1

mEN BANC
[G.R. No. L-26002. October 31, 1969.]
ABELARDO BAUTISTA and ROBERTO TAN TING, petitioners-appellees, vs. FEDERICO O. BORROMEO, INC.,
HONORABLE CESAR C. CRUZ, Judge of the Municipal Court of Mandaluyong, Rizal and JESUS BAUTISTA,
Deputy Sheriff of Manila as Special Sheriff, respondent-appellants.
Dante O. Tinga and Leopoldo V. Repotente, Jr. for petitioners-appellees.
Modesto S. Mendoza for respondents-appellants.

SYLLABUS
1. REMEDIAL LAW; PETITION FOR RELIEF; UNAVAILABILITY WHEN THERE IS ANOTHER REMEDY OPEN TO PARTY. A basic
precept is that when another remedy at law is open to a party, he cannot sue out a petition for relief under Rule 38. Thus, a
petition for relief is not a substitute for appeal. It has been held that where a defendant could have appealed but did not
appeal from the decision of the inferior court to the CFI but instead filed a petition for relief, his petition was
inappropriate as it "would amount to reviving his right to appeal which he had irretrievably lost through the gross inaction
of his counsel."
2. ID.; ID.; ID.; INSTANT CASE. Petitioners learned of the municipal court judgment on August 6, 15, when they received a
copy of its decision. They moved to set aside that judgment on August 13, 1965. On September 2, 1965, petitioners
learned of the court's order of August 14, 1965 denying their motion to set aside. They could have appealed but did not
perfect their appeal to the CFI on time they paid the appellate docket fee and deposited their appeal bond only on
September 28, eleven (11) days late. Clearly, their own fault to seasonably appeal was through their own fault. Then they
filed a petition for relief on October 26, 1965, it was way beyond the 60-day period from August 6, 1965, the time they first
learned of the judgment to be set aside, as required by Section 3, Rule 38 of the Rules of Court. The petition for relief must
therefore fail.
3. ID.; ID.; GROUNDS; EXCUSABLE NEGLIGENCE NOT AVAILABLE IN INSTANT CASE. Counsel of petitioners attributes his
failure to attend the hearing upon his reliance on the assurance of his associate in substituting for him to said hearing due
to the fact that he had another case before the City Court of Quezon City. His associate, in turn, was unable to attend the
hearing because the "records of the case had been misplaced." Considering that counsel of petitioners had consulted his
calendar before the hearing was scheduled, it can be safely presumed that his other case was not yet calendared for
hearing hence he could not have agreed in good faith to set the hearing on a day on which he had another previously
scheduled. He even failed to notify his clients of the hearing set for July 23, 1965, thus, they also failed to appear thereat.
The excuse that the record of the case had been misplaced is a stereotyped excuse resorted by lawyers in order to win a
new trial. Granting the same to be true, counsel's associate could have appeared at the hearing and inform the court of
such fact on the ground of which a postponement could have been asked. There is no excusable negligence upon which
petitioners could cling.
4. LABOR AND SOCIAL LEGISLATION; WORKMEN'S COMPENSATION ACT; RIGHT TO COMPENSATION AND SUBROGATION;
SECTIONS 2 and 6. The compensation and funeral expenses paid to the widow of the deceased by Borromeo was an
obligation arising from law Sec. 2 of the Workmen's Compensation Act and Section 6 of the same Act.
5. ID.; ID.; ID.; NO NEED TO ESTABLISH CONTRACTUAL RELATIONSHIP. There is no need to establish contractual
relationship between Quintin Delgado, the deceased employee and petitioners, owner and driver of the Ford Truck that hit
the panel truck driven by Delgado thereby causing his death. The cause of action recovery from petitioners, the
compensation and funeral expenses it paid the widow of said deceased employee, is one which does not spring from a
creditor-debtor relationship. It arises by virtue of its subrogation to the right of Quintin Delgado to sue the guilty party.
Such subrogation is sanctioned by the Workmen's Compensation Law.

DECISION
SANCHEZ, J p:

Respondents-appellants seek to overturn the decision of the Court of First Instance of Rizal of January 6, 1966
granting petitioners-appellees' petition for relief from judgment, setting aside the July 23, 1965 decision of the
Municipal Court of Mandaluyong, Rizal, in Civil Case 1365 and ordering a new trial.
The background facts are as follows:

On September 15, 1964, the Ford truck of petitioner Roberto Tan Ting driven by Abelardo Bautista, the other petitioner, and
the Volkswagen delivery panel truck owned by respondent Federico O. Borromeo, Inc. (hereinafter called Borromeo) were
involved in a traffic accident along Epifanio de los Santos Avenue. In said traffic accident, Quintin Delgado, a helper in
Borromeo's delivery panel truck, sustained injuries which resulted in his instantaneous death. Borromeo had to pay
Delgado's widow the sum of P4,444 representing the compensation (death benefit) and funeral expenses due Delgado
under the Workmen's Compensation Act.
On June 17, 1965, upon the averment that the said vehicular accident was caused by petitioners' negligence, Borromeo
started suit in the Municipal Court of Mandaluyong, Rizal to recover from petitioners the compensation and funeral
expenses it paid to the widow of Quintin Delgado. 1
At the scheduled hearing of the case on July 23, 1965, neither petitioners nor their counsel appeared. Borromeo was thus
allowed to present its evidence ex parte. On the same day, July 23, 1965, the municipal court rendered judgment in favor
of Borromeo and against the petitioners in the principal sum of P4,444, and P500 attorney's fees, and costs. Respondents
aver that this judgment has been executed and satisfied.
On August 6, 1965, petitioners received copy of the municipal court's decision.
On August 13, 1965, petitioners moved to set aside the decision. On August 14, 1965, this motion was denied.
On August 16, 1965, copy of this order of denial was sent by registered mail to counsel of petitioners. Said counsel did not
receive this registered mail and the mail matter was returned to the court unclaimed. However, said counsel learned of this
denial on September 2, 1965 allegedly "in the course of his investigation."
Petitioners filed a notice of appeal dated September 2, 1965. They, however, paid the appellate docket fee and deposited
their cash appeal bond only on September 28, 1965. Their appeal was consequently turned down by the municipal court,
for the reason that the deposit of the bond and the payment of the docket fee were done after the lapse of the
reglementary period.

Nothing was done by petitioners until October 26, 1965, when they lodged a petition for relief from the inferior court's
judgment in the Court of First Instance of Rizal. 2 They there claimed excusable negligence for the failure of petitioners'
counsel to appear in the July 23, 1965 hearing at the municipal court and asserted that they had a good and substantial
defense in that "there was no contractual relationship between the parties, whether express or implied." They sought
preliminary injunction, prayed for trial de novo on the merits. A restraining order was at first issued by the court; but the
prayer for preliminary injunction was eventually denied.
Respondents' answer contended that the petition for relief was filed out of time; that petitioners' counsel's failure to attend
the hearing of July 23, 1965 does not constitute excusable negligence; and that the affidavits attached to the petition do
not show good and substantial defense.
Petitioners thereafter moved for judgment on the pleadings. No objection thereto was interposed by respondents. The
lower court then rendered the judgment mentioned in the first part of this opinion.
A move to reconsider failed. Hence, this appeal.
We vote to reverse the lower court's judgment for the following reasons:
1. The petition for relief from judgment under Rule 38 of the Rules of Court is unavailable to petitioners.
A basic precept is that when another remedy at law is open to a party, he cannot sue out a petition for relief under Rule
38. 3 Thus, a petition for relief is not a substitute for appeal. It has been held that where a defendant could have appealed
but did not appeal from the decision of the inferior court to the Court of First Instance but instead filed a petition for
relief, his petition was inappropriate as it "would amount to reviving his right to appeal which he had irretrievably lost
through the gross inaction of his counsel." 4
Here, petitioners learned of the municipal court judgment on August 6, 1965, when they received a copy of its decision.
They moved to set aside that judgment on August 13, 1965. At that time, a petition for relief could not be availed of
because the judgment of the municipal court had not yet become final. 5 But, on September 2, 1965, petitioners learned of
the court's order of August 14, 1965 denying their motion to set aside. They could have appealed. Because, nothing in the
record suggests that the notices to petitioners to take delivery of the registered envelope containing the inferior court's
resolution denying petitioners' motion to set aside the decision were ever served on said petitioners. On the contrary,
Teresita Roxas, secretary of petitioners' counsel, in her affidavit dated October 23, 1965, Annex E of the petition for relief,
categorically denied receipt of any such notice, thus: "That I have not received any registry notice corresponding to a
registered mail at the Manila Post Office containing an order by the Municipal Court of Mandaluyong, Rizal, dated August
14, 1965." 6
But petitioners did not perfect their appeal to the Court of First Instance on time they paid the appellate docket fee and
deposited their appeal bond only on September 28, eleven (11) days late. Clearly, their failure to seasonably appeal was
through their own fault.
And, when they did file a petition for relief on October 26, 1965, it was way beyond the sixty-day period from August 6,
1965, the time they first learned of the judgment to be set aside, as required by Section 3, Rule 38 of the Rules of Court.
We accordingly, rule that petitioners' petition for relief must fail.

2. Petitioners failed to make out a case of excusable negligence for counsel's non-attendance at the July 23, 1965 hearing.

Their counsel, Atty. Leopoldo V. Repotente, Jr., explains his failure to attend the hearing in this wise "he relied on the
assurance of his associate, Atty. Lucenito N. Tagle, that the latter will attend to the case for him since on that same date he
(Atty. Repotente) had another case before the City Court of Quezon City." In his sworn statement, Atty. Tagle in turn stated
that he was unable to attend the hearing despite his promise to do so because, in his own words, "when I transferred to my
new office at A & T Building, Escolta, Manila, the record of this case was misplaced, mislaid or otherwise lost by my helpers
and was not among those turned over to my possession" and "it was only a few days after the date of hearing on July 23,
1965, that I found the record of this case in one of the drawers of my table in my former office and it was only then that I
realized my failure to attend the hearing on July 23, 1965, . . ."
We cannot view such negligence of petitioners' two attorneys as excusable. There was no plausible reason for Repotente to
entrust the hearing of the case to another lawyer. His lame excuse was that he requested Tagle to attend the hearing of
said case for him because he had another hearing at the City Court of Quezon City. This is unworthy of serious
consideration. For, as respondents aver and this is not denied by petitioners the hearing of July 23, 1965 before the
municipal court was set in open court during the initial date of hearing held on July 1, 1965 after Atty. Repotente consulted
his calendar. When Repotente agreed in open court to set the trial of the case for July 23, 1965, it may very well be
presumed that his other case in Quezon City was not yet calendared for hearing. He could not have, in good faith, agreed
to set the case for hearing on the day on which he had another previously scheduled trial. Further, he failed to notify his
clients of the hearing set for July 23, 1965; they also failed to appear thereat. Certainly, Repotentes' inadvertence cannot
be labeled as excusable.
Nor may Atty. Tagle offer as excuse the fact that the record of the case "was misplaced, mislaid or otherwise lost." This is a
stereotyped excuse. It is resorted to by lawyers in order to win new trial of the case and thereby move farther away the
day of reckoning. To be remembered is that the life of each case is in its record. If the record of the case was misplaced,
mislaid or lost, he should have nevertheless attended the scheduled hearing and requested for a postponement by reason
thereof. But he did not. Appropriate it is to recall here that a prudent lawyer keeps a separate record or diary of hearings of
cases he handles and of his professional engagements. A lawyer's schedules of hearings intended as reminder are not
noted by the lawyer in his record of the case. That would be useless for the purpose.
There is then no excusable negligence to which the petition for relief can cling.
3. Even on the merits, petitioners' case must fall.
Borromeo paid the widow of its employee, Quintin Delgado, compensation (death benefit) and funeral expenses for the
latter's death while in the course of employment. This obligation arises from law Section 2 of the Workmen's
Compensation Act. 7 The same law in its Section 6 also provides that "[i]n case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall be optional with such injured
employee either to claim compensation from his employer, under this Act, or sue such other person for damages, in
accordance with law; and in case compensation is claimed and allowed in accordance with this Act, the employer who paid
such compensation or was found liable to pay the same, shall succeed the injured employee to the right of recovering from
such person what he paid: . . ." 8
It is evident from the foregoing that "if compensation is claimed and awarded, and the employer pays it, the employer
becomes subrogated to and acquires, by operation of law, the worker's rights against the tortfeasor." 9
No need then there is to establish any contractual relationship between Quintin Delgado and herein petitioners. Indeed,
there is none. The cause of action of respondent corporation is one which does not spring from a creditor-debtor
relationship. It arises by virtue of its subrogation to the right of Quintin Delgado to sue the guilty party. Such subrogation is
sanctioned by the Workmen's Compensation Law aforesaid. It is as a subrogee to the rights of its deceased employee,
Quintin Delgado, that Borromeo filed a suit against petitioners in the Municipal Court of Mandaluyong, Rizal. 10
FOR THE REASONS GIVEN, the appealed decision of January 6, 1966 under review is hereby reversed and the petition for
relief is hereby dismissed.
Costs against petitioners-appellees. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee and Barredo, JJ., concur.
||| (Bautista v. Federico O. Borromeo, Inc., G.R. No. L-26002, [October 31, 1969], 140 PHIL 516-524)

EN BANC
[G.R. No. 4089. January 12, 1909.]
ARTURO PELAYO, plaintiff-appellant, vs. MARCELO LAURON, ET AL., defendants-appellees.
J. H. Junquera, for appellant.
Filemon Sotto, for appellees.

SYLLABUS
1. RECIPROCAL OBLIGATION OF HUSBAND AND WIFE; SUPPORT. Among the reciprocal obligations existing between a
husband and wife is that of support, which obligation is established by law.
2. ID.; SUPPORT OF STRANGERS. The law does not compel any person to support a stranger unless such person bound
himself to do so by an express contract.
3. ID.; SUPPORT OF WIFE. Where a husband whom the law compels to support his wife in living, the father and motherin-law of the latter are under no liability to provide for her.
DECISION
TORRES, J p:
On the 23d of November, 1906, Arturo Pelayo, a physician-residing in Cebu, filed a complaint against Marcelo Lauron and
Juana Abella setting forth that on or about the 13th of October of said year, at night, the plaintiff was called to the house of
the defendants, situated in San Nicolas, and that upon arrival he was requested by them to render medical assistance to
their daughter-in-law who was about to give birth to a child; that therefore, and after consultation with the attending
physician, Dr. Escano, it was found necessary, on account of the difficult birth, to remove the fetus by means of forceps
which operation was performed by the plaintiff, who also had to remove the after birth, in which service he was occupied
until the following morning, and that afterwards, on the same day, he visited the patient several times; that the just and
equitable value of the services rendered by him was P500, which the defendants refuse to pay without alleging any good
reason there for; that for said reason he prayed that judgment be entered in his favor as against the defendants, or any of
them, for the sum of P500 and costs, together with any other relief that might be deemed proper.
In answer to the complaint counsel for the defendants denied all of the allegations therein contained and alleged as a
special defense, that their daughter-in-law had died in consequence of the said childbirth, and that when she was alive she
lived with her husband independently and in a separate house without any relation whatever with them, and that, if on the
day when she gave birth she was in the house of the defendants, her stay there was accidental and due to fortuitous
circumstances; therefore, he prayed that the defendants be absolved of the complaint with costs against the plaintiff.
The plaintiff demurred to the above answer, and the court below sustained the demurrer, directing the defendants, on the
23d of January, 1907, to amend their answer. In compliance with this order the defendants presented, on the same date,
their amended answer, denying each and every one of the allegations contained in the complaint, and requesting that the
same be dismissed with costs.
As a result of the evidence adduced by both parties, judgment was entered by the court below on the 5th of April, 1907,
whereby the defendants were absolved from the former complaint, on account of the lack of sufficient evidence to
establish a right of action against the defendants, with costs against the plaintiff, who excepted to the said judgment and
in addition moved for a new trial on the ground that the judgment was contrary to law; the motion was overruled and the
plaintiff excepted and in due course presented the corresponding bill of exceptions. The motion of the defendants
requesting that the declaration contained in the judgment that the defendants had demanded he professional services of
the plaintiff he eliminated therefrom, for the reason that, according to the evidence, no such request had been made, was
also denied, and to the decision the defendants excepted.
Assuming that it is a real fact acknowledged by the defendants, that the plaintiff, by virtue of having been sent for by the
former, attended as physician and rendered professional services to a daughter-in-law of the said defendants during a
difficult and laborious childbirth, in order to decide the claim of the said physician regarding the recovery of his fees, it
becomes necessary to decide who is bound to pay the bill, whether the father and mother-in-law of the patient, or the
husband of the latter.
According to article 1089 of the Civil Code, obligations are created by law, by contracts, by quasi-contracts, and by illicit
acts and omissions or by those in which any kind of fault or negligence occurs.
Obligations arising from law are not presumed. Those expressly determined in the code or in special laws, etc., are the only
demandable ones. Obligations arising from contracts have legal force between the contracting parties and must be fulfilled
in accordance with their stipulations. (Arts. 1090 and 1091.)
The rendering of medical assistance in case of illness is comprised among the mutual obligations to which spouses are
bound by way of mutual support. (Arts. 142 and 143.).
If every obligation consists in giving, doing, or not doing something (art. 1088), and spouses are mutually bound to support
each other, there can be no question but that, when either of them by reason of illness should be in need of medical
assistance, the other is under the unavoidable obligation to furnish the necessary services of a physician in order that
health may be restored, and he or she may be freed from the sickness by which life is jeopardized; the party bound to
furnish such support is therefore liable for all expenses, including the fees of the medical expert for his professional

services. This liability originates from the above-cited mutual obligation which the law has expressly established between
the married couple.
In the face of the above legal precepts it is unquestionable that the person bound to pay the fees due to the plaintiff for
the professional services that he rendered to the daughter-in-law of the defendants during her childbirth is the husband of
the patient and not her father and mother- in-law, the defendants herein. The fact that it was not the husband who called
the plaintiff and requested his assistance for his wife is no bar to the fulfillment of the said obligation, as the defendants, in
view of the imminent danger to which the life of the patient was at that moment exposed, considered that medical
assistance was urgently needed, and the obligation of the husband to furnish his wife with the indispensable services of a
physician at such critical moments is specially established by the law, as has been seen, and compliance therewith is
unavoidable; therefore, the plaintiff, who believes that he is entitled to recover his fees, must direct his action against the
husband who is under obligation to furnish medical assistance to his lawful wife in such an emergency.

From the foregoing it, may readily be understood that it was improper to have brought an action against the defendants
simply because they were the parties who called the plaintiff and requested him to assist the patient during her difficult
confinement, and also, possibly, because they were her father and mother-in-law and the sickness occurred in their house.
The defendants were not, nor are they now, under any obligation by virtue of any legal provision, to pay the fees claimed,
nor in consequence of any contract entered into between them and the plaintiff from which such obligation might have
arisen.
In applying the provisions of the Civil Code in an action for support, the supreme court of Spain, while recognizing the
validity and efficiency of a contract to furnish support wherein a person bound himself to support another who was not his
relative, established the rule that the law does impose the obligation to pay for the support of a stranger, but as the
liability arose out of a contract, the stipulations of the agreement must be upheld. (Decision of May 11 1897.)
Within the meaning of the law, the father and mother law are strangers with respect to the obligation that devolves upon
the husband to provide support, among which is the furnishing of medical assistance to his wife at the time of her
confinement; and, on the other hand, it does not appear that a contract existed between the defendants and the plaintiff
physician, for which reason it is obvious that the former can not be compelled to pay fees which they are under no liability
to pay because it does not appear that they consented to bind themselves.
The foregoing suffices to demonstrate that the first and second errors assigned to the judgment below are unfounded,
because, if the plaintiff has no right of action against the defendants, it is needless to declare whether or not the use of
forceps is a surgical operation.
Therefore, in view of the considerations hereinbefore set forth, it is our opinion that the judgment appealed from should be
affirmed with the costs against the appellant. So ordered.
Mapa and Tracey, JJ., concur.
Arellano, C.J. and Carson. J., concur in the result.
Willard, J., dissents.
||| (Pelayo v. Lauron, G.R. No. 4089, [January 12, 1909], 12 PHIL 453-457)

FIRST DIVISION
[G.R. No. 858 . January 23, 1903.]
FRANCISCO MARTINEZ, plaintiff-appellee, vs. PEDRO MARTINEZ, defendant-appellant.
Carlos Ledesma, for appellant.
Felipe G. Calderon, for appellee.

SYLLABUS
1.OWNERSHIP OF VESSELS; REGISTRY. The person in whose name a vessel is registered is presumed to have the legal
title thereto.
2.ID; ID. The fact that a vessel registered in the name of one party was purchased with funds of another does not give
the latter either a legal or an equitable title to the vessel, nor does it raise a resulting trust in his favor.
3.CIVIL PROCEDURE; FINDING OF FACT. Where the facts recited in the decision, together with those admitted in the
pleadings, do not support the judgment it will be reversed.
4.ID.; ID. The statement that a person is the owner of a vessel is a conclusion of law and not a finding of fact.
5.OWNERSHIP OF VESSELS; REGISTRY. The exercise of acts of ownership over a vessel registered in another's name, by
one with whose funds the vessel was purchased, does not overcome the presumption that the registered owner is the legal
owner.
Per COOPER, J ., dissenting:
6.CIVIL PROCEDURE; FINDINGS OF FACT. The finding that a person is the owner of a vessel is the finding of an ultimate
fact and not of a conclusion of law
DECISION
WILLARD, J p:
In the decision in this case it is found as a fact that the titles to the steamer Balayan and the coasting vessel Ogoo are
registered in the name of the defendant. It must be assumed from this that the defendant has the legal title to the vessels,
as without it they could not be so registered.
These facts standing alone show that the defendant is the owner of the property.
Two other facts, however, appear in the decision which the appellee claims warranted the court below in deciding that the
defendant was not the owner.
1.The court found that the money with which the vessels were purchased was furnished by the plaintiff, the father of the
defendant. Does this fact make him the owner of them, the title having been taken and registered in the son's name?
The various ways in which the title to property may be acquired are stated in article 609 of the Civil Code.
The plaintiff never acquired the title to these vessels in any one of the ways therein described. He did not acquire it by
donation or succession. He did not acquire it by means of any contract.
The court does not find that the father and son had between themselves any contract of any kind by virtue of the son
agreed to transfer the title to the father or to hold it for his benefit.
There is an allegation in the complaint that the defendant acted as the agent of the plaintiff in the purchase. This is denied
in the answer and there is no finding in the decision which supports this allegation of the complaint.
There is only the bare fact that the price of property which was conveyed to the defendant by a third person was paid by
the plaintiff. It can not be said that the law by reason of this fact transfers any title or interest in the thing itself to the
plaintiff.
Article 1090 of the Civil Code provides that "obligations derived from the law are not to be presumed. Only those expressly
provided for in this Code or in special laws are enforceable."
It is provided in Article 161 of the same Code, relating to minors, that "the ownership or enjoyment of property acquired by
a minor child with funds of his parents, pertain to the latter." This article does not apply to the present case, for the son
was of age.
This is the only provision which we have found anywhere in the laws now in force that declares the property to belong to
the person who paid the money.
Nor can such general doctrine be found in the former law. Law 49, title 5, partida 5, the effect of which is incorrectly stated
in the brief of the appellee, expressly provided that property bought with another's money should not belong to the owner
of the money except in certain enumerated cases of which this is not one.
Law 48, title 5, partida 5, also expressly provided that where one bought with his own money property the title to which he
procured to be transferred to a third person, such third person had the right to keep it by reimbursing the other for his
outlay.
It may be true that the laws in some of the United States would in this case raise a resulting trust in favor of the plaintiff.
But such laws are not in force here; and whatever other right the plaintiff may have against the defendant, either for the
recovery of the money paid or for damages, it is clear that such payment gave him no title either legal or equitable to
these vessels.

If there were evidence in the case which would have justified the court below in finding that the defendant acted as the
agent of the plaintiff or that there was some other contract between them, he should have incorporated such findings in
his decision.
Article 133 of the Code of Civil Procedure requires the court to file a written decision. If the facts stated in that decision
together with those admitted in the pleadings are not sufficient as a matter of law to support the judgment, it must be
reversed, if excepted to.

The record, however, contains all the evidence and an examination of it shows that no such findings would have been
warranted. As to the Balayan, it appears that the son had nothing whatever to do with its purchase. It was bought by the
father with the money of the conjugal partnership, and the title by his direction placed in the son's name.
As to the Ogoo, the father's intervention in the purchase nowhere appears. He simply testified that it was bought with his
money.
It is said that the court below found as a fact that the father was the owner of the vessels and that we can not disturb this
finding because there was no motion for a new trial. This contention can not be sustained. The ultimate question in the
whose case was: Who owned this property? The resolution of that question depended upon the application of legal
principles to the facts connected with its acquisition and subsequent management. Those facts were that the father bought
and paid for it, and that the titles to it were taken and registered in the son's name. A statement that by reason of these
facts the father is the owner is a statement of law and not a finding of fact.
2.It was found as a fact the father had exercised acts of ownership over the vessel. That finding is entirely consistent with
the legal ownership by the son. The exercise of such acts could not transfer such ownership from the son.
3.There is in the record a letter written by the defendant to the plaintiff in which the latter is asked if he desires to sell
theBalayan. This letter is not incorporated into the findings and we have no right to consider it. But, if we had, it would not
in our opinion change the result. Such a letter might well have been written by a son to a father, both of them recognizing
the fact that the son was the owner of the property as to which the inquiry was made.
4.In conclusion we may say that even on the supposition that a written and recorded title to vessels may be overcome by
parol evidence, that offered in this case was insufficient to accomplish such a result. As to the Balayan, there is nothing
whatever to show why the father placed the title in his son's name. It may have been either as a gift or a loan. As to
the Ogoo, there is the simple declaration of the father that he paid for it. This may have been either a gift or a loan.
The judgment is reversed and a new trial is granted with costs against the appellee.
Torres, Mapa and Ladd, JJ ., concur.
Arellano, C .J ., did not sit in this case.

EN BANC
G.R. No. L-1299
November 16, 1903
VICENTE PEREZ, plaintiff-appellee,
vs.
EUGENIO POMAR, Agent of the Compaia General de Tabacos, defendant-appellant.
Francisco Dominguez for appellant.
Ledesma, Sumulong and Quintos for appellee.

TORRES, J.:
In a decision dated February 9, 1903, the judge of the Sixth Judicial District, deciding a case brought by the plaintiff against
the defendant for the recovery of wages due and unpaid, gave judgment against the latter for the sum of $600 and the
costs of suit, less the sum of $50, Mexican.
On August 27, 1902, Don Vicente Perez filed in the Court of First Instance of Laguna a complaint, which was amended on
the 17th of January of this year, asking that the court determine the amount due the plaintiff, at the customary rate of
compensation for interpreting in these Islands, for services rendered in the Tabacalera Company, and that, in view of the
circumstances of the case, judgment be rendered in his favor for such sum. The complaint also asked that the defendant
be condemned to the payment of damages in the sum of $3,200, gold, together with the costs of suit. In this complaint it
was alleged that Don Eugenio Pomar, as general agent of the Compaia General de Tabacos in the said province, verbally
requested the plaintiff on the 8th of December, 1901, to act as interpreter between himself and the military authorities;
that after the date mentioned the plaintiff continued to render such services up to and including May 31, 1902; that he had
accompanied the defendant, Pomar, during that time at conferences between the latter and the colonel commanding the
local garrison, and with various officers and doctors residing in the capital, and at conferences with Captain Lemen in the
town of Pilar, and with the major in command at the town of Pagsanjan, concerning the shipment of goods from Manila,
and with respect to Pagsanjan to this city; that the plaintiff during this period held himself in readiness to render services
whenever required; that on this account his private business, and especially a soap factory established in the capital, was
entirely abandoned; that to the end that such services might be punctually rendered, the agent, Pomar, assured him that
the Tabacalera Company always generously repaid services rendered it, and that he therefore did not trouble himself about
his inability to devote the necessary amount of time to his business, the defendant going so far as to make him flattering
promises of employment with the company, which he did not accept; that these statements were made in the absence of
witnesses and that therefore his only proof as to the same was Mr. Pomar's word as a gentleman; that the employees of
the company did not understand English, and by reason of the plaintiff's mediation between the agent, and the military
authorities large profits were obtained, as would appear from the account and letterpress books of the agency
corresponding to those dates. In the amended complaint it was added that the defendant, on behalf of the company,
offered to renumerate the plaintiff for the services rendered in the most advantageous manner in which such services are
compensated, in view of the circumstances under which they were requested; and that the plaintiff, by rendering the
company such services, was obliged to abandon his own business, the manufacture of soap, and thereby suffered
damages in the sum of $3,200, United States currency.
The defendant, on the 25th of September, 1902, filed an answer asking for the dismissal of the complaint, with costs to the
plaintiff. In his answer the defendant denied the allegation in the first paragraph of the complaint, stating that it was
wholly untrue that the company, and the defendant as its agent, had solicited the services of the plaintiff as interpreter
before the military authorities for the period stated, or for any other period, or that the plaintiff had accompanied Pomar at
the conferences mentioned, concerning shipments from Manila and exports from some of the towns of the province to this
capital. He stated that he especially denied paragraphs 2 of the complaint, as it was absolutely untrue that the plaintiff had
been at the disposal of the defendant for the purpose of rendering such services; that he therefore had not been obliged to
abandon his occupation or his soap factory, and that the statement that an offer of employment with the company had
been made to him was false. The defendant also denied that through the mediation of the plaintiff the company and
himself had obtained large profits. The statements in paragraphs 6, 7, 8, and 9 of the complaint were also denied. The
defendant stated that, on account of the friendly relations which sprang up between the plaintiff and himself, the former
borrowed from him from time to time money amounting to $175 for the purposes of his business, and that he had also
delivered to the plaintiff 36 arrobas of oil worth $106, and three packages of resin for use in coloring his soap; that the
plaintiff accompanied the defendant to Pagsanjan, Pilar, and other towns when the latter made business trips to them for
the purpose of extending his business and mercantile relations therein; that on these excursions, as well as on private and
official visits which he had to make, the plaintiff occasionally accompanied him through motives of friendship, and
especially because of the free transportation given him, and not on behalf of the company of which he was never
interpreter and for which he rendered no services; that the plaintiff in these conferences acted as interpreter of his own
free will, without being requested to do so by the defendant and without any offer of payment or compensation; that
therefore there existed no legal relation whatever between the company and the plaintiff, and that the defendant, when
accepting the spontaneous, voluntary and officious services of the plaintiff, did so in his private capacity and not as agent
of the company, and that it was for this reason that he refused to enter into negotiations with the plaintiff, he being in no
way indebted to the latter. The defendant concluded by saying that he answered in his individual capacity.
A complaint having been filed against the Compaia General de Tabacos and Don Eugenio Pomar, its agent in the Province
of Laguna, the latter, having been duly summoned, replied to the complaint, which was subsequently amended, and stated
that he made such reply in his individual capacity and not as agent of the company, with which the plaintiff had had no
legal relations. The suit was instituted between the plaintiff and Pomar, who, as such, accepted the issue and entered into
the controversy without objection, opposed the claim of the plaintiff, and concluded by asking that the complaint be
dismissed, with the costs to the plaintiff. Under these circumstances and construing the statutes liberally, we think it
proper to decide the case pending between both parties in accordance with law and the strict principles of justice.

9
From the oral testimony introduced at the trial, it appears that the plaintiff, Perez, did on various occasions render Don
Eugenio Pomar services as interpreter of English; and that he obtained passes and accompanied the defendant upon his
journeys to some of the towns in the Province of Laguna. It does not appear from the evidence, however, that the plaintiff
was constantly at the disposal of the defendant during the period of six months, or that he rendered services as such
interpreter continuously and daily during that period of time.
It does not appear that any written contract was entered into between the parties for the employment of the plaintiff as
interpreter, or that any other innominate contract was entered into; but whether the plaintiff's services were solicited or
whether they were offered to the defendant for his assistance, inasmuch as these services were accepted and made use of
by the latter, we must consider that there was a tacit and mutual consent as to the rendition of the services. This gives rise
to the obligation upon the person benefited by the services to make compensation therefor, since the bilateral obligation
to render services as interpreter, on the one hand, and on the other to pay for the services rendered, is thereby incurred.
(Arts. 1088, 1089, and 1262 of the Civil Code). The supreme court of Spain in its decision of February 12, 1889, holds,
among other things, "that not only is there an express and tacit consent which produces real contract but there is also a
presumptive consent which is the basis of quasi contracts, this giving rise to the multiple juridical relations which result in
obligations for the delivery of a thing or the rendition of a service."
Notwithstanding the denial of that defendant, it is unquestionable that it was with his consent that the plaintiff rendered
him services as interpreter, thus aiding him at a time when, owing to the existence of an insurrection in the province, the
most disturbed conditions prevailed. It follows, hence, that there was consent on the part of both in the rendition of such
services as interpreter. Such service not being contrary to law or to good custom, it was a perfectly licit object of contract,
and such a contract must necessarily have existed between the parties, as alleged by the plaintiff. (Art. 1271, Civil Code.)
The consideration for the contract is also evident, it being clear that a mutual benefit was derived in consequence of the
service rendered. It is to be supposed that the defendant accepted these services and that the plaintiff in turn rendered
them with the expectation that the benefit would be reciprocal. This shows the concurrence of the three elements
necessary under article 1261 of the Civil Code to constitute a contract of lease of service, or other innominate contract,
from which an obligation has arisen and whose fulfillment is now demanded.
Article 1254 of the Civil Code provides that a contract exists the moment that one or more persons consent to be bound,
with respect to another or others, to deliver some thing or to render some service. Article 1255 provides that the
contracting parties may establish such covenants, terms, and conditions as they deem convenient, provided they are not
contrary to law, morals or public policy. Whether the service was solicited or offered, the fact remains that Perez rendered
to Pomar services as interpreter. As it does not appear that he did this gratuitously, the duty is imposed upon the
defendant, having accepted the benefit of the service, to pay a just compensation therefor, by virtue of the innominate
contract of facio ut des implicitly established.
The obligations arising from this contract are reciprocal, and, apart from the general provisions with respect to contracts
and obligations, the special provisions concerning contracts for lease of services are applicable by analogy.
In this special contract, as determined by article 1544 of the Civil Code, one of the parties undertakes to render the other a
service for a price certain. The tacit agreement and consent of both parties with respect to the service rendered by the
plaintiff, and the reciprocal benefits accruing to each, are the best evidence of the fact that there was an implied contract
sufficient to create a legal bond, from which arose enforceable rights and obligations of a bilateral character.lawphi1.net
In contracts the will of the contracting parties is law, this being a legal doctrine based upon the provisions of articles 1254,
1258, 1262, 1278, 1281, 1282, and 1289 of the Civil Code. If it is a fact sufficiently proven that the defendant, Pomar, on
various occasions consented to accept an interpreter's services, rendered in his behalf and not gratuitously, it is but just
that he should pay a reasonable remuneration therefor, because it is a well-known principle of law that no one should be
permitted to enrich himself to the damage of another.
With respect to the value of the services rendered on different occasions, the most important of which was the first, as it
does not appear that any salary was fixed upon by the parties at the time the services were accepted, it devolves upon the
court to determine, upon the evidence presented, the value of such services, taking into consideration the few occasions
on which they were rendered. The fact that no fixed or determined consideration for the rendition of the services was
agreed upon does not necessarily involve a violation of the provisions of article 1544 of the Civil Code, because at the time
of the agreement this consideration was capable of being made certain. The discretionary power of the court, conferred
upon it by the law, is also supported by the decisions of the supreme court of Spain, among which may be cited that of
October 18, 1899, which holds as follows: "That as stated in the article of the Code cited, which follows the provisions of
law 1, title 8, of the fifth partida, the contract for lease of services is one in which one of the parties undertakes to make
some thing or to render some service to the other for a certain price, the existence of such a price being understood, as
this court has held not only when the price has been expressly agreed upon but also when it may be determined by the
custom and frequent use of the place in which such services were rendered."
No exception was taken to the judgment below by the plaintiff on account of the rejection of his claim for damages. The
decision upon this point is, furthermore, correct.
Upon the supposition that the recovery of the plaintiff should not exceed 200 Mexican pesos, owing to the inconsiderable
number of times he acted as interpreter, it is evident that the contract thus implicitly entered into was not required to be in
writing and that therefore it does not fall within article 1280 of the Civil Code; nor is it included within the provisions of

10

section 335 of the Code of Civil Procedure, as this innominate contract is not covered by that section. The contract of lease
of services is not included in any of the cases expressly designated by that section of the procedural law, as affirmed by
the appellant. The interpretation of the other articles of the Code alleged to have been infringed has also been stated fully
in this opinion.
For the reasons stated, we are of the opinion that judgment should be rendered against Don Eugenio Pomar for the
payment to the plaintiff of the sum of 200 Mexican pesos, from which will be deducted the sum of 50 pesos is made as to
the costs of this instance. The judgment below is accordingly affirmed in so far as it agrees with this opinion, and reversed
in so far as it may be in conflict therewith. Judgment will be entered accordingly twenty days after this decision is filed.
Arellano, C.J., Willard, and Mapa, JJ., concur.

EN BANC

11

G.R. No. L-29203 July 26, 1971

MARITIME COMPANY OF THE PHILIPPINES, plaintiff-appellant,
vs.
REPARATIONS COMMISSION or REPARATION MISSION, defendant-appellee.
Rafael Dinglasan for plaintiff-appellant.
Panfilo M. Manguera and Jober Ayura for defendant-appellee.
FERNANDO, J.:
Decisive of the crucial issue posed by this appeal from a decision of the lower court is the applicability of the well-settled
principle that a statute should be considered as entering into and forming part of a contract. Plaintiff Maritime Company of
the Philippines, now appellant, would deny that it is controlling in its suit to hold defendant Reparations Commission, now
appellee, liable for the freight charges as the consignee of reparations goods, notwithstanding that under Section 11 of the
Reparations Act, 1 ocean freight and other expenses incident to importation shall be paid by the end-user and not by such
agency. That defendant is exempt from such obligation is further stressed by the concluding sentence thereof: "Nothing
herein shall be construed as exempting the end-user from paying in full all the necessary costs, charges and expenses
incident to the application for and the procurement, production delivery and acquisition, of, the goods concerned." It could
not have been entirely unexpected therefore for the lower court to reach the conclusion that it had no choice on the matter
in view of the explicit character of such statutory language which must be read into the contract of shipment. So it held in
dismissing plaintiff's complaint for the recovery of freight charges. As such decision is not vitiated by any infirmity, we
affirm.
In plaintiff's complaint of July 29, 1965, after setting forth its corporate character as well as that of the defendant
Reparations Commission, which is vested by law with the power to enter into contracts and to sue and be sued, it alleged
that shipments of reparations goods were loaded in three of its vessels consigned to defendant, with corresponding freight
charges amounting to P228,250.58. 2 Then came the allegation that said vessels arrived in Manila and discharged all such
shipment of reparations goods, which were duly delivered to and received by defendant as consignee in good order and
condition, but defendant failed and refused to pay, notwithstanding repeated demands, the total amount of the freight
charge, above-mentioned. 3 There was a claim for attorney's fee in the amount of P20,000.00, plaintiff, according to the
complaint, being compelled to engage counsel. 4 The prayer was for a judgment against defendant in favor of plaintiff in
the aforesaid sum of P228,250.58 as freight charges plus 6% interest thereon from the date of the filing the complaint until
fully paid, and the sum of P20,000.0 by way of attorney's fees.
There was no denial in the answer of defendant filed on September 10, 1965 of the facts as alleged, but Section 11 of the
Reparations Act was invoked to show that it was not liable at all for the freight charges, a matter which, according to
defendant, was fully known to plaintiff as it had in several instances collected, freight charges from the end-users
concerned. 5 In its special affirmative defenses, defendant contended that plaintiff's claim was barred by a prior judgment
under the principle of res adjudicata and that "as a carrier of reparations goods, [it] is not only presumed to know the law
but is chargeable with knowledge of that law, and when it thus entered into a contract of carriage or affreightment of
reparations goods, it rendered itself bound by the pertinent provision of Section 11 of the Reparations Law ... on the
question of who is liable for said freight charges; that as a matter of fact, plaintiff in its prior dealings with the defendant on
this matter had so recognized and accepted the set-up as
envisioned by Section 11 of the Reparations Law." 6 Its prayer was for the dismissal of the complaint with costs against
plaintiff.
As noted, defendant's contention was sustained by the lower court in its decision of March 29, 1968 dismissing the
complaint. After referring to the language of Section 11 of the Reparations Act, mentioned at the opening of this opinion, it
reached the above conclusion, there, being "no doubt on the interpretation as to who will pay for the freight charges." 7 It
was likewise set forth therein that plaintiff in fact had been collecting freight charges from end-users and turning over a
portion thereof, at least 50%, to defendant to pay its outstanding obligations, plaintiff having purchased several vessels
through the Reparations Commission payable on instalIments. 8 There was no question then, to its mind, that plaintiff,
considering such conduct, had no right to demand the payment of freight charges from defendant. 9
From the above decision, an appeal was taken to this Court on April 26, 1968. The brief for plaintiff-appellant was filed on
September 7 of the same year. Defendant-appellee Reparations Commission, in turn submitted its brief on October 7,
1968. There was no reply brief on the part of the appellant. Notwithstanding the vigorous presentation of the alleged errors
imputed to the lower court, there is no legal justification, as was already indicated, for a reversal.
1. It is to be recognized that a large degree of autonomy is accorded contracting parties. Not that it is unfettered. They
may, according to the Civil Code, 10 establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public order, or public policy." The law thus sets
limits. It is a fundamental requirement that the contract entered into must be in accordance with, and not repugnant to, an
applicable statute. Its terms are embodied therein. The contracting parties need not repeat them. They do not even have
to be referred to. Every contract thus contains not only what has been explicitly stipulated, but the statutory provisions
that have any bearing on the matter. So it has been invariably held from United States v. Constantino, 11 a 1919 decision,
to Lakas Ng Manggagawang Makabayan (LMM) v. Abiera, 12 promulgated only a year ago. 13 According to Justice Malcolm,
speaking for the Court in the former: "It is an elementary rule of contracts that the laws, in force at the time the contract
was made, enter into and govern it." 14 This is how the matter is put in the latest decision: "The principle is thus well-

12

settled that an existing law enters into and forms part of a valid contract without the need for the parties expressly making
reference to it. Only thus could its validity insofar as some of its provisions are concerned be assured." 15

A fairly recent restatement of the principle, in the language of Justice J.B.L. Reyes, speaking for the Court, appears
in Liberation Steamship Co., Inc. vs. Court of Industrial Relations. 16 Thus: "The rule is that the law forms part of, and is,
read into, every contract, unless clearly excluded therefrom in those cases where such exclusion is allowed ... ." 17 What is
the law that forms part of, and is to be read into, the contract between plaintiff-appellant and defendant-appellee? It is, to
repeat, Section 11 of Republic Act No. 1789 as amended. 18 More specifically: "The insurance, ocean freight and other
expenses incident to importation shall be paid by the end-user in accordance with usual business practice." The Last
sentence is equally plain: "Nothing herein shall be construed as exempting the end-user from paying in full all the
necessary costs, charges and expenses incident to the application for and the procurement, production, delivery and
acquisition, of, the goods concerned." The above provisions, then, form part of and must be read into the shipping
contracts between plaintiff-appellant and defendant-appellee, unless they could be "clearly excluded therefrom", assuming
"such exclusion is allowed."
There is thus no persuasive force to the first error imputed to the lower court for their being applied to the contractual
relationship between the parties. There is no showing that the shipping contracts between them are clearly excluded from
the law, much less that such exclusion could be allowed. The lower court had no choice then. It yielded obedience to the
law. What it did certainly cannot be stigmatized as error.
It is in that sense that reliance by plaintiff-appellant on the force and effect to be given the usual contracts between
shipper and carriers, while finding support in the applicable provisions both of the Civil Code and the Code of Commerce, is
far from persuasive. As was pointed out in the equally forceful brief of defendant-appellee, to so view the matter is to
ignore what has been explicitly set forth in Section 11 of the Reparations Act which is controlling.
Nor did the attempt by plaintiff-appellant to invoke equitable considerations strengthen an inherently weak case. It
asserted that defendant-appellee was in a better position to collect the freight charges. This is the answer of the latter:
"Contrary to appellant's contention, it is itself and not the appellee which is in a better position to collect the corresponding
ocean freight. This is because under the Reparations Law and established reparations set-up, the incidental charges to
reparations importations, including freight charges are to be paid by the end-user to the party concerned upon the arrival
but before delivery of the goods to the end-user, and "in accordance with usual business practices." (Sect. 11 R.A. 1789, as
amended) Under this concept before the carrier issues the "Permit to deliver" the shipments, it could rightfully demand
payment as a settlement of the freight charges. This is the stage more appropriate and commands a better facility in so far
as the collection of the freight charges is concerned, and not after the goods shall have been released to the end-user by
the carrier and the corresponding contract of Conditional Purchase and Sale executed by and between the Commission and
the
End-user
concerned." 19 It cannot be said then that plaintiff-appellant's effort to thus collect would be futile. Moreover, there is
always the remedy of a court action. Both in the answer of defendant-appellee 20, as well as in its brief, 21 reference was
made to such a suit actually being filed by plaintiff-appellant against a reparations end-user, C. G. Nazario and Sons, Inc.
as well as the Reparations Commission as far back as 1961. 22 It was therein decided that defendant-appellee was not
liable for the freight charges, such obligation being incumbent on its co-defendant C. G. Nazario and Sons, Inc., the enduser.
At bottom then, this is one of those cases where a statutory provision free from any ambiguity, quite specific and definite,
calls for application. Under such circumstances, there is not even any need for construction. The task of the judiciary is
clear. 23 It must consider the law as controlling. This is what the lower court did. Certainly, no error could justly be imputed
to it.
2. Nor is the second assignment of error deserving of a better fate. Plaintiff-appellant would find fault with the holding of
the lower court that its having collected the freight charges on certain occasions from the end-users of reparations goods
and applying portions thereof to the payment of its obligation to defendant-appellee for the purchase of several vessels
indicated it had no right to demand payment thereof from the latter. On this point, the appealed decision reads: "The
practice followed by the plaintiff in its dealings with the defendant establishes the fact that the plaintiff has been collecting
the freight charges from the end-users and turning over a portion thereof (at least 50%) to the [defendant] in payment of
the outstanding obligation of the plaintiff to the defendant, the plaintiff having purchased several vessels thru the
Reparations Commission and paying the Latter by installments ... . There is, therefore, no question that as far as the
plaintiff in its relation with the defendant is concerned, said plaintiff has been collecting from the end-users the freight
charges of reparations goods from the end-users and, therefore, it has no right to demand the same from the
defendant." 24 On the face thereof, the imputation of error would be hard to justify. The conclusion reached proceeds from
an accurate appraisal of plaintiff-appellant's conduct. Nor is it without support in the evidence.
So it was made manifest in defendant-appellee's brief in these words: "To exemplify and bolster the foregoing view,
attention is respectfully invited to the herein quoted contents of Exhs. 6, 7 and 8 of defendant-appellee: From Exh. "6"
which is a letter of the plaintiff-appellant to the defendant-appellee, dated August 7, 1963 containing the manifestation of
plaintiff to turn over to the defendant 50% of freightage collected, we quote in part: "Allowing some time for the collection
of freights from the various end-users, we expect to remit to the Reparations Commission an approximate total of
P60,000.00 within 60 days". (emphasis supplied) From Exh. "7" which is a letter dated October 3, 1963, of plaintiffappellant to defendant-appellee we quote the following: "As of August 28, 1963, the only remaining past due account on
this vessel was a delinquency interest of P4,600.46. On that date, however, we paid the Reparations Commission the sum
of P37,629.80 representing 50% of the freights on reparations cargo ... ." (Emphasis supplied) And per Exh. "8" which is
also a letter of plaintiff-appellant to defendant-appellee, dated Feb. 6, 1964, and which requests authority to load

13

reparations cargoes on non-reparations vessels, there is manifested therein: "We undertake to apply 10% of
whatever freights collected on reparations cargo loaded on the above vessels to the Reparations Commission for our
reparations account with you." (Emphasis supplied)" 25

All that plaintiff-appellant could say on the matter is the following: "It is respectfully submitted, that even
assuming arguendo only that on certain occasions plaintiff-appellant would collect the freight charges from the end-users
concerned; nevertheless, that practice does not at all affect the question of who is liable for the freight charges under the
contracts of carriage, ... . Just because herein plaintiff-appellant would, on certain occasions, collect the freight charges
from the end-users by virtue of an understanding with the consignee or owner of said reparations goods, it does not
necessarily follow that under the said contracts of affreightment, the end-users are already liable for said freight charges
which are collectible and demandable thereunder only from the consignee thereof." 26 This attempt by plaintiff-appellant to
erode its conduct of its legal significance is unavailing, considering that it is based on an assumption as to defendantappellee being liable for the payment of the freight charges, which, as had been made clear, is at war with the specific
language of the controlling statutory provision.
Clearly, then, this assignment of error is lacking in merit. Plaintiff-appellant, it must be stressed, cannot possibly be
unaware of the controlling legal provisions, considering that it has been itself the beneficiary of the Reparations Act, not to
mention the fact that it has previously collected from end-users. Such was a finding of the lower court, which we are not at
liberty to disturb, the appeal being purely on questions of law. As the last two errors allegedly committed by the lower
court were based on plaintiff-appellant's basic premise as to the non-applicability of Section 11 of the Reparations Act, no
useful purpose would be served by any further discussion. It suffices to state that the appealed decision can thus stand the
vigorous attack launched against it.
3. One last word. This opinion deals with a shipping contract governed by specific provisions of the Reparations Act.
Nothing in the opinion is to be considered applicable to contracts of a similar nature where ordinarily what has been
explicitly agreed upon in the bill of lading is the measure of the respective rights and obligations of the parties.
WHEREFORE, the lower court decision of March 29, 1968 is affirmed. With costs against plaintiff-appellant.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Teehankee, Barredo, Villamor and Makasiar, JJ., concur.
Dizon, J., is on leave.
Castro, J., took no part.

FIRST DIVISION
G.R. No. 156437
March 1, 2004
NATIONAL HOUSING AUTHORITY, petitioner,
vs.
GRACE BAPTIST CHURCH and the COURT OF APPEALS, respondents.

14

DECISION
YNARES-SANTIAGO, J.:
This is a petition for review under Rule 45 of the Rules of Court, seeking to reverse the Decision of the Court of Appeals
dated February 26, 2001,1 and its Resolution dated November 8, 2002, 2 which modified the decision of the Regional Trial
Court of Quezon City, Branch 90, dated February 25, 1997. 3
On June 13, 1986, respondent Grace Baptist Church (hereinafter, the Church) wrote a letter to petitioner National Housing
Authority (NHA), manifesting its interest in acquiring Lots 4 and 17 of the General Mariano Alvarez Resettlement Project in
Cavite.4 In its letter-reply dated July 9, 1986, petitioner informed respondent:
In reference to your request letter dated 13 June 1986, regarding your application for Lots 4 and 17, Block C-3-CL, we are
glad to inform you that your request was granted and you may now visit our Project Office at General Mariano Alvarez for
processing of your application to purchase said lots.
We hereby advise you also that prior to approval of such application and in accordance with our existing policies and
guidelines, your other accounts with us shall be maintained in good standing. 5
Respondent entered into possession of the lots and introduced improvements thereon. 6
On February 22, 1991, the NHAs Board of Directors passed Resolution No. 2126, approving the sale of the subject lots to
respondent Church at the price of P700.00 per square meter, or a total price of P430,500.00. 7 The Church was duly
informed of this Resolution through a letter sent by the NHA. 8
On April 8, 1991, the Church tendered to the NHA a managers check in the amount of P55,350.00, purportedly in full
payment of the subject properties. 9 The Church insisted that this was the price quoted to them by the NHA Field Office, as
shown by an unsigned piece of paper with a handwritten computation scribbled thereon. 10 Petitioner NHA returned the
check, stating that the amount was insufficient considering that the price of the properties have changed. The Church
made several demands on the NHA to accept their tender of payment, but the latter refused. Thus, the Church instituted a
complaint for specific performance and damages against the NHA with the Regional Trial Court of Quezon City, 11 where it
was docketed as Civil Case No. Q-91-9148.
On February 25, 1997, the trial court rendered its decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Ordering the defendant to reimburse to the plaintiff the amount of P4,290.00 representing the overpayment made for
Lots 1, 2, 3, 18, 19 and 20;
2. Declaring that there was no perfected contract of sale with respect to Lots 4 and 17 and ordering the plaintiff to return
possession of the property to the defendant and to pay the latter reasonable rental for the use of the property at P200.00
per month computed from the time it took possession thereof until finally vacated. Costs against defendant.
SO ORDERED.12
On appeal, the Court of Appeals, affirmed the trial courts finding that there was indeed no contract of sale between the
parties. However, petitioner was ordered to execute the sale of the lots to Grace Baptist Church at the price of P700.00 per
square meter, with 6% interest per annum from March 1991. The dispositive portion of the Court of Appeals decision,
dated February 26, 2001, reads:
WHEREFORE, the appealed Decision is hereby AFFIRMED with the MODIFICATION that defendant-appellee NHA is hereby
ordered to sell to plaintiff-appellant Grace Baptist Church Lots 4 and 17 at the price of P700.00 per square meter, or a total
cost P430,000.00 with 6% interest per annum from March, 1991 until full payment in cash.
SO ORDERED.13
The appellate court ruled that the NHAs Resolution No. 2126, which earlier approved the sale of the subject lots to Grace
Baptist Church at the price of P700.00 per square meter, has not been revoked at any time and was therefore still in effect.
As a result, the NHA was estopped from fixing a different price for the subject properties. Considering further that the
Church had been occupying the subject lots and even introduced improvements thereon, the Court of Appeals ruled that,
in the interest of equity, it should be allowed to purchase the subject properties. 14
Petitioner NHA filed a Motion for Reconsideration which was denied in a Resolution dated November 8, 2002. Hence, the
instant petition for review on the sole issue of: Can the NHA be compelled to sell the subject lots to Grace Baptist Church in
the absence of any perfected contract of sale between the parties?

15
Petitioner submits that the Court cannot compel it to sell the subject property to Grace Baptist Church without violating its
freedom to contract.15 Moreover, it contends that equity should be applied only in the absence of any law governing the
relationship between the parties, and that the law on sales and the law on contracts in general apply to the present case. 16
We find merit in petitioners submission.
Petitioner NHA is not estopped from selling the subject lots at a price equal to their fair market value, even if it failed to
expressly revoke Resolution No. 2126. It is, after all, hornbook law that the principle of estoppel does not operate against
the Government for the act of its agents,17 or, as in this case, their inaction.
On the application of equity, it appears that the crux of the controversy involves the characterization of equity in the
context of contract law. Preliminarily, we reiterate that this Court, while aware of its equity jurisdiction, is first and
foremost, a court of law. While equity might tilt on the side of one party, the same cannot be enforced so as to overrule
positive provisions of law in favor of the other. 18 Thus, before we can pass upon the propriety of an application of equitable
principles in the case at bar, we must first determine whether or not positive provisions of law govern.
It is a fundamental rule that contracts, once perfected, bind both contracting parties, and obligations arising therefrom
have the force of law between the parties and should be complied with in good faith. 19 However, it must be understood
that contracts are not the only source of law that govern the rights and obligations between the parties. More specifically,
no contractual stipulation may contradict law, morals, good customs, public order or public policy. 20 Verily, the
mere inexistence of a contract, which would ordinarily serve as the law between the parties, does not automatically
authorize disposing of a controversy based on equitable principles alone. Notwithstanding the absence of a perfected
contract between the parties, their relationship may be governed by other existing lawswhich provide for their reciprocal
rights and obligations.
It must be remembered that contracts in which the Government is a party are subject to the same rules of contract law
which govern the validity and sufficiency of contract between individuals. All the essential elements and characteristics of
a contract in general must be present in order to create a binding and enforceable Government contract. 21
It appearing that there is no dispute that this case involves an unperfected contract, the Civil Law principles governing
contracts should apply. In Vda. de Urbano v. Government Service Insurance System,22 it was ruled that a qualified
acceptance constitutes a counter-offer as expressly stated by Article 1319 of the Civil Code. In said case, petitioners
offered to redeem mortgaged property and requested for an extension of the period of redemption. However, the offer was
not accepted by the GSIS. Instead, it made a counter-offer, which petitioners did not accept. Petitioners again offer to pay
the redemption price on staggered basis. In deciding said case, it was held that when there is absolutely no acceptance of
an offer or if the offer is expressly rejected, there is no meeting of the minds. Since petitioners offer was denied twice by
GSIS, it was held that there was clearly no meeting of the minds and, thus, no perfected contract. All that is established
was a counter-offer.23
In the case at bar, the offer of the NHA to sell the subject property, as embodied in Resolution No. 2126, was similarly not
accepted by the respondent. 24 Thus, the alleged contract involved in this case should be more accurately denominated
as inexistent. There being no concurrence of the offer and acceptance, it did not pass the stage of generation to the point
of perfection.25 As such, it is without force and effect from the very beginning or from its incipiency, as if it had never been
entered into, and hence, cannot be validated either by lapse of time or ratification. 26 Equity can not give validity to a void
contract,27 and this rule should apply with equal force to inexistent contracts.
We note from the records, however, that the Church, despite knowledge that its intended contract of sale with the NHA had
not been perfected, proceeded to introduce improvements on the disputed land. On the other hand, the NHA knowingly
granted the Church temporary use of the subject properties and did not prevent the Church from making improvements
thereon. Thus, the Church and the NHA, who both acted in bad faith, shall be treated as if they were both in good faith. 28 In
this connection, Article 448 of the Civil Code provides:
The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige
the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land and if its value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the
terms thereof.
Pursuant to our ruling in Depra v. Dumlao, 29 there is a need to remand this case to the trial court, which shall conduct the
appropriate proceedings to assess the respective values of the improvements and of the land, as well as the amounts of
reasonable rentals and indemnity, fix the terms of the lease if the parties so agree, and to determine other matters
necessary for the proper application of Article 448, in relation to Articles 546 and 548, of the Civil Code.
WHEREFORE, in view of the foregoing, the petition is GRANTED. The Court of Appeals Decision dated February 26, 2001
and Resolution dated November 8, 2002 are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Quezon
City-Branch 90, dated February 25, 1997, is REINSTATED. This case is REMANDED to the Regional Trial Court of Quezon
City, Branch 90, for further proceedings consistent with Articles 448 and 546 of the Civil Code.
No costs.
SO ORDERED.

SECOND DIVISION
G.R. No. L-23749 April 29, 1977
FAUSTINO CRUZ, plaintiff-appellant,
vs.
J. M. TUASON & COMPANY, INC., and GREGORIO ARANETA, INC., defendants-appellees.

16

BARREDO, J.:
Appeal from the order dated August 13, 1964 of the Court of First Instance of Quezon City in Civil Case No. Q7751, Faustino Cruz vs. J.M. Tuason & Co., Inc., and Gregorio Araneta, Inc., dismissing the complaint of appellant Cruz for
the recovery of improvements he has made on appellees' land and to compel appellees to convey to him 3,000 square
meters of land on three grounds: (1) failure of the complaint to state a cause of action; (2) the cause of action of plaintiff is
unenforceable under the Statute of Frauds; and (3) the action of the plaintiff has already prescribed.
Actually, a perusal of plaintiff-appellant's complaint below shows that he alleged two separate causes of action, namely: (1)
that upon request of the Deudors (the family of Telesforo Deudor who laid claim on the land in question on the strength of
an "informacion posesoria" ) plaintiff made permanent improvements valued at P30,400.00 on said land having an area of
more or less 20 quinones and for which he also incurred expenses in the amount of P7,781.74, and since defendantsappellees are being benefited by said improvements, he is entitled to reimbursement from them of said amounts and (2)
that in 1952, defendants availed of plaintiff's services as an intermediary with the Deudors to work for the amicable
settlement of Civil Case No. Q-135, then pending also in the Court of First Instance of Quezon City, and involving 50
quinones of land, of Which the 20 quinones aforementioned form part, and notwithstanding his having performed his
services, as in fact, a compromise agreement entered into on March 16, 1963 between the Deudors and the defendants
was approved by the court, the latter have refused to convey to him the 3,000 square meters of land occupied by him, (a
part of the 20 quinones above) which said defendants had promised to do "within ten years from and after date of signing
of the compromise agreement", as consideration for his services.
Within the Period allowed by the rules, the defendants filed separate motions to dismiss alleging three Identical grounds:
(1) As regards that improvements made by plaintiff, that the complaint states no cause of action, the agreement regarding
the same having been made by plaintiff with the Deudors and not with the defendants, hence the theory of plaintiff based
on Article 2142 of the Code on unjust enrichment is untenable; and (2) anent the alleged agreement about plaintiffs
services as intermediary in consideration of which, defendants promised to convey to him 3,000 square meters of land,
that the same is unenforceable under the Statute of Frauds, there being nothing in writing about it, and, in any event, (3)
that the action of plaintiff to compel such conveyance has already prescribed.
Plaintiff opposed the motion, insisting that Article 2142 of the applicable to his case; that the Statute of Frauds cannot be
invoked by defendants, not only because Article 1403 of the Civil Code refers only to "sale of real property or of an interest
therein" and not to promises to convey real property like the one supposedly promised by defendants to him, but also
because, he, the plaintiff has already performed his part of the agreement, hence the agreement has already been partly
executed and not merely executory within the contemplation of the Statute; and that his action has not prescribed for the
reason that defendants had ten years to comply and only after the said ten years did his cause of action accrue, that is,
ten years after March 16, 1963, the date of the approval of the compromise agreement, and his complaint was filed on
January 24, 1964.
Ruling on the motion to dismiss, the trial court issued the herein impugned order of August 13, 1964:
In the motion, dated January 31, 1964, defendant Gregorio Araneta, Inc. prayed that the complaint against it be dismissed
on the ground that (1) the claim on which the action is founded is unenforceable under the provision of the Statute of
Frauds; and (2) the plaintiff's action, if any has already prescribed. In the other motion of February 11, 1964, defendant J.
M. Tuason & Co., Inc. sought the dismissal of the plaintiffs complaint on the ground that it states no cause of action and on
the Identical grounds stated in the motion to dismiss of defendant Gregorio Araneta, Inc. The said motions are duly
opposed by the plaintiff.
From the allegations of the complaint, it appears that, by virtue of an agreement arrived at in 1948 by the plaintiff and the
Deudors, the former assisted the latter in clearing, improving, subdividing and selling the large tract of land consisting of
50 quinones covered by the informacion posesoria in the name of the late Telesforo Deudor and incurred expenses, which
are valued approximately at P38,400.00 and P7,781.74, respectively; and, for the reasons that said improvements are
being used and enjoyed by the defendants, the plaintiff is seeking the reimbursement for the services and expenses stated
above from the defendants.
Defendant J. M. Tuason & Co., Inc. claimed that, insofar as the plaintiffs claim for the reimbursement of the amounts of
P38,400.00 and P7,781.74 is concerned, it is not a privy to the plaintiff's agreement to assist the Deudors n improving the
50 quinones. On the other hand, the plaintiff countered that, by holding and utilizing the improvements introduced by him,
the defendants are unjustly enriching and benefiting at the expense of the plaintiff; and that said improvements constitute
a lien or charge of the property itself
On the issue that the complaint insofar as it claims the reimbursement for the services rendered and expenses incurred by
the plaintiff, states no cause of action, the Court is of the opinion that the same is well-founded. It is found that the
defendants are not parties to the supposed express contract entered into by and between the plaintiff and the Deudors for
the clearing and improvement of the 50 quinones. Furthermore in order that the alleged improvement may be considered a
lien or charge on the property, the same should have been made in good faith and under the mistake as to the title. The
Court can take judicial notice of the fact that the tract of land supposedly improved by the plaintiff had been registered
way back in 1914 in the name of the predecessors-in-interest of defendant J. M. Tuason & Co., Inc. This fact is confirmed in
the decision rendered by the Supreme Court on July 31, 1956 in Case G. R. No. L-5079 entitled J.M. Tuason & Co. Inc. vs.
Geronimo Santiago, et al., Such being the case, the plaintiff cannot claim good faith and mistake as to the title of the land.
On the issue of statute of fraud, the Court believes that same is applicable to the instant case. The allegation in par. 12 of
the complaint states that the defendants promised and agreed to cede, transfer and convey unto the plaintiff the 3,000
square meters of land in consideration of certain services to be rendered then. it is clear that the alleged agreement

17

involves an interest in real property. Under the provisions of See. 2(e) of Article 1403 of the Civil Code, such agreement is
not enforceable as it is not in writing and subscribed by the party charged.
On the issue of statute of limitations, the Court holds that the plaintiff's action has prescribed. It is alleged in par. 11 of the
complaint that, sometime in 1952, the defendants approached the plaintiff to prevail upon the Deudors to enter to a
compromise agreement in Civil Case No. Q-135 and allied cases. Furthermore, par. 13 and 14 of the complaint alleged that
the plaintiff acted as emissary of both parties in conveying their respective proposals and couter-proposals until the final
settlement was effected on March 16, 1953 and approved by Court on April 11, 1953. In the present action, which was
instituted on January 24, 1964, the plaintiff is seeking to enforce the supposed agreement entered into between him and
the defendants in 1952, which was already prescribed.
WHEREFORE, the plaintiffs complaint is hereby ordered DISMISSED without pronouncement as to costs.
SO ORDERED. (Pp. 65-69, Rec. on Appeal,)
On August 22, 1964, plaintiff's counsel filed a motion for reconsideration dated August 20, 1964 as follows:
Plaintiff through undersigned counsel and to this Honorable Court, respectfully moves to reconsider its Order bearing date
of 13 August 1964, on the following grounds:
1. THAT THE COMPLAINT STATES A SUFFICIENT CAUSE OF ACTION AGAINST DEFENDANTS IN SO FAR AS PLAINTIFF'S CLAIM
PAYMENT OF SERVICES AND REIMBURSEMENT OF HIS EXPENSES, IS CONCERNED;
II. THAT REGARDING PLAINTIFF'S CLAIM OVER THE 3,000 SQ. MS., THE SAME HAS NOT PRESCRIBED AND THE STATUTE OF
FRAUDS IS NOT APPLICABLE THERETO;
ARGUMENT
Plaintiff's complaint contains two (2) causes of action the first being an action for sum of money in the amount of
P7,781.74 representing actual expenses and P38,400.00 as reasonable compensation for services in improving the 50
quinones now in the possession of defendants. The second cause of action deals with the 3,000 sq. ms. which defendants
have agreed to transfer into Plaintiff for services rendered in effecting the compromise between the Deudors and
defendants;
Under its order of August 3, 1964, this Honorable Court dismissed the claim for sum of money on the ground that the
complaint does not state a cause of action against defendants. We respectfully submit:
1. THAT THE COMPLAINT STATES A SUFFICIENT CAUSE OF ACTION AGAINST DEFENDANTS IN SO FAR AS PLAINTIFF'S CLAIM
FOR PAYMENT OF SERVICES AND REIMBURSEMENT OF HIS EXPENSES IS CONCERNED.
Said this Honorable Court (at p. 2, Order):
ORDER

xxx xxx xxx

On the issue that the complaint, in so far as it claims the reimbursement for the services rendered and expenses incurred
by the plaintiff, states no cause of action, the Court is of the opinion that the same is well-founded. It is found that the
defendants are not parties to the supposed express contract entered into by and between the plaintiff and the Deudors for
the clearing and improvement of the 50 quinones. Furthermore, in order that the alleged improvement may he considered
a lien or charge on the property, the same should have been made in good faith and under the mistake as to title. The
Court can take judicial notice of the fact that the tract of land supposedly improved by the plaintiff had been registered
way back in 1914 in the name of the predecessors-in-interest of defendant J. M. Tuason & Co., Inc. This fact is confirmed in
the decision rendered by the Supreme Court on July 31, 1956 in case G. R. No. L-5079 entitled 'J M. Tuason & Co., Inc. vs,
Geronimo Santiago, et al.' Such being the case, the plaintiff cannot claim good faith and mistake as to the title of the land.
The position of this Honorable Court (supra) is that the complaint does not state a cause of action in so far as the claim for
services and expenses is concerned because the contract for the improvement of the properties was solely between the
Deudors and plaintiff, and defendants are not privies to it. Now, plaintiff's theory is that defendants are nonetheless liable
since they are utilizing and enjoying the benefit's of said improvements. Thus under paragraph 16 of "he complaint, it is
alleged:
(16) That the services and personal expenses of plaintiff mentioned in paragraph 7 hereof were rendered and in fact paid
by him to improve, as they in fact resulted in considerable improvement of the 50 quinones, and defendants being now in
possession of and utilizing said improvements should reimburse and pay plaintiff for such services and expenses.
Plaintiff's cause of action is premised inter alia, on the theory of unjust enrichment under Article 2142 of the civil Code:
ART. 2142. Certain lawful voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no
one shill be unjustly enriched or benefited at the expense of another.
In like vein, Article 19 of the same Code enjoins that:
ART. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due and observe honesty and good faith.
We respectfully draw the attention of this Honorable Court to the fact that ARTICLE 2142 (SUPRA) DEALS WITH QUASICONTRACTS or situations WHERE THERE IS NO CONTRACT BETWEEN THE PARTIES TO THE ACTION. Further, as we can
readily see from the title thereof (Title XVII), that the Same bears the designation 'EXTRA CONTRACTUAL OBLIGATIONS' or
obligations which do not arise from contracts. While it is true that there was no agreement between plaintiff and
defendants herein for the improvement of the 50 quinones since the latter are presently enjoying and utilizing the benefits
brought about through plaintiff's labor and expenses, defendants should pay and reimburse him therefor under the
principle that 'no one may enrich himself at the expense of another.' In this posture, the complaint states a cause of action
against the defendants.
II. THAT REGARDING PLAINTIFF'S CLAIM OVER THE 3,000 SQ. MS. THE SAME HAS NOT PRESCRIBED AND THE STATUTE OF
FRAUDS IS NOT APPLICABLE THERETO.
The Statute of Frauds is CLEARLY inapplicable to this case:
At page 2 of this Honorable Court's order dated 13 August 1964, the Court ruled as follows:
ORDER

18
xxx xxx xxx
On the issue of statute of fraud, the Court believes that same is applicable to the instant Case, The allegation in par. 12 of
the complaint states that the defendants promised and agree to cede, transfer and convey unto the plaintiff, 3,000 square
meters of land in consideration of certain services to be rendered then. It is clear that the alleged agreement involves an
interest in real property. Under the provisions of Sec. 2(e) of Article 1403 of the Civil Code, such agreement is not
enforceable as it is not in writing and subscribed by the party charged.
To bring this issue in sharper focus, shall reproduce not only paragraph 12 of the complaint but also the other pertinent
paragraphs therein contained. Paragraph 12 states thus:
COMPLAINT
xxx xxx xxx
12). That plaintiff conferred with the aforesaid representatives of defendants several times and on these occasions, the
latter promised and agreed to cede, transfer and convey unto plaintiff the 3,000 sq. ms. (now known as Lots 16-B, 17 and
18) which plaintiff was then occupying and continues to occupy as of this writing, for and in consideration of the following
conditions:
(a) That plaintiff succeed in convincing the DEUDORS to enter into a compromise agreement and that such agreement be
actually entered into by and between the DEUDORS and defendant companies;
(b) That as of date of signing the compromise agreement, plaintiff shall be the owner of the 3,000 sq. ms. but the
documents evidencing his title over this property shall be executed and delivered by defendants to plaintiff within ten (10)
years from and after date of signing of the compromise agreement;
(c) That plaintiff shall, without any monetary expense of his part, assist in clearing the 20 quinones of its occupants;
13). That in order to effect a compromise between the parties. plaintiff not only as well acted as emissary of both parties in
conveying their respective proposals and counter- proposals until succeeded in convinzing the DEUDORS to settle with
defendants amicably. Thus, on March 16, 1953, a Compromise Agreement was entered into by and between the DEUDORS
and the defendant companies; and on April 11, 1953, this agreement was approved by this Honorable Court;
14). That in order to comply with his other obligations under his agreement with defendant companies, plaintiff had to
confer with the occupants of the property, exposing himself to physical harm, convincing said occupants to leave the
premises and to refrain from resorting to physical violence in resisting defendants' demands to vacate;
That plaintiff further assisted defendants' employees in the actual demolition and transferof all the houses within the
perimeter of the 20 quinones until the end of 1955, when said area was totally cleared and the houses transferred to
another area designated by the defendants as 'Capt. Cruz Block' in Masambong, Quezon City. (Pars. 12, 13 and 14,
Complaint; Emphasis supplied)
From the foregoing, it is clear then the agreement between the parties mentioned in paragraph 12 ( supra) of the complaint
has already been fully EXECUTED ON ONE PART, namely by the plaintiff. Regarding the applicability of the statute of frauds
(Art. 1403, Civil Code), it has been uniformly held that the statute of frauds IS APPLICABLE ONLY TO EXECUTORY
CONTRACTS BUT NOT WHERE THE CONTRACT HAS BEEN PARTLY EXECUTED:
SAME ACTION TO ENFORCE. The statute of frauds has been uniformly interpreted to be applicable to executory and not
to completed or contracts. Performance of the contracts takes it out of the operation of the statute. ...
The statute of the frauds is not applicable to contracts which are either totally or partially performed , on the theory that
there is a wide field for the commission of frauds in executory contracts which can only be prevented by requiring them to
be in writing, a facts which is reduced to a minimum in executed contracts because the intention of the parties becomes
apparent buy their execution and execution, in mots cases, concluded the right the parties. ... The partial performance may
be proved by either documentary or oral evidence. (At pp. 564-565, Tolentino's Civil Code of the Philippines, Vol. IV, 1962
Ed.; Emphasis supplied).
Authorities in support of the foregoing rule are legion. Thus Mr. Justice Moran in his 'Comments on the Rules of Court', Vol.
III, 1974 Ed., at p. 167, states:
2 THE STATUTE OF FRAUDS IS APPLICABLE ONLY TO EXECUTORY CONTRACTS: CONTRACTS WHICH ARE EITHER TOTALLY OR
PARTIALLY PERFORMED ARE WITHOUT THE STATUE. The statute of frauds is applicable only to executory contracts. It is
neither applicable to executed contracts nor to contracts partially performed. The reason is simple. In executory contracts
there is a wide field for fraud because unless they be in writing there is no palpable evidence of the intention of the
contracting parties. The statute has been enacted to prevent fraud. On the other hand the commission of fraud in executed
contracts is reduced to minimum in executed contracts because (1) the intention of the parties is made apparent by the
execution and (2) execution concludes, in most cases, the rights of the parties. (Emphasis supplied)
Under paragraphs 13 and 14 of the complaint (supra) one can readily see that the plaintiff has fulfilled ALL his obligation
under the agreement between him defendants concerning the 3,000 sq. ms. over which the latter had agreed to execute
the proper documents of transfer. This fact is further projected in paragraph 15 of the complaint where plaintiff states;
15). That in or about the middle of 1963, after all the conditions stated in paragraph 12 hereof had been fulfilled and fully
complied with, plaintiff demanded of said defendants that they execute the Deed of Conveyance in his favor and deliver
the title certificate in his name, over the 3,000 sq. ms. but defendants failed and refused and continue to fail and refuse to
heed his demands. (par. 15, complaint; Emphasis supplied).
In view of the foregoing, we respectfully submit that this Honorable court erred in holding that the statute of frauds is
applicable to plaintiff's claim over the 3,000 sq. ms. There having been full performance of the contract on plaintiff's part,
the same takes this case out of the context of said statute.
Plaintiff's Cause of Action had NOT Prescribed:
With all due respect to this Honorable court, we also submit that the Court committed error in holding that this action has
prescribed:
ORDER

19

xxx xxx xxx

On the issue of the statute of limitations, the Court holds that the plaintiff's action has prescribed. It is alleged in par. III of
the complaint that, sometime in 1952, the defendants approached the plaintiff to prevail upon the Deudors to enter into a
compromise agreement in Civil Case No. Q-135 and allied cases. Furthermore, pars. 13 and 14 of the complaint alleged
that plaintiff acted as emissary of both parties in conveying their respective proposals and counter-proposals until the final
settlement was affected on March 16, 1953 and approved by the Court on April 11, 1953. In the present actin, which was
instituted on January 24, 1964, the plaintiff is seeking to enforce the supposed agreement entered into between him and
the defendants in 1952, which has already proscribed. (at p. 3, Order).
The present action has not prescribed, especially when we consider carefully the terms of the agreement between plaintiff
and the defendants. First, we must draw the attention of this Honorable Court to the fact that this is an action to compel
defendants to execute a Deed of Conveyance over the 3,000 sq. ms. subject of their agreement. In paragraph 12 of the
complaint, the terms and conditions of the contract between the parties are spelled out. Paragraph 12 (b) of the complaint
states:
(b) That as of date of signing the compromise agreement, plaintiff shall be the owner of the 3,000 sq. ms. but the
documents evidencing his title over this property shall be executed and delivered by defendants to plaintiff within ten (10)
years from and after date of signing of the compromise agreement. (Emphasis supplied).
The compromise agreement between defendants and the Deudors which was conclude through the efforts of plaintiff, was
signed on 16 March 1953. Therefore, the defendants had ten (10) years signed on 16 March 1953. Therefore, the
defendants had ten (10) years from said date within which to execute the deed of conveyance in favor of plaintiff over the
3,000 sq. ms. As long as the 10 years period has not expired, plaintiff had no right to compel defendants to execute the
document and the latter were under no obligation to do so. Now, this 10-year period elapsed on March 16, 1963. THEN and
ONLY THEN does plaintiff's cause of action plaintiff on March 17, 1963. Thus, under paragraph 15, of the complaint (supra)
plaintiff made demands upon defendants for the execution of the deed 'in or about the middle of 1963.
Since the contract now sought to be enforced was not reduced to writing, plaintiff's cause of action expires on March 16,
1969 or six years from March 16, 1963 WHEN THE CAUSE OF ACTION ACCRUED (Art. 1145, Civil Code).
In this posture, we gain respectfully submit that this Honorable Court erred in holding that plaintiff's action has prescribed.
PRAYER
WHEREFORE, it is respectfully prayed that " Honorable Court reconsider its Order dated August 13, 1964; and issue
another order denying the motions to dismiss of defendants G. Araneta, Inc. and J. M. Tuason Co. Inc. for lack of merit. (Pp.
70-85, Record on Appeal.)
Defendants filed an opposition on the main ground that "the arguments adduced by the plaintiff are merely reiterations of
his arguments contained in his Rejoinder to Reply and Opposition, which have not only been refuted in herein defendant's
Motion to Dismiss and Reply but already passed upon by this Honorable Court."
On September 7, 1964, the trial court denied the motion for reconsiderations thus:
After considering the plaintiff's Motion for Reconsideration of August 20, 1964 and it appearing that the grounds relied
upon in said motion are mere repetition of those already resolved and discussed by this Court in the order of August 13,
1964, the instant motion is hereby denied and the findings and conclusions arrived at by the Court in its order of August
13, 1964 are hereby reiterated and affirmed.
SO ORDERED. (Page 90, Rec. on Appeal.)
Under date of September 24, 1964, plaintiff filed his record on appeal.
In his brief, appellant poses and discusses the following assignments of error:
I. THAT THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT ON THE GROUND THAT APPELLANT'S CLAIM OVER THE
3,000 SQ. MS. IS ALLEGEDLY UNENFORCEABLE UNDER THE STATUTE OF FRAUDS;
II. THAT THE COURT A QUO FURTHER COMMITTED ERROR IN DISMISSING APPELLANT'S COMPLAINT ON THE GROUND THAT
HIS CLAIM OVER THE 3,000 SQ. MS. IS ALLEGEDLY BARRED BY THE STATUTE OF LIMITATIONS; and
III. THAT THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION IN SO FAR
AS APPELLANT'S CLAIM FOR REIMBURSEMENT OF EXPENSES AND FOR SERVICES RENDERED IN THE IMPROVEMENT OF THE
FIFTY (50) QUINONES IS CONCERNED.
We agree with appellant that the Statute of Frauds was erroneously applied by the trial court. It is elementary that the
Statute refers to specific kinds of transactions and that it cannot apply to any that is not enumerated therein. And the only
agreements or contracts covered thereby are the following:
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or
who has acted beyond his powers;
(2) Those do not comply with the Statute of Frauds as set forth in this number, In the following cases an agreement
hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing,
and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without
the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise to marry;
(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the
buyer accept and receive part of such goods and chattels, or the evidences, or some of them of such things in action, or
pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer
in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the
purchasers and person on whose account the sale is made, it is a sufficient memorandum:
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein:
(f) a representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a contract. (Art. 1403, civil Code.)

20

In the instant case, what appellant is trying to enforce is the delivery to him of 3,000 square meters of land which he
claims defendants promised to do in consideration of his services as mediator or intermediary in effecting a compromise of
the civil action, Civil Case No. 135, between the defendants and the Deudors. In no sense may such alleged contract be
considered as being a "sale of real property or of any interest therein." Indeed, not all dealings involving interest in real
property come under the Statute.
Moreover, appellant's complaint clearly alleges that he has already fulfilled his part of the bargains to induce the Deudors
to amicably settle their differences with defendants as, in fact, on March 16, 1963, through his efforts, a compromise
agreement between these parties was approved by the court. In other words, the agreement in question has already been
partially consummated, and is no longer merely executory. And it is likewise a fundamental principle governing the
application of the Statute that the contract in dispute should be purely executory on the part of both parties thereto.
We cannot, however, escape taking judicial notice, in relation to the compromise agreement relied upon by appellant, that
in several cases We have decided, We have declared the same rescinded and of no effect. In J. M. Tuason & Co., Inc. vs.
Bienvenido Sanvictores, 4 SCRA 123, the Court held:
It is also worthy of note that the compromise between Deudors and Tuason, upon which Sanvictores predicates his right to
buy the lot he occupies, has been validly rescinded and set aside, as recognized by this Court in its decision in G.R. No. L13768, Deudor vs. Tuason, promulgated on May 30, 1961.
We repeated this observation in J.M. Tuason & Co., Inc. vs. Teodosio Macalindong, 6 SCRA 938. Thus, viewed from what
would be the ultimate conclusion of appellant's case, We entertain grave doubts as to whether or not he can successfully
maintain his alleged cause of action against defendants, considering that the compromise agreement that he invokes did
not actually materialize and defendants have not benefited therefrom, not to mention the undisputed fact that, as pointed
out by appellees, appellant's other attempt to secure the same 3,000 square meters via the judicial enforcement of the
compromise agreement in which they were supposed to be reserved for him has already been repudiated by the courts.
(pp. 5-7. Brief of Appellee Gregorio Araneta, Inc.)
As regards appellant's third assignment of error, We hold that the allegations in his complaint do not sufficiently
Appellants' reliance. on Article 2142 of Civil Code is misplaced. Said article provides:
Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall
be unjustly enriched or benefited at the expense of another.
From the very language of this provision, it is obvious that a presumed qauasi-contract cannot emerge as against one party
when the subject mater thereof is already covered by an existing contract with another party. Predicated on the principle
that no one should be allowed to unjustly enrich himself at the expense of another, Article 2124 creates the legal fiction of
a quasi-contract precisely because of the absence of any actual agreement between the parties concerned. Corollarily, if
the one who claims having enriched somebody has done so pursuant to a contract with a third party, his cause of action
should be against the latter, who in turn may, if there is any ground therefor, seek relief against the party benefited. It is
essential that the act by which the defendant is benefited must have been voluntary and unilateral on the part of the
plaintiff. As one distinguished civilian puts it, "The act is voluntary. because the actor in quasi-contracts is not bound by
any pre-existing obligation to act. It is unilateral, because it arises from the sole will of the actor who is not previously
bound by any reciprocal or bilateral agreement. The reason why the law creates a juridical relations and imposes certain
obligation is to prevent a situation where a person is able to benefit or take advantage of such lawful, voluntary and
unilateral acts at the expense of said actor." (Ambrosio Padilla, Civil Law, Vol. VI, p. 748, 1969 ed.) In the case at bar, since
appellant has a clearer and more direct recourse against the Deudors with whom he had entered into an agreement
regarding the improvements and expenditures made by him on the land of appellees. it Cannot be said, in the sense
contemplated in Article 2142, that appellees have been enriched at the expense of appellant.
In the ultimate. therefore, Our holding above that appellant's first two assignments of error are well taken cannot save the
day for him. Aside from his having no cause of action against appellees, there is one plain error of omission. We have found
in the order of the trial court which is as good a ground as any other for Us to terminate this case favorably to appellees. In
said order Which We have quoted in full earlier in this opinion, the trial court ruled that "the grounds relied upon in said
motion are mere repetitions of those already resolved and discussed by this Court in the order of August 13, 1964", an
observation which We fully share. Virtually, therefore. appellant's motion for reconsideration was ruled to be pro-forma.
Indeed, a cursory reading of the record on appeal reveals that appellant's motion for reconsideration above-quoted
contained exactly the same arguments and manner of discussion as his February 6, 1964 "Opposition to Motion to Dismiss"
of defendant Gregorio Araneta, Inc. ((pp. 17-25, Rec. on Appeal) as well as his February 17, 1964 "Opposition to Motion to
Dismiss of Defendant J. M. Tuason & Co." (pp. 33-45, Rec. on Appeal and his February 29, 1964 "Rejoinder to Reply Oil
Defendant J. M. Tuason & Co." (pp. 52-64, Rec. on Appeal) We cannot see anything in said motion for reconsideration that is
substantially different from the above oppositions and rejoinder he had previously submitted and which the trial court had
already considered when it rendered its main order of dismissal. Consequently, appellant's motion for reconsideration did
not suspend his period for appeal. (Estrada vs. Sto. Domingo, 28 SCRA 890, 905-6.) And as this point was covered by
appellees' "Opposition to Motion for Reconsideration" (pp. 8689), hence, within the frame of the issues below, it is within
the ambit of Our authority as the Supreme Court to consider the same here even if it is not discussed in the briefs of the
parties. (Insular Life Assurance Co., Ltd. Employees Association-NATU vs. Insular Life Assurance Co., Ltd. [Resolution en
banc of March 10, 1977 in G. R. No. L-25291).
Now, the impugned main order was issued on August 13, 1964, while the appeal was made on September 24, 1964 or 42
days later. Clearly, this is beyond the 30-day reglementary period for appeal. Hence, the subject order of dismissal was
already final and executory when appellant filed his appeal.
WHEREFORE, the appeal of Faustino Cruz in this case is dismissed. No costs.
Fernando (Chairman), Antonio, Aquino and Martin, .JJ., concur.
Concepcion, Jr., JJ., took no part.
Martin, J., was designated to sit in the Second Division.

THIRD DIVISION
G.R. No. 124267
January 31, 2003
NATIONAL COMMERCIAL BANK OF SAUDI ARABIA, petitioner,
vs.
COURT OF APPEALS and PHILIPPINE BANKING CORPORATION, respondents.

21

CARPIO MORALES, J.:

May the unrippled doctrine that a motion filed without the requisite notice of hearing is a useless piece of paper with no
legal effect1 be, under the facts of the case, relaxed?
Petitioner National Commercial Bank of Saudi Arabia (NCBSA) filed a case against respondent Philippine Banking
Corporation (PBC) in the Regional Trial Court (RTC) of Makati on December 4, 1985 to recover "the duplication in the
payment of the proceeds of a letter of credit [NCBSA] has issued . . . brought about by the fact that both the head office
and the Makati branch of [PBC, the negotiating bank,] collected the proceeds of the letter of credit." 2
On August 24, 1993, the RTC of Makati rendered a decision in favor of NCBSA. 3 PBC received a copy of the decision on
September 3, 19934 and on the 12th day of the period of appeal or on September 15, 1993, it filed a Motion for
Reconsideration.5 The motion, however, did not contain a notice of hearing. 6
On September 21, 1993, NCBSA filed a Manifestation pointing out that PBC's Motion for Reconsideration did not contain
any notice of hearing.7
On September 27, 1993, NCBSA filed a Motion for Writ of Execution of the decision of the trial court. 8 On even date, PBC
filed a Motion to Set "Motion for Reconsideration" for Hearing 9 alleging as follows:
xxx
xxx
xxx
2. The Motion for Reconsideration raised both questions of facts and law arising from the erroneous findings made by the
Honorable Court in the said Decision;
3. In order that defendant can fully amplify and expound on the issues raised on the said motions, there is a need to set
the Motion for Hearing.
xxx
xxx
xxx10
NCBSA opposed this motion vigorously, it praying that it be stricken off the records. 11
By Order of February 1, 1994, the trial court struck from the records of the case PBC's Motion for Reconsideration of its
decision and granted NCBSA's Motion for Writ of Execution. 12
PBC filed a Motion for Reconsideration of said Order of February 1, 1994, this time alleging that PBC's failure to comply with
the 3-day notice rule "was essentially an honest mistake or oversight of counsel." 13 This motion was just as vigorously
opposed by NCBSA.14
By Order of March 2, 1994, the trial court denied PBC's Motion for Reconsideration of its Order of February 1, 1994, finding
that "[t]here are no compelling reasons to warrant a liberal construction of the rules on Motions." 15
PBC assailed before the Court of Appeals via Petition for Certiorari the trial court's March 2, 1994 Order. 16
By Decision of February 27, 1995, the Court of Appeals dismissed PBC's Petition for Certiorari. 17 On PBC's Motion for
Reconsideration, however, the Court of Appeals, by Amended Decision of March 8, 1996, set aside its February 27, 1995
Decision and granted PBC's Petition for Certiorari and directed the trial court to resolve PBC's Motion for Reconsideration
(of the trial court's August 24, 1993 Decision). 18
Justifying its setting aside of its February 27, 1995 Decision, the Court of Appeals held in its Amended Decision:
. . . [T]o deny petitioner's motion for reconsideration on the ground of failure to contain a notice of hearing is too harsh an
application of procedural rules especially so when petitioner has filed a motion to set the motion for reconsideration for
hearing and had furnished private respondent a copy of the motion, a fact which is not denied by the latter. 19
NCBSA thus comes to this Court assailing the Court of Appeals' Amended Decision.
The petition is impressed with merit.
The requirement of notice under Sections 4 and 5, Rule 15 in connection with Section 2, Rule 37 of the Revised Rules of
Court20 is mandatory. The absence of a notice of hearing is fatal and, in cases of motions to reconsider a decision, the
running of the period to appeal is not tolled by their filing or pendency. 21 In the case at bar, it is not disputed that PBC's
Motion for Reconsideration of the August 24, 1993 decision of the trial court did not contain the requisite notice of hearing.
In an attempt to cure the defect, PBC filed on Motion to Set the "Motion for Reconsideration" for Hearing on September 27,
1993, or 9 days after the period for filing the Notice of Appeal had expired.
The motion for reconsideration, however, being fatally defective for lack of notice of hearing, cannot be cured by a belated
filing of a notice of hearing. 22 More so in the case at bar where the Motion to Set the "Motion for Reconsideration" was filed
after the expiration of the period for filing an appeal.
NCBSA thus calls for the strict application of our rules of procedure to avoid further delays in the disposition of the
case,23 which has remained pending for more than 17 years.
PBC, on the other hand, invokes a just and fair determination of the case. 24
PBC's appeal for justice and fairness does not lie, however, there being nothing on record to show that it has been a victim
of injustice or unfairness. On the contrary, as found by the Court of Appeals in its original decision, PBC had the opportunity
to participate in the trial and present its defense and had actually made full use of the remedies under our rules of
procedure.25 More importantly, there was no oppressive exercise of judicial authority that would call for the annulment of
the trial court's resolutions. 26
The finality of the decision of the trial court cannot be set aside purely on the basis of liberality for while it is true that a
litigation is not a game of technicalities, this does not mean that the Rules of Court may be ignored at will and at random.
Only for the most persuasive of reasons should the court allow a relaxation of its procedural rules. 27
PBC, however, has not advanced any persuasive or exceptional reason in failing to set its Motion for Reconsideration of the
trial court's decision for hearing. In fact, in its Motion to Set "Motion for Reconsideration" for Hearing, PBC was completely
silent on why it did not set the Motion for Reconsideration for hearing. It just alleged that, as earlier quoted, "[i]n order that
defendant can fully amplify and expound on the issues raised on said motion, there is a need to set the Motion [for
Reconsideration] for Hearing."28 This allegation conveys that, if there was no need for PBC to "fully amplify and expound on
the issues raised" in the Motion for Reconsideration, no setting for hearing of said motion was needed. But as earlier

22

stated, the requirement of notice in this kind of motion is mandatory. The Motion for Reconsideration thus remained a mere
scrap of paper which deserved no consideration.
But assuming that PBC had presented exceptional reason or excuse for its failure to comply with the notice requirement,
the Motion for Reconsideration would be denied on the ground that it is pro forma.
In its Rejoinder29 to NCBSA's Reply to Comment to the petition at bar, PBC alleged that it was, in its Motion for
Reconsideration of the trial court's decision, raising "serious questions involving findings of fact and conclusions of law by
the trial court," thus "questioning the decision as being contrary to law and the evidence on record." 30 A reading of the
records will show, however, that the same three issues raised by PBC during the trial prescription, laches and lack of
double payment are what are being raised in its Motion for Reconsideration of the decision of the trial court.
PBC's Motion for Reconsideration of the trial court's decision was thus "in substance . . . a reiteration of reasons and
arguments"31 raised before the trial court for the dismissal of NCBSA's complaint, which reasons and arguments had
already been considered and resolved against it on the merits by the trial court. The Motion for Reconsideration was thus
merely pro forma.
Technicality aside, en passant, on the merits of PBC's Motion for Reconsideration of the trial court's decision, the trial court
did not err in brushing aside its main defense of prescription that NCBSA's complaint is "based on the quasi-contract of
solutio indebiti,"32 hence, it prescribes in six years and, therefore, when NCBSA filed its complaint nine years after the
cause of action arose, it had prescribed.
Solutio indebiti applies where: (1) a payment is made when there exists no binding relation between the payor, who has no
duty to pay, and the person who received the payment, and (2) the payment is made through mistake, and not through
liberality or some other cause33 In the case at bar, PBC and NCBSA were bound by their contract, the letter of credit, under
which NCBSA obliged itself to pay PBC, subject to compliance by the latter with certain conditions provided therein. As
such, the cause of action was based on a contract, and the prescriptive period is ten, 34 not six years.
Even PBC's defense of laches is bereft of merit, the cause of action not having yet prescribed at the time NCBSA's
complaint was filed.
Courts should never apply the doctrine of laches earlier than the expiration of time limited for the commencement of
actions at law.35
And as to PBC's allegation that the trial court erred in finding the existence of double payment, suffice it to state that PBC,
while denying that there was double payment, itself admitted having received a second set of payment for the same
amount covered by the letter of credit. Thus, in its petition for certiorari 36 filed with the Court of Appeals, it alleged, quoted
verbatim:
The second set for the same amount, although it was received and credited to [PBC's] account with Chemical Bank New
York, were to be and subsequently transmitted to the account of Labroco (International, Philippines) . . . 37(Emphasis
supplied.)
WHEREFORE, the instant petition for review on certiorari is GRANTED. The Amended Decision of the Court of Appeals dated
March 8, 1996 is SET ASIDE and the Resolutions of the Regional Trial Court declaring the Motion for Reconsideration filed by
the Philippine Banking Corporation as pro forma is REINSTATED.
SO ORDERED.
Puno, Panganiban, Sandoval-Gutierrez, and Corona JJ., concur.

THIRD DIVISION
[G.R. No. 173227. January 20, 2009.]
SEBASTIAN SIGA-AN, petitioner, vs. ALICIA VILLANUEVA, respondent.

23

DECISION
CHICO-NAZARIO, J p:
Before Us is a Petition 1 for Review on Certiorari under Rule 45 of the Rules of Court seeking to set aside the
Decision, 2 dated 16 December 2005, and Resolution, 3 dated 19 June 2006 of the Court of Appeals in CA-G.R. CV No.
71814, which affirmed in toto the Decision, 4 dated 26 January 2001, of the Las Pias City Regional Trial Court, Branch 255,
in Civil Case No. LP-98-0068.
The facts gathered from the records are as follows:
On 30 March 1998, respondent Alicia Villanueva filed a complaint 5 for sum of money against petitioner Sebastian Siga-an
before the Las Pias City Regional Trial Court (RTC), Branch 255, docketed as Civil Case No. LP-98-0068. Respondent
alleged that she was a businesswoman engaged in supplying office materials and equipments to the Philippine Navy Office
(PNO) located at Fort Bonifacio, Taguig City, while petitioner was a military officer and comptroller of the PNO from 1991 to
1996.
Respondent claimed that sometime in 1992, petitioner approached her inside the PNO and offered to loan her the amount
of P540,000.00. Since she needed capital for her business transactions with the PNO, she accepted petitioner's proposal.
The loan agreement was not reduced in writing. Also, there was no stipulation as to the payment of interest for the
loan. 6 IaDTES
On 31 August 1993, respondent issued a check worth P500,000.00 to petitioner as partial payment of the loan. On 31
October 1993, she issued another check in the amount of P200,000.00 to petitioner as payment of the remaining balance
of the loan. Petitioner told her that since she paid a total amount of P700,000.00 for the P540,000.00 worth of loan, the
excess amount of P160,000.00 would be applied as interest for the loan. Not satisfied with the amount applied as interest,
petitioner pestered her to pay additional interest. Petitioner threatened to block or disapprove her transactions with the
PNO if she would not comply with his demand. As all her transactions with the PNO were subject to the approval of
petitioner as comptroller of the PNO, and fearing that petitioner might block or unduly influence the payment of her
vouchers in the PNO, she conceded. Thus, she paid additional amounts in cash and checks as interests for the loan. She
asked petitioner for receipt for the payments but petitioner told her that it was not necessary as there was mutual trust
and confidence between them. According to her computation, the total amount she paid to petitioner for the loan and
interest accumulated to P1,200,000.00. 7
Thereafter, respondent consulted a lawyer regarding the propriety of paying interest on the loan despite absence of
agreement to that effect. Her lawyer told her that petitioner could not validly collect interest on the loan because there
was no agreement between her and petitioner regarding payment of interest. Since she paid petitioner a total amount of
P1,200,000.00 for the P540,000.00 worth of loan, and upon being advised by her lawyer that she made overpayment to
petitioner, she sent a demand letter to petitioner asking for the return of the excess amount of P660,000.00. Petitioner,
despite receipt of the demand letter, ignored her claim for reimbursement. 8
Respondent prayed that the RTC render judgment ordering petitioner to pay respondent (1) P660,000.00 plus legal interest
from the time of demand; (2) P300,000.00 as moral damages; (3) P50,000.00 as exemplary damages; and (4) an amount
equivalent to 25% of P660,000.00 as attorney's fees. 9
In his answer 10 to the complaint, petitioner denied that he offered a loan to respondent. He averred that in 1992,
respondent approached and asked him if he could grant her a loan, as she needed money to finance her business venture
with the PNO. At first, he was reluctant to deal with respondent, because the latter had a spotty record as a supplier of the
PNO. However, since respondent was an acquaintance of his officemate, he agreed to grant her a loan. Respondent paid
the loan in full. 11 jur2005
Subsequently, respondent again asked him to give her a loan. As respondent had been able to pay the previous loan in full,
he agreed to grant her another loan. Later, respondent requested him to restructure the payment of the loan because she
could not give full payment on the due date. He acceded to her request. Thereafter, respondent pleaded for another
restructuring of the payment of the loan. This time he rejected her plea. Thus, respondent proposed to execute a
promissory note wherein she would acknowledge her obligation to him, inclusive of interest, and that she would issue
several postdated checks to guarantee the payment of her obligation. Upon his approval of respondent's request for
restructuring of the loan, respondent executed a promissory note dated 12 September 1994 wherein she admitted having
borrowed an amount of P1,240,000.00, inclusive of interest, from petitioner and that she would pay said amount in March
1995. Respondent also issued to him six postdated checks amounting to P1,240,000.00 as guarantee of compliance with
her obligation. Subsequently, he presented the six checks for encashment but only one check was honored. He demanded
that respondent settle her obligation, but the latter failed to do so. Hence, he filed criminal cases for Violation of
the Bouncing Checks Law (Batas Pambansa Blg. 22) against respondent. The cases were assigned to the Metropolitan Trial
Court of Makati City, Branch 65 (MeTC). 12
Petitioner insisted that there was no overpayment because respondent admitted in the latter's promissory note that her
monetary obligation as of 12 September 1994 amounted to P1,240,000.00 inclusive of interests. He argued that
respondent was already estopped from complaining that she should not have paid any interest, because she was given
several times to settle her obligation but failed to do so. He maintained that to rule in favor of respondent is tantamount to
concluding that the loan was given interest-free. Based on the foregoing averments, he asked the RTC to dismiss
respondent's complaint.
After trial, the RTC rendered a Decision on 26 January 2001 holding that respondent made an overpayment of her loan
obligation to petitioner and that the latter should refund the excess amount to the former. It ratiocinated that respondent's
obligation was only to pay the loaned amount of P540,000.00, and that the alleged interests due should not be included in
the computation of respondent's total monetary debt because there was no agreement between them regarding payment
of interest. It concluded that since respondent made an excess payment to petitioner in the amount of P660,000.00

24

through mistake, petitioner should return the said amount to respondent pursuant to the principle of solutio
indebiti. 13 HEIcDT
The RTC also ruled that petitioner should pay moral damages for the sleepless nights and wounded feelings experienced by
respondent. Further, petitioner should pay exemplary damages by way of example or correction for the public good, plus
attorney's fees and costs of suit.
The dispositive portion of the RTC Decision reads:
WHEREFORE, in view of the foregoing evidence and in the light of the provisions of law and jurisprudence on the matter,
judgment is hereby rendered in favor of the plaintiff and against the defendant as follows:
(1) Ordering defendant to pay plaintiff the amount of P660,000.00 plus legal interest of 12% per annum computed from 3
March 1998 until the amount is paid in full;
(2) Ordering defendant to pay plaintiff the amount of P300,000.00 as moral damages;
(3) Ordering defendant to pay plaintiff the amount of P50,000.00 as exemplary damages; CcAESI
(4) Ordering defendant to pay plaintiff the amount equivalent to 25% of P660,000.00 as attorney's fees; and
(5) Ordering defendant to pay the costs of suit. 14
Petitioner appealed to the Court of Appeals. On 16 December 2005, the appellate court promulgated its Decision
affirming in toto the RTC Decision, thus:
WHEREFORE, the foregoing considered, the instant appeal is hereby DENIED and the assailed decision [is] AFFIRMED in
toto. 15
Petitioner filed a motion for reconsideration of the appellate court's decision but this was denied. 16 Hence, petitioner
lodged the instant petition before us assigning the following errors:
I.
THE RTC AND THE COURT OF APPEALS ERRED IN RULING THAT NO INTEREST WAS DUE TO PETITIONER; aHcDEC
II.
THE RTC AND THE COURT OF APPEALS ERRED IN APPLYING THE PRINCIPLE OF SOLUTIO INDEBITI. 17
Interest is a compensation fixed by the parties for the use or forbearance of money. This is referred to as monetary
interest. Interest may also be imposed by law or by courts as penalty or indemnity for damages. This is called
compensatory interest. 18 The right to interest arises only by virtue of a contract or by virtue of damages for delay or
failure to pay the principal loan on which interest is demanded. 19
Article 1956 of the Civil Code, which refers to monetary interest, 20 specifically mandates that no interest shall be due
unless it has been expressly stipulated in writing. As can be gleaned from the foregoing provision, payment of monetary
interest is allowed only if: (1) there was an express stipulation for the payment of interest; and (2) the agreement for the
payment of interest was reduced in writing. The concurrence of the two conditions is required for the payment of monetary
interest. Thus, we have held that collection of interest without any stipulation therefor in writing is prohibited by law. 21
It appears that petitioner and respondent did not agree on the payment of interest for the loan. Neither was there
convincing proof of written agreement between the two regarding the payment of interest. Respondent testified that
although she accepted petitioner's offer of loan amounting to P540,000.00, there was, nonetheless, no verbal or written
agreement for her to pay interest on the loan. 22
Petitioner presented a handwritten promissory note dated 12 September 1994 23 wherein respondent purportedly
admitted owing petitioner "capital and interest". Respondent, however, explained that it was petitioner who made a
promissory note and she was told to copy it in her own handwriting; that all her transactions with the PNO were subject to
the approval of petitioner as comptroller of the PNO; that petitioner threatened to disapprove her transactions with the
PNO if she would not pay interest; that being unaware of the law on interest and fearing that petitioner would make good
of his threats if she would not obey his instruction to copy the promissory note, she copied the promissory note in her own
handwriting; and that such was the same promissory note presented by petitioner as alleged proof of their written
agreement on interest. 24 Petitioner did not rebut the foregoing testimony. It is evident that respondent did not really
consent to the payment of interest for the loan and that she was merely tricked and coerced by petitioner to pay interest.
Hence, it cannot be gainfully said that such promissory note pertains to an express stipulation of interest or written
agreement of interest on the loan between petitioner and respondent. cCTAIE
Petitioner, nevertheless, claims that both the RTC and the Court of Appeals found that he and respondent agreed on the
payment of 7% rate of interest on the loan; that the agreed 7% rate of interest was duly admitted by respondent in her
testimony in the Batas Pambansa Blg. 22 cases he filed against respondent; that despite such judicial admission by
respondent, the RTC and the Court of Appeals, citing Article 1956 of the Civil Code, still held that no interest was due him
since the agreement on interest was not reduced in writing; that the application of Article 1956 of the Civil Code should not
be absolute, and an exception to the application of such provision should be made when the borrower admits that a
specific rate of interest was agreed upon as in the present case; and that it would be unfair to allow respondent to pay only
the loan when the latter very well knew and even admitted in the Batas Pambansa Blg. 22 cases that there was an agreed
7% rate of interest on the loan. 25
We have carefully examined the RTC Decision and found that the RTC did not make a ruling therein that petitioner and
respondent agreed on the payment of interest at the rate of 7% for the loan. The RTC clearly stated that although
petitioner and respondent entered into a valid oral contract of loan amounting to P540,000.00, they, nonetheless, never
intended the payment of interest thereon. 26 While the Court of Appeals mentioned in its Decision that it concurred in the
RTC's ruling that petitioner and respondent agreed on a certain rate of interest as regards the loan, we consider this as
merely an inadvertence because, as earlier elucidated, both the RTC and the Court of Appeals ruled that petitioner is not
entitled to the payment of interest on the loan. The rule is that factual findings of the trial court deserve great weight and
respect especially when affirmed by the appellate court. 27 We found no compelling reason to disturb the ruling of both
courts.
Petitioner's reliance on respondent's alleged admission in the Batas Pambansa Blg. 22 cases that they had agreed on the
payment of interest at the rate of 7% deserves scant consideration. In the said case, respondent merely testified that after
paying the total amount of loan, petitioner ordered her to pay interest. 28 Respondent did not categorically declare in the
same case that she and respondent made an express stipulation in writing as regards payment of interest at the rate of

25

7%. As earlier discussed, monetary interest is due only if there was an express stipulation in writing for the payment of
interest. cSTCDA
There are instances in which an interest may be imposed even in the absence of express stipulation, verbal or written,
regarding payment of interest. Article 2209 of the Civil Code states that if the obligation consists in the payment of a sum
of money, and the debtor incurs delay, a legal interest of 12% per annum may be imposed as indemnity for damages if no
stipulation on the payment of interest was agreed upon. Likewise, Article 2212 of the Civil Code provides that interest due
shall earn legal interest from the time it is judicially demanded, although the obligation may be silent on this point.
All the same, the interest under these two instances may be imposed only as a penalty or damages for breach of
contractual obligations. It cannot be charged as a compensation for the use or forbearance of money. In other words, the
two instances apply only to compensatory interest and not to monetary interest. 29 The case at bar involves petitioner's
claim for monetary interest.
Further, said compensatory interest is not chargeable in the instant case because it was not duly proven that respondent
defaulted in paying the loan. Also, as earlier found, no interest was due on the loan because there was no written
agreement as regards payment of interest.
Apropos the second assigned error, petitioner argues that the principle of solutio indebiti does not apply to the instant
case. Thus, he cannot be compelled to return the alleged excess amount paid by respondent as interest. 30
Under Article 1960 of the Civil Code, if the borrower of loan pays interest when there has been no stipulation therefor, the
provisions of the Civil Code concerning solutio indebiti shall be applied. Article 2154 of the Civil Code explains the principle
of solutio indebiti. Said provision provides that if something is received when there is no right to demand it, and it was
unduly delivered through mistake, the obligation to return it arises. In such a case, a creditor-debtor relationship is created
under a quasi-contract whereby the payor becomes the creditor who then has the right to demand the return of payment
made by mistake, and the person who has no right to receive such payment becomes obligated to return the same. The
quasi-contract of solutio indebiti harks back to the ancient principle that no one shall enrich himself unjustly at the
expense of another. 31 The principle of solutio indebiti applies where (1) a payment is made when there exists no binding
relation between the payor, who has no duty to pay, and the person who received the payment; and (2) the payment is
made through mistake, and not through liberality or some other cause. 32 We have held that the principle of solutio
indebiti applies in case of erroneous payment of undue interest. 33 IcCATD
It was duly established that respondent paid interest to petitioner. Respondent was under no duty to make such payment
because there was no express stipulation in writing to that effect. There was no binding relation between petitioner and
respondent as regards the payment of interest. The payment was clearly a mistake. Since petitioner received something
when there was no right to demand it, he has an obligation to return it.
We shall now determine the propriety of the monetary award and damages imposed by the RTC and the Court of Appeals.
Records show that respondent received a loan amounting to P540,000.00 from petitioner. 34 Respondent issued two
checks with a total worth of P700,000.00 in favor of petitioner as payment of the loan. 35 These checks were subsequently
encashed by petitioner. 36 Obviously, there was an excess of P160,000.00 in the payment for the loan. Petitioner claims
that the excess of P160,000.00 serves as interest on the loan to which he was entitled. Aside from issuing the said two
checks, respondent also paid cash in the total amount of P175,000.00 to petitioner as interest. 37 Although no receipts
reflecting the same were presented because petitioner refused to issue such to respondent, petitioner, nonetheless,
admitted in his Reply-Affidavit 38 in the Batas Pambansa Blg. 22 cases that respondent paid him a total amount of
P175,000.00 cash in addition to the two checks. Section 26, Rule 130 of the Rules of Evidence provides that the declaration
of a party as to a relevant fact may be given in evidence against him. Aside from the amounts of P160,000.00 and
P175,000.00 paid as interest, no other proof of additional payment as interest was presented by respondent. Since we
have previously found that petitioner is not entitled to payment of interest and that the principle of solutio indebiti applies
to the instant case, petitioner should return to respondent the excess amount of P160,000.00 and P175,000.00 or the total
amount of P335,000.00. Accordingly, the reimbursable amount to respondent fixed by the RTC and the Court of Appeals
should be reduced from P660,000.00 to P335,000.00.
As earlier stated, petitioner filed five (5) criminal cases for violation of Batas Pambansa Blg. 22 against respondent. In the
said cases, the MeTC found respondent guilty of violating Batas Pambansa Blg. 22 for issuing five dishonored checks to
petitioner. Nonetheless, respondent's conviction therein does not affect our ruling in the instant case. The two checks,
subject matter of this case, totaling P700,000.00 which respondent claimed as payment of the P540,000.00 worth of loan,
were not among the five checks found to be dishonored or bounced in the five criminal cases. Further, the MeTC found that
respondent made an overpayment of the loan by reason of the interest which the latter paid to petitioner. 39
Article 2217 of the Civil Code provides that moral damages may be recovered if the party underwent physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and
similar injury. Respondent testified that she experienced sleepless nights and wounded feelings when petitioner refused to
return the amount paid as interest despite her repeated demands. Hence, the award of moral damages is justified.
However, its corresponding amount of P300,000.00, as fixed by the RTC and the Court of Appeals, is exorbitant and should
be equitably reduced. Article 2216 of the Civil Code instructs that assessment of damages is left to the discretion of the
court according to the circumstances of each case. This discretion is limited by the principle that the amount awarded
should not be palpably excessive as to indicate that it was the result of prejudice or corruption on the part of the trial
court. 40 To our mind, the amount of P150,000.00 as moral damages is fair, reasonable, and proportionate to the injury
suffered by respondent. SACHcD
Article 2232 of the Civil Code states that in a quasi-contract, such as solutio indebiti, exemplary damages may be imposed
if the defendant acted in an oppressive manner. Petitioner acted oppressively when he pestered respondent to pay interest
and threatened to block her transactions with the PNO if she would not pay interest. This forced respondent to pay interest
despite lack of agreement thereto. Thus, the award of exemplary damages is appropriate. The amount of P50,000.00
imposed as exemplary damages by the RTC and the Court is fitting so as to deter petitioner and other lenders from
committing similar and other serious wrongdoings. 41

26

Jurisprudence instructs that in awarding attorney's fees, the trial court must state the factual, legal or equitable
justification for awarding the same. 42 In the case under consideration, the RTC stated in its Decision that the award of
attorney's fees equivalent to 25% of the amount paid as interest by respondent to petitioner is reasonable and moderate
considering the extent of work rendered by respondent's lawyer in the instant case and the fact that it dragged on for
several years. 43 Further, respondent testified that she agreed to compensate her lawyer handling the instant case such
amount. 44 The award, therefore, of attorney's fees and its amount equivalent to 25% of the amount paid as interest by
respondent to petitioner is proper.
Finally, the RTC and the Court of Appeals imposed a 12% rate of legal interest on the amount refundable to respondent
computed from 3 March 1998 until its full payment. This is erroneous.
We held in Eastern Shipping Lines, Inc. v. Court of Appeals, 45 that when an obligation, not constituting a loan or
forbearance of money is breached, an interest on the amount of damages awarded may be imposed at the rate of 6% per
annum. We further declared that when the judgment of the court awarding a sum of money becomes final and executory,
the rate of legal interest, whether it is a loan/forbearance of money or not, shall be 12% per annum from such finality until
its satisfaction, this interim period being deemed equivalent to a forbearance of credit. aCTcDS
In the present case, petitioner's obligation arose from a quasi-contract of solutio indebiti and not from a loan or
forbearance of money. Thus, an interest of 6% per annum should be imposed on the amount to be refunded as well as on
the damages awarded and on the attorney's fees, to be computed from the time of the extra-judicial demand on 3 March
1998, 46 up to the finality of this Decision. In addition, the interest shall become 12% per annum from the finality of this
Decision up to its satisfaction.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 71814, dated 16 December 2005, is hereby AFFIRMED
with the following MODIFICATIONS: (1) the amount of P660,000.00 as refundable amount of interest is reduced to THREE
HUNDRED THIRTY FIVE THOUSAND PESOS (P335,000.00); (2) the amount of P300,000.00 imposed as moral damages is
reduced to ONE HUNDRED FIFTY THOUSAND PESOS (P150,000.00); (3) an interest of 6% per annum is imposed on the
P335,000.00, on the damages awarded and on the attorney's fees to be computed from the time of the extra-judicial
demand on 3 March 1998 up to the finality of this Decision; and (4) an interest of 12% per annum is also imposed from the
finality of this Decision up to its satisfaction. Costs against petitioner.
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Nachura and Leonardo-de Castro, * JJ., concur.
||| (Siga-an v. Villanueva, G.R. No. 173227, [January 20, 2009], 596 PHIL 760-777)

27

FIRST DIVISION
[G.R. No. 129282. November 29, 2001.]
DMPI EMPLOYEES CREDIT COOPERATIVE, INC., (DMPI-ECCI), petitioner, vs. HON. ALEJANDRO M. VELEZ, as Presiding Judge of
the RTC, Misamis Oriental, Br. 20, and ERIBERTA VILLEGAS, respondents.
Isaidro Q. Lico and Marieto P. Gallego for petitioner.
Constantino Jaraula for private respondents.
SYNOPSIS
Carmen Mandawe is an employee of DMPI-ECCI. Allegedly, respondent Villegas entrusted money to Mandawe for deposit
with DMPI Employees Credit Corporation, Inc. DMPI-ECCI. Mandawe, however, failed to account the entrusted amount and
hence, an information for estafa was filed against her. Subsequently, when Villegas also filed a complaint for sum of money
and damages against Mandawe and DMPI-ECCI, DMPI-ECCI sought the dismissal of the same on the ground that there is a
pending criminal case and the civil complaint failed to contain a certification against forum shopping as required under
Circular No. 28-91.
There was no violation of the circular. At the time of the filing of the civil complaint, the requirement of certification on
forum shopping is not yet applicable to the lower courts. On the issue of the pending criminal case, under the present rule,
only the civil liability arising from the offense charged is deemed instituted with the criminal action unless the same is
waived or its filing reserved. This does not include recovery of civil liability under Arts. 32, 33, 34 and 2176 of the Civil
Code arising from the same act or omission which may be prosecuted separately without reservation. Thus, the
independent civil action for damages on account of the fraud committed against Villegas under Art. 33 of the Civil Code
may proceed independently even if without reservation as to its filing.
SYLLABUS
1. REMEDIAL LAW; CIRCULAR NO. 28-91 (CERTIFICATION OF NON-FORUM SHOPPING); EXTENDED APPLICATION THEREOF.
Circular No. 28-91 of the Supreme Court requires a certificate of non-forum shopping to be attached to petitions filed
before the Supreme Court and the Court of Appeals. This circular was revised on February 8, 1994 by extending the
requirement to all initiatory pleadings filed in all courts and quasi-judicial agencies other than the Supreme Court and the
Court of Appeals. Respondent Villegas' failure to attach a certificate of non-forum shopping in her complaint did not violate
Circular No. 28-91, because at the time of filing, the requirement applied only to petitions filed with the Supreme Court and
the Court of Appeals. Likewise, Administrative Circular No. 04-94 is inapplicable for the reason that the complaint was filed
on March 29, 1994, three days before April 1, 1994, the date of effectivity of the circular.
2. CRIMINAL LAW; CLASSES OF INJURIES; PERSONAL INJURY; CIVIL LIABILITY; ELUCIDATED. As a general rule, an offense
causes two (2) classes of injuries. The first is the social injury produced by the criminal act which is sought to be repaired
thru the imposition of the corresponding penalty, and the second is the personal injury caused to the victim of the crime
which injury is sought to be compensated through indemnity which is civil in nature. Thus, "every person criminally liable
for a felony is also civilly liable." This is the law governing the recovery of civil liability arising from the commission of an
offense. Civil liability includes restitution, reparation for damage caused, and indemnification of consequential damages.
The offended party may prove the civil liability of an accused arising from the commission of the offense in the criminal
case since the civil action is either deemed instituted with the criminal action or is separately instituted. However, with
respect to civil actions for recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code arising from the
same act or omission, the rule has been changed. Under the present rule, only the civil liability arising from the offense
charged is deemed instituted with the criminal action unless the offended party waives the civil action, reserves his right to
institute it separately, or institutes the civil action prior to the criminal action. There is no more need for a reservation of
the right to file the independent civil actions under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines. "The
reservation and waiver referred to refers only to the civil action for the recovery of the civil liability arising from the offense
charged. This does not include recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code of the
Philippines arising from the same act or omission which may be prosecuted separately even without a
reservation." AaECSH
3. REMEDIAL LAW; CRIMINAL PROCEDURE; RETRO-ACTIVE EFFECT OF INDEPENDENT CIVIL ACTIONS. The changes in the
Revised Rules on Criminal Procedure pertaining to independent civil actions which became effective on December 1, 2000
are applicable to this case. Procedural laws may be given retroactive effect to actions pending and undetermined at the
time of their passage. There are no vested rights in the rules of procedure. Thus, Civil Case No. CV-94-214, an independent
civil action for damages on account of the fraud committed against respondent Villegas under Article 33 of the Civil Code,
may proceed independently even if there was no reservation as to its filing.
DECISION
PARDO, J p:
The Case
In this special civil action for certiorari, petitioner DMPI Employees Credit Cooperative, Inc. (DMPI-ECCI) seeks the
annulment of the order 1 of the Regional Trial Court, Misamis Oriental, Branch 20, granting the motion for reconsideration
of respondent Eriberta Villegas, and thus reversing the previous dismissal of Civil Case No. CV-94-214.
The Facts
On February 18, 1994, the prosecuting attorney filed with the Regional Trial Court, Misamis Oriental, Branch 37, an
information for estafa2 against Carmen Mandawe for alleged failure to account to respondent Eriberta Villegas the amount
of P608,532.46. Respondent Villegas entrusted this amount to Carmen Mandawe, an employee of petitioner DMPI-ECCI, for
deposit with the teller of petitioner.
Subsequently, on March 29, 1994, respondent Eriberta Villegas filed with the Regional Trial Court, Misamis Oriental, Branch
20, a complaint 3 against Carmen Mandawe and petitioner DMPI-ECCI for a sum of money and damages with preliminary
attachment arising out of the same transaction. In time, petitioner sought the dismissal of the civil case on the following
grounds: (1) that there is a pending criminal case in RTC Branch 37, arising from the same facts, and (2) that the complaint
failed to contain a certification against forum shopping as required by Supreme Court Circular No. 28-91. 4

28

On December 12, 1996, the trial court issued an order 5 dismissing Civil Case No. CV-94-214. On January 21, 1997,
respondent filed a motion for reconsideration 6 of the order.
On February 21, 1997, the trial court issued an order 7 granting respondent's motion for reconsideration, thereby recalling
the dismissal of the case.
Hence, this petition. 8
The Issues
The issues raised are: (1) whether the plaintiff's failure to attach a certification against forum shopping in the complaint is
a ground to dismiss the case; 9 and, (2) whether the civil case could proceed independently of the criminal case for estafa
without having reserved the filing of the civil action.

The Court's Ruling

On the first issue, Circular No. 28-91 10 of the Supreme Court requires a certificate of non-forum shopping to be attached
to petitions filed before the Supreme Court and the Court of Appeals. This circular was revised on February 8, 1994 11 by
extending the requirement to all initiatory pleadings filed in all courts and quasi-judicial agencies other than the Supreme
Court and the Court of Appeals.
Respondent Villegas' failure to attach a certificate of non-forum shopping in her complaint did not violate Circular No. 2891, because at the time of filing, the requirement applied only to petitions filed with the Supreme Court and the Court of
Appeals. 12 Likewise, Administrative Circular No. 04-94 is inapplicable for the reason that the complaint was filed on March
29, 1994, three days before April 1, 1994, the date of effectivity of the circular. 13
On the second issue, as a general rule, an offense causes two (2) classes of injuries. The first is the social injury produced
by the criminal act which is sought to be repaired thru the imposition of the corresponding penalty, and the second is the
personal injury caused to the victim of the crime which injury is sought to be compensated through indemnity which is civil
in nature. 14
Thus, "every person criminally liable for a felony is also civilly liable." 15 This is the law governing the recovery of civil
liability arising from the commission of an offense. Civil liability includes restitution, reparation for damage caused, and
indemnification of consequential damages. 16
The offended party may prove the civil liability of an accused arising from the commission of the offense in the criminal
case since the civil action is either deemed instituted with the criminal action or is separately instituted.
Rule 111, Section 1 of the Revised Rules of Criminal Procedure, which became effective on December 1, 2000, provides
that: SCEDaT
"(a) When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged
shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to
institute it separately or institutes the civil action prior to the criminal action." [Italics supplied]
Rule 111, Section 2 further provides that
"After the criminal action has been commenced, the separate civil action arising therefrom cannot be instituted until final
judgment has been entered in the criminal action." [Italics supplied]
However, with respect to civil actions for recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code
arising from the same act or omission, the rule has been changed.
Under the present rule, only the civil liability arising from the offense charged is deemed instituted with the criminal action
unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action
prior to the criminal action. 17
There is no more need for a reservation of the right to file the independent civil actions under Articles 32, 33, 34 and 2176
of the Civil Code of the Philippines. "The reservation and waiver referred to refers only to the civil action for the recovery of
the civil liability arising from the offense charged. This does not include recovery of civil liability under Articles 32, 33, 34
and 2176 of the Civil Code of the Philippines arising from the same act or omission which may be prosecuted separately
even without a reservation." 18
Rule 111, Section 3 reads:
"Sec. 3. When civil action may proceed independently. In the cases provided in Articles 32, 33, 34 and 2176 of the Civil
Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently
of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party
recover damages twice for the same act or omission charged in the criminal action."
The changes in the Revised Rules on Criminal Procedure pertaining to independent civil actions which became effective on
December 1, 2000 are applicable to this case.
Procedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage. There
are no vested rights in the rules of procedure. 19
Thus, Civil Case No. CV-94-214, an independent civil action for damages on account of the fraud committed against
respondent Villegas under Article 33 of the Civil Code, may proceed independently even if there was no reservation as to
its filing.
The Fallo
WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the order dated February 21, 1997. 20
No costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Kapunan and Ynares-Santiago., JJ., concur.
||| (DMPI Employees Credit Cooperative, Inc. v. Velez, G.R. No. 129282, [November 29, 2001], 422 PHIL 381-388)

SECOND DIVISION
[G.R. No. 165496. February 12, 2007.]
HUN HYUNG PARK, petitioner, vs. EUNG WON CHOI, respondent.

29

DECISION
CARPIO-MORALES, J p:
Petitioner, Hun Hyung Park, assails the Court of Appeals (CA) Resolutions dated May 20, 2004 1 and September 28,
2004 2 in CA G.R. CR No. 28344 dismissing his petition and denying reconsideration thereof, respectively.
In an Information 3 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 Order 5 of February 27, 2003, the Metropolitan Trial Court (MeTC) of Makati, Branch 65 granted the Demurrer and
dismissed the case. The prosecution's Motion for Reconsideration was denied. 6
Petitioner appealed the civil aspect 7 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
respondent's 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 respondent's 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 Petitioner's 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. 00-2-10-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. TCDHaE
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 Court's
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 party-respondent 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 one's 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 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 petitioner's position, the range of permutation is not left to the pleader's 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 petition 16 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 oath 18 to secure an

30

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 petitioner's 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 petitioner's 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 MeTCFebruary 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." 22
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 respondent's Motion for Reconsideration and the March 29,
2004 RTC Order denying petitioner's 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. aHcDEC
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
respondent's 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 court's 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 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

31

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
petitioner's motion for reconsideration pleading that proceedings with respect to the civil aspect of the case continue.
Petitioner's position is tenuous.
Petitioner's citation of Section 1 of Rule 33 is incorrect. 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 ofCriminal 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 petitioner's attribution of waiver to respondent, it cannot be determined with certainty from the records the nature
of the alleged oral objections of respondent to petitioner's 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 voluntariness
of the waiver is frowned upon, 40 hence, courts must indulge every reasonable presumption against it. 41
This Court therefore upholds respondent's 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. SEHaTC
Costs against petitioner.
SO ORDERED.
Quisumbing, Carpio, Tinga and Velasco, Jr., JJ., concur.
||| (Hun Hyung Park v. Eung Won Choi, G.R. No. 165496, [February 12, 2007], 544 PHIL 431-447)

32

SECOND DIVISION
[G.R. No. 177960. January 29, 2009.]
JEFFREY RESO DAYAP, petitioner, vs. PRETZY-LOU SENDIONG, GENESA SENDIONG, ELVIE SY and DEXIE DURAN,respondents.

DECISION
TINGA, J p:
Before us is a petition for review 1 on certiorari of the Decision 2 dated 17 August 2006 and Resolution 3 dated 25 April
2007 by the Court of Appeals in CA-G.R. SP No. 01179 entitled, Pretzy-Lou P. Sendiong, Genesa R. Sendiong, Elvie H. Sy and
Dexie Duran v. Hon. Judge Cresencio Tan and Jeffrey Reso Dayap. cACEHI
The case had its origins in the filing of an Information 4 on 29 December 2004 by the Provincial Prosecutor's Office,
Sibulan, Negros Oriental, charging herein petitioner Jeffrey Reso Dayap with the crime of Reckless Imprudence resulting to
Homicide, Less Serious Physical Injuries, and Damage to Property. The pertinent portion of the information reads:
That at about 11:55 o'clock in the evening of 28 December 2004 at Brgy. Maslog, Sibulan, Negros Oriental, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, did then and there, willfully, unlawfully and
feloniously drive in a reckless and imprudent manner a 10-wheeler cargo truck with plate number ULP-955, color blue, fully
loaded with sacks of coconut shell, registered in the name of Ruben Villabeto of Sta. Agueda Pamplona, Negros Oriental,
thereby hitting an automobile, a Colt Galant with plate number NLD-379 driven by Lou Gene R. Sendiong who was with two
female passengers, namely: Dexie Duran and Elvie Sy, thus causing the instantaneous death of said Lou Gene R. Sendiong,
less serious physical injuries on the bodies of Dexie Duran and Elvie Sy and extensive damage to the above-mentioned
Colt Galant which is registered in the name of Cristina P. Weyer of 115 Dr. V. Locsin St., Dumaguete City, to the damage of
the heirs of the same Lou Gene R. Sendiong and the other two offended parties above-mentioned.
An act defined and penalized by Article 365 of the Revised Penal Code.
On 10 January 2005, before the Municipal Trial Court (MTC) of Sibulan, Negros Oriental, petitioner was arraigned and he
pleaded not guilty to the charge. 5
On 17 January 2005, respondents Pretzy-Lou P. Sendiong, Genesa Sendiong and Dexie Duran filed a motion for leave of
court to file an amended information. 6 They sought to add the allegation of abandonment of the victims by petitioner,
thus: "The driver of the 10-wheeler cargo truck abandoned the victims, at a time when said [Lou-Gene] R. Sendiong was
still alive inside the car; he was only extracted from the car by the by-standers." 7
On 21 January 2005, however, the Provincial Prosecutor filed an Omnibus Motion praying that the motion to amend the
information be considered withdrawn. 8 On 21 January 2003, the MTC granted the withdrawal and the motion to amend
was considered withdrawn. 9
Pre-trial and trial of the case proceeded. Respondents testified for the prosecution. After the prosecution had rested its
case, petitioner sought leave to file a demurrer to evidence which was granted. Petitioner filed his Demurrer to
Evidence 10 dated 15 April 2005 grounded on the prosecution's failure to prove beyond reasonable doubt that he is
criminally liable for reckless imprudence, to which respondents filed a Comment 11 dated 25 April 2005. STECDc
In the Order 12 dated 16 May 2005, the MTC granted the demurrer and acquitted petitioner of the crime of reckless
imprudence. The MTC found that the evidence presented by respondents failed to establish the allegations in the
Information. Pertinent portions of the order state:
An examination of the allegations in the information and comparing the same with the evidence presented by the
prosecution would reveal that the evidence presented has not established said allegations. The facts and circumstances
constituting the allegations charged have not been proven. It is elementary in the rules of evidence that a party must
prove his own affirmative allegations.
xxx xxx xxx
Nowhere in the evidence of the prosecution can this Court find that it was the accused who committed the crime as
charged. Its witnesses have never identified the accused as the one who has committed the crime. The prosecution never
bothered to establish if indeed it was the accused who committed the crime or asked questions which would have proved
the elements of the crime. The prosecution did not even establish if indeed it was the accused who was driving the truck at
the time of the incident. The Court simply cannot find any evidence which would prove that a crime has been committed
and that the accused is the person responsible for it. There was no evidence on the allegation of the death of Lou Gene R.
Sendiong as there was no death certificate that was offered in evidence. The alleged less serious physical injuries on the
bodies of Dexie Duran and Elvie Sy were not also proven as no medical certificate was presented to state the same nor
was a doctor presented to establish such injuries. The alleged damage to the [C]olt [G]alant was also not established in
any manner as no witness ever testified on this aspect and no documentary evidence was also presented to state the
damage. The prosecution therefore failed to establish if indeed it was the accused who was responsible for the death of
Lou Gene R. Sendiong and the injuries to Dexie Duran and Elvie Sy, including the damage to the Colt Galant. The mother of
the victim testified only on the expenses she incurred and the shock she and her family have suffered as a result of the
incident. But sad to say, she could not also pinpoint if it was the accused who committed the crime and be held responsible
for it. This Court could only say that the prosecution has practically bungled this case from its inception.
xxx xxx xxx
The defense furthermore argued that on the contrary, the prosecution's [evidence] conclusively show that the swerving of
vehicle 1 [the Colt Galant] to the lane of vehicle 2 [the cargo truck] is the proximate cause of the accident. The court again
is inclined to agree with this argument of the defense. It has looked carefully into the sketch of the accident as indicated in
the police blotter and can only conclude that the logical explanation of the accident is that vehicle 1 swerved into the lane
of vehicle 2, thus hitting the latter's inner fender and tires. Exhibit "7" which is a picture of vehicle 2 shows the extent of its
damage which was the effect of vehicle 1's ramming into the rear left portion of vehicle 2 causing the differential guide of
vehicle 2 to be cut, its tires busted and pulled out together with their axle. The cutting of the differential guide cause[d] the
entire housing connecting the tires to the truck body to collapse, thus causing vehicle 2 to tilt to its left side and swerve
towards the lane of vehicle 1. It was this accident that caused the swerving, not of[sic] any negligent act of the accused.
xxx xxx xxx

33

Every criminal conviction requires of the prosecution to prove two things the fact of the crime, i.e., the presence of all
the elements of the crime for which the accused stands charged, and the fact that the accused is the perpetrator of the
crime. Sad to say, the prosecution has miserably failed to prove these two things. When the prosecution fails to discharge
its burden of establishing the guilt of the accused, an accused need not even offer evidence in his behalf. HIEAcC
xxx xxx xxx
WHEREFORE, premises considered, the demurrer is granted and the accused JEFFREY RESO DAYAP is hereby acquitted for
insufficiency of evidence. The bail bond posted for his temporary liberty is also hereby cancelled and ordered released to
the accused or his duly authorized representative.
SO ORDERED. 13
Respondents thereafter filed a petition for certiorari under Rule 65, 14 alleging that the MTC's dismissal of the case was
done without considering the evidence adduced by the prosecution. Respondents added that the MTC failed to observe the
manner the trial of the case should proceed as provided in Sec. 11, Rule 119 of the Rules of Court as well as failed to rule
on the civil liability of the accused in spite of the evidence presented. The case was raffled to the Regional Trial Court (RTC)
of Negros Oriental, Br. 32.
In the order 15 dated 23 August 2005, the RTC affirmed the acquittal of petitioner but ordered the remand of the case to
the MTC for further proceedings on the civil aspect of the case. The RTC ruled that the MTC's recital of every fact in arriving
at its conclusions disproved the allegation that it failed to consider the evidence presented by the prosecution. The records
also demonstrated that the MTC conducted the trial of the case in the manner dictated by Sec. 11, Rule 119 of the Rules of
Court, except that the defense no longer presented its evidence after the MTC gave due course to the accused's demurrer
to evidence, the filing of which is allowed under Sec. 23, Rule 119. The RTC however agreed that the MTC failed to rule on
the accused's civil liability, especially since the judgment of acquittal did not include a declaration that the facts from
which the civil liability might arise did not exist. Thus, the RTC declared that the aspect of civil liability was not passed
upon and resolved to remand the issue to the MTC. The dispositive portion of the decision states:
WHEREFORE, the questioned order of the Municipal Trial Court of Sibulan on accused's acquittal is AFFIRMED. The case is
REMANDED to the court of origin or its successor for further proceedings on the civil aspect of the case. No costs.
SO ORDERED. 16
Both parties filed their motions for reconsideration of the RTC order, but these were denied for lack of merit in the
order 17dated 12 September 2005.
Respondents then filed a petition for review with the Court of Appeals under Rule 42, docketed as CA-G.R. SP. No. 01179.
The appellate court subsequently rendered the assailed decision and resolution. The Court of Appeals ruled that there
being no proof of the total value of the properties damaged, the criminal case falls under the jurisdiction of the RTC and the
proceedings before the MTC are null and void. In so ruling, the appellate court cited Tulor v. Garcia (correct title of the case
is Cuyos v. Garcia) 18 which ruled that in complex crimes involving reckless imprudence resulting in homicide or physical
injuries and damage to property, the jurisdiction of the court to take cognizance of the case is determined by the fine
imposable for the damage to property resulting from the reckless imprudence, not by the corresponding penalty for the
physical injuries charged. It also found support in Sec. 36 of the Judiciary Reorganization Act of 1980 and the 1991 Rule 8
on Summary Procedure, which govern the summary procedure in first-level courts in offenses involving damage to property
through criminal negligence where the imposable fine does not exceed P10,000.00. As there was no proof of the total
value of the property damaged and respondents were claiming the amount of P1,500,000.00 as civil damages, the case
falls within the RTC's jurisdiction. The dispositive portion of the Decision dated 17 August 2006 reads: cTSDAH
WHEREFORE, premises considered, judgment is hereby rendered by Us REMANDING the case to the Regional Trial Court
(RTC), Judicial Region, Branch 32, Negros Oriental for proper disposition of the merits of the case.
SO ORDERED. 19
Petitioner moved for reconsideration of the Court of Appeals decision, 20 arguing that jurisdiction over the case is
determined by the allegations in the information, and that neither the 1991 Rule on Summary Procedure nor Sec. 36 of the
Judiciary Reorganization Act of 1980 can be the basis of the RTC's jurisdiction over the case. However, the Court of Appeals
denied the motion for reconsideration for lack of merit in the Resolution dated 25 April 2007. 21 It reiterated that it is the
RTC that has proper jurisdiction considering that the information alleged a willful, unlawful, felonious killing as well as
abandonment of the victims.
In the present petition for review, petitioner argues that the MTC had jurisdiction to hear the criminal case for reckless
imprudence, owing to the enactment of Republic Act (R.A.) No. 7691, 22 which confers jurisdiction to first-level courts on
offenses involving damage to property through criminal negligence. He asserts that the RTC could not have acquired
jurisdiction on the basis of a legally unfiled and officially withdrawn amended information alleging abandonment.
Respondents are also faulted for challenging the MTC's order acquitting petitioner through a special civil action
for certiorari under Rule 65 in lieu of an ordinary appeal under Rule 42.
The petition has merit. It should be granted.
The first issue is whether the Court of Appeals erred in ruling that jurisdiction over the offense charged pertained to the
RTC.
Both the MTC and the RTC proceeded with the case on the basis of the Information dated 29 December 2004 charging
petitioner only with the complex crime of reckless imprudence resulting to homicide, less serious physical injuries and
damage to property. The Court of Appeals however declared in its decision that petitioner should have been charged with
the same offense but aggravated by the circumstance of abandonment of the victims. It appears from the records however
that respondents' attempt to amend the information by charging the aggravated offense was unsuccessful as the MTC had
approved the Provincial Prosecutor's motion to withdraw their motion to amend the information. The information filed
before the trial court had remained unamended. 23Thus, petitioner is deemed to have been charged only with the offense
alleged in the original Information without any aggravating circumstance.
Article 365 of the Revised Penal Code punishes any person who, by reckless imprudence, commits any act which, had it
been intentional, would constitute a grave felony, with the penalty of arresto mayor in its maximum period to prision
correccional in its medium period. When such reckless imprudence the use of a motor vehicle, resulting in the death of a

34

person attended the same article imposes upon the defendant the penalty of prision correccional in its medium and
maximum periods. IDaEHS
The offense with which petitioner was charged is reckless imprudence resulting in homicide, less serious physical injuries
and damage to property, a complex crime. Where a reckless, imprudent, or negligent act results in two or more grave or
less grave felonies, a complex crime is committed. 24 Article 48 of the Revised Penal Code provides that when the single
act constitutes two or more grave or less grave felonies, or when an offense is a necessary means for committing the
other, the penalty for the most serious crime shall be imposed, the same to be applied in its maximum period. Since Article
48 speaks of felonies, it is applicable to crimes through negligence in view of the definition of felonies in Article 3 as "acts
or omissions punishable by law" committed either by means of deceit (dolo) or fault (culpa). 25 Thus, the penalty
imposable upon petitioner, were he to be found guilty, is prision correccional in its medium period (2 years, 4 months and 1
day to 4 years) and maximum period (4 years, 2 months and 1 day to 6 years).
Applicable as well is the familiar rule that the jurisdiction of the court to hear and decide a case is conferred by the law in
force at the time of the institution of the action, unless such statute provides for a retroactive application thereof. 26 When
this case was filed on 29 December 2004, Section 32 (2) of Batas Pambansa Bilang 129 had already been amended by R.A.
No. 7691. R.A. No. 7691extended the jurisdiction of the first-level courts over criminal cases to include all offenses
punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other
imposable accessory or other penalties including those for civil liability. It explicitly states "that in offenses involving
damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof." It follows that
criminal cases for reckless imprudence punishable with prision correccional in its medium and maximum periods should fall
within the jurisdiction of the MTC and not the RTC. Clearly, therefore, jurisdiction to hear and try the same pertained to the
MTC and the RTC did not have original jurisdiction over the criminal case. 27 Consequently, the MTC of Sibulan, Negros
Oriental had properly taken cognizance of the case and the proceedings before it were valid and legal.
As the records show, the MTC granted petitioner's demurrer to evidence and acquitted him of the offense on the ground of
insufficiency of evidence. The demurrer to evidence in criminal cases, such as the one at bar, is "filed after the prosecution
had rested its case", and when the same is granted, it calls "for an appreciation of the evidence adduced by the
prosecution and its sufficiency to warrant conviction beyond reasonable doubt, resulting in a dismissal of the case on the
merits, tantamount to an acquittal of the accused." 28 Such dismissal of a criminal case by the grant of demurrer to
evidence may not be appealed, for to do so would be to place the accused in double jeopardy. 29 But while the dismissal
order consequent to a demurrer to evidence is not subject to appeal, the same is still reviewable but only
by certiorari under Rule 65 of the Rules of Court. Thus, in such case, the factual findings of the trial court are conclusive
upon the reviewing court, and the only legal basis to reverse and set aside the order of dismissal upon demurrer to
evidence is by a clear showing that the trial court, in acquitting the accused, committed grave abuse of discretion
amounting to lack or excess of jurisdiction or a denial of due process, thus rendering the assailed judgment void. 30
Accordingly, respondents filed before the RTC the petition for certiorari alleging that the MTC gravely abused its discretion
in dismissing the case and failing to consider the evidence of the prosecution in resolving the same, and in allegedly failing
to follow the proper procedure as mandated by the Rules of Court. The RTC correctly ruled that the MTC did not abuse its
discretion in dismissing the criminal complaint. The MTC's conclusions were based on facts diligently recited in the order
thereby disproving that the MTC failed to consider the evidence presented by the prosecution. The records also show that
the MTC correctly followed the procedure set forth in the Rules of Court. ETDHaC
The second issue is whether the Court of Appeals erred in ordering the remand of the case of the matter of civil liability for
the reception of evidence.
We disagree with the Court of Appeals on directing the remand of the case to the RTC for further proceedings on the civil
aspect, as well as with the RTC in directing a similar remand to the MTC.
The acquittal of the accused does not automatically preclude a judgment against him on the civil aspect of the case. The
extinction of the penal action does not carry with it the extinction of the civil liability 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
is acquitted. 31 However, the civil action based on delict may 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 32 or where the
accused did not commit the acts or omission imputed to him. 33
Thus, 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. 34 This is because when the accused files a demurrer to evidence, he has not yet adduced evidence both on
the criminal and civil aspects of the case. The only evidence on record is the evidence for the prosecution. What the trial
court should do is issue an order or partial judgment granting the demurrer to evidence and acquitting the accused, and
set the case for continuation of trial for the accused to adduce evidence on the civil aspect of the case and for the private
complainant to adduce evidence by way of rebuttal. Thereafter, the court shall render judgment on the civil aspect of the
case. 35
A scrutiny of the MTC's decision supports the conclusion that the acquittal was based on the findings that the act or
omission from which the civil liability may arise did not exist and that petitioner did not commit the acts or omission
imputed to him; hence, petitioner's civil liability has been extinguished by his acquittal. It should be noted that the MTC
categorically stated that it cannot find any evidence which would prove that a crime had been committed and that accused
was the person responsible for it. It added that the prosecution failed to establish that it was petitioner who committed the
crime as charged since its witnesses never identified petitioner as the one who was driving the cargo truck at the time of
the incident. Furthermore, the MTC found that the proximate cause of the accident is the damage to the rear portion of the
truck caused by the swerving of the Colt Galant into the rear left portion of the cargo truck and not the reckless driving of
the truck by petitioner, clearly establishing that petitioner is not guilty of reckless imprudence. Consequently, there is no
more need to remand the case to the trial court for proceedings on the civil aspect of the case, since petitioner's acquittal
has extinguished his civil liability.

35

WHEREFORE, the petition is GRANTED. The Court of Appeals' Decision dated 17 August 2006 and Resolution dated 25 April
2007 in CA-G.R. SP. No. 01179 are REVERSED and SET ASIDE. The Order dated 16 May 2005 of the Municipal Trial Court of
Sibulan, Negros Oriental in Criminal Case No. 3016-04 granting the Demurrer to Evidence and acquitting petitioner Jeffrey
Reso Dayap of the offense charged therein is REINSTATED and AFFIRMED. ISHaCD
SO ORDERED.
Quisumbing, Corona, * Carpio-Morales and Chico-Nazario, ** JJ., concur.
||| (Dayap v. Sendiong, G.R. No. 177960, [January 29, 2009], 597 PHIL 127-142)

FIRST DIVISION
[G.R. No. 19495. February 2, 1924.]
HONRION LASAM ET AL., plaintiffs-appellants, vs. FRANK SMITH, jr., defendant-appellant.
Palma & Leuterion for plaintiffs-appellant.
Mariano Alisngco for defendant-appellant.

36

SYLLABUS
1. DAMAGES; CONTRACT OF CARRIAGE OF PASSENGERS; BREACH OF CONTRACT. Defendant, the owner of a public
garage, under took to convey the plaintiffs by automobile from San Fernando, La union, to Currimao, Ilocos Norte. While on
the way to result of which the plaintiffs were injured. Held: That the action for damages articles 1101-1107 of the Civil
Code, and not article 1903, were applicable.
2. ID.; ID.; FORTUITOUS EVENT. The expression "events which cannot be foreseen and which having been foreseen, are
inevitable" is synonymous with the term "fortuitous event" of which some extraordinary circumstance independent of the
will of the obligor, or of his employees, is one of the essential elements.
3. ID.; ID.; CARRIER OF PASSENGERS NOT AN INSURER AGAINST ALL RISKS. Neither under American nor Spanish law is a
carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by
exercising due care and diligence.
4. DAMAGES; CONTRACT, NEGLIGENCE IN FULFILLMENT . In determining the extent of the liability for losses or damages
resulting the courts have a discretionary power to moderate the liability according to the circumstance (Civil Code article
1103; De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 766.)
DECISION
OSTRAND, J p:
The plaintiffs are husband and wife and this action is brought to recover damages in the sum of P20,000 for physical
injuries sustained by them in an automobile accident. The trial court rendered a judgment in their favor for the sum of
P1,254.10, with legal interest from the date of the judgment. Both the plaintiffs and the defendant appeal, the former
maintaining that the damages awarded are insufficient while the latter denies all liability for any damages whatever.
It appears from the evidence that on February 27, 1918, the defendant was of San Fernando, La Union, and engaged in the
business of carrying passengers for hire from one point to another in the Province of La Union and the surrounding
provinces. On the date mentioned, he undertook to convey plaintiff from San Fernando to Currimao, Ilocos Norte, in
a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed chauffeur, but after having
reached the town of San Juan, the chauffeur allowed his assistant, Remigio Bueno, to drive the car. Bueno held to driver's
license, but had some experience in driving, and with the exception of some slight engine trouble while passing through
the town of Luna, the car functioned well until after the crossing of the Abra River in Tagudin, when, according to the
testimony of witnesses for the plaintiffs, defects developed in the steering gear so as to make accurate steering
impossible, and after zigzagging for a distance of about half a kilometer, the car left the road and went down a steep
embankment.
The defendant, in his testimony, maintains that there was no defect in the steering gear, neither before nor after the
accident, and expresses the opinion that the swaying or zigzagging of the car must have been due to its having been
driven at an excessive rate of speed. This may possibly be true, but it is, from our point of view, immaterial whether the
accident was caused by negligence on the part of the defendant's employees, or whether it was due to the same in either
event.
In going over the bank of the road, the automobile was overturned and the plaintiffs pinned down under it. Mr. Lasam
escaped with a few contusions and a "dislocated" rib, but his wife, Joaquina Sanchez, received serious injuries, among
which was a compound fracture of one of the bones in her left wrist. She also appears to have suffered a nervous
breakdown from which she had not fully recovered at the time of the trial.
The complaint in the case was filed about a year and a half after the occurrence above related. It alleges, among other
things, that the accident was due to defects in the automobile as well as to the incompetence and negligence of the
chauffeur, and the case appears to have been tried largely upon the theory that it sounds in tort and that the liability of
the defendant is governed by article 1903 of the Civil Code. The trial court held, however, that the cause of action rests on
the defendant's breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil Code, and not
article 1903, are applicable. The court further found that the breach of the contract was not due to fortuitous events and
that, therefore, the defendant was liable in damages.
In our opinion, the conclusions of the court below are entirely correct. That upon the facts stated the defendant's liability, if
any, is contractual, is well settled by previous decisions of the court, beginning with the case of Rakes vs. Atlantic, Gulf &
Pacific Co. (7 Phil., 359), and the distinction between extra-contractual liability and contractual liability has been so ably
and exhaustively discussed in various other cases, that nothing further need here be said upon that subject. (See Cangco
vs. Manila Railroad Co. 38 Phil., 768; Manila Railroad Co. Compania Trasatlantica and Atlantic, Gulf & Pacific Co., 38 Phil.,
875; De Guia vs. Manila Electric Railroad & Light source of the defendant's legal liability is the contract of carriage; the by
entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination; and that having
failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned
in article 1105 of the Civil Code, which reads as follows:
"No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the
exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such
liability."
This brings us to the principal question in the case: What is meant by "events which cannot be foreseen and which having
been foreseen, are inevitable?" The Spanish authorities regard the language employed as an effort to define the term caso
fortuito and hold that the two expressions are synonymous. (Manresa, Comentarios al Co Civil Espaol, vol. 8, pp. 88 et
seq.; Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.)
The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which defines caso fortuito as "ocasion que acaese
por aventura deque non se puede ante ver. E son estos, derrivamientos de casas e fuego que se enciende so ora, e

37

quebrantamiento de navio, fuerca de ladrones. . . . ( An event that takes place by accident and could not have been
foreseen, Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers. . . .)"
Escriche defines caso fortuito as "an unexpected event such as floods, torrents, shipwrecks, conflagrations, lightning,
compulsion, insurrections, destruction of buildings by unforeseen accidents and other occurrences of a similar nature."
In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Espaola says: " In a legal sense and,
consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The cause of
the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be
independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it
can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the debtor
to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any participation in the
aggravation of the injury resulting to the creditor." (5 Enciclopedia Juridica Espaola, 309.)
As will be seen, these authorities agree that some extraordinary circumstance independent of the will of the obligor, or of
his employees, is an essential element of a caso fortuito. Turning to the present case, it is at once apparent that this
elements is lacking. It is not suggested that the accident in question was due to an act of God or to adverse road
conditions which could not have been foreseen. As far as the record shows, the accident was caused either by defects in
the automobile or else through the negligence of its driver. That is not a caso fortuito.
We agree with counsel that neither under the American nor Spanish law is a carrier of passengers an absolute insurer
against the risks of travel from which the passenger may protect himself by exercising ordinary care and diligence. The
case of Alba vs. Sociedad Anonima de Tranvias, Jurisprudencia Civil, vol. 102, p. 928, cited by the defendant in support of
his contentions, affords a good illustration of the application of this principle. In that case Alba, a passenger on a street car,
was standing on the platform of the car while it was in motion. The car rounded a curve causing Alba to lose his balance
and fall off the platform, sustaining sever injuries. In an action brought by him to recover damages, the supreme court of
Spain held that inasmuch as the car at the time of the accident was travelling at a moderate rate of speed and there was
no infraction of the regulations, and the plaintiff was exposed to no greater danger than that inherent in that particular
mode of travel, the plaintiff could not recover, especially so since he should have been on his guard against a contingency
as natural as that of losing his balance to a greater or less extent when the car rounded the curve.
But such is not the present case; here the passengers had no means of avoiding the danger or escaping the injury.
The plaintiffs maintain that the evidence clearly establishes that they are entitled to damages in the sum of P7,832.80
instead of P1,254.10 as found by the trial court, and their assignments of error relate to this point only.
There can be no doubt that the expenses incurred by the plaintiffs as a result of the accident greatly exceeded the amount
of the damages awarded. But bearing in mind that in determining the extent of the liability for losses or damages resulting
from negligence in the fulfillment of a contractual obligation, the courts have " a discretionary power to moderate the
liability according to the circumstances" (De Guia vs. Manila Electric Railroad & light Co., 40 Phil., 706 Phil; art. 1103, Civil
Code), we do not think that the evidence is such as to justify us in interfering with the discretion of the court below in this
respect. As pointed out by that court in its well-reasoned and well considered decision, by far the greater part of the
damages claimed by the plaintiffs resulted from the fracture of a bone in the left wrist of Joaquina Sanchez and from her
objections to having a decaying splinter of the bone refusal to submit to such an operation, a series of infections ensued
and which required constant and expensive medical treatment for several years. We agree with the these expenses.
For the reasons stated, the judgment appealed from is affirmed, without costs in this instance. So ordered.
Araullo, C. J., Street, Malcolm, Johns, and Romualdez, JJ., concur.
||| (Lasam v. Smith, Jr., G.R. No. 19495, [February 2, 1924], 45 PHIL 657-663)

SECOND DIVISION
[G.R. No. L-24803. May 26, 1977.]
PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito Elcano, deceased, plaintiffsappellants, vs. REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of said minor, defendantsappellees.
Cruz & Avecilla for appellants.
Marvin R. Hill & Associates for appellees.

38

DECISION
BARREDO, J p:
Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in Civil Case No. Q-8102, Pedro
Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to dismiss of defendants, the complaint of plaintiffs for
recovery of damages from defendant Reginald Hill, a minor, married at the time of the occurrence, and his father, the
defendant Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald of the son of the
plaintiffs, named Agapito Elcano, of which, when criminally prosecuted, the said accused was acquitted on the ground that
his act was not criminal, because of "lack of intent to kill, coupled with mistake."
Actually, the motion to dismiss based on the following grounds:
"1. The present action is not only against but a violation of section 1, Rule 107, which is now Rule III, of the Revised Rules
of Court;
"2. The action is barred by a prior judgment which is now final and or in res-adjudicata;
"3. The complaint had no cause of action against defendant Marvin Hill, because he was relieved as guardian of the other
defendant through emancipation by marriage." (P. 23, Record [p. 4, Record on Appeal.])
was first denied by the trial court. It was only upon motion for reconsideration of the defendants of such denial, reiterating
the above grounds that the following order was issued:
"Considering the motion for reconsideration filed by the defendants on January 14, 1965 and after thoroughly examining
the arguments therein contained, the Court finds the same to be meritorious and well-founded.
WHEREFORE, the Order of this Court on December 8, 1964 is hereby reconsidered by ordering the dismissal of the above
entitled case.
"SO ORDERED.
"Quezon City, Philippines, January 29, 1965." (p. 40, Record [p. 21, Record on Appeal.)
Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our resolution the following
assignment of errors:
"THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING THE CLAIM OF DEFENDANTS THAT
I
"THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION OF SECTION 1, RULE 107, NOW RULE 111, OF THE
REVISED RULES OF COURT, AND THAT SECTION 3(c) OF RULE 111, RULES OF COURT IS INAPPLICABLE;
II
"THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINAL OR RES-ADJUDICATA;
III
"THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE CIVIL CODE, ARE INAPPLICABLE IN THE INSTANT
CASE; and
IV
"THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST DEFENDANT MARVIN HILL BECAUSE HE WAS RELIEVED AS
GUARDIAN OF THE OTHER DEFENDANT THROUGH EMANCIPATION BY MARRIAGE." (page 4, Record.)
It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant-appellee Reginald Hill was prosecuted
criminally in Criminal Case No. 5102 of the Court of First Instance of Quezon City. After due trial, he was acquitted on the
ground that his act was not criminal because of "lack of intent to kill, coupled with mistake." Parenthetically, none of the
parties has favored Us with a copy of the decision of acquittal, presumably because appellants do not dispute that such
indeed was the basis stated in the court's decision. And so, when appellants filed their complaint against appellees
Reginald and his father, Atty. Marvin Hill, on account of the death of their son, the appellees filed the motion to dismiss
above-referred to.
As We view the foregoing background of this case, the two decisive issues presented for Our resolution are:
1. Is the present civil action for damages barred by the acquittal of Reginald in the criminal case wherein the action for civil
liability was not reversed?
2. May Article 2180 (2nd and last paragraphs) of the Civil Code be applied against Atty. Hill, notwithstanding the
undisputed fact that at the time of the occurrence complained of, Reginald, though a minor, living with and getting
subsistence from his father, was already legally married?
The first issue presents no more problem than the need for a reiteration and further clarification of the dual character,
criminal and civil, of fault or negligence as a source of obligation which was firmly established in this jurisdiction in Barredo
vs. Garcia, 73 Phil. 607. In that case, this Court postulated, on the basis of a scholarly dissertation by Justice Bocobo on the
nature of culpa aquiliana in relation to culpa criminal or delito and mere culpa or fault, with pertinent citation of decisions
of the Supreme Court of Spain, the works of recognized civilians, and earlier jurisprudence of our own, that the same given
act can result in civil liability not only under the Penal Code but also under the Civil Code. Thus, the opinion holds:
"The above case is pertinent because it shows that the same act may come under both the Penal Code and the Civil Code.
In that case, the action of the agent was unjustified and fraudulent and therefore could have been the subject of a criminal
action. And yet, it was held to be also a proper subject of a civil action under article 1902 of the Civil Code. It is also to be
noted that it was the employer and not the employee who was being sued." (pp. 615-616, 73 Phil.) 1
"It will be noticed that the defendant in the above case could have been prosecuted in a criminal case because his
negligence causing the death of the child was punishable by the Penal Code. Here is therefore a clear instance of the same
act of negligence being a proper subject matter either of a criminal action with its consequent civil liability arising from a

39

crime or of an entirely separate and independent civil action for fault or negligence under article 1902 of the Civil Code.
Thus, in this jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana under the Civil Code has been fully
and clearly recognized, even with regard to a negligent act for which the wrongdoer could have been prosecuted and
convicted in a criminal case and for which, after such a conviction, he could have been sued for this civil liability arising
from his crime." (p. 617, 73 Phil.) 2
"It is most significant that in the case just cited, this Court specifically applied article 1902 of the Civil Code. It is thus that
although J. V. House could have been criminally prosecuted for reckless or simple negligence and not only punished but
also made civilly liable because of his criminal negligence, nevertheless this Court awarded damages in an independent
civil action for fault or negligence under article 1902 of the Civil Code." (p. 618, 73 Phil.) 3
"The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose of this case. But
inasmuch as we are announcing doctrines that have been little understood, in the past, it might not be inappropriate to
indicate their foundations.
"Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also simple negligence. If we were to hold
that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, accordingly to the literal
import of article 1093 of the Civil Code, the legal institution of culpa aquilina would have very little scope and application in
actual life. Death or injury to persons and damage to property through any degree of negligence even the slightest
would have to be indemnified only through the principle of civil liability arising from a crime. In such a state of affairs, what
sphere would remain for cuasi-delito or culpa aquiliana? We are loath to impute to the lawmaker any intention to bring
about a situation to absurd and anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the letter that
killeth rather than the spirit that giveth life. We will not use the literal meaning of the law to smother and render almost
lifeless a principle of such ancient origin and such full-grown development as culpa aquiliana or cuasi-delito, which is
conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code.
"Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a civil
case, preponderance of evidence is sufficient to make the defendant pay in damages. There are numerous cases of
criminal negligence which can not be shown beyond reasonable doubt, but can be proved by a preponderance of evidence.
In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil
Code. Otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi remedium." (p. 620, 73 Phil.)
"Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on this subject, which
has given rise to the overlapping or concurrence of spheres already discussed, and for lack of understanding of the
character and efficacy of the action for culpa aquiliana, there has grown up a common practice to seek damages only by
virtue of the civil responsibility arising from a crime, forgetting that there is another remedy, which is by invoking articles
1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it has nevertheless rendered practically
useless and nugatory the more expeditious and effective remedy based on culpa aquiliana or culpa extra-contractual. In
the present case, we are asked to help perpetuate this usual course. But we believe it is high time we pointed out to the
harms done by such practice and to restore the principle of responsibility for fault or negligence under articles 1902 et
seq. of the Civil Code to its full rigor. It is high time we caused the stream of quasi-delict or culpa aquiliana to flow on its
own natural channel, so that its waters may no longer be diverted into that of a crime under the Penal Code. This will, it is
believed, make for the better safeguarding or private rights because it re-establishes an ancient and additional remedy,
and for the further reason that an independent civil action, not depending on the issues, limitations and results of a
criminal prosecution, and entirely directed by the party wronged or his counsel, is more likely to secure adequate and
efficacious redress." (p. 621, 73 Phil.)
Contrary to an immediate impression one might get upon a reading of the foregoing excerpts from the opinion in Garcia that the concurrence of the Penal Code and the Civil Code therein referred to contemplate only acts of negligence and not
intentional voluntary acts deeper reflection would reveal that the thrust of the pronouncements therein is not so limited,
but that in fact it actually extends to fault or culpa. This can be seen in the reference made therein to the Sentence of the
Supreme Court of Spain of February 14, 1919, supra, which involved a case of fraud or estafa, not a negligent act. Indeed,
Article 1093 of the Civil Code of Spain, in force here at the time of Garcia, provided textually that obligations "which are
derived from acts or omissions in which fault or negligence, not punishable by law, intervene shall be the subject of
Chapter II, Title XV of this book (which refers to quasi-delicts.)" And it is precisely the underline qualification, "not
punishable by law", that Justice Bocobo emphasized could lead to an undesirable construction or interpretation of the letter
of the law that "killeth, rather than the spirit that giveth life" hence, the ruling that "(W)e will not use the literal meaning of
the law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa
aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code." And
so, because Justice Bacobo was Chairman of the Code Commission that drafted the original text of the new Civil Code, it is
to be noted that the said Code, which was enacted after the Garcia doctrine, no longer uses the term, "not punishable by
law," thereby making it clear that the concept of culpa aquiliana includes acts which are criminal in character or in
violation of the penal law, whether voluntary or negligent. Thus, the corresponding provisions to said Article 1093 in the
new code, which is Article 1162, simply says, "Obligations derived from quasi-delictsshall be governed by the provisions of
Chapter 2, Title XVII of this Book, (on quasi-delicts) and by special laws." More precisely, a new provision, Article 2177 of
the new code provides:
"ART. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil
liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant."
According to the Code Commission: "The foregoing provision (Article 2177) through at first sight startling, is not so novel or
extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal
law, while the latter is a 'culpa aquilian' or quasi-delict, of ancient origin, having always had its own foundation and
individuality, separate from criminal negligence. Such distinction between criminal negligence and 'culpa extra-contractual'
or 'cuasi-delito' has been sustained by decision of the Supreme Court of Spain and maintained as clear, sound and
perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the proposed Article 2177, acquittal from an

40

accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not
for civil liability arising from criminal negligence, but for damages due to a quasi-delict or 'culpa aquiliana'. But said article
forestalls a double recovery." (Report of the Code) Commission, p. 162.)
Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of Justice
Bacobo about construction that upholds "the spirit that giveth life" rather than that which is literal that killeth the intent of
the lawmaker should be observed in applying the same. And considering that the preliminary chapter on human relations
of the new Civil Code definitely establishes the separability and independence of liability in a civil action for acts criminal in
character (under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100 of the Revised Penal
Code, and, in a sense, the Rules of Court, under Sections 2 and 3 (c), Rule 111, contemplate also the same separability, it
is "more congruent with the spirit of law, equity and justice, and more in harmony with modern progress", to borrow the
felicitous relevant language in Rakes vs. Atlantic. Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176,
where it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character,
whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal
act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not
allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the
extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article
100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a
crime is not estinguished even by a declaration in the criminal case that the criminal act charged has not happened or has
not been committed by the accused. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes
voluntary and negligent acts which may be punishable by law. 4
It results, therefore, that the acquittal of Reginal Hill in the criminal case has not extinguished his liability for quasi-delict,
hence that acquittal is not a bar to the instant action against him.
Coming now to the second issue about the effect of Reginald's emancipation by marriage on the possible civil liability of
Atty. Hill, his father, it is also Our considered opinion that the conclusion of appellees that Atty. Hill is already free from
responsibility cannot be upheld.
While it is true that parental authority is terminated upon emancipation of the child (Article 327, Civil Code), and under
Article 397, emancipation takes place "by the marriage of the minor (child)", it is, however, also clear that pursuant to
Article 399, emancipation by marriage of the minor is not really full or absolute. Thus "(E)mancipation by marriage or by
voluntary concession shall terminate parental authority over the child's person. It shall enable the minor to administer his
property as though he were of age, but he cannot borrow money or alienate or encumber real property without the consent
of his father or mother, or guardian. He can sue and be sued in court only with the assistance of his father, mother or
guardian."
Now under Article 2180, "(T)he obligation imposed by article 2176 is demandable not only for one's own acts or omissions,
but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother,
are responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by
the minor children who live in their company." In the instant case, it is not controverted that Reginald, although married,
was living with his father and getting subsistence from him at the time of the occurrence in question. Factually, therefore,
Reginald was still subservient to and dependent on his father, a situation which is not unusual.
It must be borne in mind that, according to Manresa, the reason behind the joint and solidary liability of parents with their
offending child under Article 2180 is that is the obligation of the parent to supervise their minor children in order to prevent
them from causing damage to third persons. 5 On the other hand, the clear implication of Article 399, in providing that a
minor emancipated by marriage may not, nevertheless, sue or be sued without the assistance of the parents, is that such
emancipation does not carry with it freedom to enter into transactions or do any act that can give rise to judicial litigation.
(See Manresa, id., Vol. II, pp. 766-767, 776.) And surely, killing someone else invites judicial action. Otherwise stated, the
marriage of a minor child does not relieve the parents of the duty to see to it that the child, while still a minor, does not
give answerable for the borrowings of money and alienation or encumbering of real property which cannot be done by their
minor married child without their consent. (Art. 399; Manresa, supra.)
Accordingly, in Our considered view, Article 2180 applies to Atty. Hill notwithstanding the emancipation by marriage of
Reginald. However, inasmuch as it is evident that Reginald is now of age, as a matter of equity, the liability of Atty. Hill has
become merely subsidiary to that of his son.
WHEREFORE, the order appealed from is reversed and the trial court is ordered to proceed in accordance with the
foregoing opinion. Costs against appellees.
Fernando (Chairman), Antonio and Martin, JJ., concur.
Concepcion Jr., J., is on leave.
Martin, J., was designated to sit in the Second Division.
||| (Elcano v. Hill, G.R. No. L-24803, [May 26, 1977], 167 PHIL 462-475)

41

FIRST DIVISION
[G.R. No. L-46179. January 31, 1978.]
CANDIDA VIRATA, TOMAS VIRATA, MANOLITO VIRATA, EDERLINDA VIRATA, NAPOLEON VIRATA, ARACELY VIRATA, ZENAIDA
VIRATA, LUZMINDA VIRATA, PACITA VIRATA, and EVANGELINA VIRATA, petitioners, vs. VICTORIO OCHOA, MAXIMO BORILLA
and THE COURT OF FIRST INSTANCE OF CAVITE, 7th JUDICIAL DISTRICT, BRANCH V, stationed at BACOOR,
CAVITE, respondents.
Remulla, Estrella & Associates for petitioners.
Exequil C. Masangkay for respondents.

SYNOPSIS
A criminal action for reckless imprudence was filed against a driver of a jeepney. Before the criminal case could be decided,
the heirs of the victim manifested that they were filing and they so did file a separate civil action for damages against the
owner and the driver of the jeepney based on quasi-delict. The driver was subsequently acquitted of the crime charge. The
defendants in the civil case then moved to dismiss the same, which motion the trial court granted.
The principal issue before the Supreme Court is whether the heirs of the victim can prosecute an action for damages based
on quasi-delict against the driver and owner.
The Supreme Court held that the acquittal of the driver of the crime charged is not a bar to the prosecution of a civil case
for damages based on quasi-delict.
Order of dismissal set aside and case remanded to the lower court for further proceedings.
SYLLABUS
1. ACTIONS; CULPA AQUILIANA; AGGRIEVED PARTY MAY FILE SEPARATE ACTION BASED ON CULPA AQUILIANA. In
negligence cases the aggrieved parties may choose between an action under the Revised Penal Code or for quasi-delict
under Article 2176 of the Civil Code of the Philippines. What is prohibited by Article 2177 of the Civil Code is to recover
twice for the same negligent act.
2. ID.; ID.; ACQUITTAL OF ACCUSED NOT A BAR TO PROSECUTION FOR DAMAGES BASED ON QUASI-DELICT. The acquittal
of the accused of the crime of homicide through reckless imprudence is not a bar to the prosecution of a civil case for
damages based on quasi-delict. The source of obligation sought to be enforced in the civil action is quasi-delict, not an act
or omission punishable by law. Under Article 1157 of the Civil Code of the Philippines, quasi-delict and an act or omission
punishable by law are two different sources of obligation. Moreover, to prevail in the action for damages, plaintiff have only
be establish its cause of action by preponderance of evidence.
DECISION
FERNANDEZ, J p:
This is an appeal by certiorari, from the order of the Court of First Instance of Cavite, Branch V, in Civil Case No. B-134
granting the motion of the defendants to dismiss the complaint on the ground that there is another action pending
between the same parties for the same cause 1
The record shows that on September 24, 1975 one Arsenio Virata died as a result of having been bumped while walking
along Taft Avenue, Pasay City by a passenger jeepney driven by Maximo Borilla and registered in the name of Victorio
Ochoa; that Borilla is the employee driver of Ochoa; that for the death of Arsenio Virata, a criminal action for homicide
through reckless imprudence was instituted on September 25, 1975 against Maximo Borilla in the Court of First Instance of
Rizal at Pasay City, docketed as Criminal Case No. 3162-P of said court; that at the hearing of the said criminal case on
December 12, 1975, Atty. Julio Francisco, the private prosecutor, made a reservation to face a separate civil action for
damages against the driver on his criminal liability; that on February 19, 1976 Atty. Julio Francisco filed a motion in said
criminal case to withdraw the reservation to file a separate civil action; that thereafter, the private prosecutor actively
participated in the trial and presented evidence on the damages; that on June 29, 1976 the heirs of Arsenio Virata again
reserved their right to institute in separate civil action; that on July 29, 1977 the heirs of Arsenio Virata, petitioners herein,
commenced Civil No. B-134 in the Court of First Instance of Cavite at Bacoor, Branch V, for damages based on quasi-delict
against the driver Maximo Borilla and the registered owner of the jeepney, Victorio Ochoa; that on August 13, 1976 the
defendants, private respondents herein, filed a motion to dismiss on the ground that there is another action, Criminal Case
No. 3162-P, pending between the same parties for the same cause; that on September 8, 1976 the Court of First Instance
of Rizal at Pasay City rendered in decision in Criminal Case No. 3612-P acquitting the accused, Maximo Borilla, on the
ground that he caused an injury by mere accident; and that on January 31, 1977, the Court of First Instance of Cavite at
Bacoor granted the motion to dismiss Civil Case No. B-134 for damages 2
The principal issue is whether or not the petitioners, heirs of the deceased Arsenio Virata, can prosecute an action for
damages based on quasi-delict against Maximo Borilla and Victorio Ochoa, driver and owner, respectively of the passenger
jeepney that bumped Arsenio Virata.
It is settled that in negligence cases the aggrieved parties may choose between an action under the Revised Penal Code or
for quasi-delict under Article 2176 of the Civil Code of the Philippines. What is prohibited by Article 2177 of the Civil Code
of the Philippines is to recover twice for the same negligent act. LLpr
The Supreme Court has held that:
"According to the Code Commission: 'The foregoing provision (Article 2177) though at first sight startling, is not so novel or
extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal
law, while the latter is a 'culpa aquiliana' or quasi-delict, of ancient origin, having always had its own foundation and
individuality, separate from criminal negligence. Such distinction between criminal negligence and 'culpa extra-contractual'
or 'quasi-delito' has been sustained by decision of the Supreme Court of Spain and maintained as clear, sound and
perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the proposed Article 2177, acquittal from an
accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not
for civil liability arising from criminal negligence, but for damages due to a quasi-delict or 'culpa aquiliana'. But said article
forestalls a double recovery." (Report of the Code Commission, p. 162.)

42

Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of Justice
Bocobo about construction that upholds 'the spirit that giveth life' rather than that which is literal that killeth the intent of
the lawmaker should be observed in applying the same. And considering that the preliminary chapter on human relations
of the new Civil Code definitely establishes the separability and independence of liability in a civil action for acts criminal in
character (under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100 of the Revised Penal
Code, and, in a sense, the Rules of Court, under Sections 2 and 3(c), Rule 111, contemplate also the same separability, it is
'more congruent with the spirit of law, equity and justice, and more in harmony with modern progress', to borrow the
felicitous relevant language in Rakes vs. Atlantic Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176,
where it refers to 'fault or negligence,' covers not only acts 'not punishable by law' but also acts criminal in character,
whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal
act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not
allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the
extinction of civil liability referred to in Par (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article
100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a
crime is not 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. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes
voluntary and negligent acts which may be punishable by law. 3
The petitioners are not seeking to recover twice for the same negligent act. Before Criminal Case No. 3162-P was decided,
they manifested in said criminal case that they were filing a separate civil action for damages against the owner and driver
of the passenger jeepney based on quasi-delict. This acquittal of the driver, Maximo Borilla, of the crime charged in
Criminal Case No. 3162-P is not a bar to the prosecution of Civil Case No. B-134 for damages based on quasi-delict. The
source of the obligation sought to be enforced in Civil Case No. B-134 is quasi-delict, not an act or omission punishable by
law. Under Article 1157 of the Civil Code of the Philippines, quasi-delict and an act or omission punishable by law are two
different sources of obligation.
Moreover, for the petitioners to prevail in the action for damages, Civil Case No. B-134, they have only to establish their
cause of action by preponderance of the evidence.
WHEREFORE, the order of dismissal appealed from is hereby set aside and Civil Case No. B-134 is reinstated and remanded
to the lower court for further proceedings, with costs against the private respondents.
SO ORDERED.
Teehankee (Chairman), Makasiar, Muoz Palma and Guerrero, JJ., concur.
||| (Virata v. Ochoa, G.R. No. L-46179, [January 31, 1978], 171 PHIL 418-422)

THIRD DIVISION
[G.R. No. 141986. July 11, 2002.]
NEPLUM, INC., petitioner, vs. EVELYN V. ORBESO, respondent.

43

DECISION
PANGANIBAN, J p:
Within what period may private offended parties appeal the civil aspect of a judgment acquitting the accused based on
reasonable doubt? Is the 15-day period to be counted from the promulgation of the decision to the accused or from the
time a copy thereof is served on the offended party? Our short answer is: from the time the offended party had actual or
constructive knowledge of the judgment, whether it be during its promulgation or as a consequence of the service of the
notice of the decision.
The Case
Before us is a Petition 1 for Review on Certiorari under Rule 45 of the Rules of Court, seeking to set aside the February 17,
2000 Order 2 of the Regional Trial Court (RTC) of Makati City (Branch 133) in Criminal Case No. 96-246. The Order reads in
full as follows:
"Opposition to Notice of Appeal being well-taken, as prayed for, the Notice of Appeal and the Amended Notice of Appeal
are denied due course." 3
The foregoing Order effectively prevented petitioner from appealing the civil aspect of the criminal proceedings in which
the accused was acquitted based on reasonable doubt. CIAHDT
The Facts
The factual antecedents, as narrated by petitioner in its Memorandum, 4 are as follows:
"2.01 On 29 October 1999, the trial court promulgated its judgment (the 'Judgment') in Criminal Case No. 96-246
acquitting the accused of the crime of estafa on the ground that the prosecution failed to prove the guilt of the accused
beyond reasonable doubt. The accused and her counsel as well as the public and private prosecutors were present during
such promulgation.
'2.01.1 The private prosecutor represented the interests of the petitioner who was the private offended party in Criminal
Case No. 96-246.'
"2.02 On 12 November 1999, the petitioner, through the private prosecutor, received its copy of the Judgment.
"2.03 On 29 November 1999, petitioner filed its 25 November 1999 Motion for Reconsideration (Civil Aspect) of the
Judgment.
'2.03.1 Considering that 27 November 1999 was a Saturday, petitioner filed its Motion for Reconsideration on 29 November
1999, a Monday.'
"2.04 On 28 January 2000, a Friday, petitioner received its copy of the 24 January 2000 Order of the Trial Court denying for
lack of merit petitioner's Motion for Reconsideration.
"2.05 On 31 January 2000, a Monday, petitioner filed its 28 January 2000 Notice of Appeal from the Judgment. On the same
day, petitioner filed by registered mail its 28 January 2000 Amended Notice of Appeal.
"2.06 On 17 February 2000, the Trial Court issued its Challenged Order, which petitioner received through the private
prosecutor on 22 February 2000, denying due course to petitioner's Notice of Appeal and Amended Notice of
Appeal . . . ." 5
Ruling of the Trial Court
The RTC refused to give due course to petitioner's Notice of Appeal 6 and Amended Notice of Appeal. 7 It accepted
respondent's arguments that the Judgment from which the appeal was being taken had become final, because the Notice
of Appeal and the Amended Notice of Appeal were filed beyond the reglementary period. The 15-day period was counted
by the trial court from the promulgation of the Decision sought to be reviewed. THacES
Hence, this Petition. 8
The Issue
In its Memorandum, petitioner submits this lone issue for our consideration:
"Whether the period within which a private offended party may appeal from, or move for a reconsideration of, or otherwise
challenge, the civil aspect of a judgment in a criminal action should be reckoned from the date of promulgation or from the
date of such party's actual receipt of a copy of such judgment considering that any party appealing or challenging such
judgment would necessarily need a copy thereof, which is in writing and which clearly express the factual and legal bases
thereof to be able to file an intelligent appeal or other challenge." 9
The Court's Ruling
The Petition is unmeritorious.
Preliminary Matter:
Mode of Review
Petitioner brought this case to this Court through a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
The Petition seeks to set aside the February 17, 2000 Order of the RTC which, in effect, disallowed petitioner's appeal of its
Judgment.
An ordinary appeal from the RTC to the Court of Appeals (CA) is "taken by filing a notice of appeal with the court which
rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party." 10 Consequently,
the disallowance of the notice of appeal signifies the disallowance of the appeal itself. IDSaEA
A petition for review under Rule 45 is a mode of appeal of a lower court's decision or final order direct to the Supreme
Court. However, the questioned Order is not a "decision or final order" from which an appeal may be taken. The Rules of
Court states explicitly:
"No appeal may be taken from:
xxx xxx xxx
(d) An order disallowing or dismissing an appeal;" 11
On the other hand, a petition for certiorari is the suitable remedy that petitioner should have used, in view of the last
paragraph of the same provision which states:

44

"In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate
special civil action under Rule 65." 12
In turn, Rule 65, Section 1, provides:
"SEC. 1. Petition for certiorari When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,
and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as
law and justice may require." 13 (Italics supplied)
By availing itself of the wrong or inappropriate mode of appeal, the Petition merits an outright dismissal. 14 Supreme Court
Circular No. 2-90 15 (hereinafter "Circular") is unequivocal in directing the dismissal of an inappropriate mode of appeal
thus:
"4. Erroneous Appeals An appeal taken to either the Supreme Court or the Court of Appeals by the wrong or
inappropriate mode shall be dismissed." 16
The same Circular provides that petitioner's counsel has the duty of using the proper mode of review. ICHcaD
"e) Duty of counsel It is therefore incumbent upon every attorney who would seek review of a judgment or order
promulgated against his client to make sure of the nature of the errors he proposes to assign, whether these be of fact or
of law; then upon such basis to ascertain carefully which Court has appellate jurisdiction; and finally, to follow scrupulously
the requisites for appeal prescribed by law, ever aware that any error or imprecision in compliance may well be fatal to his
client's cause." 17
This Court has often admonished litigants for unnecessarily burdening it with the task of determining under which rule a
petition should fall. It has likewise warned lawyers to follow scrupulously the requisites for appeal prescribed by law, ever
aware that any error or imprecision in compliance may well be fatal to the client's cause. 18
On this score alone, the Petition could have been given short shrift and outrightly dismissed. Nevertheless, due to the
novelty of the issue presented and its far-reaching effects, the Court will deal with the arguments raised by petitioner and
lay down the rule on this matter. As an exception to Circular 2-90, it will treat the present proceedings as a petition
for certiorari under Rule 65.
Main Issue:
Timeliness of Appeal
Petitioner contends that an appeal by the private offended party under the Rules of Criminal Procedure must be made
within 15 days from the time the appealing party receives a copy of the relevant judgment. It cites Section 6, Rule 122 of
the 1985 Rules on Criminal Procedure, which provides:
"SEC. 6. When appeal to be taken. An appeal must be taken within fifteen (15) days from promulgation or notice of the
judgment or order appealed from. This period for perfecting an appeal shall be interrupted from the time a motion for new
trial or reconsideration is filed until notice of the order overruling the motion shall have been served upon the accused or
his counsel." (Italics supplied)
The italicized portion of the provision uses the conjunctive "or" in providing for the reckoning period within which an appeal
must be taken. It shall be counted from the promulgation or the notice of the judgment or order.
It is petitioner's assertion that "the parties would always need a written reference or a copy of the judgment . . . to
intelligently examine and consider the judgment from which an appeal will be taken." 19 Thus, it concludes that the 15-day
period for filing a notice of appeal must be counted from the time the losing party actually receives a copy of the decision
or order. Petitioner ratiocinates that it "could not be expected to capture or memorize all the material details of the
judgment during the promulgation thereof." 20 It likewise poses the question: "why require all proceedings in court to be
recorded in writing if the parties thereto would not be allowed the benefit of utilizing these written [documents]?" 21
We clarify. Had it been the accused who appealed, we could have easily ruled that the reckoning period for filing an appeal
be counted from the promulgation of the judgment. In People v. Tamani, 22 the Court was confronted with the question of
when to count the period within which the accused must appeal the criminal conviction. Answered the Court: ACTISD
"The assumption that the fifteen-day period should be counted from February 25, 1963, when a copy of the decision was
allegedly served on appellant's counsel by registered mail is not well-taken. The word 'promulgation' in Section 6 should be
construed as referring to 'judgment,' while the word 'notice' should be construed as referring to 'order.'" 23
The interpretation in that case was very clear. The period for appeal was to be counted from the date of promulgation of
the decision. Text writers 24 are in agreement with this interpretation.
In an earlier case, 25 this Court explained the same interpretation in this wise:
"It may, therefore, be stated that one who desires to appeal in a criminal case must file a notice to that effect within fifteen
days from the date the decision is announced or promulgated to the defendant. And this can be done by the court either
by announcing the judgment in open court as was done in this case, or by promulgating the judgment in the manner set
forth in [S]ection 6, Rule 116 of the Rules of Court." 26
Clear as those interpretations may have been, they cannot be applied to the case at bar, because in those instances it was
the accused who appealed, while here we are confronted with the offended party's appeal of the civil aspect only. Thus, the
question arises whether the accused-appellant's period for appeal, as construed in the cited cases, is the same as that for
the private offended party. We answer in the negative.
No
Need
to
Reserve
Independent Civil Action
At the outset, we must explain that the 2000 Rules on Criminal Procedure deleted the requirement of reserving
independent civil actions and allowed these to proceed separately from criminal ones. Thus, the civil actions referred to
in Articles 32, 27 33, 28 34 29 and 2176 30 of the Civil Code shall remain "separate, distinct and independent" of any
criminal prosecution based on the same act. Here are some direct consequences of such revision and omission:
1. The right to bring the foregoing actions based on the Civil Code need not be reserved in the criminal prosecution, since
they are not deemed included therein.

45

2. The institution or waiver of the right to file a separate civil action arising from the crime charged does not extinguish the
right to bring such action.
3. The only limitation is that the offended party cannot recover more than once for the same act or omission.
Thus, deemed instituted in every criminal prosecution is the civil liability arising from the crime or delict per se (civil
liability ex delicto), but not those liabilities from quasi-delicts, contracts or quasi-contracts. In fact, even if a civil action is
filed separately, the ex delicto civil liability in the criminal prosecution remains, and the offended party may subject to
the control of the prosecutor still intervene in the criminal action in order to protect such remaining civil interest
therein. 31 By the same token, the offended party may appeal a judgment in a criminal case acquitting the accused on
reasonable doubt, but only in regard to the civil liability ex delicto. EATcHD
And this is precisely what herein petitioner wanted to do: to appeal the civil liability arising from the crime the civil
liability ex delicto.
Period
for
Perfecting an Appeal
Section 6 of Rule 122 of the 2000 Rules on Criminal Procedure declares:
"Section 6. When appeal to be taken. An appeal must be taken within fifteen (15) days from promulgation of the
judgment or from notice of the final order appealed from. This period for perfecting an appeal shall be suspended from the
time a motion for new trial or reconsideration is filed until notice of the order overruling the motions has been served upon
the accused or his counsel at which time the balance of the period begins to run."
This provision is similar, though not identical, to Section 6 of Rule 122 of the 1985 Rules invoked by petitioner. The
difference is that the former makes clear that promulgation refers to "judgment," and notice refers to "final order appealed
from."
Taken on its face, the provision seems to suggest that the period for any appeal, whether by the accused or by the private
offended party, must be counted from and understood in conjunction with the provision on the promulgation of the
judgment. This provision mentions the presence of the accused, the judge or the clerk of court in certain instances, and/or
the counsel or representative of the accused. Petitioner is correct in observing that the private offended party is not
required to be present during the promulgation; in fact, the said party is not even mentioned in the provision.
For clarity, the 2000 Rule on the promulgation of judgment is quoted in full hereunder:
"Section 6. Promulgation of judgment The judgment is promulgated by reading it in the presence of the accused and any
judge of the court in which it was rendered. However, if the conviction is for a light offense, the judgment may be
pronounced in the presence of his counsel or representative. When the judge is absent or outside the province or city, the
judgment may be promulgated by the clerk of court.
"If the accused is confined or detained in another province or city, the judgment may be promulgated by the executive
judge of the Regional Trial Court having jurisdiction over the place of confinement or detention upon request of the court
which rendered the judgment. The court promulgating the judgment shall have authority to accept the notice of appeal
and to approve the bail bond pending appeal; provided, that if the decision of the trial court convicting the accused
changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed and resolved by
the appellate court.
"The proper clerk of court shall give notice to the accused personally or through his bondsman or warden and counsel,
requiring him to be present at the promulgation of the decision. If the accused was tried in absentia because he jumped
bail or escaped from prison, the notice to him shall be served at his last known address.
"In case the accused fails to appear at the scheduled date of promulgation of judgment despite notice, the promulgation
shall be made by recording the judgment in the criminal docket and serving him a copy thereof at his last known address
or thru his counsel.
"If the judgment is for conviction and the failure of the accused to appear was without justifiable cause, he shall lose the
remedies available in these rules against the judgment and the court shall order his arrest. Within fifteen (15) days from
promulgation of judgment, however, the accused may surrender and file a motion for leave of court to avail of these
remedies. He shall state the reasons for his absence at the scheduled promulgation and if he proves that his absence was
for a justifiable cause, he shall be allowed to avail of said remedies within fifteen (15) days from notice." 32
Appeal
of
the
Accused
Different
from That of the Offended Party
Clearly, the Rule on the promulgation of judgment refers to the accused, not to the private offended party, who is not even
required to be present during the proceedings. Since the judgment may be promulgated in the absence of the latter, it will
be inequitable to count from that date the period of appeal for the said party. It is but logical to begin tolling such period
only upon service of the notice of judgment upon the offended party, and not from its promulgation to the accused. It is
only through notice to the former that an appeal can reasonably be made, for it is only from that date that the complainant
will have knowledge of the need to elevate the case. Till then, the remedy of appeal would not be an option in the event of
an adverse judgment. AaSCTD
We clarify also that the situations covered by this Rule (Section 6, Rule 122) are limited to appeals of judgments rendered
by regional trial and inferior courts. In higher courts, there is no promulgation in the concept of Section 6, Rule 122 of the
2000 Rules on Criminal Procedure. In the Supreme Court and the Court of Appeals, a decision is promulgated when the
signed copy thereof is filed with the clerk of court, who then causes copies to be served upon the parties or their
counsels. 33 Hence, the presence of either party during promulgation is not required.
The period to appeal, embodied in Section 6 of Rule 122 of the Rules on Criminal Procedure, cannot be applied equally to
both accused-appellant and private offended party. Further bolstering this argument is the second sentence of this
provision which mandates as follows:
". . . . This period for perfecting an appeal shall be suspended from the time a motion for new trial or reconsideration is
filed until notice of the order overruling the motions has been served upon the accused or his counsel at which time the
balance of the period begins to run." 34 (Italics supplied)
The above-quoted portion provides for the procedure for suspending and resuming the reglementary period of appeal
specifically mentioned in the preceding sentence. However, it is clear that the procedure operates only in relation to the

46

accused. This conclusion can be deduced from the fact that after being interrupted, the period to appeal begins to run
again only after the accused or the counselof the accused is given notice of the order overruling the motion for
reconsideration or for new trial. Verily, the assumption behind this provision is that the appeal was taken by the accused,
not by the private offended party.
Indeed, the rules governing the period of appeal in a purely civil action should be the same as those covering the civil
aspects of criminal judgments. If these rules are not completely identical, the former may be suppletory to the latter. As
correctly pointed out by petitioner, "[t]he appeal from the civil aspect of a judgment in a criminal action is, for all intents
and purposes, an appeal from a judgment in a civil action as such appeal cannot affect the criminal aspect
thereof." 35 Being akin to a civil action, the present appeal may be guided by the Rules on Civil Procedure. CTcSAE

In People v. Santiago, 36 the Court has definitively ruled that in a criminal case in which the offended party is the State,
the interest of the private complainant or the private offended party is limited to the civil liability arising therefrom. If a
criminal case is dismissed by the trial court or if there is an acquittal, an appeal of the criminal aspect may be undertaken,
whenever legally feasible, only by the State through the solicitor general. As a rule, only the solicitor general may
represent the People of the Philippines on appeal. The private offended party or complainant may not undertake such
appeal.
However, the offended party or complainant may appeal the civil aspect despite the acquittal of the accused. As such, the
present appeal undertaken by the private offended party relating to the civil aspect of the criminal judgment can no longer
be considered a criminal action per se, wherein the State prosecutes a person for an act or omission punishable by law.
Instead, it becomes a suit analogous to a civil action.
Being in the nature of a civil case, the present intended appeal involves proceedings brought to the Court of Appeals from
a decision of the RTC in the exercise of the latter's original jurisdiction. Thus, it should be properly done by filing a notice of
appeal. 37 An appeal by virtue of such notice shall be filed within 15 days from notice of the judgment or final order
appealed from. 38 For the private offended party, this rule then forecloses the counting of the period to appeal from the
"promulgation" of the judgment to the accused.
In sum, we hold that an offended party's appeal of the civil liability ex delicto of a judgment of acquittal should be filed
within 15 days from notice of the judgment or the final order appealed from. To implement this holding, trial courts are
hereby directed to cause, in criminal cases, the service of their judgments upon the private offended parties or their duly
appointed counsels the private prosecutors. This step will enable them to appeal the civil aspects under the appropriate
circumstances.
General
Rule
Not
Applicable
to the Present Case
Having laid down the general rule on the appeal of civil liabilities ex delicto, we now determine its application to the
present controversy. In short, was petitioner's appeal timely filed?
If we were to follow the reasoning of petitioner, the Notice of Appeal filed on January 31, 2000 was on time, considering
that (1) the judgment had been received by its counsel only on November 12, 1999; and (2) the Motion for Reconsideration
filed on November 29, 2000 interrupted the running of the reglementary period. ATCEIc
However, a peculiar circumstance in this case militates against this conclusion. Here, the private prosecutor himself was
present during the promulgation of the Judgment. This fact is undeniable, as petitioner itself admits his presence in its
Memorandum as follows:
"2.01 On 29 October 1999, the Trial Court promulgated its judgment (the 'Judgment') in Criminal Case No. 96-246
acquitting the accused of the crime of estafa on the ground that the prosecution failed to prove the guilt of the accused
beyond reasonable doubt. The accused and her counsel as well as the public and private prosecutors were present during
such promulgation." 39 (Italics supplied)
Further, private prosecutor 40 even signed a copy of the Judgment dated October 29, 1999, a signature which in
unequivocal terms signifies notification of the party he represents herein petitioner.
Having been present during the promulgation and having been furnished a copy of the judgment at the time, private
offended party was in effect actually notified of the Judgment, and from that time already had knowledge of the need to
appeal it. Thus, the very raison d'tre of this Decision is already satisfied: the filing of an appeal by the said party, only
after being notified of the Judgment. As argued by respondent, "did not the public and private prosecutors acquire notice of
judgment at its promulgation because of their presence? Notice of the judgment may not be defined in any other
way . . . ." 41
Petitioner stresses the need for service of the judgment on the offended party. It harps on the fact that based on
constitutional, statutory and even jurisprudential edicts judgments must be in writing and with the factual and legal
bases thereof clearly expressed.
Petitioner posits that it can make an appeal only after receiving a written copy of the judgment, for "the parties would
always need a written reference or a copy [thereof which] they can review or refer to from time to time." 42 To rule
otherwise would supposedly deny them due process.
We clarify. If petitioner or its counsel had never been notified of the Judgment, then the period for appeal would never have
run. True, no law requires the offended party to attend the promulgation, much less to secure a copy of the decision on
that date. But fiction must yield to reality. By mere presence, the offended party was already actually notified of the
Decision of acquittal and should have taken the necessary steps to ensure that a timely appeal be filed.
Besides, all that petitioner had to do was to file a simple notice of appeal a brief statement of its intention to elevate the
trial court's Decision to the CA. There was no reason why it could not have done so within 15 days after actually knowing
the adverse judgment during the promulgation. 43 Parties and their counsels are presumed to be vigilant in protecting
their interests and must take the necessary remedies without delay and without resort to technicalities.
Appeal
Not
Part
of Due Process
It should be stressed that the right to appeal is neither a natural right nor a part of due process. It is merely a procedural
remedy of statutory origin and may be exercised only in the manner prescribed by the provisions of law authorizing its

47

exercise. 44 Hence, its requirements must be strictly complied with. 45 The failure of petitioner to file a timely notice of
appeal from the judgment, thus rendering the judgment final and executory, is not a denial of due process. It might have
lost its right to appeal, but it was not denied its day in court. TCDHaE
It would be incorrect to perceive the procedural requirements of the rules on appeal as merely harmless and trivial
technicalities that can be discarded. 46 Indeed, deviations from the rules cannot be tolerated. 47 "The rationale for this
strict attitude is not difficult to appreciate. These rules are designed to facilitate the orderly disposition of appealed cases.
In an age where courts are bedeviled by clogged dockets, these rules need to be followed by appellants with greater
fidelity. Their observance cannot be left to the whims and caprices of appellants." 48
Neither has petitioner justified a deviation from an otherwise stringent rule. Anyone seeking exemption from the
application of the reglementary period for filing an appeal has the burden of proving the existence of exceptionally
meritorious instances warranting such deviation. 49
A fundamental precept is that the reglementary periods under the Rules are to be strictly observed, for they are
indispensable interdictions against needless delay and for an orderly discharge of judicial business. 50 After judgment has
become final, vested rights are acquired by the winning party. Just as the losing party has the right to file an appeal within
the prescribed period, so does the winning party also have the correlative right to enjoy the finality of the resolution of the
case. 51 This principle becomes even more essential in view of the fact that the criminal aspect has already been
adjudicated.
WHEREFORE, the Petition is hereby DENIED and the assailed Order AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, Sandoval-Gutierrez and Carpio, JJ., concur.
||| (Neplum, Inc. v. Orbeso, G.R. No. 141986, [July 11, 2002], 433 PHIL 844-869)

48

THIRD DIVISION
[G.R. No. 170596. November 28, 2008.]
NGO SIN SING and TICIA DY NGO, petitioners, vs. LI SENG GIAP & SONS, INC., and CONTECH CONSTRUCTION TECHNOLOGY
DEVELOPMENT CORPORATION, respondents.

DECISION
NACHURA, J p:
This is a petition for review on certiorari of the Decision 1 of the Court of Appeals (CA) dated May 11, 2005 and the
resolution denying the motion for reconsideration thereof in CA-G.R. CV No. 65553. DEICTS
The facts are as follows:
Petitioner spouses Ngo Sin Sing and Ticia Dy Ngo owned a lot at 745 Caballero St., Binondo. In 1978, they decided to
construct a 5-storey concrete building thereon, the NSS Building, and for this project, they contracted the services of
Contech Construction Technology Development Corporation (Contech) as their General Contractor. Adjacent to their lot is a
semi-concrete building known as the Li Seng Giap Building (LSG Building), owned by Li Seng Giap & Sons, Inc.
(respondent). During the construction of the NSS Building, the respondent, through its general manager, John T. Lee,
received complaints from their tenants about defects in the building. There were cracks appearing on the floors, the steel
door was bent, and concrete slabs of the walls were falling apart. 2 An inspection of the premises revealed that the
excavation made by Contech on petitioners' land was close to the common boundary, exposing the foundation of the LSG
Building. As a gesture of goodwill to their neighbors, the petitioners assured the respondent that repairs would be
undertaken by their contractor. In December 1979, Contech announced that it had completed repairs on the LSG Building.
Notwithstanding this assurance, more defects in the LSG Building appeared, i.e., tilted floors, cracks in the columns and
beams, distorted window frames. Apparently, the LSG Building was continuously sagging and the respondent felt that it
was no longer safe to occupy the building.
In 1981, the respondent was constrained to consult engineers, E.S. de Castro Ph.D. and Associates, through Control
Builders Corporation, to investigate the cause of the damages in the LSG Building and to determine its present structural
integrity. It was immediately noticed that the LSG Building underwent differential settlement. 3 Based on their ocular
inspection on the building measurement of the actual differential settlement, structural analysis of the building and
determination of the sub-surface soil conditions, the consultants concluded that the structural failure of the LSG Building
resulted from the differential settlement caused by the excavation during the construction of the NSS Building. Since the
building had undergone large differential settlements beyond safe tolerable limits, the consultants recommended the
complete demolition of the LSG Building. The demolition and reconstruction of the building was estimated to cost the
respondents about P8,021,687.00. 4 The respondents demanded that the petitioners rebuild the LSG Building or pay the
cost of the same, which the petitioners refused.
Thus, a complaint for sum of money was filed against Ngo Sin Sing, Ticia Dy Ngo and Contech Construction Technology
Development Corporation with the Regional Trial Court of Manila, docketed as Civil Case No. 83-19367, praying that the
petitioners and Contech be ordered to, jointly and severally, pay the following sums:
1) P8,021,687.00, representing the actual cost of demolition and reconstruction of the LSG Building;
2) P154,800.00 which plaintiff contracted to pay the E.S. de Castro, Ph.D. and Associates, and Control Builders Corporation
to determine the extent of the damages and the structural integrity of the LSG Building;
3) P543,672.00, representing the income that the plaintiff will lose from the rentals during the reconstruction of the
building;
4) P10,000.00 as attorney's fees. 5
In their Answer, 6 spouses Ngo Sin Sing and Ticia Dy Ngo moved to dismiss the complaint alleging that: (1) the
respondent's building had been structurally unstable and deficient since incipiency, having been constructed in 1966
without the appropriate provision to vouchsafe its structural integrity including differential settlements during its economic
life; and (2) the structural defects and failure were traceable not necessarily due to soil erosion but to a number of external
forces constantly working upon the building including earthquakes and improper maintenance. Petitioners filed a crossclaim against Contech averring that pursuant to their construction contract, all claims of third parties should be answered
by said corporation. 7 ECcTaH
For its part, Contech alleged that the excavation did not reach the common boundary and was eight (8) inches, more or
less, away from the common boundary. Adequate and necessary precautions were undertaken which included the putting
of wood sheet piles along the boundaries to prevent soil erosion and all phases of work were done according to the
approved plan. Assuming it was liable on the cross-claim, such liability was deemed waived or abandoned for failure of Ngo
Sin Sing to notify Contech of such claim. 8
After due hearing, the trial court ruled that the defendants were negligent. It found that the excavation made on
defendant's lot was near the common boundary, and that soil erosion would not have taken place if wood sheet piles were
properly put in place along the common boundary. However, the trial court also stated that the plaintiff was likewise not
without fault. The trial court noted that the LSG Building was originally a 2-storey building and the plaintiff added two more
floors without providing the necessary foundation and reinforcement causing the building to sag. The trial court held that it
was but fair for the plaintiff to assume its share of the faults and defects of its property in this case.
Thus, the trial court rendered judgment as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendants Ngo Sin Sing, Ticia Dy Ngo and
[Contech] Construction Technology Development Corp. jointly and severally, liable to pay plaintiff Li Seng Giap & Sons, Inc.
the sum of P4,010,843.50. The claim for other damages cannot be awarded for lack of sufficient basis. Defendant Contech
Technology & Development Corp. shall reimburse defendants Spouses Ngo Sin Sing & Ticia Dy Ngo for whatever amount
the latter will pay to plaintiff. The counterclaims of defendants are DISMISSED. 9
Dissatisfied with the trial court's ruling, Li Seng Giap & Sons, Inc. and the spouses Ngo Sin Sing and Ticia Dy Ngo filed their
respective appeals. Contech no longer appealed.
The respondent disagreed with the trial court's finding that it was guilty of contributory negligence and that it must share
in the cost of the reconstruction of the LSG Building. It claimed that the LSG Building never exhibited any sign of structural

49

distress from the time it was completely constructed in 1968, despite the fact that Manila was rocked by several
earthquakes, the most violent of which was in 1969. The defects were experienced only when excavation and construction
of the NSS Building started. Respondent reiterated its prayer in the complaint.
The petitioners, on the other hand, averred that there was no basis for holding them jointly and severally liable with
Contech for the payment of the amount of damages to the respondent. The trial court correctly pointed out that as owner
of the property, it was their right to construct on their land and have it excavated. More importantly, they had a contract
with Contech wherein it was provided that all claims of third persons would be answered by the company.
On May 11, 2005, the CA affirmed the trial court's decision with modification. The appellate court ruled that the respondent
had a proven cause of action against the petitioners; that respondent's right to property was invaded or disturbed when
excavation was done without sufficient lateral or subjacent support. As such, the petitioners' liability as project owner
should be shared with the contractor, applying the provisions of Article 2194 of the Civil Code which states that "the
responsibility of two or more persons for a quasi-delict is solidary." 10 The CA refuted the findings of the trial court
imputing contributory negligence to the respondents Li Seng Giap & Sons, Inc., and ruled that the spouses Ngo Sin Sing
and Ticia Dy Ngo together with Contech, were solidarily liable for the whole amount. Thus: ISDHcT
IN VIEW OF THE FOREGOING, the decision appealed from is MODIFIED in that the defendants shall jointly and severally pay
the plaintiff the sum of P8,021,687.[00] with interest at 6 percent per annum from the date of the filing of the complaint
until paid, plus ten percent of the principal award as attorney's fees and costs. The rest of the decision is AFFIRMED.
Aggrieved, the spouses Ngo Sin Sing and Ticia Dy Ngo now come to this Court raising the following assignment of errors:
I.
RESPONDENT COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN RENDERING THE ASSAILED DECISION AND
RESOLUTION WHICH IGNORED AND DISREGARDED CLEAR EVIDENCE ON RECORD THAT RESPONDENT LSG'S OWN
NEGLIGENCE WAS THE PROXIMATE CAUSE OF THE DAMAGE TO ITS BUILDING, OR AT LEAST, AMOUNTED TO CONTRIBUTORY
NEGLIGENCE WARRANTING REDUCTION OF THE AWARD.
II.
RESPONDENT COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN RENDERING THE ASSAILED DECISION AND
RESOLUTION WHEN DESPITE THE FACT THAT NO ACT OR OMISSION CONSTITUTING NEGLIGENCE HAD BEEN SUCCESSFULLY
IMPUTED AGAINST PETITIONERS, IT HELD PETITIONERS JOINTLY AND SEVERALLY LIABLE WITH RESPONDENT CONTECH FOR
RECONSTRUCTION COSTS.
III.
RESPONDENT COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN RENDERING THE ASSAILED DECISION AND
RESOLUTION WHEN, WITHOUT ANY LEGAL AND FACTUAL BASIS, IT ORDERED PETITIONER TO PAY RESPONDENT LSG
ATTORNEY'S FEES IN THE AMOUNT OF TEN (10%) [PERCENT] OF THE PRINCIPAL AMOUNT. 11

We resolve to grant the petition.

In petitions for review, the Court does not normally review the factual findings of the courts below, but when the findings of
the CA differ from those of the trial court, the Court will not hesitate to scrutinize the evidence on record. As between these
two courts, it cannot be denied that the trial court is in a better position to ascertain the facts of the case considering its
peculiar opportunity to be in direct contact with the witnesses and the evidence presented. As such, this Court is inclined
to uphold the findings of the trial court in this case which we find to be more conformable to the evidence on
record. DEAaIS
The records reveal that the LSG Building was constructed as early as 1956. Originally, the building permit dated June 27,
1956 12 was for the construction of a 3-storey building. Apparently, this was amended when another building permit was
issued on August 20, 1956, 13for the construction of a 2-storey building only. The City Engineer testified that the
Certificate of Occupancy was issued for the August 20, 1956 permit which was for the 2-storey building. 14 In 1966, the
building was burned. Thereafter, it was rebuilt with two floors added to the original 2-storey building. The CA stressed that,
according to John T. Lee, Manager of LSG Building, the present building was an entirely new edifice and not one built on the
ashes of the old. 15 However, on cross-examination, John T. Lee admitted that:
WITNESS:
May I recall sometime in 1940, the property was purchased with an existing building apartment wooden in 1940.
Sometime in 1956, the wooden apartment was destroyed by fire. So in 1956, a permit was requested and granted to
construct a three storey reinforce concrete building. Now on the later part of 1956 it was amended. The permit was
amended. It was changed to a two storey concrete building. It is called semi-concrete. So the building was finished in 1957.
Then in 1966 that semi-concrete building was burned. So we requested for a building permit to reconstruct and include a
3rd and 4th storey building.
COURT:
Q So the 3rd and 4th storey will be built on the skeleton?
A According to my brother that is exactly the . . .
Q Skeleton on the ground floor and second floor and what was added was the 3rd and 4th floor? Storey?
A Yes, sir.
Q And it was finished when?
A It was finished in 1968.
Q And it was semi-concrete?
A No reinforce concrete in 1968.
Q So the 3rd and 4th storey was added to the shell of the ground and 2nd floor which was burned?
A Yes, your honor. 16
Whether or not the building is a new edifice or built on the old ashes is really of no moment. Verily, the foundation of the
LSG Building which was good to support only two floors remained the same and could not support the weight of the
present 4-storey building. Edgardo Soriano, Civil Engineer from the Office of the City Engineers Manila, testified that there
was a great possibility that the settlement may be progressive, 17 and that the damages may be due to the defect in the
foundation and not due to the excavation. 18More intriguing is the statement in the report of E.S de Castro which reads:

50

In terms of purely engineering considerations, it would be best to demolish the existing building and then rebuild using
present data as design guides. Economic feasibility is, of course, beyond the scope of this study.
If the owners wish to salvage whatever they can of the present building, it is suggested that the 3rd and 4th floors be
removed and retain use of the ground and second floors only. To leave the building in its present condition would be
unsafe. 19
This only goes to show that the additional two floors put up on the LSG Building could have overburdened the foundation's
load-bearing capacity and contributed to the sagging of the building. The possibility of settlement due to weak foundation
cannot, therefore, be discounted. As the trial court correctly ruled: "adding more floors without touching or reinforcing the
building's bottom line or foundation are already manifestive of some negligence or ignorance on the part of said building
owner. . . . Had plaintiff stuck to his original building 2-storey with its kind of foundation, the excavation by its adjacent
neighbor would not matter much or affect the building in question at the outset." 20 TCacIA
Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard to which he is required to conform for his own protection. 21 In this case,
considering that respondent's negligence must have necessarily contributed to the sagging of the LSG Building, a
reduction of the award is warranted. We, therefore, agree with the trial court that respondent should likewise share in the
cost of the restructuring of its building. This is more in keeping with justice and equity. As the trial court ratiocinated:
After going over the records of the case, the Court believes and so holds that plaintiff is equally negligent in not providing
the necessary foundation and reinforcement to accommodate/support the additional floors and this finding is supported by
plaintiff's evidence more particularly the declaration of John Lee that the 3rd and 4th floors were built on the skeleton of
the ground and 2nd floor which was burned (tsn pp. 8-9, July 9, 1985). To be adding additional floors to the original 2-storey
of plaintiff's building and depending merely on the skeleton of the ground and second floors for its third and fourth floors
without touching or reinforcing that building's bottom line or foundation are already manifestive of some negligence or
ignorance on the part of said building owner (plaintiff). To put all the blame and responsibility for the defects, cracks and
tilting or sagging of the building in question on the shoulders of the defendants is not proper. Plaintiff must realize his
share of the faults and defects of his property in the situation. 22
xxx xxx xxx
In view of this and considering that the plaintiff's building is still occupied by tenants and has not been condemned nor
condemnation proceedings accordingly instituted, the Court believes that demands of substantial justice are satisfied by
allocating the damages on 50-50 ratio. Thus, 50% of the damages sustained by the building is to be borne by the plaintiff
and the other 50% by the defendants jointly and severally upon reconstruction of the former's building. The amount of
P154,000.00 for the services rendered by Contech(sic) Builders should be shouldered by the plaintiff alone. Defendant
Contech shall reimburse defendants Spouses Ngo Sin Sing and Ticia Dy Ngo for whatever amount the latter will pay to the
plaintiff. 23
The lower courts also found that there was insufficient lateral or subjacent support provided on the adjoining lot when
excavation was done on petitioners' land. While there were wood sheet piles placed along the sides of the excavation, they
were not properly braced to prevent a failure wedge. 24 Such failure can only be accounted to the contractor, which is no
other than Contech. In the Proposal 25submitted to the petitioners, Contech committed to undertake the construction of
the NSS Building, providing labor and equipment for the project. Work included excavation for foundation, formworks, steel
works, etc. Construction would be completed after 365 days. It was also provided that the petitioners were "released and
relieved of any and all liabilities and responsibilities for any injury to the workers and laborers employed in the work
contracted for, as well as for third-party liabilities." 26 As it turned out in the course of the construction of the NSS Building,
Contech failed to observe the proper procedure prior to excavation. We quote the trial court: ACcISa
Clearly, defendant Contech failed to observe his procedure of providing lateral and subjacent support prior to excavation.
Under the doctrine of "supervening negligence" which states that where both parties are negligent but the negligence of
one is appreciably later in time than of the other, or when it is impossible to determine whose fault or negligence should be
attributed to the incident, the one who had the last clear opportunity to avoid the impending harm and failed to do so is
chargeable with the consequences thereof. Stated differently, the rule would also mean that an antecedent negligence of a
person does not preclude the recovery of damages for the supervening negligence of or bar a defense against the liability
sought by another, if the latter, who had the last fair chance, could have avoided the impending harm by the exercise of
due diligence.
In the case at bench, the negligence of Contech caused the damages sustained by the building, which did not discharge its
duty of excavating eight (8) inches away from the boundary line from the lot of plaintiff with insufficient lateral and
subjacent support. 27
Article 2176 of the New Civil Code provides:
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. HCEcAa
The requisites of quasi-delict are the following:
(a) There must be an act or omission;
(b) Such act or omission causes damage to another;
(c) Such act or omission is caused by fault or negligence; and
(d) There is no pre-existing contractual relation between the parties. 28
These requisites are attendant in the instant case. The tortious act was the excavation done without observing the proper
safeguards. Although the trial court stated that petitioner as land owner had every right to excavate on his own land, such
right is not absolute as to deprive the adjacent owner sufficient lateral support pursuant to Article 684, New Civil Code,
which states that:
No proprietor shall make such excavation upon his land as to deprive any adjacent land or building of sufficient lateral or
subjacent support.

51

For the damage caused to the respondent, petitioners and Contech are jointly liable as they are joint tort-feasors.
Conformably with Article 2194, the responsibility of two or more persons who are liable for the quasi-delict is
solidary. 29 In Lafarge Cement Philippines, Inc. v. Continental Cement Corporation, 30 the Court had the occasion to
explain:
[O]bligations arising from tort are, by their nature, always solidary. We have assiduously maintained this legal principle as
early as 1912 in Worcester v. Ocampo, in which we held:
. . . The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort.
They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he
participates, but is also jointly liable with his tort feasors. . . .
It may be stated as a general rule that joint tort feasors are all the persons who command, instigate, promote, encourage,
advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for
their benefit. They are each liable as principals, to the same extent and in the same manner as if they had performed the
wrongful act themselves. . . . CIaASH
Joint tort feasors are jointly and severally liable for the tort which they commit. The persons injured may sue all of them or
any number less than all. Each is liable for the whole damages caused by all, and all together are jointly liable for the
whole damage. It is no defense for one sued alone, that the others who participated in the wrongful act are not joined with
him as defendants; nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the
others. . . .
Joint tort feasors are not liable pro rata. The damages can not be apportioned among them, except among themselves.
They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally
liable for the whole amount. . . .
A payment in full for the damage done, by one of the joint tort feasors, of course satisfies any claim which might exist
against the others. There can be but satisfaction. The release of one of the joint tort feasors by agreement generally
operates to discharge all. . . .
Of course, the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. The
courts may release some for lack of evidence while condemning others of the alleged tort feasors. And this is true even
though they are charged jointly and severally. 31
Prescinding from the above, there is basis to re-examine the court's disposition in this case as to the liability of the
petitioner in the light of the judgment rendered (1) holding the petitioner and Contech jointly and severally liable, and (2)
giving the right to the petitioner to be reimbursed for whatever amount it shall pay the respondent. 32
In Citytrust Banking Corporation v. Court of Appeals, 33 the Court stated that a judgment may determine the ultimate
rights of the parties on the same side as between themselves, such that questions of primary and secondary liability
between joint tort-feasors may be determined. Such judgment does not make the "co-defendants" adversaries. It permits
only the determination of questions of primary and secondary liability between joint tort-feasors. 34
In Weiner v. Mager & Throne, Inc., et al., 35 it was held that
In order to avoid a multiplicity of suits, and to place it in the power of the defendant to get a determination of an entire
controversy in a single action, statutory provision is made whereby, if the rights of the defendants as between themselves
are determinable in an action, the whole matter may be disposed of in the judgment of such action, instead of leaving the
defendants to litigate independently after the judgment has been entered in the main action. aHTCIc
From the foregoing, it is clear that this Court is not precluded from rendering a judgment that determines the liabilities of
the "co-defendants" (petitioners and Contech) in this case. Rather than invite the definite prospect of the petitioners filing
or instituting an action later on seeking reimbursement from the party primarily liable, which in this case is Contech, it
would be more in keeping with the principles of expediency and the policy against multiplicity of suits to make a direct
adjudication in this regard. Considering that there was no proffered evidence of negligence on the part of the petitioners,
the inescapable conclusion is that Contech is ultimately liable and should answer for the cost of the damage.
Indeed, the facts show that Contech's negligence was the proximate cause of the damage. Construction is a field requiring
technical expertise. The petitioners, as ordinary laymen, would understandably have no knowledge at all about the
technical aspect of constructing a building. This was precisely the reason why they contracted the services of a reputable
construction firm to undertake the project. Petitioners had every right to rely on the warranties and representations of their
contractor.
We note that Contech has remained silent, as if accepting its fate of liability in this case. The trial court observed that
Contech did not present evidence to controvert the parties' assertions or prove their allegations in the answer, despite an
order to do so. 36 From the trial court's decision, both the petitioner and respondent filed their respective appeals while
Contech no longer challenged said decision. Thus, the decision holding it liable has become final and executory.
Moreover, the trial court pointed out that Contech fell short of its responsibility as contractor in this valuable project. It
failed to insure its work against possible risks. We quote:
Defendant Contech as the contractor should have been prudent enough as to have sought and acquired a Contractor All
Risk (CAR) insurance policy and/or Erection All Risk (EAR) insurance policy in the course of such a construction that it had
contracted with co-defendant Spouses. Had CAR & EAR insurance policies been availed of before any excavation was
undertaken the plaintiff could have run after the insurance companies that could have covered those risks. Contractors of
building should have taken the roles of the wise and prudent father to their customers or clients as they are specialists in
themselves as their field of know-how in technology would always be demanded and extracted of them by all their
patrons. 37 TAaEIc
As to the award for attorney's fees in the CA decision, the same should be deleted, as the appellate court did not provide
any basis whatsoever to justify the award.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is SET ASIDE. The decision of the Regional Trial
Court is REINSTATED with the modification that Contech Construction Technology Development Corporation, alone, is
ORDERED to pay respondent Li Seng Giap & Sons, Inc., the sum of P4,010,843.50.
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Chico-Nazario and Reyes, JJ., concur.

||| (Ngo Sin Sing v. Li Seng Giap & Sons, Inc., G.R. No. 170596, [November 28, 2008], 593 PHIL 270-288)

52

SECOND DIVISION
[G.R. No. 182356. December 4, 2013.]
DRA. LEILA A. DELA LLANA, petitioner, vs. REBECCA BIONG, doing business under the name and style of Pongkay
Trading,respondent.

53

DECISION
BRION, J p:
Every case essentially turns on two basic questions: questions of fact and questions of law. Questions of fact are for the
parties and their counsels to respond to, based on what supporting facts the legal questions require; the court can only
draw conclusion from the facts or evidence adduced. When the facts are lacking because of the deficiency of presented
evidence, then the court can only draw one conclusion: that the case must fail for lack of evidentiary support.
The present case is one such case as Dra. Leila A. dela Llana's (petitioner) petition for review on certiorari 1 challenging
the February 11, 2008 decision 2 and the March 31, 2008 resolution 3 of the Court of Appeals (CA) in CA-G.R. CV No.
89163.
The Factual Antecedents
On March 30, 2000, at around 11:00 p.m., Juan dela Llana was driving a 1997 Toyota Corolla car along North Avenue,
Quezon City. 4 His sister, Dra. dela Llana, was seated at the front passenger seat while a certain Calimlim was at the
backseat. 5 Juan stopped the car across the Veterans Memorial Hospital when the signal light turned red. A few seconds
after the car halted, a dump truck containing gravel and sand suddenly rammed the car's rear end, violently pushing the
car forward. Due to the impact, the car's rear end collapsed and its rear windshield was shattered. Glass splinters flew,
puncturing Dra. dela Llana. Apart from these minor wounds, Dra. dela Llana did not appear to have suffered from any other
visible physical injuries. 6 ACIEaH
The traffic investigation report dated March 30, 2000 identified the truck driver as Joel Primero. It stated that Joel was
recklessly imprudent in driving the truck. 7 Joel later revealed that his employer was respondent Rebecca Biong, doing
business under the name and style of "Pongkay Trading" and was engaged in a gravel and sand business. 8
In the first week of May 2000, Dra. dela Llana began to feel mild to moderate pain on the left side of her neck and
shoulder. The pain became more intense as days passed by. Her injury became more severe. Her health deteriorated to the
extent that she could no longer move her left arm. On June 9, 2000, she consulted with Dr. Rosalinda Milla, a rehabilitation
medicine specialist, to examine her condition. Dr. Milla told her that she suffered from a whiplash injury, an injury caused
by the compression of the nerve running to her left arm and hand. Dr. Milla required her to undergo physical therapy to
alleviate her condition.
Dra. dela Llana's condition did not improve despite three months of extensive physical therapy. 9 She then consulted other
doctors, namely, Drs. Willie Lopez, Leonor Cabral-Lim and Eric Flores, in search for a cure. Dr. Flores, a neuro-surgeon,
finally suggested that she undergo a cervical spine surgery to release the compression of her nerve. On October 19, 2000,
Dr. Flores operated on her spine and neck, between the C5 and the C6 vertebrae. 10 The operation released the
impingement of the nerve, but incapacitated Dra. dela Llana from the practice of her profession since June 2000 despite
the surgery. 11
Dra. dela Llana, on October 16, 2000, demanded from Rebecca compensation for her injuries, but Rebecca refused to
pay. 12 Thus, on May 8, 2001, Dra. dela Llana sued Rebecca for damages before the Regional Trial Court of Quezon
City (RTC). She alleged that she lost the mobility of her arm as a result of the vehicular accident and claimed P150,000.00
for her medical expenses (as of the filing of the complaint) and an average monthly income of P30,000.00 since June 2000.
She further prayed for actual, moral, and exemplary damages as well as attorney's fees. 13
In defense, Rebecca maintained that Dra. dela Llana had no cause of action against her as no reasonable relation existed
between the vehicular accident and Dra. dela Llana's injury. She pointed out that Dra. dela Llana's illness became manifest
one month and one week from the date of the vehicular accident. As a counterclaim, she demanded the payment of
attorney's fees and costs of the suit. 14
At the trial, Dra. dela Llana presented herself as an ordinary witness 15 and Joel as a hostile witness. 16 Dra. dela Llana
reiterated that she lost the mobility of her arm because of the vehicular accident. To prove her claim, she identified and
authenticated a medical certificate dated November 20, 2000 issued by Dr. Milla. The medical certificate stated that Dra.
dela Llana suffered from a whiplash injury. It also chronicled her clinical history and physical examinations. 17 Meanwhile,
Joel testified that his truck hit the car because the truck's brakes got stuck. 18
In defense, Rebecca testified that Dra. dela Llana was physically fit and strong when they met several days after the
vehicular accident. She also asserted that she observed the diligence of a good father of a family in the selection and
supervision of Joel. She pointed out that she required Joel to submit a certification of good moral character as well
as barangay, police, and NBI clearances prior to his employment. She also stressed that she only hired Primero after he
successfully passed the driving skills test conducted by Alberto Marcelo, a licensed driver-mechanic. 19
Alberto also took the witness stand. He testified that he checked the truck in the morning of March 30, 2000. He affirmed
that the truck was in good condition prior to the vehicular accident. He opined that the cause of the vehicular accident was
a damaged compressor. According to him, the absence of air inside the tank damaged the compressor. 20 cDTHIE
RTC Ruling
The RTC ruled in favor of Dra. dela Llana and held that the proximate cause of Dra. dela Llana's whiplash injury to be Joel's
reckless driving. 21 It found that a whiplash injury is an injury caused by the sudden jerking of the spine in the neck area. It
pointed out that the massive damage the car suffered only meant that the truck was over-speeding. It maintained that Joel
should have driven at a slower pace because road visibility diminishes at night. He should have blown his horn and warned
the car that his brake was stuck and could have prevented the collision by swerving the truck off the road. It also
concluded that Joel was probably sleeping when the collision occurred as Joel had been driving for fifteen hours on that
fateful day.
The RTC further declared that Joel's negligence gave rise to the presumption that Rebecca did not exercise the diligence of
a good father of a family in Joel's selection and supervision of Joel. Rebecca was vicariously liable because she was the
employer and she personally chose him to drive the truck. On the day of the collision, she ordered him to deliver gravel

54

and sand to Muoz Market, Quezon City. The Court concluded that the three elements necessary to establish Rebecca's
liability were present: (1) that the employee was chosen by the employer, personally or through another; (2) that the
services were to be rendered in accordance with orders which the employer had the authority to give at all times; and (3)
that the illicit act of the employee was on the occasion or by reason of the functions entrusted to him.
The RTC thus awarded Dra. dela Llana the amounts of P570,000.00 as actual damages, P250,000.00 as moral damages,
and the cost of the suit. 22
CA Ruling
In a decision dated February 11, 2008, the CA reversed the RTC ruling. It held that Dra. dela Llana failed to establish a
reasonable connection between the vehicular accident and her whiplash injury by preponderance of evidence.
Citing Nutrimix Feeds Corp. v. Court of Appeals, 23 it declared that courts will not hesitate to rule in favor of the other party
if there is no evidence or the evidence is too slight to warrant an inference establishing the fact in issue. It noted that the
interval between the date of the collision and the date when Dra. dela Llana began to suffer the symptoms of her illness
was lengthy. It concluded that this interval raised doubts on whether Joel's reckless driving and the resulting collision in
fact caused Dra. dela Llana's injury.
It also declared that courts cannot take judicial notice that vehicular accidents cause whiplash injuries. It observed that
Dra. dela Llana did not immediately visit a hospital to check if she sustained internal injuries after the accident. Moreover,
her failure to present expert witnesses was fatal to her claim. It also gave no weight to the medical certificate. The medical
certificate did not explain how and why the vehicular accident caused the injury. 24
The Petition
Dra. dela Llana points out in her petition before this Court that Nutrimix is inapplicable in the present case. She stresses
that Nutrimixinvolved the application of Articles 1561 and 1566 of the Civil Code,provisions governing hidden defects.
Furthermore, there was absolutely no evidence in Nutrimix that showed that poisonous animal feeds were sold to the
respondents in that case. acIHDA
As opposed to the respondents in Nutrimix, Dra. dela Llana asserts that she has established by preponderance of evidence
that Joel's negligent act was the proximate cause of her whiplash injury. First, pictures of her damaged car show that the
collision was strong. She posits that it can be reasonably inferred from these pictures that the massive impact resulted in
her whiplash injury. Second, Dr. Milla categorically stated in the medical certificate that Dra. dela Llana suffered from
whiplash injury. Third, her testimony that the vehicular accident caused the injury is credible because she was a surgeon.
Dra. dela Llana further asserts that the medical certificate has probative value. Citing several cases, she posits that an
uncorroborated medical certificate is credible if uncontroverted. 25 She points out that expert opinion is unnecessary if the
opinion merely relates to matters of common knowledge. She maintains that a judge is qualified as an expert to determine
the causation between Joel's reckless driving and her whiplash injury. Trial judges are aware of the fact that whiplash
injuries are common in vehicular collisions.
The Respondent's Position
In her Comment, 26 Rebecca points out that Dra. dela Llana raises a factual issue which is beyond the scope of a petition
for review oncertiorari under Rule 45 of the Rules of Court. She maintains that the CA's findings of fact are final and
conclusive. Moreover, she stresses that Dra. dela Llana's arguments are not substantial to merit this Court's consideration.
The Issue
The sole issue for our consideration in this case is whether Joel's reckless driving is the proximate cause of Dra. dela
Llana's whiplash injury.

Our Ruling
We find the petition unmeritorious. The Supreme Court may review questions of fact in a petition for review on certiorari
when the findings of fact by the lower courts are conflicting
The issue before us involves a question of fact and this Court is not a trier of facts. As a general rule, the CA's findings of
fact are final and conclusive and this Court will not review them on appeal. It is not the function of this Court to examine,
review or evaluate the evidence in a petition for review on certiorari under Rule 45 of the Rules of Court. We can only
review the presented evidence, by way of exception, when the conflict exists in findings of the RTC and the CA. 27 We see
this exceptional situation here and thus accordingly examine the relevant evidence presented before the trial court.
Dra. dela Llana failed to establish her case by preponderance of evidence
Article 2176 of the Civil Code provides that "[w]hoever 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 a quasi-delict." Under this provision, the elements necessary to establish a quasi-delict case are: (1)
damages to the plaintiff; (2) negligence, by act or omission, of the defendant or by some person for whose acts the
defendant must respond, was guilty; and (3) the connection of cause and effect between such negligence and the
damages. 28 These elements show that the source of obligation in a quasi-delict case is the breach or omission of mutual
duties that civilized society imposes upon its members, or which arise from non-contractual relations of certain members
of society to others. 29 AHcDEI
Based on these requisites, Dra. dela Llana must first establish by preponderance of evidence the three elements of quasidelict before we determine Rebecca's liability as Joel's employer. She should show the chain of causation between Joel's
reckless driving and her whiplash injury. Only after she has laid this foundation can the presumption that Rebecca did
not exercise the diligence of a good father of a family in the selection and supervision of Joel arise. 30 Once negligence,
the damages and the proximate causation are established, this Court can then proceed with the application and the
interpretation of the fifth paragraph of Article 2180 of the Civil Code. 31 Under Article 2176 of the Civil Code,in relation
with the fifth paragraph of Article 2180, "an action predicated on an employee's act or omission may be instituted against
the employer who is held liable for the negligent act or omission committed by his employee." 32 The rationale for these
graduated levels of analyses is that it is essentially the wrongful or negligent act or omission itself which creates
the vinculum juris in extra-contractual obligations. 33

55

In civil cases, a party who alleges a fact has the burden of proving it. He who alleges has the burden of proving his
allegation by preponderance of evidence or greater weight of credible evidence. 34 The reason for this rule is that bare
allegations, unsubstantiated by evidence, are not equivalent to proof. In short, mere allegations are not evidence. 35
In the present case, the burden of proving the proximate causation between Joel's negligence and Dra. dela Llana's
whiplash injury rests on Dra. dela Llana. She must establish by preponderance of evidence that Joel's negligence, in its
natural and continuous sequence, unbroken by any efficient intervening cause, produced her whiplash injury, and without
which her whiplash injury would not have occurred. 36
Notably, Dra. dela Llana anchors her claim mainly on three pieces of evidence: (1) the pictures of her damaged car, (2) the
medical certificate dated November 20, 2000, and (3) her testimonial evidence. However, none of these pieces of evidence
show the causal relation between the vehicular accident and the whiplash injury. In other words, Dra. dela Llana, during
trial, did not adduce thefactum probans or the evidentiary facts by which the factum probandum or the ultimate fact can
be established, as fully discussed below. 37
A. The pictures of the damaged car only demonstrate the impact of the collision
Dra. dela Llana contends that the pictures of the damaged car show that the massive impact of the collision caused her
whiplash injury. We are not persuaded by this bare claim. Her insistence that these pictures show the causation grossly
belies common logic. These pictures indeed demonstrate the impact of the collision. However, it is a far-fetched
assumption that the whiplash injury can also be inferred from these pictures. HaIATC
B. The medical certificate cannot be considered because it was not admitted in evidence
Furthermore, the medical certificate, marked as Exhibit "H" during trial, should not be considered in resolving this case for
the reason that it was not admitted in evidence by the RTC in an order dated September 23, 2004. 38 Thus, the CA erred in
even considering this documentary evidence in its resolution of the case. It is a basic rule that evidence which has not
been admitted cannot be validly considered by the courts in arriving at their judgments.
However, even if we consider the medical certificate in the disposition of this case, the medical certificate has no probative
value for being hearsay. It is a basic rule that evidence, whether oral or documentary, is hearsay if its probative value is
not based on the personal knowledge of the witness but on the knowledge of another person who is not on the witness
stand. 39 Hearsay evidence, whether objected to or not, cannot be given credence 40 except in very unusual circumstance
that is not found in the present case. Furthermore, admissibility of evidence should not be equated with weight of
evidence. The admissibility of evidence depends on its relevance and competence, while the weight of evidence pertains
to evidence already admitted and its tendency to convince and persuade. Thus, a particular item of evidence may be
admissible, but its evidentiary weight depends on judicial evaluation within the guidelines provided by the Rules of
Court. 41
During trial, Dra. dela Llana testified:
"Q: Did your physician tell you, more or less, what was the reason why you were feeling that pain in your left arm?
A: Well, I got a certificate from her and in that certificate, she stated that my condition was due to a compression of the
nerve, which supplied my left arm and my left hand.
Court:
By the way, what is the name of this physician, Dra.?
Witness:
Her name is Dra. Rosalinda Milla. She is a Rehabilitation Medicine Specialist.
Atty. Yusingco:
You mentioned that this Dra. Rosalinda Milla made or issued a medical certificate. What relation does this medical
certificate, marked as Exhibit H have to do with that certificate, you said was made by Dra. Milla?
Witness:
This is the medical certificate that Dra. Milla made out for me.
Atty. Yusingco:
Your Honor, this has been marked as Exhibit H.
Atty. Yusingco:
What other medical services were done on you, Dra. dela Llana, as a result of that feeling, that pain that you felt in your
left arm?
Witness:
Well, aside from the medications and physical therapy, a re-evaluation of my condition after three months indicated that I
needed surgery. ISHCcT
Atty. Yusingco:
Did you undergo this surgery?
Witness:
So, on October 19, I underwent surgery on my neck, on my spine.
Atty. Yusingco:
And, what was the result of that surgical operation?
Witness:
Well, the operation was to relieve the compression on my nerve, which did not resolve by the extensive and prolonged
physical therapy that I underwent for more than three months." 42 (emphasis ours)
Evidently, it was Dr. Milla who had personal knowledge of the contents of the medical certificate. However, she was not
presented to testify in court and was not even able to identify and affirm the contents of the medical certificate.
Furthermore, Rebecca was deprived of the opportunity to cross-examine Dr. Milla on the accuracy and veracity of her
findings.
We also point out in this respect that the medical certificate nonetheless did not explain the chain of causation in fact
between Joel's reckless driving and Dra. dela Llana's whiplash injury. It did not categorically state that the whiplash injury
was a result of the vehicular accident. A perusal of the medical certificate shows that it only attested to her medical
condition, i.e., that she was suffering from whiplash injury. However, the medical certificate failed to substantially relate

56

the vehicular accident to Dra. dela Llana's whiplash injury. Rather, the medical certificate only chronicled her medical
history and physical examinations.
C. Dra. dela Llana's opinion that Joel's negligence caused her whiplash injury has no probative value
Interestingly, the present case is peculiar in the sense that Dra. dela Llana, as the plaintiff in this quasi-delict case, was
the lonephysician-witness during trial. Significantly, she merely testified as an ordinary witness before the trial court. Dra.
dela Llana essentially claimed in her testimony that Joel's reckless driving caused her whiplash injury.
Despite the fact that Dra. dela Llana is a physician and even assuming that she is an expert in neurology, we cannot give
weight to her opinion that Joel's reckless driving caused her whiplash injury without violating the rules on evidence.
Under the Rules of Court,there is a substantial difference between an ordinary witness and an expert witness. The opinion
of an ordinary witness may be received in evidence regarding: (a) the identity of a person about whom he has adequate
knowledge; (b) a handwriting with which he has sufficient familiarity; and (c) the mental sanity of a person with whom he is
sufficiently acquainted. Furthermore, the witness may also testify on his impressions of the emotion, behavior, condition or
appearance of a person. 43 On the other hand, the opinion of an expert witness may be received in evidence on a matter
requiring special knowledge, skill, experience or training which he shown to possess. 44
However, courts do not immediately accord probative value to an admitted expert testimony, much less to an unobjected
ordinary testimony respecting special knowledge. The reason is that the probative value of an expert testimony does not
lie in a simple exposition of the expert's opinion. Rather, its weight lies in the assistance that the expert witness may afford
the courts by demonstrating the facts which serve as a basis for his opinion and the reasons on which the logic of his
conclusions is founded. 45
In the present case, Dra. dela Llana's medical opinion cannot be given probative value for the reason that she was not
presented as an expert witness. As an ordinary witness, she was not competent to testify on the nature, and the cause and
effects of whiplash injury. Furthermore, we emphasize that Dra. dela Llana, during trial, nonetheless did not provide a
medical explanation on the nature as well as the cause and effects of whiplash injury in her testimony.
The Supreme Court cannot take judicial notice that vehicular accidents cause whiplash injuries
Indeed, a perusal of the pieces of evidence presented by the parties before the trial court shows that Dra. dela Llana did
not present any testimonial or documentary evidence that directly shows the causal relation between the vehicular
accident and Dra. dela Llana's injury. Her claim that Joel's negligence caused her whiplash injury was not established
because of the deficiency of the presented evidence during trial. We point out in this respect that courts cannot take
judicial notice that vehicular accidents cause whiplash injuries. This proposition is not public knowledge, or is capable of
unquestionable demonstration, or ought to be known to judges because of their judicial functions. 46 We have no expertise
in the field of medicine. Justices and judges are only tasked to apply and interpret the law on the basis of the parties'
pieces of evidence and their corresponding legal arguments. ITSaHC
In sum, Dra. dela Llana miserably failed to establish her case by preponderance of evidence. While we commiserate with
her, our solemn duty to independently and impartially assess the merits of the case binds us to rule against Dra. dela
Llana's favor. Her claim, unsupported by preponderance of evidence, is merely a bare assertion and has no leg to stand on.
WHEREFORE, premises considered, the assailed Decision dated February 11, 2008 and Resolution dated March 31, 2008 of
the Court of Appeals are hereby AFFIRMED and the petition is hereby DENIED for lack of merit.
SO ORDERED.
Carpio, Del Castillo, Perez and Perla-Bernabe, JJ., concur.
||| (Dela Llana v. Biong, G.R. No. 182356, [December 4, 2013])