewels of Europe. Petitioner was allowed to make a partial
payment of only US$300.00 for the second tour because her niece was then
an employee of the travel agency. Consequently, respondent prayed that
petitioner be ordered to pay the balance of P12,901.00 for the British
Pageant package tour.

WHEREFORE, premises considered, the decision of the Regional Trial


Court dated October 26, 1995 is hereby REVERSED and SET ASIDE. A
new judgment is hereby ENTERED requiring the plaintiff-appellee to pay to
the defendant-appellant the amount of P12,901.00, representing the
balance of the price of the British Pageant Package Tour, the same to earn
legal interest at the rate of SIX PERCENT (6%) per annum, to be computed
from the time the counterclaim was filed until the finality of this decision.
After this decision becomes final and executory, the rate of TWELVE
PERCENT (12%) interest per annum shall be additionally imposed on the
total obligation until payment thereof is satisfied. The award of attorneys
fees is DELETED. Costs against the plaintiff-appellee.

After due proceedings, the trial court rendered a decision,[4] the dispositive
part of which reads:
WHEREFORE, premises considered, judgment is hereby rendered as
follows:
1. Ordering the defendant to return and/or refund to the plaintiff the amount
of Fifty Three Thousand Nine Hundred Eighty Nine Pesos and Forty Three
Centavos (P53,989.43) with legal interest thereon at the rate of twelve
percent (12%) per annum starting January 16, 1992, the date when the
complaint was filed;
2. Ordering the defendant to pay the plaintiff the amount of Five Thousand
(P5,000.00) Pesos as and for reasonable attorneys fees;
3. Dismissing the defendants counterclaim, for lack of merit; and
4. With costs against the defendant.
SO ORDERED.[5]

SO ORDERED.[6]
Upon denial of her motion for reconsideration,[7] petitioner filed the instant
petition under Rule 45 on the following grounds:
I
It is respectfully submitted that the Honorable Court of Appeals committed a
reversible error in reversing and setting aside the decision of the trial court
by ruling that the petitioner is not entitled to a refund of the cost of unavailed
Jewels of Europe tour she being equally, if not more, negligent than the
private respondent, for in the contract of carriage the common carrier is
obliged to observe utmost care and extra-ordinary diligence which is higher
in degree than the ordinary diligence required of the passenger. Thus, even
if the petitioner and private respondent were both negligent, the petitioner
cannot be considered to be equally, or worse, more guilty than the private
respondent. At best, petitioners negligence is only contributory while the
private respondent [is guilty] of gross negligence making the principle of pari
delicto inapplicable in the case;

42

Pacao, Irene G.
Torts and Damages
II
The Honorable Court of Appeals also erred in not ruling that the Jewels of
Europe tour was not indivisible and the amount paid therefor refundable;
III
The Honorable Court erred in not granting to the petitioner the
consequential damages due her as a result of breach of contract of
carriage.[8]
Petitioner contends that respondent did not observe the standard of care
required of a common carrier when it informed her wrongly of the flight
schedule. She could not be deemed more negligent than respondent since
the latter is required by law to exercise extraordinary diligence in the
fulfillment of its obligation. If she were negligent at all, the same is merely
contributory and not the proximate cause of the damage she suffered. Her
loss could only be attributed to respondent as it was the direct consequence
of its employees gross negligence.
Petitioners contention has no merit.
By definition, a contract of carriage or transportation is one whereby a
certain person or association of persons obligate themselves to transport
persons, things, or news from one place to another for a fixed price.[9] Such
person or association of persons are regarded as carriers and are classified
as private or special carriers and common or public carriers.[10] A common
carrier is defined under Article 1732 of the Civil Code as persons,
corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water or air, for
compensation, offering their services to the public.
It is obvious from the above definition that respondent is not an entity
engaged in the business of transporting either passengers or goods and is
therefore, neither a private nor a common carrier. Respondent did not
undertake to transport petitioner from one place to another since its
covenant with its customers is simply to make travel arrangements in their
behalf. Respondents services as a travel agency include procuring tickets
and facilitating travel permits or visas as well as booking customers for
tours.
While petitioner concededly bought her plane ticket through the efforts of
respondent company, this does not mean that the latter ipso facto is a
common carrier. At most, respondent acted merely as an agent of the
airline, with whom petitioner ultimately contracted for her carriage to Europe.
Respondents obligation to petitioner in this regard was simply to see to it
that petitioner was properly booked with the airline for the appointed date

and time. Her transport to the place of destination, meanwhile, pertained


directly to the airline.
The object of petitioners contractual relation with respondent is the latters
service of arranging and facilitating petitioners booking, ticketing and
accommodation in the package tour. In contrast, the object of a contract of
carriage is the transportation of passengers or goods. It is in this sense that
the contract between the parties in this case was an ordinary one for
services and not one of carriage. Petitioners submission is premised on a
wrong assumption.
The nature of the contractual relation between petitioner and respondent is
determinative of the degree of care required in the performance of the
latters obligation under the contract. For reasons of public policy, a common
carrier in a contract of carriage is bound by law to carry passengers as far
as human care and foresight can provide using the utmost diligence of very
cautious persons and with due regard for all the circumstances.[11] As
earlier stated, however, respondent is not a common carrier but a travel
agency. It is thus not bound under the law to observe extraordinary diligence
in the performance of its obligation, as petitioner claims.
Since the contract between the parties is an ordinary one for services, the
standard of care required of respondent is that of a good father of a family
under Article 1173 of the Civil Code.[12] This connotes reasonable care
consistent with that which an ordinarily prudent person would have
observed when confronted with a similar situation. The test to determine
whether negligence attended the performance of an obligation is: did the
defendant in doing the alleged negligent act use that reasonable care and
caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence.[13]
In the case at bar, the lower court found Menor negligent when she
allegedly informed petitioner of the wrong day of departure. Petitioners
testimony was accepted as indubitable evidence of Menors alleged
negligent act since respondent did not call Menor to the witness stand to
refute the allegation. The lower court applied the presumption under Rule
131, Section 3 (e)[14] of the Rules of Court that evidence willfully
suppressed would be adverse if produced and thus considered petitioners
uncontradicted testimony to be sufficient proof of her claim.
On the other hand, respondent has consistently denied that Menor was
negligent and maintains that petitioners assertion is belied by the evidence
on record. The date and time of departure was legibly written on the plane
ticket and the travel papers were delivered two days in advance precisely so
that petitioner could prepare for the trip. It performed all its obligations to
enable petitioner to join the tour and exercised due diligence in its dealings
with the latter.
We agree with respondent.

43

Pacao, Irene G.
Torts and Damages
Respondents failure to present Menor as witness to rebut petitioners
testimony could not give rise to an inference unfavorable to the former.
Menor was already working in France at the time of the filing of the
complaint,[15] thereby making it physically impossible for respondent to
present her as a witness. Then too, even if it were possible for respondent
to secure Menors testimony, the presumption under Rule 131, Section 3(e)
would still not apply. The opportunity and possibility for obtaining Menors
testimony belonged to both parties, considering that Menor was not just
respondents employee, but also petitioners niece. It was thus error for the
lower court to invoke the presumption that respondent willfully suppressed
evidence under Rule 131, Section 3(e). Said presumption would logically be
inoperative if the evidence is not intentionally omitted but is simply
unavailable, or when the same could have been obtained by both parties.
[16]
In sum, we do not agree with the finding of the lower court that Menors
negligence concurred with the negligence of petitioner and resultantly
caused damage to the latter. Menors negligence was not sufficiently proved,
considering that the only evidence presented on this score was petitioners
uncorroborated narration of the events. It is well-settled that the party
alleging a fact has the burden of proving it and a mere allegation cannot
take the place of evidence.[17] If the plaintiff, upon whom rests the burden
of proving his cause of action, fails to show in a satisfactory manner facts
upon which he bases his claim, the defendant is under no obligation to
prove his exception or defense.[18]
Contrary to petitioners claim, the evidence on record shows that respondent
exercised due diligence in performing its obligations under the contract and
followed standard procedure in rendering its services to petitioner. As
correctly observed by the lower court, the plane ticket[19] issued to
petitioner clearly reflected the departure date and time, contrary to
petitioners contention. The travel documents, consisting of the tour itinerary,
vouchers and instructions, were likewise delivered to petitioner two days
prior to the trip. Respondent also properly booked petitioner for the tour,
prepared the necessary documents and procured the plane tickets. It
arranged petitioners hotel accommodation as well as food, land transfers
and sightseeing excursions, in accordance with its avowed undertaking.
Therefore, it is clear that respondent performed its prestation under the
contract as well as everything else that was essential to book petitioner for
the tour. Had petitioner exercised due diligence in the conduct of her affairs,
there would have been no reason for her to miss the flight. Needless to say,
after the travel papers were delivered to petitioner, it became incumbent
upon her to take ordinary care of her concerns. This undoubtedly would
require that she at least read the documents in order to assure herself of the
important details regarding the trip.

The negligence of the obligor in the performance of the obligation renders


him liable for damages for the resulting loss suffered by the obligee. Fault or
negligence of the obligor consists in his failure to exercise due care and
prudence in the performance of the obligation as the nature of the obligation
so demands.[20] There is no fixed standard of diligence applicable to each
and every contractual obligation and each case must be determined upon
its particular facts. The degree of diligence required depends on the
circumstances of the specific obligation and whether one has been
negligent is a question of fact that is to be determined after taking into
account the particulars of each case.[21]
The lower court declared that respondents employee was negligent. This
factual finding, however, is not supported by the evidence on record. While
factual findings below are generally conclusive upon this court, the rule is
subject to certain exceptions, as when the trial court overlooked,
misunderstood, or misapplied some facts or circumstances of weight and
substance which will affect the result of the case.[22]
In the case at bar, the evidence on record shows that respondent company
performed its duty diligently and did not commit any contractual breach.
Hence, petitioner cannot recover and must bear her own damage.
WHEREFORE, the instant petition is DENIED for lack of merit. The decision
of the Court of Appeals in CA-G.R. CV No. 51932 is AFFIRMED.
Accordingly, petitioner is ordered to pay respondent the amount of
P12,901.00 representing the balance of the price of the British Pageant
Package Tour, with legal interest thereon at the rate of 6% per annum, to be
computed from the time the counterclaim was filed until the finality of this
Decision. After this Decision becomes final and executory, the rate of 12%
per annum shall be imposed until the obligation is fully settled, this interim
period being deemed to be by then an equivalent to a forbearance of credit.
[23]
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ., concur.
[1] TSN, March 4, 1993, pp. 4-6.
[2] RTC Records, p. 1.
[3] TSN, August 30, 1994, pp. 6-9.
[4] Rollo, pp. 38-43.
[5] Id. at 43; penned by Judge Lucia Violago Isnani.
[6] Id. at 36.

44

Pacao, Irene G.
Torts and Damages
[7] Id. at 37.
xxxxxxxxx
[8] Id. at 15.
[15] Supra, note 3 at 10.
[9] Commentaries and Jurisprudence on the Commercial Laws of the
Philippines, Vol. 4 (1993 Edition), Aguedo F. Agbayani, p. 1, citing 1 Blanco
640.

[16] The Revised Rules of Court in the Philippines, Vol. VII, Part II (1999
Edition) V. Francisco, p. 92.

[10] Id. at 4.

[17] Pimentel v. Court of Appeals, 307 SCRA 38.

[11] Civil Code of the Philippines, Article 1755.

[18] Castilex Industrial Corporation v. Vasquez, Jr., 378 Phil. 1009, 1018
(1999), citing Belen v. Belen, 13 Phil. 202, 206 (1909), cited in Martin v.
Court of Appeals, G.R. No. 82248, 205 SCRA 591 (1992).

[12] Article 1173. The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the obligation
and corresponds with the circumstances of the persons, of the time and of
the place. When negligence shows bad faith, the provisions of Articles 1171
and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in
the performance, that which is expected of a good father of a family shall be
required.
[13] Jarco Marketing Corporation v. Court of Appeals, 378 Phil. 991, 1003
(1999), citing Picart v. Smith, 37 Phil. 809 (1918).
[14] This rule states:
SEC. 3. Disputable presumptions. The following presumptions are
satisfactory if uncontradicted, but may be contradicted and overcome by
other evidence:

[19] Supra, note 2 at 60 & 94.


[20] Bayne Adjusters and Surveyors, Inc. v. Court of Appeals, G.R. No.
116332, 323 SCRA 231 (2000), citing Articles 1170, 1172-73, Civil Code;
Southeastern College, Inc. v. Court of Appeals, 354 Phil 434 (1998).
[21] Commentaries and Jurisprudence on the Civil Code of the Philippines,
Vol. IV (1999 Edition), Arturo M. Tolentino, p. 124.
[22] Supra, note 13, citing Borillo v. CA, G.R. No. 55691, 209 SCRA 130
(1992); Mckee v. Intermediate Appellate Court, G.R. No. 68102, 211 SCRA
517 (1992); and Salvador v. Court of Appeals, 313 Phil. 36 (1995).
[23] Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, 12
July 1994, 234 SCRA 78, 97.

xxxxxxxxx
(e) That evidence willfully suppressed would be adverse if produced;

45

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