1.
rentals, retroactive to January 1985, pending renewal of his contract until the arrival
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 108245 November 25, 1994
MANOLO P. SAMSON, petitioner,
vs.
COURT OF APPEALS, SANTOS & SONS, INC., and ANGEL SANTOS, respondents.
Clara Dumandan-Singh for petitioner.
Paterno A. Catacutan for private respondents.
PUNO, J.:
Petitioner MANOLO P. SAMSON prays for the reversal of the Decision of the Court of
Appeals, dated November 27, 1992, 1 modifying the decision of the Regional Trial
Court of Pasig, Branch 157, dated November 29, 1990, and absolving private
respondent Angel Santos from liability for the damages sustained by petitioner.
The antecedent facts, as borne by the records, are as follows:
The subject matter of this case is a commercial unit at the Madrigal Building, located
at Claro M. Recto Avenue, Sta. Cruz, Manila. The building is owned by Susana Realty
Corporation and the subject premises was leased to private respondent Angel
Santos. The lessee's haberdashery store, Santos & Sons, Inc., occupied the premises
for almost twenty (20) years on a yearly basis. 2 Thus, the lease contract in force
between the parties in the year 1983 provided that the term of the lease shall be
one (1) year, starting on August 1, 1983 until July 31, 1984. 3
On June 28, 1984, the lessor Susana Realty Corporation, through its representative
Mr. Jes Gal R. Sarmiento, Jr., informed respondents that the lease contract which
was to expire on July 31, 1984 would not be renewed. 4
Nonetheless, private respondent's lease contract was extended until December 31,
1984. 5 Private respondent also continued to occupy the leased premises beyond
the extended term.
On February 5, 1985, private respondent received a letter 6 from the lessor, through
its Real Estate Accountant Jane F. Bartolome, informing him of the increase in
of Ms. Ma. Rosa Madrigal (one of the owners of Susana Realty).
Four days later or on February 9, 1985, petitioner Manolo Samson saw private
respondent in the latter's house and offered to buy the store of Santos & Sons and
his right to lease the subject premises. 7 Petitioner was advised to return after a
week.
On February 15, 1985, petitioner returned to private respondent's house to confirm
his offer. On said occasion, private respondent presented petitioner with a letter
containing his counter proposal, thus:
MANOLO SAMSON
Marikina, Metro Manila
Sir:
In line with our negotiation to sell our rights in the Madrigal building at Recto, Rizal
Avenue, I propose the following:
1. The lease contract between Santos and Sons, Inc. and Madrigal was impliedly
renewed. It will be formally renewed this monthly (sic) when Tanya Madrigal arrives.
2. To avoid breach of contract with Madrigal, I suggest that you acquire all our
shares in Santos and Sons, Inc.
3. I will answer and pay all obligations of Santos and Sons, Inc. as of February 28,
1985.
Very truly yours,
Angel C. Santos
Petitioner affixed his signature on the letter-proposal signifying his acceptance. 8
They agreed that the consideration for the sale of the store and leasehold right of
Santos & Sons, Inc. shall be P300,000.00.
On February 20, 1985, petitioner paid P150,000.00 to private respondent
representing the value of existing improvements in the Santos & Sons store. The
parties agreed that the balance of P150,000.00 shall be paid upon the formal
renewal of the lease contract between private respondent and Susana Realty. It was
also a condition precedent to the transfer of the leasehold right of private
respondent to petitioner. 9
In March 1985, petitioner began to occupy the Santos & Sons store. He utilized the
store for the sale of his own goods. 10
All went well for a few months. In July 1985, however, petitioner received a notice
from Susana Realty, addressed to Santos & Sons, Inc., directing the latter to vacate
the leased premises on or before July 15, 1985. 11 Private respondent failed to
renew his lease over the premises and petitioner was forced to vacate the same on
July 16, 1985.
Petitioner then filed an action for damages against private respondent. He imputed
fraud and bad faith against private respondent when the latter stated in his letter-
proposal that his lease contract with Susana Realty has been impliedly renewed.
Petitioner claimed that this misrepresentation induced him to purchase the store of
Santos & Sons and the leasehold right of private respondent.
In defense, respondent alleged that their agreement was to the effect that the
consideration for the sale was P300,000.00, broken down as follows: P150,000.00
shall be for the improvements in the store, and the balance of P150,000.00 shall be
for the sale of the leasehold right of Santos & Sons over the subject premises. The
balance shall be paid only after the formal renewal of the lease contract and its
actual transfer to petitioner.
Trial on the merits ensued. On November 29, 1990, the trial court rendered a
decision 12 in favor of petitioner. The dispositive portion reads:
WHEREFORE, AND IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered
in favor of plaintiff Manolo P. Samson and against defendants Santos and Sons, Inc.,
and Angel C. Santos, ordering the said defendants to pay jointly and severally unto
the plaintiff:
1. The sum of P150,000.00, representing the cash advance payment for the store
and the right to occupy its leased premises subject matter of the sale involved, with
interest thereon at the legal rate from the filing of the complaint on November 5,
1985 until the same is fully paid;
2. The sum of P70,000.00 representing the cost of additional improvements of the
store sold, also with legal interest from November 5, 1985 until the full payment
thereof;
3. The sum of P150,000.00, representing the loss that the plaintiff suffered from the
sale at bargain prices of the goods taken out of the store, with legal interest thereon
from the (d)ate of this decision until the same is fully paid;
4. The sum of P100,000.00 representing the profits which plaintiff failed to realize
from the sale of the goods referred to above, with legal interest thereon from the
date of the decision until said amount is fully paid;
5. The amounts of P100,000.00 and P50,000.00 as moral and exemplary damages,
respectively, also with legal interest thereon, from the date of this judgment until
fully paid; and
6. The sum of P45,000.00 as and for attorney's fees and expenses of litigation, in
addition to judicial costs.
On the defendants' counterclaim, the plaintiff is ordered to return to the defendants
the latter's steel filing cabinet, adding machine, typewriter and all its unused sales
invoices, receipts and blank checks, if the plaintiff still has any of the said papers or
documents.
SO ORDERED. 13
Private respondent appealed to the Court of Appeals. In a Decision dated November
27, 1992, 14 the appellate court modified the decision of the trial court after finding
that private respondent did not exercise fraud or bad faith in its dealings with
petitioner. The dispositive portion of the impugned decision reads:
WHEREFORE, the appealed decision is hereby MODIFIED by reducing the amounts
the trial court awarded to appellee Manolo P. Samson in that appellants Santos &
Sons, Inc. and Angel C. Santos are ordered to pay appellee, by way of
reimbursement, the P150,000.00 which the latter gave appellants as advance
payment for their store and lease right with legal interest to be reckoned from the
promulgation date of this decision; and AFFIRMED with respect to the trial court's
judgment ordering appellee to return to appellants the latter's filing cabinet, adding
machine, typewriter, and all their unused sales invoices, receipts and blank checks, if
appellee still has any of these documents. No costs.
SO ORDERED. 15
Hence this petition for review with the following assigned errors:
I
WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISREGARDING THE
FOLLOWING FACTUAL FINDINGS OF THE TRIAL COURT:
1. THAT RESPONDENTS DELIBERATELY AND FRAUDULENTLY CONCEALED FROM THE
PETITIONER THE FACT THAT THE LEASE ON THE SUBJECT STORE PREMISES HAD
ALREADY EXPIRED AND WOULD NO LONGER BE RENEWED BY THE LESSOR.
2. THAT SOLELY BY REASON OF RESPONDENTS' FRAUDULENT CONDUCT AND BAD
FAITH, PETITIONER EXERCISING THE DILIGENCE REQUIRED UNDER THE
CIRCUMSTANCES, THE LATTER INCURRED DAMAGES AND LOSSES.
II
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING RESPONDENTS FREE
FROM LIABILITY TO PETITIONER FOR THE DAMAGES THE LATTER HAD INCURRED ON
ACCOUNT OF THE RESPONDENTS' BAD FAITH.
The pivotal issue in the case at bench is whether or not private respondent Angel
Santos committed fraud or bad faith in representing to petitioner that his contract
of lease over the subject premises has been impliedly renewed by Susana Realty.
Undoubtedly, it was this representation which induced petitioner to enter into the
subject contract with private respondent.
We find the petition devoid of merit.
Bad faith is essentially a state of mind affirmatively operating with furtive design or
with some motive of ill-will. 16 It does not simply connote bad judgment or
negligence. It imports a dishonest purpose or some moral obliquity and conscious
doing of wrong. 17 Bad faith is thus synonymous with fraud and involves a design to
mislead or deceive another, not prompted by an honest mistake as to one's rights or
duties, but by some interested or sinister motive. 18
In contracts, the kind of fraud that will vitiate consent is one where, through
insidious words or machinations of one of the contracting parties, the other is
induced to enter into a contract which, without them, he would not have agreed to.
19 This is known as dolo causante or causal fraud which is basically a deception
employed by one party prior to or simultaneous to the contract in order to secure
the consent of the other.
Petitioner claims that their agreement was that the amount of P300,000.00 is the
consideration for the transfer of private respondent's leasehold right to him and he
paid P150,000.00 as downpayment therefor. He insists that private respondent
acted in bad faith in assuring him that his lease contract with Susana Realty has
been impliedly renewed and would be formally renewed upon the arrival of Tanya
Madrigal (representative of Susana Realty). As evidence of private respondent's bad
faith, petitioner stresses that private respondent himself admitted that prior to
February 15, 1985, he was informed by his lawyer that he could not yet sell his lease
right to petitioner for his lease over the premises has not been renewed by Susana
Realty Corporation.
After carefully examining the records, we sustain the finding of public respondent
Court of Appeals that private respondent was neither guilty of fraud nor bad faith in
claiming that there was implied renewal of his contract of lease with Susana Realty.
The records will bear that the original contract of lease between the lessor Susana
Realty and the lessee private respondent was for a period of one year, commencing
on August 1, 1983 until July 31, 1984. Subsequently, however, private respondent's
lease was extended until December 31, 1984. At this point, it was clear that the
lessor had no intention to renew the lease contract of private respondent for
another year. However, on February 5, 1985, the lessor, thru its Real Estate
Accountant, sent petitioner a letter 20 of even date, worded as follows:
February 5, 1985
Mr. Angel Santos
1609-1613 C.M. Recto Avenue
Sta. Cruz, Manila
Dear Mr. Santos:
This is to notify you that the rentals for the 1609-1613 C.M. Recto Avenue, Sta. Cruz,
Manila, which you are leasing with (sic) us has been increased from P77.81 to
P100.00 per square meter retroactive January 1985 (as you have not vacated the
place) pending renewal of your contract until the arrival of Miss Ma. Rosa A.S.
Madrigal.
Thus, your new rate will be PESOS: FOURTEEN THOUSAND TWO HUNDRED FIFTY
ONLY (P14,250.00) since you are occupying One Hundred Forty-Two and 50/100
square meters.
Please note that we are charging the same for everybody and they all agreed to pay
the new rate.
We do expect your full cooperation with regards (sic) to this matter.
Very truly yours,
(Sgd.) JANE F. BARTOLOME
Accountant-Real Estate
Clearly, this letter led private respondent to believe and conclude that his lease
contract was impliedly renewed and that formal renewal thereof would be made
upon the arrival of Tanya Madrigal. This much was admitted by petitioner himself
when he testified during cross-examination that private respondent initially told him
of the fact that his lease contract with Susana Realty has already expired but he was
anticipating its formal renewal upon the arrival of Madrigal. 21 Thus, from the start,
it was known to both parties that, insofar as the agreement regarding the transfer of
private respondent's leasehold right to petitioner was concerned, the object thereof
relates to a future right. 22 It is a conditional contract recognized in civil law, 23 the
efficacy of which depends upon an expectancy — the formal renewal of the lease
contract between private respondent and Susana Realty.
In sum, we hold that under the facts proved, private respondent cannot be held
guilty of fraud or bad faith when he entered into the subject contract with
petitioner. Causal fraud or bad faith on the part of one of the contracting parties
which allegedly induced the other to enter into a contract must be proved by clear
and convincing evidence. This petitioner failed to do.
IN VIEW WHEREOF, the appealed decision is hereby AFFIRMED in toto. Costs against
petitioner.

The records would also reveal that private respondent's lawyer informed him that SO ORDERED.
he could sell the improvements within the store for he already owned them but the
sale of his leasehold right over the store could not as yet be made for his lease Narvasa, C.J., Regalado and Mendoza, JJ., concur.
contract had not been actually renewed by Susana Realty. Indeed, it was precisely
pursuant to this advice that private respondent and petitioner agreed that the
improvements in the store shall be sold to petitioner for P150,000.00 24 while the
leasehold right shall be sold for the same amount of P150,000.00, payable only #Footnotes
upon the formal renewal of the lease contract and the actual transfer of the
leasehold right to petitioner. 25 The efficacy of the contract between the parties 1 Penned by Associate Justice Jesus M. Elbinias and concurred in by Associate
was thus made dependent upon the happening of this suspensive condition. Justices Nathanael P. De Pano, Jr. and Angelina S. Gutierrez.

Moreover, public respondent Court of Appeals was correct when it faulted

petitioner for failing to exercise sufficient diligence in verifying first the status of
private respondent's lease. We thus quote with approval the decision of the Court
of Appeals when it ruled, thus:

When appellant Angel C. Santos said that the lease contract had expired but that it
was impliedly renewed, that representation should have put appellee on guard. To
protect his interest, appellee should have checked with the lessor whether that was
so, and this he failed to do; or he would have simply deferred his decision on the
proposed sale until Miss Madrigal's arrival, and this appellee also failed to do. In
short, as a buyer of the store and lease right in question — or as a buyer of any
object of commerce for that matter — appellee was charged with the obligation of
caution aptly expressed in the universal maxim caveat emptor. 26

Indeed, petitioner had every opportunity to verify the status of the lease contract of
private respondent with Susana Realty. As held by this Court in the case of Caram, Jr.
v. Laureta, 27 the rule caveat emptor requires the purchaser to be aware of the
supposed title of the vendor and he who buys without checking the vendor's title
takes all the risks and losses consequent to such failure. In the case at bench, the
means of verifying for himself the status of private respondent's lease contract with
Susana Realty was open to petitioner. Nonetheless, no effort was exerted by
petitioner to confirm the status of the subject lease right. 28 He cannot now claim
that he has been deceived.
2.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-25906 May 28, 1970
PEDRO D. DIOQUINO, plaintiff-appellee,
vs.
FEDERICO LAUREANO, AIDA DE LAUREANO and JUANITO LAUREANO, defendants-
appellants.
Pedro D. Dioquino in his own behalf.
Arturo E. Valdomero, Jose L. Almario and Rolando S. Relova for defendants-appellants.
FERNANDO, J.:
The present lawsuit had its origin in a relationship, if it could be called such, the use of a
car owned by plaintiff Pedro D. Dioquino by defendant Federico Laureano, clearly of a
character casual and temporary but unfortunately married by an occurrence resulting in
its windshield being damaged. A stone thrown by a boy who, with his other companions,
was thus engaged in what undoubtedly for them must have been mistakenly thought to
be a none too harmful prank did not miss its mark. Plaintiff would hold defendant
Federico Laureano accountable for the loss thus sustained, including in the action filed
the wife, Aida de Laureano, and the father, Juanito Laureano. Plaintiff prevail in the
lower court, the judgment however going only against the principal defendant, his
spouse and his father being absolved of any responsibility. Nonetheless, all three of
them appealed directly to us, raising two questions of law, the first being the failure of
the lower court to dismiss such a suit as no liability could have been incurred as a result
of a fortuitous event and the other being its failure to award damages against plaintiff
for the unwarranted inclusion of the wife and the father in this litigation. We agree that
the lower court ought to have dismissed the suit, but it does not follow that thereby
damages for the inclusion of the above two other parties in the complaint should have
been awarded appellants.
The facts as found by the lower court follow: "Attorney Pedro Dioquino, a practicing
lawyer of Masbate, is the owner of a car. On March 31, 1964, he went to the office of the
MVO, Masbate, to register the same. He met the defendant Federico Laureano, a patrol
officer of said MVO office, who was waiting for a jeepney to take him to the office of the
Provincial Commander, PC, Masbate. Attorney Dioquino requested the defendant
Federico Laureano to introduce him to one of the clerks in the MVO Office, who could
facilitate the registration of his car and the request was graciously attended to.
Defendant Laureano rode on the car of Atty. Dioquino on his way to the P.C. Barracks at
Masbate. While about to reach their destination, the car driven by plaintiff's driver and
with defendant Federico Laureano as the sole passenger was stoned by some
'mischievous boys,' and its windshield was broken. Defendant Federico Laureano chased
the boys and he was able to catch one of them. The boy was taken to Atty. Dioquino
[and] admitted having thrown the stone that broke the car's windshield. The plaintiff and
the defendant Federico Laureano with the boy returned to the P.C. barracks and the
father of the boy was called, but no satisfactory arrangements [were] made about the
damage to the
windshield." 1
It was likewise noted in the decision now on appeal: "The defendant Federico Laureano
refused to file any charges against the boy and his parents because he thought that the
stone-throwing was merely accidental and that it was due to force majeure. So he did
not want to take any action and after delaying the settlement, after perhaps consulting a
lawyer, the defendant Federico Laureano refused to pay the windshield himself and
challenged that the case be brought to court for judicial adjudication. There is no
question that the plaintiff tried to convince the defendant Federico Laureano just to pay
the value of the windshield and he even came to the extent of asking the wife to
convince her husband to settle the matter amicably but the defendant Federico
Laureano refused to make any settlement, clinging [to] the belief that he could not be
held liable because a minor child threw a stone accidentally on the windshield and
therefore, the same was due to force majeure." 2
1. The law being what it is, such a belief on the part of defendant Federico Laureano was
justified. The express language of Art. 1174 of the present Civil Code which is a
restatement of Art. 1105 of the Old Civil Code, except for the addition of the nature of
an obligation requiring the assumption of risk, compels such a conclusion. It reads thus:
"Except in cases expressly specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk, no
person shall be responsible for those events which could not be, foreseen, or which,
though foreseen were inevitable." Even under the old Civil Code then, as stressed by us
in the first decision dating back to 1908, in an opinion by Justice Mapa, the rule was
well-settled that in the absence of a legal provision or an express covenant, "no one
should be held to account for fortuitous cases." 3 Its basis, as Justice Moreland stressed,
is the Roman law principle major casus est, cui humana infirmitas resistere non potest. 4
Authorities of repute are in agreement, more specifically concerning an obligation
arising from contract "that some extraordinary circumstance independent of the will of
the obligor, or of his employees, is an essential element of a caso fortuito." 5 If it could
be shown that such indeed was the case, liability is ruled out. There is no requirement of
"diligence beyond what human care and foresight can provide." 6
The error committed by the lower court in holding defendant Federico Laureano liable
appears to be thus obvious. Its own findings of fact repel the motion that he should be
made to respond in damages to the plaintiff for the broken windshield. What happened
was clearly unforeseen. It was a fortuitous event resulting in a loss which must be borne
by the owner of the car. An element of reasonableness in the law would be manifestly
lacking if, on the circumstances as thus disclosed, legal responsibility could be imputed
to an individual in the situation of defendant Laureano. Art. 1174 of the Civil Code
guards against the possibility of its being visited with such a reproach. Unfortunately, the
lower court was of a different mind and thus failed to heed its command.
It was misled, apparently, by the inclusion of the exemption from the operation of such a
provision of a party assuming the risk, considering the nature of the obligation
undertaken. A more careful analysis would have led the lower court to a different and
correct interpretation. The very wording of the law dispels any doubt that what is
therein contemplated is the resulting liability even if caused by a fortuitous event where
the party charged may be considered as having assumed the risk incident in the nature
of the obligation to be performed. It would be an affront, not only to the logic but to the
realities of the situation, if in the light of what transpired, as found by the lower court,
defendant Federico Laureano could be held as bound to assume a risk of this nature.
There was no such obligation on his part.
Reference to the leading case of Republic v. Luzon Stevedoring Corp. 7 will illustrate
when the nature of the obligation is such that the risk could be considered as having
been assumed. As noted in the opinion of Justice J.B.L. Reyes, speaking for the Court:
"The appellant strongly stresses the precautions taken by it on the day in question: that
it assigned two of its most powerful tugboats to tow down river its barge L-1892; that it
assigned to the task the more competent and experienced among its patrons, had the
towlines, engines and equipment double-checked and inspected; that it instructed its
patrons to take extra-precautions; and concludes that it had done all it was called to do,
and that the accident, therefore, should be held due to force majeure or fortuitous
event." Its next paragraph explained clearly why the defense of caso fortuito or force
majeure does not lie. Thus: "These very precautions, however, completely destroy the
appellant's defense. For caso fortuito or force majeure (which in law are identical in so
far as they exempt an obligor from liability) by definition, are extraordinary events not
foreseeable or avoidable, 'events that could not be foreseen, or which, though foreseen,
were inevitable' (Art. 1174, Civil Code of the Philippines). It is, therefore, not enough
that the event should not have been foreseen or participated, as is commonly believed,
but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the
happening is not impossibility to foresee the same: un hecho no constituye caso fortuito
por la sola circunstancia de que su existencia haga mas dificil o mas onerosa la accion
diligente del presente ofensor' (Peirano Facio, Responsibilidad Extra-contractual, p. 465;
Mazeaud, Traite de la Responsibilite Civile, Vol. 2, sec. 1569). The very measures
adopted by appellant prove that the possibility of danger was not only foreseeable, but
actually foreseen, and was not caso fortuito."
In that case then, the risk was quite evident and the nature of the obligation such that a
party could rightfully be deemed as having assumed it. It is not so in the case before us.
It is anything but that. If the lower court, therefore, were duly mindful of what this
particular legal provision contemplates, it could not have reached the conclusion that
defendant Federico Laureano could be held liable. To repeat, that was clear error on its
part.
2. Appellants do not stop there. It does not suffice for them that defendant Federico
Laureano would be freed from liability. They would go farther. They would take plaintiff
to task for his complaint having joined the wife, Aida de Laureano, and the father,
Juanita Laureano. They were far from satisfied with the lower court's absolving these
two from any financial responsibility. Appellants would have plaintiff pay damages for
their inclusion in this litigation. We are not disposed to view the matter thus.
It is to be admitted, of course, that plaintiff, who is a member of the bar, ought to have
exercised greater care in selecting the parties against whom he would proceed. It may
be said that his view of the law that would consider defendant Federico Laureano liable
on the facts as thus disclosed, while erroneous, is not bereft of plausibility. Even the
lower court, mistakenly of course, entertained similar view. For plaintiff, however, to
have included the wife and the father would seem to indicate that his understanding of
the law is not all that it ought to have been.
Plaintiff apparently was not entirely unaware that the inclusion in the suit filed by him
was characterized by unorthodoxy. He did attempt to lend some color of justification by
explicitly setting forth that the father was joined as party defendant in the case as he
was the administrator of the inheritance of an undivided property to which defendant
Federico Laureano could lay claim and that the wife was likewise proceeded against
because the conjugal partnership would be made to respond for whatever liability would
be adjudicated against the husband.
It cannot be said that such an attempt at justification is impressed with a high persuasive
quality. Far from it. Nonetheless, mistaken as plaintiff apparently was, it cannot be
concluded that he was prompted solely by the desire to inflict needless and unjustified
vexation on them. Considering the equities of the situation, plaintiff having suffered a
pecuniary loss which, while resulting from a fortuitous event, perhaps would not have
occurred at all had not defendant Federico Laureano borrowed his car, we, feel that he is
not to be penalized further by his mistaken view of the law in including them in his
complaint. Well-worth paraphrasing is the thought expressed in a United States
Supreme Court decision as to the existence of an abiding and fundamental principle that
the expenses and annoyance of litigation form part of the social burden of living in a
society which seeks to attain social control through law. 8
WHEREFORE, the decision of the lower court of November 2, 1965 insofar as it orders
defendant Federico Laureano to pay plaintiff the amount of P30,000.00 as damages plus
the payment of costs, is hereby reversed. It is affirmed insofar as it dismissed the case
against the other two defendants, Juanita Laureano and Aida de Laureano, and declared
that no moral damages should be awarded the parties. Without pronouncement as to
costs.
3.
FIRST DIVISION
[G.R. No. 129792. December 21, 1999]
JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE and ELISA PANELO,
petitioners, vs. HONORABLE COURT OF APPEALS, CONRADO C. AGUILAR and CRISELDA
R. AGUILAR, respondents.
DECISION
DAVIDE, JR., C.J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners
seek the reversal of the 17 June 1996 decision[1] of the Court of Appeals in C.A. G.R. No.
CV 37937 and the resolution[2]denying their motion for reconsideration. The assailed
decision set aside the 15 January 1992 judgment of the Regional Trial Court (RTC),
Makati City, Branch 60 in Civil Case No. 7119 and ordered petitioners to pay damages
and attorneys fees to private respondents Conrado and Criselda (CRISELDA) Aguilar.
Petitioner Jarco Marketing Corporation is the owner of Syvels Department Store, Makati
City. Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the stores branch
manager, operations manager, and supervisor, respectively. Private respondents are
spouses and the parents of Zhieneth Aguilar (ZHIENETH).
In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd floor of Syvels
Department Store, Makati City. CRISELDA was signing her credit card slip at the payment
and verification counter when she felt a sudden gust of wind and heard a loud thud. She
looked behind her. She then beheld her daughter ZHIENETH on the floor, her young body
pinned by the bulk of the stores gift-wrapping counter/structure. ZHIENETH was crying
and screaming for help. Although shocked, CRISELDA was quick to ask the assistance of
the people around in lifting the counter and retrieving ZHIENETH from the floor.[3]
ZHIENETH was quickly rushed to the Makati Medical Center where she was operated on.
The next day ZHIENETH lost her speech and thereafter communicated with CRISELDA by
writing on a magic slate. The injuries she sustained took their toil on her young body.
She died fourteen (14) days after the accident or on 22 May 1983, on the hospital bed.
She was six years old.[4]
The cause of her death was attributed to the injuries she sustained. The provisional
medical certificate[5] issued by ZHIENETHs attending doctor described the extent of her
injuries:
Diagnoses:
1. Shock, severe, sec. to intra-abdominal injuries due to blunt injury
2. Hemorrhage, massive, intraperitoneal sec. to laceration, (L) lobe liver
3. Rupture, stomach, anterior & posterior walls
4. Complete transection, 4th position, duodenum
5. Hematoma, extensive, retroperitoneal
6. Contusion, lungs, severe
CRITICAL
After the burial of their daughter, private respondents demanded upon petitioners the
reimbursement of the hospitalization, medical bills and wake and funeral expenses[6]
which they had incurred. Petitioners refused to pay. Consequently, private respondents
filed a complaint for damages, docketed as Civil Case No. 7119 wherein they sought the
payment of P157,522.86 for actual damages, P300,000 for moral damages, P20,000 for
attorneys fees and an unspecified amount for loss of income and exemplary damages.
In their answer with counterclaim, petitioners denied any liability for the injuries and
consequent death of ZHIENETH. They claimed that CRISELDA was negligent in exercising
care and diligence over her daughter by allowing her to freely roam around in a store
filled with glassware and appliances. ZHIENETH too, was guilty of contributory
negligence since she climbed the counter, triggering its eventual collapse on her.
Petitioners also emphasized that the counter was made of sturdy wood with a strong
support; it never fell nor collapsed for the past fifteen years since its construction.
Additionally, petitioner Jarco Marketing Corporation maintained that it observed the
diligence of a good father of a family in the selection, supervision and control of its
employees. The other petitioners likewise raised due care and diligence in the
performance of their duties and countered that the complaint was malicious for which
they suffered besmirched reputation and mental anguish. They sought the dismissal of
the complaint and an award of moral and exemplary damages and attorneys fees in their
favor.
In its decision[7] the trial court dismissed the complaint and counterclaim after finding
that the preponderance of the evidence favored petitioners. It ruled that the proximate
cause of the fall of the counter on ZHIENETH was her act of clinging to it. It believed
petitioners witnesses who testified that ZHIENETH clung to the counter, afterwhich the
structure and the girl fell with the structure falling on top of her, pinning her stomach. In
contrast, none of private respondents witnesses testified on how the counter fell. The
trial court also held that CRISELDAs negligence contributed to ZHIENETHs accident.
In absolving petitioners from any liability, the trial court reasoned that the counter was
situated at the end or corner of the 2nd floor as a precautionary measure hence, it could
not be considered as an attractive nuisance.[8] The counter was higher than ZHIENETH.
It has been in existence for fifteen years. Its structure was safe and well-balanced.
ZHIENETH, therefore, had no business climbing on and clinging to it.
Private respondents appealed the decision, attributing as errors of the trial court its
findings that: (1) the proximate cause of the fall of the counter was ZHIENETHs
misbehavior; (2) CRISELDA was negligent in her care of ZHIENETH; (3) petitioners were
not negligent in the maintenance of the counter; and (4) petitioners were not liable for
the death of ZHIENETH.
Further, private respondents asserted that ZHIENETH should be entitled to the
conclusive presumption that a child below nine (9) years is incapable of contributory
negligence. And even if ZHIENETH, at six (6) years old, was already capable of
contributory negligence, still it was physically impossible for her to have propped herself
on the counter. She had a small frame (four feet high and seventy pounds) and the
counter was much higher and heavier than she was. Also, the testimony of one of the
stores former employees, Gerardo Gonzales, who accompanied ZHIENETH when she was
brought to the emergency room of the Makati Medical Center belied petitioners theory
that ZHIENETH climbed the counter. Gonzales claimed that when ZHIENETH was asked
by the doctor what she did, ZHIENETH replied, [N]othing, I did not come near the
counter and the counter just fell on me.[9] Accordingly, Gonzales testimony on
ZHIENETHs spontaneous declaration should not only be considered as part of res gestae
but also accorded credit.
Moreover, negligence could not be imputed to CRISELDA for it was reasonable for her to
have let go of ZHIENETH at the precise moment that she was signing the credit card slip.
Finally, private respondents vigorously maintained that the proximate cause of
ZHIENETHs death, was petitioners negligence in failing to institute measures to have the
counter permanently nailed.
On the other hand, petitioners argued that private respondents raised purely factual
issues which could no longer be disturbed. They explained that ZHIENETHs death while
unfortunate and tragic, was an accident for which neither CRISELDA nor even ZHIENETH
could entirely be held faultless and blameless. Further, petitioners adverted to the trial
courts rejection of Gonzales testimony as unworthy of credence.
As to private respondents claim that the counter should have been nailed to the ground,
petitioners justified that it was not necessary. The counter had been in existence for
several years without any prior accident and was deliberately placed at a corner to avoid
such accidents. Truth to tell, they acted without fault or negligence for they had
exercised due diligence on the matter. In fact, the criminal case[10] for homicide through
simple negligence filed by private respondents against the individual petitioners was
dismissed; a verdict of acquittal was rendered in their favor.
The Court of Appeals, however, decided in favor of private respondents and reversed the
appealed judgment. It found that petitioners were negligent in maintaining a structurally
dangerous counter. The counter was shaped like an inverted L[11] with a top wider than
the base. It was top heavy and the weight of the upper portion was neither evenly
distributed nor supported by its narrow base. Thus, the counter was defective, unstable
and dangerous; a downward pressure on the overhanging portion or a push from the
front could cause the counter to fall. Two former employees of petitioners had already
previously brought to the attention of the management the danger the counter could
cause. But the latter ignored their concern. The Court of Appeals faulted the petitioners
for this omission, and concluded that the incident that befell ZHIENETH could have been
avoided had petitioners repaired the defective counter. It was inconsequential that the
counter had been in use for some time without a prior incident.
The Court of Appeals declared that ZHIENETH, who was below seven (7) years old at the
time of the incident, was absolutely incapable of negligence or other tort. It reasoned
that since a child under nine (9) years could not be held liable even for an intentional
wrong, then the six-year old ZHIENETH could not be made to account for a mere
mischief or reckless act. It also absolved CRISELDA of any negligence, finding nothing
wrong or out of the ordinary in momentarily allowing ZHIENETH to walk while she
signed the document at the nearby counter.
The Court of Appeals also rejected the testimonies of the witnesses of petitioners. It
found them biased and prejudiced. It instead gave credit to the testimony of
disinterested witness Gonzales. The Court of Appeals then awarded P99,420.86 as actual
damages, the amount representing the hospitalization expenses incurred by private
respondents as evidenced by the hospital's statement of account.[12] It denied an award
for funeral expenses for lack of proof to substantiate the same. Instead, a compensatory
damage of P50,000 was awarded for the death of ZHIENETH.
We quote the dispositive portion of the assailed decision,[13] thus:
WHEREFORE, premises considered, the judgment of the lower court is SET ASIDE and
another one is entered against [petitioners], ordering them to pay jointly and severally
unto [private respondents] the following:
1. P50,000.00 by way of compensatory damages for the death of Zhieneth Aguilar, with
legal interest (6% p.a.) from 27 April 1984;
2. P99,420.86 as reimbursement for hospitalization expenses incurred; with legal
interest (6% p.a.) from 27 April 1984;
3. P100,000.00 as moral and exemplary damages;
4. P20,000.00 in the concept of attorneys fees; and
5. Costs.

Private respondents sought a reconsideration of the decision but the same was denied
in the Court of Appeals resolution[14] of 16 July 1997.
Petitioners now seek the reversal of the Court of Appeals decision and the reinstatement
of the judgment of the trial court. Petitioners primarily argue that the Court of Appeals
erred in disregarding the factual findings and conclusions of the trial court. They stress
that since the action was based on tort, any finding of negligence on the part of the
private respondents would necessarily negate their claim for damages, where said
negligence was the proximate cause of the injury sustained. The injury in the instant
case was the death of ZHIENETH. The proximate cause was ZHIENETHs act of clinging to
the counter. This act in turn caused the counter to fall on her. This and CRISELDAs
contributory negligence, through her failure to provide the proper care and attention to
her child while inside the store, nullified private respondents claim for damages. It is also
for these reasons that parents are made accountable for the damage or injury inflicted
on others by their minor children. Under these circumstances, petitioners could not be
held responsible for the accident that befell ZHIENETH.
Petitioners also assail the credibility of Gonzales who was already separated from Syvels
at the time he testified; hence, his testimony might have been tarnished by ill-feelings
against them.
For their part, private respondents principally reiterated their arguments that neither
ZHIENETH nor CRISELDA was negligent at any time while inside the store; the findings
and conclusions of the Court of Appeals are substantiated by the evidence on record;
the testimony of Gonzales, who heard ZHIENETH comment on the incident while she
was in the hospitals emergency room should receive credence; and finally, ZHIENETHs
part of the res gestae declaration that she did nothing to cause the heavy structure to
fall on her should be considered as the correct version of the gruesome events.
We deny the petition.
The two issues to be resolved are: (1) whether the death of ZHIENETH was accidental or
attributable to negligence; and (2) in case of a finding of negligence, whether the same
was attributable to private respondents for maintaining a defective counter or to
CRISELDA and ZHIENETH for failing to exercise due and reasonable care while inside the
store premises.
An accident pertains to an unforeseen event in which no fault or negligence attaches to
the defendant.[15] It is a fortuitous circumstance, event or happening; an event
happening without any human agency, or if happening wholly or partly through human
agency, an event which under the circumstances is unusual or unexpected by the person
to whom it happens.[16]
On the other hand, negligence is the omission to do something which a reasonable man,
guided by those considerations which ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a prudent and reasonable man would not
do.[17] Negligence is the failure to observe, for the protection of the interest of another
person, that degree of care, precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury.[18]
Accident and negligence are intrinsically contradictory; one cannot exist with the other.
Accident occurs when the person concerned is exercising ordinary care, which is not
caused by fault of any person and which could not have been prevented by any means
suggested by common prudence.[19]
The test in determining the existence of negligence is enunciated in the landmark case
of Picart v. Smith,[20] thus: Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person would have used in the
same situation? If not, then he is guilty of negligence.[21]
We rule that the tragedy which befell ZHIENETH was no accident and that ZHIENETHs
death could only be attributed to negligence.
We quote the testimony of Gerardo Gonzales who was at the scene of the incident and
accompanied CRISELDA and ZHIENETH to the hospital:
Q While at the Makati Medical Center, did you hear or notice anything while the child
was being treated?
A At the emergency room we were all surrounding the child. And when the doctor asked
the child what did you do, the child said nothing, I did not come near the counter and
the counter just fell on me.
Q (COURT TO ATTY. BELTRAN)
You want the words in Tagalog to be translated?
ATTY. BELTRAN
Yes, your Honor.
COURT
Granted. Intercalate wala po, hindi po ako lumapit doon. Basta bumagsak.[22]
This testimony of Gonzales pertaining to ZHIENETHs statement formed (and should be
admitted as) part of the res gestae under Section 42, Rule 130 of the Rules of Court,
thus:
Part of res gestae. Statements made by a person while a startling occurrence is taking
place or immediately prior or subsequent thereto with respect to the circumstances
thereof, may be given in evidence as part of the res gestae. So, also, statements
accompanying an equivocal act material to the issue, and giving it a legal significance,
may be received as part of the res gestae.
It is axiomatic that matters relating to declarations of pain or suffering and statements
made to a physician are generally considered declarations and admissions.[23] All that is
required for their admissibility as part of the res gestae is that they be made or uttered
under the influence of a startling event before the declarant had the time to think and
concoct a falsehood as witnessed by the person who testified in court. Under the
circumstances thus described, it is unthinkable for ZHIENETH, a child of such tender age
and in extreme pain, to have lied to a doctor whom she trusted with her life. We
therefore accord credence to Gonzales testimony on the matter, i.e., ZHIENETH
performed no act that facilitated her tragic death. Sadly, petitioners did, through their
negligence or omission to secure or make stable the counters base.
Gonzales earlier testimony on petitioners insistence to keep and maintain the
structurally unstable gift-wrapping counter proved their negligence, thus:
Q When you assumed the position as gift wrapper at the second floor, will you please
describe the gift wrapping counter, were you able to examine?
A Because every morning before I start working I used to clean that counter and since it
is not nailed and it was only standing on the floor, it was shaky.
xxx
Q Will you please describe the counter at 5:00 oclock [sic] in the afternoon on [sic] May
9 1983?
A At that hour on May 9, 1983, that counter was standing beside the verification
counter. And since the top of it was heavy and considering that it was not nailed, it can
collapse at anytime, since the top is heavy.
xxx
Q And what did you do?
A I informed Mr. Maat about that counter which is [sic] shaky and since Mr. Maat is fond
of putting display decorations on tables, he even told me that I would put some
decorations. But since I told him that it not [sic] nailed and it is shaky he told me better
inform also the company about it. And since the company did not do anything about the
counter, so I also did not do anything about the counter.[24] [Emphasis supplied]
Ramon Guevarra, another former employee, corroborated the testimony of Gonzales,
thus:
Q Will you please described [sic] to the honorable Court the counter where you were
assigned in January 1983?
xxx
A That counter assigned to me was when my supervisor ordered me to carry that
counter to another place. I told him that the counter needs nailing and it has to be
nailed because it might cause injury or accident to another since it was shaky.
Q When that gift wrapping counter was transferred at the second floor on February 12,
1983, will you please describe that to the honorable Court?
A I told her that the counter wrapper [sic] is really in good [sic] condition; it was shaky. I
told her that we had to nail it.
Q When you said she, to whom are you referring to [sic]?
A I am referring to Ms. Panelo, sir.
Q And what was the answer of Ms. Panelo when you told her that the counter was
shaky?
A She told me Why do you have to teach me. You are only my subordinate and you are
to teach me? And she even got angry at me when I told her that.
xxx
Q From February 12, 1983 up to May 9, 1983, what if any, did Ms. Panelo or any
employee of the management do to that (sic)
xxx
Witness:
None, sir. They never nailed the counter. They only nailed the counter after the accident
happened.[25] [Emphasis supplied]
Without doubt, petitioner Panelo and another store supervisor were personally
informed of the danger posed by the unstable counter. Yet, neither initiated any
concrete action to remedy the situation nor ensure the safety of the stores employees
and patrons as a reasonable and ordinary prudent man would have done. Thus, as
confronted by the situation petitioners miserably failed to discharge the due diligence
required of a good father of a family.
On the issue of the credibility of Gonzales and Guevarra, petitioners failed to establish
that the formers testimonies were biased and tainted with partiality. Therefore, the
allegation that Gonzales and Guevarras testimonies were blemished by ill feelings
against petitioners since they (Gonzales and Guevarra) were already separated from the
company at the time their testimonies were offered in court was but mere speculation
and deserved scant consideration.
It is settled that when the issue concerns the credibility of witnesses, the appellate
courts will not as a general rule disturb the findings of the trial court, which is in a better
position to determine the same. The trial court has the distinct advantage of actually
hearing the testimony of and observing the deportment of the witnesses.[26] However,
the rule admits of exceptions such as when its evaluation was reached arbitrarily or it
overlooked or failed to appreciate some facts or circumstances of weight and substance
which could affect the result of the case.[27] In the instant case, petitioners failed to
bring their claim within the exception.
did not loiter as petitioners would want to impress upon us. She even admitted to the
doctor who treated her at the hospital that she did not do anything; the counter just fell
on her.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED and the
challenged decision of the Court of Appeals of 17 June 1996 in C.A. G.R. No. CV 37937 is
hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.

Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that
favors children below nine (9) years old in that they are incapable of contributory
negligence. In his book,[28] former Judge Cezar S. Sangco stated:

In our jurisdiction, a person under nine years of age is conclusively presumed to have
acted without discernment, and is, on that account, exempt from criminal liability. The
same presumption and a like exemption from criminal liability obtains in a case of a
person over nine and under fifteen years of age, unless it is shown that he has acted
with discernment. Since negligence may be a felony and a quasi-delict and required
discernment as a condition of liability, either criminal or civil, a child under nine years of
age is, by analogy, conclusively presumed to be incapable of negligence; and that the
presumption of lack of discernment or incapacity for negligence in the case of a child
over nine but under fifteen years of age is a rebuttable one, under our law. The rule,
therefore, is that a child under nine years of age must be conclusively presumed
incapable of contributory negligence as a matter of law. [Emphasis supplied]

Even if we attribute contributory negligence to ZHIENETH and assume that she climbed
over the counter, no injury should have occurred if we accept petitioners theory that the
counter was stable and sturdy. For if that was the truth, a frail six-year old could not have
caused the counter to collapse. The physical analysis of the counter by both the trial
court and Court of Appeals and a scrutiny of the evidence[29]on record reveal
otherwise, i.e., it was not durable after all. Shaped like an inverted L, the counter was
heavy, huge, and its top laden with formica. It protruded towards the customer waiting
area and its base was not secured.[30]

CRISELDA too, should be absolved from any contributory negligence. Initially, ZHIENETH
held on to CRISELDAs waist, later to the latters hand.[31] CRISELDA momentarily
released the childs hand from her clutch when she signed her credit card slip. At this
precise moment, it was reasonable and usual for CRISELDA to let go of her child. Further,
at the time ZHIENETH was pinned down by the counter, she was just a foot away from
her mother; and the gift-wrapping counter was just four meters away from CRISELDA.
[32] The time and distance were both significant. ZHIENETH was near her mother and
4.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 137347 March 4, 2004
PEOPLE OF THE PHILIPPINES, appellee,
vs.
PO3 FERDINAND FALLORINA Y FERNANDO, appellant.
DECISION
CALLEJO, SR., J.:
For automatic review is the Decision1 of the Regional Trial Court of Quezon City, Branch
95, convicting appellant PO3 Ferdinand Fallorina y Fernando of murder for the killing of
eleven-year-old Vincent Jorojoro, Jr. while the latter was flying his kite on top of a roof.
The court a quo sentenced the appellant to suffer the death penalty.
The accusatory portion of the Information charging the appellant with murder reads:
That on or about the 26th day of September 1998, in Quezon City, Philippines, the said
accused, with intent to kill, by means of treachery and taking advantage of superior
strength, did then and there, wilfully, unlawfully and feloniously attack, assault and
employ personal violence upon the person of VINCENT JOROJORO, JR. y MORADAS, a
minor, eleven (11) years of age, by then and there, shooting him with a gun, hitting him
on the head, thereby inflicting upon him serious and mortal wound which was the direct
and immediate cause of his death, to the damage and prejudice of the heirs of the said
offended party.
CONTRARY TO LAW.2
Upon arraignment on October 20, 1998, the appellant, with the assistance of counsel,
pleaded not guilty. Thereafter, trial ensued.
Case for the Prosecution3
Eleven-year-old Vincent Jorojoro, Jr. was the third child of Vicente and Felicisima
Jorojoro. The family lived at Sitio Militar, Barangay Bahay Toro, Project 8, Quezon City.
Vincent, nicknamed "Hataw," was a grade three pupil whose education was sponsored
by the Spouses Petinato, an American couple, through an educational foundation.4
The appellant was an officer of the Philippine National Police detailed in the Traffic
Management Group (TMG) based in Camp Crame, Quezon City, but was on detached
service with the Motorcycle Unit of the Metropolitan Manila Development Authority
(MMDA).
At about 2:30 p.m. of September 26, 1998, Vincent asked permission from his mother
Felicisima if he could play outside. She agreed.5 Together with his playmate Whilcon
"Buddha" Rodriguez, Vincent played with his kite on top of the roof of an abandoned
carinderia beside the road in Sitio Militar, Barangay Bahay Toro. Beside this carinderia
was a basketball court, where fourteen-year-old Ricardo Salvo and his three friends,
nicknamed L.A., Nono and Puti, were playing backan, a game of basketball.
Ricardo heard the familiar sound of a motorcycle coming from the main road across the
basketball court. He was nonplussed when he looked at the person driving the
motorcycle and recognized the appellant. Ricardo knew that the appellant abhorred
children playing on the roof of the carinderia and berated them for it. His friend Ong-ong
had previously been scolded by the appellant for playing on the roof.
Ricardo called on Vincent and Whilcon to come down from the roof. When the appellant
saw Vincent and Whilcon, the former stopped his motorcycle and shouted at them,
"Putang inang mga batang ito, hindi kayo magsibaba d'yan!" After hearing the shouts of
the appellant, Whilcon immediately jumped down from the roof.6 Vincent, meanwhile,
was lying on his stomach on the roof flying his kite. When he heard the appellant's
shouts, Vincent stood up and looked at the latter. Vincent turned his back, ready to get
down from the roof. Suddenly, the appellant pointed his .45 caliber pistol7 towards the
direction of Vincent and fired a shot. Vincent was hit on the left parietal area. He fell
from the roof, lying prostrate near the canal beside the abandoned carinderia and the
basketball court.8
Whilcon rushed to help Vincent up but was shocked when he saw blood on the latter's
head. Whilcon retreated and left his friend.9 The appellant approached Vincent and
carried the latter's hapless body in a waiting tricycle and brought him to the Quezon City
General Hospital. Vincent was pronounced dead on arrival.
Meantime, word reached Vincent's parents that their son was shot and brought to the
hospital. They rushed to the hospital, only to see their son's already lifeless body. The
appellant was nowhere to be found.
Dr. Ravell Ronald R. Baluyot of the Medico-Legal Division of the National Bureau of
Investigation (NBI) conducted an autopsy where he made the following findings:
Cyanosis, lips and nailbeds.
Abrasion, 7.0 x 2.0 cms., right arm, middle third, postero-lateral aspect.
Contused-abrasion, 14.5 x 2.5 cms., postero-lateral chest wall, right side.

Gunshot Wound, Entrance, 3.0 x 0.8 cms., roughly ovaloid, with irregular edges, abrasion
collar widest postero-inferiorly, located at the head, left parietal area, 9.0 cms. above
and 8.0 cms. behind the left external auditory meatus, directed forward upward and
from left to right, involving the scalp, fracturing the left parietal bone (punched-in),
lacerating the left and right cerebral hemispheres of the brain, fracturing the right
parietal bone (punched-out), lacerating the scalp, making an Exit wound, 3.3 x 1.0 cms.,
stellate with everted and irregular edges, 12.0 cms. above and 2.0 cms. in front of the
right external auditory meatus.
Intracranial hemorrhage, subdural and subarachnoid, extensive, bilateral.
Scalp hematoma, fronto-parietal areas, bilateral.
Visceral organs, congested.
Stomach, one-fourth (1/4) filled with partially digested food particles.
CAUSE OF DEATH: GUNSHOT WOUND, HEAD.10
Dr. Baluyot testified that the victim died from a single gunshot wound in the head. The
bullet entered the left upper back portion of the head (above the level of the left ear)11
and exited to the right side.12 Dr. Baluyot signed Vincent's certificate of death.13
At about 3:00 p.m., SPO2 Felix Pajarillo and Police Inspector Abelardo P. Aquino
proceeded to the scene of the shooting but failed to find the victim and the appellant.
They proceeded to the Quezon City General Hospital where they heard that the victim
had died. They returned to the crime scene and recovered an empty shell from a .45
caliber gun.14
On September 28, 1998, Major Isidro Suyo, the Chief of the MMDA Motorcycle Unit to
which the appellant was assigned on detached service, reported to the Sangandaan
Police Station that the appellant had not reported for duty.15 At 2:10 p.m. of September
29, 1998, Police Senior Superintendent Alfonso Nalangan, the Regional Director of the
PNP-TMG, NCR, surrendered the appellant to the Sangandaan Police Station together
with his .45 caliber pistol bearing Serial No. AOC-38701.16
Meantime, upon the urging of Vicente Jorojoro, Ricardo was brought to the Department
of Justice where he was enrolled under its Witness Protection Program. He gave his
sworn statement to NBI Special Agent Roberto Divinagracia on September 29, 1998.17
On the same date, P/Insp. Abelardo Aquino wrote the Chief of the PNP Crime Laboratory
Examination Unit requesting for the ballistic examination of the .45 caliber pistol with
Serial No. AOC-38701 and the empty shell of a .45 caliber gun found at the scene of the
shooting.18 Before noon on September 30, 1998, Divinagracia arrived at the station and
turned over two witnesses, Raymond Castro and Ricardo Salvo. He also turned over the
witnesses' sworn statements.19 On October 2, 1998, on orders of the police station
commander,20 Pajarillo took pictures of the crime scene, including the carinderia and
the roof with a bullet hole as part of the office filing.21 He did not inform the
prosecution that he took such pictures, nor did he furnish it with copies thereof.
However, the appellant's counsel learned of the existence of the said pictures.
On October 5, 1998, P/Insp. Mario Prado signed Firearms Identification Report No. FAIB-
124-98 stating that:
FINDINGS:
Microscopic examination and comparison of the specimen marked "FAP" revealed the
same individual characteristics with cartridge cases fired from the above-mentioned
firearm.
CONCLUSION:
The specimen marked "FAP" was fired from the above-mentioned caliber .45 Thompson
Auto Ordnance pistol with serial number AOC-38701.22
Vincent's family suffered mental anguish as a result of his death. As evidenced by
receipts, they spent P49,174 for the funeral.23
Case for the Appellant
The appellant denied shooting Vincent. He testified that at about 1:30 p.m. of
September 26, 1998, Macario Ortiz, a resident of Sitio San Jose, Quezon City, asked for
police assistance; Macario's brother-in-law was drunk and armed with a knife, and was
creating trouble in their house. The appellant's house was located along a narrow alley
(eskinita) perpendicular to the main road. It was 200 meters away from Macario's
house.24 Responding to the call, the appellant took his .45 service revolver, cocked it,
put the safety lock in place and tucked the gun at his right waistline. He brought out his
motorcycle from the garage and slowly negotiated the bumpy alley leading to the main
road. Macario, who was waiting for him at the main road, called his attention to his
revolver which was about to fall off from his waist. The appellant got distracted and
brought his motorcycle to the right side of the road, near the abandoned carinderia
where he stopped. As he stepped his right foot on the ground to keep himself from
falling, the appellant lost his balance and slipped to the right. At this point, the revolver
fell to the ground near his foot and suddenly went off. Bystanders shouted, "Ano yon,
ano yon, mukhang may tinamaan." He picked up his gun and examined it. He put the
safety latch back on and tucked it at his right waistline. He then told Macario to wait for
a while to check if somebody was really hit. He went near the abandoned carinderia and
saw Vincent sprawled to the ground. He picked up the bloodied child, boarded him on a
tricycle on queue and instructed its driver, Boy Candaje, to bring the boy to the
hospital.25 On board the tricycle were Jeffrey Dalansay and Milbert Doring.
The appellant rode his motorcycle and proceeded to his mother's house in Caloocan City
but did not inform her of the incident. He then called his superior officer, Major Isidro
Suyo, at the Base 103, located at Roces Avenue, Quezon City. The appellant informed
Major Suyo that he met an accident; that his gun fell and fired; and, that the bullet
accidentally hit a child. He also told his superior that he might not be able to report for
work that day and the following day. He assured his superior that he would surrender
later. He then went to Valenzuela City to the house of his friend PO3 Angelito Lam, who
was a motorcycle unit cop. The appellant stayed there for three days. He also visited
friends during that time.
On September 29, 1998, he went to the office of Major Suyo and surrendered his .45
caliber pistol. Major Suyo accompanied and turned over the appellant to the
commanding officer at Camp Crame, Quezon City. The appellant was subjected to a
neuro and drug test. He stated that the results of the drug test were negative. The
appellant was then referred to the Sangandaan Police Station for investigation.26 The
pictures27 of the crime scene were given to him by Barangay Tanod Johnny Yaket, shown
in one of the pictures pointing to a bullet hole. The appellant's testimony was
corroborated in pari materia by Macario Ortiz.
Leonel Angelo Balaoro, Vincent's thirteen-year-old playmate, testified that at 1:30 p.m.
of September 26, 1998, he was playing basketball at Barangay Bahay Toro, at the
basketball court along the road beside the chapel. With him were Ricardo, Puti and
Nono. Vincent was on the rooftop of the carinderia with Whilcon. While Puti was
shooting the ball, an explosion ensued. He and Ricardo ran beside the chapel near the
basketball court. He looked back towards the basketball court and saw the appellant,
about 15 meters away from the canal, holding the prostrate and bloodied Vincent. He
did not see the appellant shoot Vincent. He did not report what he saw to the police
authorities. He was ordered by his father to testify for the appellant. He also testified
that his mother was related to Daniel, the appellant's brother.
On January 19, 1999, the trial court rendered judgment convicting the appellant of
murder, qualified by treachery and aggravated by abuse of public position. The trial
court did not appreciate in favor of the appellant the mitigating circumstance of
voluntary surrender. The decretal portion of the decision reads:
WHEREFORE, judgment is hereby rendered finding the accused PO3 Ferdinand Fallorina
y Fernando GUILTY beyond reasonable doubt of the crime of Murder defined in and
penalized by Article 248 of the Revised Penal Code, as amended by Republic Act No.
7659, and in view of the presence of the aggravating circumstance of taking advantage
by the accused of his public position (par. 1, Art. 14, Revised Penal Code), is hereby
sentenced to suffer the penalty of DEATH.
The accused is hereby ordered to indemnify the heirs of the late Vincent Jorojoro, Jr. the
amounts of P49,174.00, as actual damages; P50,000.00, as moral damages; P25,000.00,
as exemplary damages; and, P50,000.00, as death indemnity.
The accused is to pay the costs.
The .45 caliber pistol, service firearm (Exh. "R") of the accused, shall remain under the
custody of the Court and shall be disposed of in accordance with the existing rules and
regulations upon the finality of this decision.28
The appellant assigned the following errors for resolution:
1. THE COURT A QUO SERIOUSLY ERRED IN NOT GIVING DUE CREDENCE TO RELEVANT
PHYSICAL EVIDENCE, WHICH IF CONSIDERED COULD HAVE ALTERED THE CONCLUSIONS
ARRIVED AT BY THE COURT AND THE OUTCOME OF THE CASE.
2. THE COURT A QUO SERIOUSLY ERRED BY OVERSTEPPING THE LINE OF JUDGING AND
ADVOCACY, AND GOING INTO THE REALM OF SPECULATION, PATENTLY DEMONSTRATING
BIAS AND PARTIALITY.
3. THE COURT A QUO ERRED IN GIVING UNDUE CREDENCE TO THE TESTIMONY OF
RICARDO SALVO, ALLEGED PROSECUTION EYEWITNESS, WHOSE TESTIMONY IS WANTING
IN PROBABILITY, AS IT IS CONTRARY TO THE COMMON EXPERIENCE OF MANKIND.
4. THE COURT A QUO GRAVELY ERRED IN INEQUITABLY APPRECIATING EXCULPATORY
AND INCULPATORY FACTS AND CIRCUMSTANCES WHICH SHOULD HAVE BEEN
CONSIDERED IN FAVOR OF THE ACCUSED.
5. THE COURT A QUO ERRED IN FAILING TO APPRECIATE THE MITIGATING
CIRCUMSTANCE OF VOLUNTARY SURRENDER IN FAVOR OF THE ACCUSED.
6. THE COURT A QUO GRAVELY ERRED IN APPRECIATING THE AGGRAVATING
CIRCUMSTANCE OF TAKING ADVANTAGE OF HIS POSITION BY ACCUSED.29
The appellant asserts that the trial court failed to appreciate in his favor the physical
evidence, viz., the hole found on the rooftop of the carinderia where Vincent was when
he was shot. The appellant contends that the picture30 taken on October 2, 1998 by no
less than SPO2 Felix Pajarillo, one of the principal witnesses of the prosecution, and the
pictures31 showing Barangay Tanod Yaket pointing to a hole on the roof buttress the
defense of the appellant that the shooting was accidental. The appellant maintains that
his service revolver fell to the ground, hit a hard object, and as the barrel of the gun was
pointed to an oblique direction, it fired, hitting the victim who was on the rooftop. The
bullet hit the back portion of the victim's head, before exiting and hitting the rooftop.
The appellant posits that the pictures belie Ricardo's testimony that he deliberately shot
the victim, and, instead, complements Dr. Baluyot's testimony that the gunshot wound
came from somewhere behind the victim, somewhere lower than the point of entrance.
The appellant invokes P/Insp. Mario Prado's testimony that if a gun hits the ground in an
oblique position, the gun will fire and the bullet will exit in the same position as the gun,
that is, also in an oblique position.
The Office of the Solicitor General, for its part, asserts that the contention of the
appellant is based on speculations and surmises, the factual basis for his conclusion not
having been proven by competent and credible evidence. There is no evidence on record
that the hole shown in the pictures32 was caused by a bullet from a .45 caliber pistol.
The appellant did not present Barangay Tanod Johnny Yaket, who was shown in the
pictures, to testify on the matter. The appellant failed to prove that any slug was found
on the rooftop or under the roof which came from the appellant's .45 caliber pistol.
According to the Solicitor General, the pictures relied upon by the appellant cannot
overcome the positive and straightforward testimony of the young eyewitness Ricardo
Salvo.
We agree with the Office of the Solicitor General. Whether or not the appellant is
exempt from criminal liability is a factual issue. The appellant was burdened to prove,
with clear and convincing evidence, his affirmative defense that the victim's death was
caused by his gun accidentally going off, the bullet hitting the victim without his fault or
intention of causing it; hence, is exempt from criminal liability under Article 12,
paragraph 4 of the Revised Penal Code which reads –
The following are exempt from criminal liability:
… evidence showing that the gun hit a hard object when it fell to the ground, what part of
4. Any person who, while performing a lawful act with due care, causes an injury by
mere accident without fault or intention of causing it.
The basis for the exemption is the complete absence of intent and negligence on the
part of the accused. For the accused to be guilty of a felony, it must be committed either
with criminal intent or with fault or negligence.33
The elements of this exempting circumstance are (1) a person is performing a lawful act;
(2) with due care; (3) he causes an injury to another by mere accident; and (4) without
any fault or intention of causing it.34 An accident is an occurrence that "happens outside
the sway of our will, and although it comes about through some act of our will, lies
beyond the bounds of humanly foreseeable consequences." If the consequences are
plainly foreseeable, it will be a case of negligence.
In Jarco Marketing Corporation v. Court of Appeals,35 this Court held that an accident is
a fortuitive circumstance, event or happening; an event happening without any human
agency, or if happening wholly or partly through human agency, an event which under
the circumstance is unusual or unexpected by the person to whom it happens.
Negligence, on the other hand, is the failure to observe, for the protection of the
interest of another person, that degree of care, precaution and vigilance which the
circumstances justly demand without which such other person suffers injury. Accident
and negligence are intrinsically contradictory; one cannot exist with the other.36 In
criminal negligence, the injury caused to another should be unintentional, it being
simply the incident of another act performed without malice.37 The appellant must rely
on the strength of his evidence and not on the weakness of that of the prosecution
because by admitting having caused the death of the victim, he can no longer be
acquitted.
In this case, the appellant failed to prove, with clear and convincing evidence, his
defense.
First. The appellant appended to his counter-affidavit in the Office of the Quezon City
Prosecutor the pictures showing the hole on the roof of the carinderia38 to prove that
he shot the victim accidentally. However, when the investigating prosecutor propounded
clarificatory questions on the appellant relating to the pictures, the latter refused to
answer. This can be gleaned from the resolution of the investigating prosecutor, thus:
Classificatory questions were propounded on the respondent but were refused to be
answered. This certainly led the undersigned to cast doubt on respondent's allegations.
The defenses set forth by the respondent are evidentiary in character and best
appreciated in a full-blown trial; and that the same is not sufficient to overcome
probable cause.39
Second. The appellant did not see what part of the gun hit the victim.40 There is no
the gun hit the ground and the position of the gun when it fell from the appellant's
waist.
Third. In answer to the clarificatory questions of the court, the appellant testified that
the chamber of his pistol was loaded with bullets and was cocked when he placed it on
his right waistline.41 He also testified that the gun's safety lock was on. He was asked if
the gun would fire if the hammer is moved backward with the safety lock in place, and
the appellant admitted that even if he pulled hard on the trigger, the gun would not fire:
Q Is this your service firearm?
A Yes, Your Honor.
Q So the chamber might have been loaded when you went out of the house?
A Yes, Your Honor.
Q What about the hammer, how was the hammer at that time when you tucked the
gun in your waistline?
A The hammer was cocked like this.
COURT:
Can you not stipulate that the hammer is moved backwards near the safety grip.
 Q Can you not admit that at this position, the accused pulled the trigger, the hammer
ATTY. AND PROS. SINTAY: did not move forward?

Admitted, Your Honor. PROS. SINTAY AND ATTY. PRINCIPE:

ATTY. PEREZ: Admitted, Your Honor.

Yes, Your Honor. COURT: (to the witness)

COURT: (to the witness)
Q You are a policeman, if there is a bullet inside the barrel of the gun and then the
hammer is moved backwards and therefore it is open, that means that if you pull the
trigger, the bullet will fire because the hammer will move forward and then hit the base
of the bullet?
Q And therefore at this position, even if I pull the trigger many times, a bullet will not
come out from the muzzle of the gun because the hammer is on a safety locked (sic)?
A Yes, Your Honor.
Q Even if I pushed it very hard, it will not fire the gun?

A Yes, Your Honor. A Yes, Your Honor.

Q Therefore, the gun was cocked when you came out? Q Alright, I will ask you again a question. If the hammer of the gun is like this and
therefore it is open but it is on a safety lock, there is space between the safety grip
A Yes, Your Honor. which is found below the hammer, there is a space, is it not?

Q You did not place the safety lock before you went out of your house? A Yes, Your Honor.

A I safety (sic) it, sir. Q That even if I pushed the safety grip forward, like this.

Q So when you boarded the motorcycle, the gun was on a safety lock? The Court gave the gun to the accused for him to demonstrate.

A Yes, Your Honor. (to the witness)

Q Will you please place the safety lock of that gun, point it upwards. You push it forward in order to push the hammer. Hard if you want but do not remove
the safety lock.
(witness did as instructed)
(witness did as instructed)
It is now on a safety locked (sic)?
The witness tried to push the safety grip and it does not touch the hammer even if the
A Yes, Your Honor. hammer is cocked.42

Q Pull the trigger if the hammer will move forward? Fourth. The trial court was witness as the appellant's counsel himself proved that the
defense proffered by the appellant was incredible. This can be gleaned from the decision
(witness did as instructed) of the trial court:

A It will not, Your Honor. 3. More importantly, and which the Court considers it as providential, when the counsel
of the accused was holding the gun in a cocked position and the safety lock put in place,
COURT: (to the parties) the gun accidentally dropped on the cemented floor of the courtroom and the gun did
not fire and neither was the safety lock moved to its unlock position to cause the
hammer of the gun to move forward. The safety lock of the gun remained in the same
position as it was when it dropped on the floor.43
Fifth. After the shooting, the appellant refused to surrender himself and his service
firearm. He hid from the investigating police officers and concealed himself in the house
of his friend SPO3 Angelito Lam in Valenzuela City, and transferred from one house to
another for three days to prevent his arrest:
Q So did you surrender that afternoon of September 26, 1998?
A No, Your Honor.
Q I thought you were surrendering to Major Suyo?
A I was but I was not able to surrender to Major Suyo, Your Honor.
Q Why, you were already able to talk to Major Suyo?
A Because at that time I was already confused and did not know what to do, Your
Honor.
ATTY. PRINCIPE: (to the witness)
Q What is your relation with PO3 Angelito Lam of Valenzuela?
A Just my co-motorcycle unit cop in the TMG, sir.
Q Did I hear you right that you slept at the residence of PO3 Lam for three days?
A Yes, sir.
Q Why instead of going home to your residence at Bahay Toro?
A Because I am worried, sir.
COURT: (to the witness)
Q So what did you do for three days in the house of PO3 Lam?
A During daytime, I go to my friends, other friends and in the evening, I go back to
the house of PO3 Lam, Your Honor.
Q So if you were able to visit your friends on September 27 or 28, 1998 and then
returned to the house of PO3 Lam in the evening, why did you not go to Major Suyo or
to your 103 Base?
A Your Honor, during those days I am really calling Major Suyo.
Q Why did you not go to your office at Camp Crame, Quezon City?
A At that time, I did not have money, Your Honor.
Q What is the connection of you having money to that of informing your officer that
you will surrender?
A What I know, Your Honor, is that if I do that I will already be detained and that I will
have no money to spend.
ATTY. PRINCIPE: (to the witness)
Q Mr. Witness, from the time of the incident up to Sept. 29, 1998, you did not even
visit your family in Barangay Bahay Toro?
A No, sir.
COURT: (to the witness)
Q Did you send somebody to visit your family?
A No, Your Honor.
ATTY. PRINCIPE: (to the witness)
Q Did you cause to blotter the shooting incident of Vincent?
A I was not able to do that, sir.
Q You did not even talk to the Bgy. Officials in Bgy. Bahay Toro?
A No sir, because I already brought the child to the hospital.44
The conduct of the appellant after the shooting belies his claim that the death of the
victim was accidental and that he was not negligent.
We agree with the encompassing disquisitions of the trial court in its decision on this
matter:
The coup de grace against the claim of the accused, a policeman, that the victim was
accidentally shot was his failure to surrender himself and his gun immediately after the
incident. As a police officer, it is hard to believe that he would choose to flee and keep
himself out of sight for about three (3) days if he indeed was not at fault. It is beyond
human comprehension that a policeman, who professes innocence would come out into
the open only three (3) days from the incident and claim that the victim was accidentally
shot. Human behavior dictates, especially when the accused is a policeman, that when Q: Was there any companion of Vincent?
one is innocent of some acts or when one is in the performance of a lawful act but
causes injury to another without fault or negligence, he would, at the first moment, A: Yes, sir.
surrender to the authorities and give an account of the accident. His failure to do so
would invite suspicion and whatever account or statement he would give later on Q: What was the position of Vincent at that time that you saw him and Fallorina shot
becomes doubtful. him?

For the accused, therefore, to claim that Vincent was accidentally shot is odious, if not, A: "Nakatalikod po siya."
an insult to human intelligence; it is incredible and unbelievable, and more of a fantasy
than a reality. It was a deliberate and intentional act, contrary to accused's claim, that it …
happened outside the sway of his will.45
Q: You included in this Exhibit O your drawing the figure of a certain Jeffrey and you
It is a well-entrenched rule that findings of facts of the trial court, its calibration of the and his tricycle? Why did you include this drawing?
testimonies of the witnesses, its assessment of the credibility of the said witnesses and
the probative weight of their testimonies are accorded high respect, if not conclusive A: Because it was in the tricycle where Vincent was boarded to and brought to the
effect by the appellate court, as the trial judge was in a better position to observe the hospital.
demeanor and conduct of the witnesses as they testified.46 We have carefully reviewed
the records of the case and found no reason to deviate from the findings of the trial (Witness referring to Exhibit O-11)
court.
Q: And who was the driver of that tricycle?
The testimony of prosecution witness Ricardo Salvo deserves credence. He testified in a
positive and straightforward manner, which testimony had the earmarks of truth and A: It was Jeffrey who drove the tricycle, sir.
sincerity. Even as he was subjected to a grueling cross-examination by the appellant's
counsel, he never wavered in his testimony. He positively identified the appellant as the Q: You also drew here a motorcycle already marked as Exhibit O-7. Why did you
assailant and narrated in detail how the latter deliberately aimed his gun and shot the include the motorcycle?
victim. The relevant portions of his testimony are quoted:
A: Because Fallorina was riding on that motorcycle at that time.
Q: While playing basketball with Nono, LA and Puti, do you remember of any unusual
incident which took place? COURT: (to the witness)

A: Yes, sir. Q: So when Ferdinand Fallorina shot the boy, the motorcycle was moving?

Q: What was that unusual incident? A: It was stationary, your Honor.

A: When Vincent was shot, sir. Q: Did you see where he came from, I am referring to Fallorina before you saw him
shot the boy?
Q: Who shot Vincent?
…
A: Ferdinand Fallorina, sir.
A: He came from their house, Your Honor.
…
Q: What was his attire, I am referring to Ferdinand Fallorina?
Q: And in what place that Vincent was shot by Fallorina?
A: He was wearing white shirt and blue pants, Your Honor.
A: He was at the roof of the karinderia, sir.
…
A: Only one, sir.
ATTY. PRINCIPE: (to the witness)
Q: Do you recognize the gun used by Fallorina?
Q: At that time that Fallorina shot the victim, was Buddha still there?
A: Yes, sir.
A: He ran, sir. He jumped in this place, sir.
Q: What was that gun?
(Witness is pointing to a place near the canal already marked as Exhibit O-14).
A: .45 cal., sir.
Q: Now from the witness stand that you are now seated. Can you tell the Court how
far where (sic) you from Fallorina at that time of the shooting? Q: Are you familiar with .45 cal.?

COURT: A: No, sir.

Can the prosecution and the accused stipulate that the distance pointed to by the Q: Why do you know that it was .45 cal.?
witness is more or less 7 meters.
A: Because that kind of gun, I usually see that in the movies, sir.
…
Q: Ricardo, you said that you have known Fallorina for two (2) years and you saw him
ATTY. PRINCIPE: (to the witness) shot Vincent on September 26, 1998 at around 2:30 in the afternoon. Please look
around the courtroom now and point at the person of PO3 Ferdinand Fallorina?
Q: How about the distance of Fallorina from Vincent, can you tell that?
CT. INTERPRETER:
COURT: (to the witness)
Witness is pointing to a male person the one seated at the back of the lady and wearing
Can you point a distance between Fallorina and the boy at that time the body (sic) was a yellow shirt and maong pants and when asked of his name, he stated his name as
shot? Ferdinand Fallorina.

COURT: ATTY. PRINCIPE: (to the witness)

10 meters more or less? Q: Can you tell to the Court whether you heard utterances at that time that he shot
the victim?
…
…
Q: How long have you known Ferdinand Fallorina before the incident?
A: Yes, sir.
A: More or less two years, sir.
Q: What was that?
Q: Why do you know him?
A: "Putang inang mga batang ito, hindi kayo magsisibaba diyan!"
A: I usually see him in that place at Sitio Militar, especially on Sundays, sir.
…
…
Q: After Fallorina shot Vincent Jorojoro, you saw Vincent Jorojoro falling from the
Q: How many shots did you hear? roof, what about Fallorina, what did he do?
A: He was still on board his motorcycle and then he went at the back of the
karinderia where Vincent fell, Your Honor.
Q: And after he went at the back of the karinderia and looked at Vincent Jorojoro,
what did he do?
A: He carried Vincent, Your Honor.
Q: And after carrying Vincent, what did he do?
A: He boarded Vincent in the tricycle.
Q: What about the gun, what did he do with the gun?
A: I do not know anymore.47
The appellant even uttered invectives at the victim and Whilcon before he shot the
victim. In fine, his act was deliberate and intentional.
It bears stressing that of the eyewitnesses listed in the Information as witnesses for the
prosecution, only Ricardo Salvo remained steadfast after he was brought under the
Witness Protection Program of the Department of Justice. He explained that the reason
why he testified for the prosecution, despite the fact that the appellant was a
policeman, was because he pitied the victim's mother who was always crying,48 unable
to obtain justice for her son. We find no ill motive why Ricardo would falsely testify
against the appellant. It was only his purest intention of ferreting out the truth in this
incident and that justice be done to the victim.49 Hence, the testimony of Ricardo is
entitled to full faith and credence.
The Crime Committed by the Appellant
We agree with the trial court that the appellant committed murder under Article 248 of
the Revised Penal Code qualified by treachery. As the trial court correctly pointed out,
Vincent was shot intentionally while his back was turned against the appellant. The little
boy was merely flying his kite and was ready to get down from the roof when the
appellant fired a shot directed at him. The essence of treachery is the sudden and
unexpected attack on an unsuspecting victim without the slightest provocation on his
part.50 Nonetheless, Vincent was an eleven-year-old boy. He could not possibly put up a
defense against the appellant, a police officer who was armed with a gun. It is not so
much as to put emphasis on the age of the victim, rather it is more of a description of
the young victim's state of helplessness.51 Minor children, who by reason of their
tender years, cannot be expected to put up a defense. When an adult person illegally
attacks a child, treachery exists.52 The abuse of superior strength as alleged in the
Information is already absorbed by treachery and need not be considered as a separate
aggravating circumstance.53
We, however, note that the trial court appreciated the aggravating circumstance of
abuse of public position in this case. We reverse the trial court on this score.
There is no dispute that the appellant is a policeman and that he used his service
firearm, the .45 caliber pistol, in shooting the victim. However, there is no evidence on
record that the appellant took advantage of his position as a policeman when he shot
the victim.54 The shooting occurred only when the appellant saw the victim on the
rooftop playing with his kite. The trial court erred in appreciating abuse of public
position against the appellant.
The trial court did not, however, err in ruling that the appellant is not entitled to the
mitigating circumstance of voluntary surrender. Surrender is said to be voluntary when it
is done by the accused spontaneously and made in such a manner that it shows the
intent of the accused to surrender unconditionally to the authorities, either because he
acknowledges his guilt or he wishes to save them the trouble and expense necessarily
incurred in his search and capture.55
In this case, the appellant deliberately evaded arrest, hid in the house of PO3 Lam in
Valenzuela City, and even moved from one house to another for three days. The
appellant was a policeman who swore to obey the law. He made it difficult for his
brother-officers to arrest him and terminate their investigation. It was only after the
lapse of three days that the appellant gave himself up and surrendered his service
firearm.
Under Article 248 of the Revised Penal Code, the penalty for murder is reclusion
perpetua to death. Since there is no modifying circumstance in the commission of the
crime, the appellant should be sentenced to suffer the penalty of reclusion perpetua,
conformably to Article 63 of the Revised Penal Code.
IN LIGHT OF ALL THE FOREGOING, the Decision of the Regional Trial Court of Quezon
City, Branch 95, is AFFIRMED WITH MODIFICATION. The appellant PO3 Ferdinand
Fallorina y Fernando is found guilty beyond reasonable doubt of the crime of murder
under Article 248 of the Revised Penal Code and, there being no modifying
circumstances in the commission of the crime, is hereby sentenced to suffer the penalty
of reclusion perpetua. He is also ordered to pay the heirs of the victim Vincent Jorojoro,
Jr. the amount of P49,174 as actual damages; P50,000 as moral damages; P50,000 as
civil indemnity; and P25,000 as exemplary damages.
SO ORDERED.
5.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-49188 January 30, 1990
PHILIPPINE AIRLINES, INC., petitioner,
vs.
HON. COURT OF APPEALS, HON. JUDGE RICARDO D. GALANO, Court of First Instance of
Manila, Branch XIII, JAIME K. DEL ROSARIO, Deputy Sheriff, Court of First Instance,
Manila, and AMELIA TAN, respondents.
GUTIERREZ, JR., J.:
Behind the simple issue of validity of an alias writ of execution in this case is a more
fundamental question. Should the Court allow a too literal interpretation of the Rules
with an open invitation to knavery to prevail over a more discerning and just approach?
Should we not apply the ancient rule of statutory construction that laws are to be
interpreted by the spirit which vivifies and not by the letter which killeth?
This is a petition to review on certiorari the decision of the Court of Appeals in CA-G.R.
No. 07695 entitled "Philippine Airlines, Inc. v. Hon. Judge Ricardo D. Galano, et al.",
dismissing the petition for certiorari against the order of the Court of First Instance of
Manila which issued an alias writ of execution against the petitioner.
The petition involving the alias writ of execution had its beginnings on November 8,
1967, when respondent Amelia Tan, under the name and style of Able Printing Press
commenced a complaint for damages before the Court of First Instance of Manila. The
case was docketed as Civil Case No. 71307, entitled Amelia Tan, et al. v. Philippine
Airlines, Inc.
After trial, the Court of First Instance of Manila, Branch 13, then presided over by the
late Judge Jesus P. Morfe rendered judgment on June 29, 1972, in favor of private
respondent Amelia Tan and against petitioner Philippine Airlines, Inc. (PAL) as follows:
WHEREFORE, judgment is hereby rendered, ordering the defendant Philippine Air Lines:
1. On the first cause of action, to pay to the plaintiff the amount of P75,000.00 as actual
damages, with legal interest thereon from plaintiffs extra-judicial demand made by the
letter of July 20, 1967;
2. On the third cause of action, to pay to the plaintiff the amount of P18,200.00,
representing the unrealized profit of 10% included in the contract price of P200,000.00
plus legal interest thereon from July 20,1967;
3. On the fourth cause of action, to pay to the plaintiff the amount of P20,000.00 as and
for moral damages, with legal interest thereon from July 20, 1 967;
4. On the sixth cause of action, to pay to the plaintiff the amount of P5,000.00 damages
as and for attorney's fee.
Plaintiffs second and fifth causes of action, and defendant's counterclaim, are dismissed.
With costs against the defendant. (CA Rollo, p. 18)
On July 28, 1972, the petitioner filed its appeal with the Court of Appeals. The case was
docketed as CA-G.R. No. 51079-R.
On February 3, 1977, the appellate court rendered its decision, the dispositive portion of
which reads:
IN VIEW WHEREOF, with the modification that PAL is condemned to pay plaintiff the sum
of P25,000.00 as damages and P5,000.00 as attorney's fee, judgment is affirmed, with
costs. (CA Rollo, p. 29)
Notice of judgment was sent by the Court of Appeals to the trial court and on dates
subsequent thereto, a motion for reconsideration was filed by respondent Amelia Tan,
duly opposed by petitioner PAL.
On May 23,1977, the Court of Appeals rendered its resolution denying the respondent's
motion for reconsideration for lack of merit.
No further appeal having been taken by the parties, the judgment became final and
executory and on May 31, 1977, judgment was correspondingly entered in the case.
The case was remanded to the trial court for execution and on September 2,1977,
respondent Amelia Tan filed a motion praying for the issuance of a writ of execution of
the judgment rendered by the Court of Appeals. On October 11, 1977, the trial court,
presided over by Judge Galano, issued its order of execution with the corresponding writ
in favor of the respondent. The writ was duly referred to Deputy Sheriff Emilio Z. Reyes
of Branch 13 of the Court of First Instance of Manila for enforcement.
Four months later, on February 11, 1978, respondent Amelia Tan moved for the issuance
of an alias writ of execution stating that the judgment rendered by the lower court, and
affirmed with modification by the Court of Appeals, remained unsatisfied.
On March 1, 1978, the petitioner filed an opposition to the motion for the issuance of an
alias writ of execution stating that it had already fully paid its obligation to plaintiff
through the deputy sheriff of the respondent court, Emilio Z. Reyes, as evidenced by
cash vouchers properly signed and receipted by said Emilio Z. Reyes.
On March 3,1978, the Court of Appeals denied the issuance of the alias writ for being
premature, ordering the executing sheriff Emilio Z. Reyes to appear with his return and
explain the reason for his failure to surrender the amounts paid to him by petitioner PAL.
However, the order could not be served upon Deputy Sheriff Reyes who had absconded
or disappeared.
On March 28, 1978, motion for the issuance of a partial alias writ of execution was filed
by respondent Amelia Tan.
On April 19, 1978, respondent Amelia Tan filed a motion to withdraw "Motion for Partial
Alias Writ of Execution" with Substitute Motion for Alias Writ of Execution. On May 1,
1978, the respondent Judge issued an order which reads:
As prayed for by counsel for the plaintiff, the Motion to Withdraw 'Motion for Partial
Alias Writ of Execution with Substitute Motion for Alias Writ of Execution is hereby
granted, and the motion for partial alias writ of execution is considered withdrawn.
Let an Alias Writ of Execution issue against the defendant for the fall satisfaction of the
judgment rendered. Deputy Sheriff Jaime K. del Rosario is hereby appointed Special
Sheriff for the enforcement thereof. (CA Rollo, p. 34)
On May 18, 1978, the petitioner received a copy of the first alias writ of execution issued
on the same day directing Special Sheriff Jaime K. del Rosario to levy on execution in the
sum of P25,000.00 with legal interest thereon from July 20,1967 when respondent
Amelia Tan made an extra-judicial demand through a letter. Levy was also ordered for
the further sum of P5,000.00 awarded as attorney's fees.
On May 23, 1978, the petitioner filed an urgent motion to quash the alias writ of
execution stating that no return of the writ had as yet been made by Deputy Sheriff
Emilio Z. Reyes and that the judgment debt had already been fully satisfied by the
petitioner as evidenced by the cash vouchers signed and receipted by the server of the
writ of execution, Deputy Sheriff Emilio Z. Reyes.
On May 26,1978, the respondent Jaime K. del Rosario served a notice of garnishment on
the depository bank of petitioner, Far East Bank and Trust Company, Rosario Branch,
Binondo, Manila, through its manager and garnished the petitioner's deposit in the said
bank in the total amount of P64,408.00 as of May 16, 1978. Hence, this petition for
certiorari filed by the Philippine Airlines, Inc., on the grounds that:
I Internal Revenue v. Visayan Electric Co., 19 SCRA 697, 698 [1967]). A judgment cannot
AN ALIAS WRIT OF EXECUTION CANNOT BE ISSUED WITHOUT PRIOR RETURN OF THE
ORIGINAL WRIT BY THE IMPLEMENTING OFFICER.
II
PAYMENT OF JUDGMENT TO THE IMPLEMENTING OFFICER AS DIRECTED IN THE WRIT OF
EXECUTION CONSTITUTES SATISFACTION OF JUDGMENT.
III
INTEREST IS NOT PAYABLE WHEN THE DECISION IS SILENT AS TO THE PAYMENT THEREOF.
IV
SECTION 5, RULE 39, PARTICULARLY REFERS TO LEVY OF PROPERTY OF JUDGMENT
DEBTOR AND DISPOSAL OR SALE THEREOF TO SATISFY JUDGMENT.
Can an alias writ of execution be issued without a prior return of the original writ by the
implementing officer?
We rule in the affirmative and we quote the respondent court's decision with approval:
The issuance of the questioned alias writ of execution under the circumstances here
obtaining is justified because even with the absence of a Sheriffs return on the original
writ, the unalterable fact remains that such a return is incapable of being obtained (sic)
because the officer who is to make the said return has absconded and cannot be
brought to the Court despite the earlier order of the court for him to appear for this
purpose. (Order of Feb. 21, 1978, Annex C, Petition). Obviously, taking cognizance of this
circumstance, the order of May 11, 1978 directing the issuance of an alias writ was
therefore issued. (Annex D. Petition). The need for such a return as a condition
precedent for the issuance of an alias writ was justifiably dispensed with by the court
below and its action in this regard meets with our concurrence. A contrary view will
produce an abhorent situation whereby the mischief of an erring officer of the court
could be utilized to impede indefinitely the undisputed and awarded rights which a
prevailing party rightfully deserves to obtain and with dispatch. The final judgment in
this case should not indeed be permitted to become illusory or incapable of execution
for an indefinite and over extended period, as had already transpired. (Rollo, pp. 35-36)
Judicium non debet esse illusorium; suum effectum habere debet (A judgment ought not
to be illusory it ought to have its proper effect).
Indeed, technicality cannot be countenanced to defeat the execution of a judgment for
execution is the fruit and end of the suit and is very aptly called the life of the law
(Ipekdjian Merchandising Co. v. Court of Tax Appeals, 8 SCRA 59 [1963]; Commissioner of
be rendered nugatory by the unreasonable application of a strict rule of procedure.
Vested rights were never intended to rest on the requirement of a return, the office of
which is merely to inform the court and the parties, of any and all actions taken under
the writ of execution. Where such information can be established in some other manner,
the absence of an executing officer's return will not preclude a judgment from being
treated as discharged or being executed through an alias writ of execution as the case
may be. More so, as in the case at bar. Where the return cannot be expected to be
forthcoming, to require the same would be to compel the enforcement of rights under a
judgment to rest on an impossibility, thereby allowing the total avoidance of judgment
debts. So long as a judgment is not satisfied, a plaintiff is entitled to other writs of
execution (Government of the Philippines v. Echaus and Gonzales, 71 Phil. 318). It is a
well known legal maxim that he who cannot prosecute his judgment with effect, sues his
case vainly.
More important in the determination of the propriety of the trial court's issuance of an
alias writ of execution is the issue of satisfaction of judgment.
Under the peculiar circumstances surrounding this case, did the payment made to the
absconding sheriff by check in his name operate to satisfy the judgment debt? The Court
rules that the plaintiff who has won her case should not be adjudged as having sued in
vain. To decide otherwise would not only give her an empty but a pyrrhic victory.
It should be emphasized that under the initial judgment, Amelia Tan was found to have
been wronged by PAL.
She filed her complaint in 1967.
After ten (10) years of protracted litigation in the Court of First Instance and the Court of
Appeals, Ms. Tan won her case.
It is now 1990.
Almost twenty-two (22) years later, Ms. Tan has not seen a centavo of what the courts
have solemnly declared as rightfully hers. Through absolutely no fault of her own, Ms.
Tan has been deprived of what, technically, she should have been paid from the start,
before 1967, without need of her going to court to enforce her rights. And all because
PAL did not issue the checks intended for her, in her name.
Under the peculiar circumstances of this case, the payment to the absconding sheriff by
check in his name did not operate as a satisfaction of the judgment debt.
In general, a payment, in order to be effective to discharge an obligation, must be made
to the proper person. Article 1240 of the Civil Code provides:
Payment shall be made to the person in whose favor the obligation has been
constituted, or his successor in interest, or any person authorized to receive it.
(Emphasis supplied)
Thus, payment must be made to the obligee himself or to an agent having authority,
express or implied, to receive the particular payment (Ulen v. Knecttle 50 Wyo 94, 58
[2d] 446, 111 ALR 65). Payment made to one having apparent authority to receive the
money will, as a rule, be treated as though actual authority had been given for its
receipt. Likewise, if payment is made to one who by law is authorized to act for the
creditor, it will work a discharge (Hendry v. Benlisa 37 Fla. 609, 20 SO 800,34 LRA 283).
The receipt of money due on ajudgment by an officer authorized by law to accept it will,
therefore, satisfy the debt (See 40 Am Jm 729, 25; Hendry v. Benlisa supra; Seattle v.
Stirrat 55 Wash. 104 p. 834,24 LRA [NS] 1275).
The theory is where payment is made to a person authorized and recognized by the
creditor, the payment to such a person so authorized is deemed payment to the creditor.
Under ordinary circumstances, payment by the judgment debtor in the case at bar, to
the sheriff should be valid payment to extinguish the judgment debt.
There are circumstances in this case, however, which compel a different conclusion.
The payment made by the petitioner to the absconding sheriff was not in cash or legal
tender but in checks. The checks were not payable to Amelia Tan or Able Printing Press
but to the absconding sheriff.
Did such payments extinguish the judgment debt?
Article 1249 of the Civil Code provides:
The payment of debts in money shall be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency which is legal tender in the
Philippines.
The delivery of promissory notes payable to order, or bills of exchange or other
mercantile documents shall produce the effect of payment only when they have been
cashed, or when through the fault of the creditor they have been impaired.
In the meantime, the action derived from the original obligation shall be held in
abeyance.
In the absence of an agreement, either express or implied, payment means the
discharge of a debt or obligation in money (US v. Robertson, 5 Pet. [US] 641, 8 L. ed. 257)
and unless the parties so agree, a debtor has no rights, except at his own peril, to
substitute something in lieu of cash as medium of payment of his debt (Anderson v. Gill,
79 Md.. 312, 29 A 527, 25 LRA 200,47 Am. St. Rep. 402). Consequently, unless authorized
to do so by law or by consent of the obligee a public officer has no authority to accept
anything other than money in payment of an obligation under a judgment being
executed. Strictly speaking, the acceptance by the sheriff of the petitioner's checks, in
the case at bar, does not, per se, operate as a discharge of the judgment debt.
Since a negotiable instrument is only a substitute for money and not money, the delivery
of such an instrument does not, by itself, operate as payment (See. 189, Act 2031 on
Negs. Insts.; Art. 1249, Civil Code; Bryan Landon Co. v. American Bank, 7 Phil. 255; Tan
Sunco v. Santos, 9 Phil. 44; 21 R.C.L. 60, 61). A check, whether a manager's check or
ordinary cheek, is not legal tender, and an offer of a check in payment of a debt is not a
valid tender of payment and may be refused receipt by the obligee or creditor. Mere
delivery of checks does not discharge the obligation under a judgment. The obligation is
not extinguished and remains suspended until the payment by commercial document is
actually realized (Art. 1249, Civil Code, par. 3).
If bouncing checks had been issued in the name of Amelia Tan and not the Sheriff's,
there would have been no payment. After dishonor of the checks, Ms. Tan could have
run after other properties of PAL. The theory is that she has received no value for what
had been awarded her. Because the checks were drawn in the name of Emilio Z. Reyes,
neither has she received anything. The same rule should apply.
It is argued that if PAL had paid in cash to Sheriff Reyes, there would have been payment
in full legal contemplation. The reasoning is logical but is it valid and proper? Logic has
its limits in decision making. We should not follow rulings to their logical extremes if in
doing so we arrive at unjust or absurd results.
In the first place, PAL did not pay in cash. It paid in cheeks.
And second, payment in cash always carries with it certain cautions. Nobody hands over
big amounts of cash in a careless and inane manner. Mature thought is given to the
possibility of the cash being lost, of the bearer being waylaid or running off with what he
is carrying for another. Payment in checks is precisely intended to avoid the possibility of
the money going to the wrong party. The situation is entirely different where a Sheriff
seizes a car, a tractor, or a piece of land. Logic often has to give way to experience and to
reality. Having paid with checks, PAL should have done so properly.
Payment in money or cash to the implementing officer may be deemed absolute
payment of the judgment debt but the Court has never, in the least bit, suggested that
judgment debtors should settle their obligations by turning over huge amounts of cash
or legal tender to sheriffs and other executing officers. Payment in cash would result in
damage or interminable litigations each time a sheriff with huge amounts of cash in his
hands decides to abscond.
As a protective measure, therefore, the courts encourage the practice of payments by
cheek provided adequate controls are instituted to prevent wrongful payment and illegal
withdrawal or disbursement of funds. If particularly big amounts are involved, escrow
arrangements with a bank and carefully supervised by the court would be the safer
procedure. Actual transfer of funds takes place within the safety of bank premises. These
practices are perfectly legal. The object is always the safe and incorrupt execution of the
judgment.
It is, indeed, out of the ordinary that checks intended for a particular payee are made
out in the name of another. Making the checks payable to the judgment creditor would
have prevented the encashment or the taking of undue advantage by the sheriff, or any
person into whose hands the checks may have fallen, whether wrongfully or in behalf of
the creditor. The issuance of the checks in the name of the sheriff clearly made possible
the misappropriation of the funds that were withdrawn.
As explained and held by the respondent court:
... [K]nowing as it does that the intended payment was for the private party respondent
Amelia Tan, the petitioner corporation, utilizing the services of its personnel who are or
should be knowledgeable about the accepted procedures and resulting consequences of
the checks drawn, nevertheless, in this instance, without prudence, departed from what
is generally observed and done, and placed as payee in the checks the name of the
errant Sheriff and not the name of the rightful payee. Petitioner thereby created a
situation which permitted the said Sheriff to personally encash said checks and
misappropriate the proceeds thereof to his exclusive personal benefit. For the prejudice
that resulted, the petitioner himself must bear the fault. The judicial guideline which we
take note of states as follows:
As between two innocent persons, one of whom must suffer the consequence of a
breach of trust, the one who made it possible by his act of confidence must bear the
loss. (Blondeau, et al. v. Nano, et al., L-41377, July 26, 1935, 61 Phil. 625)
Having failed to employ the proper safeguards to protect itself, the judgment debtor
whose act made possible the loss had but itself to blame.
The attention of this Court has been called to the bad practice of a number of executing
officers, of requiring checks in satisfaction of judgment debts to be made out in their
own names. If a sheriff directs a judgment debtor to issue the checks in the sheriff's
name, claiming he must get his commission or fees, the debtor must report the sheriff
immediately to the court which ordered the execution or to the Supreme Court for
appropriate disciplinary action. Fees, commissions, and salaries are paid through regular
channels. This improper procedure also allows such officers, who have sixty (60) days
within which to make a return, to treat the moneys as their personal finds and to deposit
the same in their private accounts to earn sixty (60) days interest, before said finds are
turned over to the court or judgment creditor (See Balgos v. Velasco, 108 SCRA 525
[1981]). Quite as easily, such officers could put up the defense that said checks had been
issued to them in their private or personal capacity. Without a receipt evidencing
payment of the judgment debt, the misappropriation of finds by such officers becomes
clean and complete. The practice is ingenious but evil as it unjustly enriches court
personnel at the expense of litigants and the proper administration of justice. The
temptation could be far greater, as proved to be in this case of the absconding sheriff.
The correct and prudent thing for the petitioner was to have issued the checks in the
intended payee's name.

The pernicious effects of issuing checks in the name of a person other than the intended
payee, without the latter's agreement or consent, are as many as the ways that an artful
mind could concoct to get around the safeguards provided by the law on negotiable
instruments. An angry litigant who loses a case, as a rule, would not want the winning
party to get what he won in the judgment. He would think of ways to delay the winning
party's getting what has been adjudged in his favor. We cannot condone that practice
especially in cases where the courts and their officers are involved. We rule against the
petitioner.
Anent the applicability of Section 15, Rule 39, as follows:
Section 15. Execution of money judgments. — The officer must enforce an execution of a
money judgment by levying on all the property, real and personal of every name and
nature whatsoever, and which may be disposed of for value, of the judgment debtor not
exempt from execution, or on a sufficient amount of such property, if they be sufficient,
and selling the same, and paying to the judgment creditor, or his attorney, so much of
the proceeds as will satisfy the judgment. ...
the respondent court held:
We are obliged to rule that the judgment debt cannot be considered satisfied and
therefore the orders of the respondent judge granting the alias writ of execution may
not be pronounced as a nullity.
xxx xxx xxx
It is clear and manifest that after levy or garnishment, for a judgment to be executed
there is the requisite of payment by the officer to the judgment creditor, or his attorney,
so much of the proceeds as will satisfy the judgment and none such payment had been
concededly made yet by the absconding Sheriff to the private respondent Amelia Tan.
The ultimate and essential step to complete the execution of the judgment not having
been performed by the City Sheriff, the judgment debt legally and factually remains
unsatisfied.
Strictly speaking execution cannot be equated with satisfaction of a judgment. Under
unusual circumstances as those obtaining in this petition, the distinction comes out
clearly.
Execution is the process which carries into effect a decree or judgment (Painter v.
Berglund, 31 Cal. App. 2d. 63, 87 P 2d 360, 363; Miller v. London, 294 Mass 300, 1 NE 2d
198, 200; Black's Law Dictionary), whereas the satisfaction of a judgment is the payment
of the amount of the writ, or a lawful tender thereof, or the conversion by sale of the
debtor's property into an amount equal to that due, and, it may be done otherwise than
upon an execution (Section 47, Rule 39). Levy and delivery by an execution officer are
not prerequisites to the satisfaction of a judgment when the same has already been
realized in fact (Section 47, Rule 39). Execution is for the sheriff to accomplish while
satisfaction of the judgment is for the creditor to achieve. Section 15, Rule 39 merely
provides the sheriff with his duties as executing officer including delivery of the proceeds
of his levy on the debtor's property to satisfy the judgment debt. It is but to stress that
the implementing officer's duty should not stop at his receipt of payments but must
continue until payment is delivered to the obligor or creditor.
Finally, we find no error in the respondent court's pronouncement on the inclusion of
interests to be recovered under the alias writ of execution. This logically follows from
our ruling that PAL is liable for both the lost checks and interest. The respondent court's
decision in CA-G.R. No. 51079-R does not totally supersede the trial court's judgment in
Civil Case No. 71307. It merely modified the same as to the principal amount awarded as
actual damages.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The
judgment of the respondent Court of Appeals is AFFIRMED and the trial court's issuance
of the alias writ of execution against the petitioner is upheld without prejudice to any
action it should take against the errant sheriff Emilio Z. Reyes. The Court Administrator is
ordered to follow up the actions taken against Emilio Z. Reyes.
SO ORDERED.
Fernan, C.J., Cruz, Paras, Bidin, Griño-Aquino, Medialdea and Regalado, JJ., concur.
Separate Opinions
NARVASA, J., dissenting:
The execution of final judgments and orders is a function of the sheriff, an officer of the
court whose authority is by and large statutorily determined to meet the particular
exigencies arising from or connected with the performance of the multifarious duties of
the office. It is the acknowledgment of the many dimensions of this authority, defined by
statute and chiselled by practice, which compels me to disagree with the decision
reached by the majority.
A consideration of the wide latitude of discretion allowed the sheriff as the officer of the
court most directly involved with the implementation and execution of final judgments
and orders persuades me that PAL's payment to the sheriff of its judgment debt to
Amelia Tan, though made by check issued in said officer's name, lawfully satisfied said
obligation and foreclosed further recourse therefor against PAL, notwithstanding the
sheriffs failure to deliver to Tan the proceeds of the check.
It is a matter of history that the judiciary .. is an inherit or of the Anglo-American
tradition. While the common law as such .. "is not in force" in this jurisdiction, "to
breathe the breath of life into many of the institutions, introduced [here] under
American sovereignty, recourse must be had to the rules, principles and doctrines of the
common law under whose protecting aegis the prototypes of these institutions had their
birth" A sheriff is "an officer of great antiquity," and was also called the shire reeve. A
shire in English law is a Saxon word signifying a division later called a county. A reeve is
an ancient English officer of justice inferior in rank to an alderman .. appointed to
process, keep the King's peace, and put the laws in execution. From a very remote
period in English constitutional history .. the shire had another officer, namely the shire
reeve or as we say, the sheriff. .. The Sheriff was the special representative of the legal or
central authority, and as such usually nominated by the King. .. Since the earliest times,
both in England and the United States, a sheriff has continued his status as an adjunct of
the court .. . As it was there, so it has been in the Philippines from the time of the
organization of the judiciary .. . (J. Fernando's concurring opinion in Bagatsing v. Herrera,
65 SCRA 434)
One of a sheriff s principal functions is to execute final judgments and orders. The Rules
of Court require the writs of execution to issue to him, directing him to enforce such
judgments and orders in the manner therein provided (Rule 39). The mode of
enforcement varies according to the nature of the judgment to be carried out: whether
it be against property of the judgment debtor in his hands or in the hands of a third
person i e. money judgment), or for the sale of property, real or personal (i.e. foreclosure
of mortgage) or the delivery thereof, etc. (sec. 8, Rule 39).
Under sec. 15 of the same Rule, the sheriff is empowered to levy on so much of the
judgment debtor's property as may be sufficient to enforce the money judgment and sell
these properties at public auction after due notice to satisfy the adjudged amount. It is
the sheriff who, after the auction sale, conveys to the purchaser the property thus sold
(secs. 25, 26, 27, Rule 39), and pays the judgment creditor so much of the proceeds as
will satisfy the judgment. When the property sold by him on execution is an immovable
which consequently gives rise to a light of redemption on the part of the judgment
debtor and others (secs. 29, 30, Rule 39), it is to him (or to the purchaser or
redemptioner that the payments may be made by those declared by law as entitled to
redeem (sec. 31, Rule 39); and in this situation, it becomes his duty to accept payment
and execute the certificate of redemption (Enage v. Vda. y Hijos de Escano, 38 Phil. 657,
cited in Moran, Comments on the Rules of Court, 1979 ed., vol. 2, pp. 326-327). It is also
to the sheriff that "written notice of any redemption must be given and a duplicate filed
with the registrar of deeds of the province, and if any assessments or taxes are paid by
the redemptioner or if he has or acquires any lien other than that upon which the
redemption was made, notice thereof must in like manner be given to the officer and
filed with the registrar of deeds," the effect of failure to file such notice being that
redemption may be made without paying such assessments, taxes, or liens (sec. 30, Rule
39).
The sheriff may likewise be appointed a receiver of the property of the judgment debtor
where the appointment of the receiver is deemed necessary for the execution of the
judgment (sec. 32, Rule 39).
At any time before the sale of property on execution, the judgment debtor may prevent
the sale by paying the sheriff the amount required by the execution and the costs that
have been incurred therein (sec. 20, Rule 39).
The sheriff is also authorized to receive payments on account of the judgment debt
tendered by "a person indebted to the judgment debtor," and his "receipt shall be a
sufficient discharge for the amount so paid or directed to be credited by the judgment
creditor on the execution" (sec. 41, Rule 39).
Now, obviously, the sheriff s sale extinguishes the liability of the judgment debtor either
in fun, if the price paid by the highest bidder is equal to, or more than the amount of the
judgment or pro tanto if the price fetched at the sale be less. Such extinction is not in
any way dependent upon the judgment creditor's receiving the amount realized, so that
the conversion or embezzlement of the proceeds of the sale by the sheriff does not
revive the judgment debt or render the judgment creditor liable anew therefor.
So, also, the taking by the sheriff of, say, personal property from the judgment debtor for
delivery to the judgment creditor, in fulfillment of the verdict against him, extinguishes
the debtor's liability; and the conversion of said property by the sheriff, does not make
said debtor responsible for replacing the property or paying the value thereof.
In the instances where the Rules allow or direct payments to be made to the sheriff, the
payments may be made by check, but it goes without saying that if the sheriff so desires,
he may require payment to be made in lawful money. If he accepts the check, he places
himself in a position where he would be liable to the judgment creditor if any damages
are suffered by the latter as a result of the medium in which payment was made
(Javellana v. Mirasol, et al., 40 Phil. 761). The validity of the payment made by the
judgment debtor, however, is in no wise affected and the latter is discharged from his
obligation to the judgment creditor as of the moment the check issued to the sheriff is
encashed and the proceeds are received by Id. office. The issuance of the check to a
person authorized to receive it (Art. 1240, Civil Code; See. 46 of the Code of Civil
Procedure; Enage v. Vda y Hijos de Escano, 38 Phil. 657, cited in Javellana v. Mirasol, 40
Phil. 761) operates to release the judgment debtor from any further obligations on the
judgment.
The sheriff is an adjunct of the court; a court functionary whose competence involves
both discretion and personal liability (concurring opinion of J. Fernando, citing Uy Piaoco
v. Osmena, 9 Phil. 299, in Bagatsing v. Herrera, 65 SCRA 434). Being an officer of the
court and acting within the scope of his authorized functions, the sheriff s receipt of the
checks in payment of the judgment execution, may be deemed, in legal contemplation,
as received by the court itself (Lara v. Bayona, 10 May 1955, No. L- 10919).
That the sheriff functions as a conduit of the court is further underscored by the fact
that one of the requisites for appointment to the office is the execution of a bond,
"conditioned (upon) the faithful performance of his (the appointee's) duties .. for the
delivery or payment to Government, or the person entitled thereto, of all properties or
sums of money that shall officially come into his hands" (sec. 330, Revised
Administrative Code).
There is no question that the checks came into the sheriffs possession in his official
capacity. The court may require of the judgment debtor, in complying with the
judgment, no further burden than his vigilance in ensuring that the person he is paying
money or delivering property to is a person authorized by the court to receive it. Beyond
this, further expectations become unreasonable. To my mind, a proposal that would
make the judgment debtor unqualifiedly the insurer of the judgment creditor's
entitlement to the judgment amount which is really what this case is all about begs the
question.
That the checks were made out in the sheriffs name (a practice, by the way, of long and
common acceptance) is of little consequence if juxtaposed with the extent of the
authority explicitly granted him by law as the officer entrusted with the power to
execute and implement court judgments. The sheriffs requirement that the checks in
payment of the judgment debt be issued in his name was simply an assertion of that
authority; and PAL's compliance cannot in the premises be faulted merely because of
the sheriffs subsequent malfeasance in absconding with the payment instead of turning
it over to the judgment creditor.
If payment had been in cash, no question about its validity or of the authority and duty
of the sheriff to accept it in settlement of PAL's judgment obligation would even have
arisen. Simply because it was made by checks issued in the sheriff s name does not
warrant reaching any different conclusion.
As payment to the court discharges the judgment debtor from his responsibility on the
judgment, so too must payment to the person designated by such court and authorized
to act in its behalf, operate to produce the same effect.
It is unfortunate and deserving of commiseration that Amelia Tan was deprived of what
was adjudged to her when the sheriff misappropriated the payment made to him by PAL
in dereliction of his sworn duties. But I submit that her remedy lies, not here and in
reviving liability under a judgment already lawfully satisfied, but elsewhere.
ACCORDINGLY, I vote to grant the petition.
Melencio-Herrera, Gancayco, J., concurs.
FELICIANO, J., dissenting:
I concur in the able dissenting opinions of Narvasa and Padilla, JJ. and would merely wish
to add a few footnotes to their lucid opinions.
1. Narvasa, J. has demonstrated in detail that a sheriff is authorized by the Rules of Court
and our case law to receive either legal tender or checks from the judgment debtor in
satisfaction of the judgment debt. In addition, Padilla, J. has underscored the obligation
of the sheriff, imposed upon him by the nature of his office and the law, to turn over
such legal tender, checks and proceeds of execution sales to the judgment creditor. The
failure of a sheriff to effect such turnover and his conversion of the funds (or goods) held
by him to his own uses, do not have the effect of frustrating payment by and consequent
discharge of the judgment debtor.
To hold otherwise would be to throw the risk of the sheriff faithfully performing his duty
as a public officer upon those members of the general public who are compelled to deal
with him. It seems to me that a judgment debtor who turns over funds or property to
the sheriff can not reasonably be made an insurer of the honesty and integrity of the
sheriff and that the risk of the sheriff carrying out his duties honestly and faithfully is
properly lodged in the State itself The sheriff, like all other officers of the court, is
appointed and paid and controlled and disciplined by the Government, more specifically
by this Court. The public surely has a duty to report possible wrongdoing by a sheriff or
similar officer to the proper authorities and, if necessary, to testify in the appropriate
judicial and administrative disciplinary proceedings. But to make the individual members
of the general community insurers of the honest performance of duty of a sheriff, or
other officer of the court, over whom they have no control, is not only deeply unfair to
the former. It is also a confession of comprehensive failure and comes too close to an
abdication of duty on the part of the Court itself. This Court should have no part in that.
2. I also feel compelled to comment on the majority opinion written by Gutierrez, J. with
all his customary and special way with words. My learned and eloquent brother in the
Court apparently accepts the proposition that payment by a judgment debtor of cash to
a sheriff produces the legal effects of payment, the sheriff being authorized to accept
such payment. Thus, in page 10 of his ponencia, Gutierrez, J. writes:
The receipt of money due on a judgment by an officer authorized by law to accept it will
satisfy the debt. (Citations omitted)
The theory is where payment is made to a person authorized and recognized by the
creditor, the payment to such a person so authorized is deemed payment to the creditor.
Under ordinary circumstances, payment by the judgment debtor in the case at bar, to
the sheriff would be valid payment to extinguish the judgment debt.
Shortly thereafter, however, Gutierrez, J. backs off from the above position and strongly
implies that payment in cash to the sheriff is sheer imprudence on the part of the
judgment debtor and that therefore, should the sheriff abscond with the cash, the
judgment debtor has not validly discharged the judgment debt:
It is argued that if PAL had paid in cash to Sheriff Reyes, there would have been payment
in full legal contemplation. The reasoning is logical but is it valid and proper?
In the first place, PAL did not pay in cash. It paid in checks.
And second, payment in cash always carries with it certain cautions. Nobody hands over
big amounts of cash in a careless and inane manner. Mature thought is given to the
possibility of the cash being lost, of the bearer being waylaid or running off with what he
is carrying for another. Payment in checks is precisely intended to avoid the possibility of
the money going to the wrong party....
Payment in money or cash to the implementing officer may be deemed absolute
payment of the judgment debt but the court has never, in the least bit, suggested that
judgment debtors should settle their obligations by turning over huge amounts of cash
or legal tender to sheriffs and other executing officers. ... (Emphasis in the original)
(Majority opinion, pp. 12-13)
There is no dispute with the suggestion apparently made that maximum safety is
secured where the judgment debtor delivers to the sheriff not cash but a check made
out, not in the name of the sheriff, but in the judgment creditor's name. The
fundamental point that must be made, however, is that under our law only cash is legal
tender and that the sheriff can be compelled to accept only cash and not checks, even if
made out to the name of the judgment creditor. 1 The sheriff could have quite lawfully
required PAL to deliver to him only cash, i.e., Philippine currency. If the sheriff had done
so, and if PAL had complied with such a requirement, as it would have had to, one would
have to agree that legal payment must be deemed to have been effected. It requires no
particularly acute mind to note that a dishonest sheriff could easily convert the money
and abscond. The fact that the sheriff in the instant case required, not cash to be
delivered to him, but rather a check made out in his name, does not change the legal
situation. PAL did not thereby become negligent; it did not make the loss anymore
possible or probable than if it had instead delivered plain cash to the sheriffs.
It seems to me that the majority opinion's real premise is the unspoken one that the
judgment debtor should bear the risk of the fragility of the sheriff s virtue until the
money or property parted with by the judgment debtor actually reaches the hands of
the judgment creditor. This brings me back to my earlier point that risk is most
appropriately borne not by the judgment debtor, nor indeed by the judgment creditor,
but by the State itself. The Court requires all sheriffs to post good and adequate fidelity
bonds before entering upon the performance of their duties and, presumably, to
maintain such bonds in force and effect throughout their stay in office. 2 The judgment
creditor, in circumstances like those of the instant case, could be allowed to execute
upon the absconding sheriff s bond. 3
I believe the Petition should be granted and I vote accordingly.
PADILLA, J., Dissenting Opinion
From the facts that appear to be undisputed, I reach a conclusion different from that of
the majority. Sheriff Emilio Z. Reyes, the trial court's authorized sheriff, armed with a
writ of execution to enforce a final money judgment against the petitioner Philippine
Airlines (PAL) in favor of private respondent Amelia Tan, proceeded to petitioner PAL's
office to implement the writ.
There is no question that Sheriff Reyes, in enforcing the writ of execution, was acting
with full authority as an officer of the law and not in his personal capacity. Stated
differently, PAL had every right to assume that, as an officer of the law, Sheriff Reyes
would perform his duties as enjoined by law. It would be grossly unfair to now charge
PAL with advanced or constructive notice that Mr. Reyes would abscond and not deliver
to the judgment creditor the proceeds of the writ of execution. If a judgment debtor
cannot rely on and trust an officer of the law, as the Sheriff, whom else can he trust?
Pursued to its logical extreme, if PAL had delivered to Sheriff Reyes the amount of the
judgment in CASH, i.e. Philippine currency, with the corresponding receipt signed by
Sheriff Reyes, this would have been payment by PAL in full legal contemplation, because
under Article 1240 of the Civil Code, "payment shall be made to the person in whose
favor the obligation has been constituted or his successor in interest or any person
authorized to receive it." And said payment if made by PAL in cash, i.e., Philippine
currency, to Sheriff Reyes would have satisfied PAL's judgment obligation, as payment is
a legally recognized mode for extinguishing one's obligation. (Article 1231, Civil Code).
Under Sec. 15, Rule 39, Rules of Court which provides that-
Sec. 15. Execution of money judgments. — The officer must enforce an execution of a
money judgment by levying on all the property, real and personal of every name and
nature whatsoever, and which may be disposed of for value, of the judgment debtor not
exempt from execution, or on a sufficient amount of such property, if there be sufficient,
and selling the same, and paying to the judgment creditor, or his attorney, so much of
the proceeds as will satisfy the judgment. ... .(emphasis supplied)
it would be the duty of Sheriff Reyes to pay to the judgment creditor the proceeds of the
execution i.e., the cash received from PAL (under the above assumption). But, the duty
of the sheriff to pay the cash to the judgment creditor would be a matter separate the
distinct from the fact that PAL would have satisfied its judgment obligation to Amelia
Tan, the judgment creditor, by delivering the cash amount due under the judgment to
Sheriff Reyes.

Did the situation change by PAL's delivery of its two (2) checks totalling P30,000.00
drawn against its bank account, payable to Sheriff Reyes, for account of the judgment
rendered against PAL? I do not think so, because when Sheriff Reyes encashed the Separate Opinions
checks, the encashment was in fact a payment by PAL to Amelia Tan through Sheriff
Reyes, an officer of the law authorized to receive payment, and such payment
discharged PAL'S obligation under the executed judgment.
NARVASA, J., dissenting:
If the PAL cheeks in question had not been encashed by Sheriff Reyes, there would be no
payment by PAL and, consequently no discharge or satisfaction of its judgment
The execution of final judgments and orders is a function of the sheriff, an officer of the
obligation. But the checks had been encashed by Sheriff Reyes giving rise to a situation
court whose authority is by and large statutorily determined to meet the particular
as if PAL had paid Sheriff Reyes in cash, i.e., Philippine currency. This, we repeat, is
exigencies arising from or connected with the performance of the multifarious duties of
payment, in legal contemplation, on the part of PAL and this payment legally discharged
the office. It is the acknowledgment of the many dimensions of this authority, defined by
PAL from its judgment obligation to the judgment creditor. To be sure, the same
statute and chiselled by practice, which compels me to disagree with the decision
encashment by Sheriff Reyes of PAL's checks delivered to him in his official capacity as
reached by the majority.
Sheriff, imposed an obligation on Sheriff Reyes to pay and deliver the proceeds of the
encashment to Amelia Tan who is deemed to have acquired a cause of action against
A consideration of the wide latitude of discretion allowed the sheriff as the officer of the
Sheriff Reyes for his failure to deliver to her the proceeds of the encashment. As held:
court most directly involved with the implementation and execution of final judgments
and orders persuades me that PAL's payment to the sheriff of its judgment debt to
Payment of a judgment, to operate as a release or satisfaction, even pro tanto must be
Amelia Tan, though made by check issued in said officer's name, lawfully satisfied said
made to the plaintiff or to some person authorized by him, or by law, to receive it. The
obligation and foreclosed further recourse therefor against PAL, notwithstanding the
payment of money to the sheriff having an execution satisfies it, and, if the plaintiff fails
sheriffs failure to deliver to Tan the proceeds of the check.
to receive it, his only remedy is against the officer (Henderson v. Planters' and Merchants
Bank, 59 SO 493, 178 Ala. 420).
It is a matter of history that the judiciary .. is an inherit or of the Anglo-American
tradition. While the common law as such .. "is not in force" in this jurisdiction, "to
Payment of an execution satisfies it without regard to whether the officer pays it over to
breathe the breath of life into many of the institutions, introduced [here] under
the creditor or misapplies it (340, 33 C.J.S. 644, citing Elliot v. Higgins, 83 N.C. 459). If
American sovereignty, recourse must be had to the rules, principles and doctrines of the
defendant consents to the Sheriff s misapplication of the money, however, defendant is
common law under whose protecting aegis the prototypes of these institutions had their
estopped to claim that the debt is satisfied (340, 33 C.J.S. 644, citing Heptinstall v.
birth" A sheriff is "an officer of great antiquity," and was also called the shire reeve. A
Medlin 83 N.C. 16).
shire in English law is a Saxon word signifying a division later called a county. A reeve is
an ancient English officer of justice inferior in rank to an alderman .. appointed to
The above rulings find even more cogent application in the case at bar because, as
process, keep the King's peace, and put the laws in execution. From a very remote
contended by petitioner PAL (not denied by private respondent), when Sheriff Reyes
period in English constitutional history .. the shire had another officer, namely the shire
served the writ of execution on PAL, he (Reyes) was accompanied by private
reeve or as we say, the sheriff. .. The Sheriff was the special representative of the legal or
respondent's counsel. Prudence dictated that when PAL delivered to Sheriff Reyes the
central authority, and as such usually nominated by the King. .. Since the earliest times,
two (2) questioned checks (payable to Sheriff Reyes), private respondent's counsel
both in England and the United States, a sheriff has continued his status as an adjunct of
should have insisted on their immediate encashment by the Sheriff with the drawee
the court .. . As it was there, so it has been in the Philippines from the time of the
bank in order to promptly get hold of the amount belonging to his client, the judgment
organization of the judiciary .. . (J. Fernando's concurring opinion in Bagatsing v. Herrera,
creditor.
65 SCRA 434)
ACCORDINGLY, I vote to grant the petition and to quash the court a quo's alias writ of
One of a sheriff s principal functions is to execute final judgments and orders. The Rules
execution.
of Court require the writs of execution to issue to him, directing him to enforce such
judgments and orders in the manner therein provided (Rule 39). The mode of
Melencio-Herrera, Gancayco, Sarmiento, Cortes, JJ., concurs.
enforcement varies according to the nature of the judgment to be carried out: whether
it be against property of the judgment debtor in his hands or in the hands of a third
person i e. money judgment), or for the sale of property, real or personal (i.e. foreclosure
of mortgage) or the delivery thereof, etc. (sec. 8, Rule 39).
Under sec. 15 of the same Rule, the sheriff is empowered to levy on so much of the
judgment debtor's property as may be sufficient to enforce the money judgment and sell
these properties at public auction after due notice to satisfy the adjudged amount. It is
the sheriff who, after the auction sale, conveys to the purchaser the property thus sold
(secs. 25, 26, 27, Rule 39), and pays the judgment creditor so much of the proceeds as
will satisfy the judgment. When the property sold by him on execution is an immovable
which consequently gives rise to a light of redemption on the part of the judgment
debtor and others (secs. 29, 30, Rule 39), it is to him (or to the purchaser or
redemptioner that the payments may be made by those declared by law as entitled to
redeem (sec. 31, Rule 39); and in this situation, it becomes his duty to accept payment
and execute the certificate of redemption (Enage v. Vda. y Hijos de Escano, 38 Phil. 657,
cited in Moran, Comments on the Rules of Court, 1979 ed., vol. 2, pp. 326-327). It is also
to the sheriff that "written notice of any redemption must be given and a duplicate filed
with the registrar of deeds of the province, and if any assessments or taxes are paid by
the redemptioner or if he has or acquires any lien other than that upon which the
redemption was made, notice thereof must in like manner be given to the officer and
filed with the registrar of deeds," the effect of failure to file such notice being that
redemption may be made without paying such assessments, taxes, or liens (sec. 30, Rule
39).
The sheriff may likewise be appointed a receiver of the property of the judgment debtor
where the appointment of the receiver is deemed necessary for the execution of the
judgment (sec. 32, Rule 39).
At any time before the sale of property on execution, the judgment debtor may prevent
the sale by paying the sheriff the amount required by the execution and the costs that
have been incurred therein (sec. 20, Rule 39).
The sheriff is also authorized to receive payments on account of the judgment debt
tendered by "a person indebted to the judgment debtor," and his "receipt shall be a
sufficient discharge for the amount so paid or directed to be credited by the judgment
creditor on the execution" (sec. 41, Rule 39).
Now, obviously, the sheriff s sale extinguishes the liability of the judgment debtor either
in fun, if the price paid by the highest bidder is equal to, or more than the amount of the
judgment or pro tanto if the price fetched at the sale be less. Such extinction is not in
any way dependent upon the judgment creditor's receiving the amount realized, so that
the conversion or embezzlement of the proceeds of the sale by the sheriff does not
revive the judgment debt or render the judgment creditor liable anew therefor.
So, also, the taking by the sheriff of, say, personal property from the judgment debtor for
delivery to the judgment creditor, in fulfillment of the verdict against him, extinguishes
the debtor's liability; and the conversion of said property by the sheriff, does not make
said debtor responsible for replacing the property or paying the value thereof.
In the instances where the Rules allow or direct payments to be made to the sheriff, the
payments may be made by check, but it goes without saying that if the sheriff so desires,
he may require payment to be made in lawful money. If he accepts the check, he places
himself in a position where he would be liable to the judgment creditor if any damages
are suffered by the latter as a result of the medium in which payment was made
(Javellana v. Mirasol, et al., 40 Phil. 761). The validity of the payment made by the
judgment debtor, however, is in no wise affected and the latter is discharged from his
obligation to the judgment creditor as of the moment the check issued to the sheriff is
encashed and the proceeds are received by Id. office. The issuance of the check to a
person authorized to receive it (Art. 1240, Civil Code; See. 46 of the Code of Civil
Procedure; Enage v. Vda y Hijos de Escano, 38 Phil. 657, cited in Javellana v. Mirasol, 40
Phil. 761) operates to release the judgment debtor from any further obligations on the
judgment.
The sheriff is an adjunct of the court; a court functionary whose competence involves
both discretion and personal liability (concurring opinion of J. Fernando, citing Uy Piaoco
v. Osmena, 9 Phil. 299, in Bagatsing v. Herrera, 65 SCRA 434). Being an officer of the
court and acting within the scope of his authorized functions, the sheriff s receipt of the
checks in payment of the judgment execution, may be deemed, in legal contemplation,
as received by the court itself (Lara v. Bayona, 10 May 1955, No. L- 10919).
That the sheriff functions as a conduit of the court is further underscored by the fact
that one of the requisites for appointment to the office is the execution of a bond,
"conditioned (upon) the faithful performance of his (the appointee's) duties .. for the
delivery or payment to Government, or the person entitled thereto, of all properties or
sums of money that shall officially come into his hands" (sec. 330, Revised
Administrative Code).
There is no question that the checks came into the sheriffs possession in his official
capacity. The court may require of the judgment debtor, in complying with the
judgment, no further burden than his vigilance in ensuring that the person he is paying
money or delivering property to is a person authorized by the court to receive it. Beyond
this, further expectations become unreasonable. To my mind, a proposal that would
make the judgment debtor unqualifiedly the insurer of the judgment creditor's
entitlement to the judgment amount which is really what this case is all about-begs the
question.
That the checks were made out in the sheriffs name (a practice, by the way, of long and
common acceptance) is of little consequence if juxtaposed with the extent of the
authority explicitly granted him by law as the officer entrusted with the power to
execute and implement court judgments. The sheriffs requirement that the checks in
payment of the judgment debt be issued in his name was simply an assertion of that
authority; and PAL's compliance cannot in the premises be faulted merely because of
the sheriffs subsequent malfeasance in absconding with the payment instead of turning
it over to the judgment creditor.

If payment had been in cash, no question about its validity or of the authority and duty
of the sheriff to accept it in settlement of PAL's judgment obligation would even have
arisen. Simply because it was made by checks issued in the sheriff s name does not
warrant reaching any different conclusion.

As payment to the court discharges the judgment debtor from his responsibility on the
judgment, so too must payment to the person designated by such court and authorized
to act in its behalf, operate to produce the same effect.

It is unfortunate and deserving of commiseration that Amelia Tan was deprived of what
was adjudged to her when the sheriff misappropriated the payment made to him by PAL
in dereliction of his sworn duties. But I submit that her remedy lies, not here and in
reviving liability under a judgment already lawfully satisfied, but elsewhere.

ACCORDINGLY, I vote to grant the petition.

6.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20761 July 27, 1966
LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for respondents.
BARRERA, J.:
La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No.
23267-R, holding it liable for quasi-delict and ordering it to pay to respondents Mariano
Beltran, et al., P6,000.00 for the death of his minor daughter Raquel Beltran, plus
P400.00 as actual damages.
The facts of the case as found by the Court of Appeals, briefly are:
On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with
their minor daughters, namely, Milagros, 13 years old, Raquel, about 4½ years old, and
Fe, over 2 years old, boarded the Pambusco Bus No. 352, bearing plate TPU No. 757
(1953 Pampanga), owned and operated by the defendant, at San Fernando, Pampanga,
bound for Anao, Mexico, Pampanga. At the time, they were carrying with them four
pieces of baggages containing their personal belonging. The conductor of the bus, who
happened to be a half-brother of plaintiff Mariano Beltran, issued three tickets (Exhs. A,
B, & C) covering the full fares of the plaintiff and their eldest child, Milagros. No fare was
charged on Raquel and Fe, since both were below the height at which fare is charged in
accordance with the appellant's rules and regulations.
After about an hour's trip, the bus reached Anao whereat it stopped to allow the
passengers bound therefor, among whom were the plaintiffs and their children to get
off. With respect to the group of the plaintiffs, Mariano Beltran, then carrying some of
their baggages, was the first to get down the bus, followed by his wife and his children.
Mariano led his companions to a shaded spot on the left pedestrians side of the road
about four or five meters away from the vehicle. Afterwards, he returned to the bus in
controversy to get his other bayong, which he had left behind, but in so doing, his
daughter Raquel followed him, unnoticed by her father. While said Mariano Beltran was
on the running board of the bus waiting for the conductor to hand him his bayong which
he left under one of its seats near the door, the bus, whose motor was not shut off while
unloading, suddenly started moving forward, evidently to resume its trip,
notwithstanding the fact that the conductor has not given the driver the customary
signal to start, since said conductor was still attending to the baggage left behind by
Mariano Beltran. Incidentally, when the bus was again placed into a complete stop, it
had travelled about ten meters from the point where the plaintiffs had gotten off.
Sensing that the bus was again in motion, Mariano Beltran immediately jumped from
the running board without getting his bayong from the conductor. He landed on the side
of the road almost in front of the shaded place where he left his wife and children. At
that precise time, he saw people beginning to gather around the body of a child lying
prostrate on the ground, her skull crushed, and without life. The child was none other
than his daughter Raquel, who was run over by the bus in which she rode earlier
together with her parents.
For the death of their said child, the plaintiffs commenced the present suit against the
defendant seeking to recover from the latter an aggregate amount of P16,000 to cover
moral damages and actual damages sustained as a result thereof and attorney's fees.
After trial on the merits, the court below rendered the judgment in question.
On the basis of these facts, the trial court found defendant liable for breach of contract
of carriage and sentenced it to pay P3,000.00 for the death of the child and P400.00 as
compensatory damages representing burial expenses and costs.
On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach
of contract in the case, for the reason that when the child met her death, she was no
longer a passenger of the bus involved in the incident and, therefore, the contract of
carriage had already terminated. Although the Court of Appeals sustained this theory, it
nevertheless found the defendant-appellant guilty of quasi-delict and held the latter
liable for damages, for the negligence of its driver, in accordance with Article 2180 of the
Civil Code. And, the Court of Appeals did not only find the petitioner liable, but
increased the damages awarded the plaintiffs-appellees to P6,000.00, instead of
P3,000.00 granted by the trial court.
In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding
it liable for quasi-delict, considering that respondents complaint was one for breach of
contract, and (2) in raising the award of damages from P3,000.00 to P6,000.00 although
respondents did not appeal from the decision of the lower court.
Under the facts as found by the Court of Appeals, we have to sustain the judgement
holding petitioner liable for damages for the death of the child, Raquel Beltran. It may be
pointed out that although it is true that respondent Mariano Beltran, his wife, and their
children (including the deceased child) had alighted from the bus at a place designated
for disembarking or unloading of passengers, it was also established that the father had
to return to the vehicle (which was still at a stop) to get one of his bags or bayong that
was left under one of the seats of the bus. There can be no controversy that as far as the
father is concerned, when he returned to the bus for his bayong which was not
unloaded, the relation of passenger and carrier between him and the petitioner
remained subsisting. For, the relation of carrier and passenger does not necessarily
cease where the latter, after alighting from the car, aids the carrier's servant or employee
in removing his baggage from the car.1 The issue to be determined here is whether as to
the child, who was already led by the father to a place about 5 meters away from the
bus, the liability of the carrier for her safety under the contract of carriage also
persisted.
It has been recognized as a rule that the relation of carrier and passenger does not cease
at the moment the passenger alights from the carrier's vehicle at a place selected by the
carrier at the point of destination, but continues until the passenger has had a
reasonable time or a reasonable opportunity to leave the carrier's premises. And, what
is a reasonable time or a reasonable delay within this rule is to be determined from all
the circumstances. Thus, a person who, after alighting from a train, walks along the
station platform is considered still a passenger.2 So also, where a passenger has alighted
at his destination and is proceeding by the usual way to leave the company's premises,
but before actually doing so is halted by the report that his brother, a fellow passenger,
has been shot, and he in good faith and without intent of engaging in the difficulty,
returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus
continues to be a passenger entitled as such to the protection of the railroad and
company and its agents.3
In the present case, the father returned to the bus to get one of his baggages which was
not unloaded when they alighted from the bus. Raquel, the child that she was, must
have followed the father. However, although the father was still on the running board of
the bus awaiting for the conductor to hand him the bag or bayong, the bus started to
run, so that even he (the father) had to jump down from the moving vehicle. It was at
this instance that the child, who must be near the bus, was run over and killed. In the
circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost
diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be
observed by a common carrier in the discharge of its obligation to transport safely its
passengers. In the first place, the driver, although stopping the bus, nevertheless did not
put off the engine. Secondly, he started to run the bus even before the bus conductor
gave him the signal to go and while the latter was still unloading part of the baggages of
the passengers Mariano Beltran and family. The presence of said passengers near the
bus was not unreasonable and they are, therefore, to be considered still as passengers
of the carrier, entitled to the protection under their contract of carriage.
But even assuming arguendo that the contract of carriage has already terminated,
herein petitioner can be held liable for the negligence of its driver, as ruled by the Court
of Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint,
which reads —
That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs'
daughter, was caused by the negligence and want of exercise of the utmost diligence of
a very cautious person on the part of the defendants and their agent, necessary to
transport plaintiffs and their daughter safely as far as human care and foresight can
provide in the operation of their vehicle.
is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict,
while incompatible with the other claim under the contract of carriage, is permissible
under Section 2 of Rule 8 of the New Rules of Court, which allows a plaintiff to allege
causes of action in the alternative, be they compatible with each other or not, to the end
that the real matter in controversy may be resolved and determined.4
The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was
predicated when it was alleged in the complaint that "the death of Raquel Beltran,
plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost
diligence of a very cautious person on the part of the defendants and their agent." This
allegation was also proved when it was established during the trial that the driver, even
before receiving the proper signal from the conductor, and while there were still persons
on the running board of the bus and near it, started to run off the vehicle. The
presentation of proof of the negligence of its employee gave rise to the presumption
that the defendant employer did not exercise the diligence of a good father of the family
in the selection and supervision of its employees. And this presumption, as the Court of
Appeals found, petitioner had failed to overcome. Consequently, petitioner must be
adjudged peculiarily liable for the death of the child Raquel Beltran.
The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of
Appeals, however, cannot be sustained. Generally, the appellate court can only pass
upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs
did not appeal from that portion of the judgment of the trial court awarding them on
P3,000.00 damages for the death of their daughter. Neither does it appear that, as
appellees in the Court of Appeals, plaintiffs have pointed out in their brief the
inadequacy of the award, or that the inclusion of the figure P3,000.00 was merely a
clerical error, in order that the matter may be treated as an exception to the general
rule.5 Herein petitioner's contention, therefore, that the Court of Appeals committed
error in raising the amount of the award for damages is, evidently,
meritorious.1äwphï1.ñët
Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the
petitioner to pay to the respondents Mariano Beltran, et al., the sum of P3,000.00 for
the death of the child, Raquel Beltran, and the amount of P400.00 as actual damages.
No costs in this instance. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and Castro,
JJ., concur.
Makalintal, J., concurs in the result.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-21486 May 14, 1966
LA MALLORCA and PAMPANGA BUS COMPANY, petitioner,
vs.
VALENTIN DE JESUS, MANOLO TOLENTINO and COURT OF APPEALS, respondents.
Manuel O. Chan for petitioners.
Sixto T. Antonio for respondents.
MAKALINTAL, J.:
La Mallorca and Pampanga Bus Company, Inc., commonly known as La Mallorca-
Pambusco, filed this appeal by certiorari from the decision of the Court of Appeals which
affirmed that rendered by the Court of First Instance of Bulacan in its civil case No. 2100,
entitled "Valentin de Jesus and Manolo Tolentino vs. La Mallorca-Pambusco." The court a
quo sentenced the defendant, now petitioner, "to pay to plaintiffs the amount of
P2,132.50 for actual damages; P14,400.00 as compensatory damages; P10,000.00 to
each plaintiff by way of moral damages; and P3,000.00 as counsel fees."
Two errors are attributed to the appellate Court: (1) "in sustaining the decision (of the
court a quo) holding that the petitioners were liable for the accident which was caused
by a blow-out of one of the tires of the bus and in not considering the same as caso
fortuito," and (2) in holding petitioners liable for moral damages.
The suit arose by reason of the death of Lolita de Jesus, 20-year old daughter of Valentin
de Jesus and wife of Manolo Tolentino, in a head-on collision between petitioner's bus,
on which she was a passenger, and a freight truck traveling in the opposite direction, in a
barrio in Marilao Bulacan, in the morning of October 8, 1959. The immediate cause of
the collision was the fact that the driver of the bus lost control of the wheel when its left
front tire suddenly exploded.
Petitioner maintains that a tire blow-out is a fortuitous event and gives rise to no liability
for negligence, citing the rulings of the Court of Appeals in Rodriguez vs. Red Line
Transportation Co., CA-G.R. No. 8136, December 29, 1954, and People vs. Palapad, CA-
G.R. No. 18480, June 27, 1958. These rulings, however, not only are not not binding on
this Court but were based on considerations quite different from those that obtain in the
at bar. The appellate Court there made no findings of any specified acts of negligence on
the part of the defendants and confined itself to the question of whether or not a tire
blow-out, by itself alone and without a showing as to the causative factors, would
generate liability. In the present case, the cause of the blow-out was known. The inner
tube of the left front tire, according to petitioner's own evidence and as found by the
Court of Appeals "was pressed between the inner circle of the left wheel and the rim
which had slipped out of the wheel." This was, said Court correctly held, a mechanical
defect of the conveyance or a fault in its equipment which was easily discoverable if the
bus had been subjected to a more thorough, or rigid check-up before it took to the road
that morning.
Then again both the trial court and the Court of Appeals found as a fact that the bus was
running quite fast immediately before the accident. Considering that the tire which
exploded was not new — petitioner describes it as "hindi masyadong kalbo," or not so
very worn out — the plea of caso fortuito cannot be entertained.1äwphï1.ñët
The second issue raised by petitioner is already a settled one. In this jurisdiction moral
damages are recoverable by reason of the death of a passenger caused by the breach of
contract of a common carrier, as provided in Article 1764, in relation to Article 2206, of
the Civil Code. These articles have been applied by this Court in a number of cases,
among them Necesito, etc. vs. Paras, et al., L-10605-06, June 30, 1958; Mercado vs. Lira,
L-13328-29, Sept. 29, 1961; Villa-Rey Transit vs. Bello, L-18957, April 23, 1963.
Wherefore, the judgment appealed from is affirmed, with costs against petitioners.
7.
THIRD DIVISION
[G.R. No. 118126. March 4, 1996]
TRANS-ASIA SHIPPING LINES, INC., petitioner, vs. COURT OF APPEALS and ATTY. RENATO
T. ARROYO, respondents.
DECISION
DAVIDE, JR., J.:
As formulated by the petitioner, the issue in this petition for review on certiorari under
Rule 45 of the Rules of Court is as follows:
In case of interruption of a vessels voyage and the consequent delay in that vessels
arrival at its port of destination, is the right of a passenger affected thereby to be
determined and governed by the vague Civil Code provision on common carriers, or shall
it be, in the absence of a specific provision thereon, governed by Art. 698 of the Code of
Commerce?[1]
The petitioner considers it a novel question of law.
Upon a closer evaluation, however, of the challenged decision of the Court of Appeals of
23 November 1994,[2] vis-a-vis, the decision of 29 June 1992 in Civil Case No. 91-491 of
the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 24,[3] as well as the
allegations and arguments adduced by the parties, we find the petitioners formulation of
the issue imprecise. As this Court sees it, what stands for resolution is a common carriers
liability for damages to a passenger who disembarked from the vessel upon its return to
the port of origin, after it suffered engine trouble and had to stop at sea, having
commenced the contracted voyage on one engine.
The antecedents are summarized by the Court of Appeals as follows:
Plaintiff [herein private respondent Atty. Renato Arroyo], a public attorney, bought a
ticket [from] defendant [herein petitioner], a corporation engaged in x x x inter-island
shipping, for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu
City on November 12, 1991.
At around 5:30 in the evening of November 12, 1991, plaintiff boarded the M/V Asia
Thailand vessel. At that instance, plaintiff noticed that some repair works [sic] were
being undertaken on the engine of the vessel. The vessel departed at around 11:00 in
the evening with only one (1) engine running.
After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its
anchor thereat. After half an hour of stillness, some passengers demanded that they
should be allowed to return to Cebu City for they were no longer willing to continue
their voyage to Cagayan de Oro City. The captain acceded [sic] to their request and thus
the vessel headed back to Cebu City.
At Cebu City, plaintiff together with the other passengers who requested to be brought
back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to
Cagayan de Oro City. Plaintiff, the next day, boarded the M/V Asia Japan for its voyage to
Cagayan de Oro City, likewise a vessel of defendant.
On account of this failure of defendant to transport him to the place of destination on
November 12, 1991, plaintiff filed before the trial court a complaint for damages against
defendant.[4]
In his complaint, docketed as Civil Case No. 91-491, plaintiff (hereinafter private
respondent) alleged that the engines of the M/V Asia Thailand conked out in the open
sea, and for more than an hour it was stalled and at the mercy of the waves, thus
causing fear in the passengers. It sailed back to Cebu City after it regained power, but for
unexplained reasons, the passengers, including the private respondent, were arrogantly
told to disembark without the necessary precautions against possible injury to them.
They were thus unceremoniously dumped, which only exacerbated the private
respondents mental distress. He further alleged that by reason of the petitioners
wanton, reckless, and willful acts, he was unnecessarily exposed to danger and, having
been stranded in Cebu City for a day, incurred additional expenses and loss of income.
He then prayed that he be awarded P1,100.00, P50,000.00, and P25,000.00 as
compensatory, moral, and exemplary damages, respectively.[5]
In his pre-trial brief, the private respondent asserted that his complaint was an action for
damage&arising from bad faith, breach of contract and from tort, with the former
arising from the petitioners failure to carry [him] to his place of destination as
contracted, while the latter from the conduct of the [petitioner] resulting [in] the
infliction of emotional distress to the private respondent.[6]
After due trial, the trial court rendered its decision[7] and ruled that the action was only
for breach of contract, with Articles 1170, 1172, and 1173 of the Civil Code as applicable
law - not Article 2180 of the same Code. It was of the opinion that Article 1170 made a
person liable for damages if, in the performance of his obligation, he was guilty of fraud,
negligence, or delay, or in any manner contravened the tenor thereof; moreover,
pursuant to Article 2201 of the same Code, to be entitled to damages, the non-
performance of the obligation must have been tainted not only by fraud, negligence, or
delay, but also bad faith, malice, and wanton attitude. It then disposed of the case as
follows:
WHEREFORE, it not appearing from the evidence that plaintiff was left in the Port of
Cebu because of the fault, negligence, malice or wanton attitude of defendants
employees, the complaint is DISMISSED. Defendants counterclaim is likewise dismissed it
not appearing also that filing of the case by plaintiff was motivated by malice or bad
faith.[8]
The trial court made the following findings to support its disposition:
In the light of the evidence adduced by the parties and of the above provisions of the
New Civil Code, the issue to be resolved, in the resolution of this case is whether or not,
defendant thru its employee in [sic] the night of November 12, 1991, committed fraud,
negligence, bad faith or malice when it left plaintiff in the Port of Cebu when it sailed
back to Cagayan de Oro City after it has [sic] returned from Kawit Island.
Evaluation of the evidence of the parties tended to show nothing that defendant
committed fraud. As early as 3:00 p.m. of November 12, 1991, defendant did not hide
the fact that the cylinder head cracked. Plaintiff even saw during its repair. If he had
doubts as to the vessels capacity to sail, he had time yet to take another boat. The ticket
could be returned to defendant and corresponding cash [would] be returned to him.
Neither could negligence, bad faith or malice on the part of defendant be inferred from
the evidence of the parties. When the boat arrived at [the] Port of Cebu after it returned
from Kawit Island, there was an announcement that passengers who would like to
disembark were given ten (10) minutes only to do so. By this announcement, it could be
inferred that the boat will [sic] proceed to Cagayan de Oro City. If plaintiff entertained
doubts, he should have asked a member of the crew of the boat or better still, the
captain of the boat. But as admitted by him, he was of the impression only that the boat
will not proceed to Cagayan de Oro that evening so he disembarked. He was instead, the
ones [sic] negligent. Had he been prudent, with the announcement that those who will
disembark were given ten minutes only, he should have lingered a little by staying in his
cot and inquired whether the boat will proceed to Cagayan de Oro City or not.
Defendant cannot be expected to be telling [sic] the reasons to each passenger.
Announcement by microphone was enough.
The court is inclined to believe that the story of defendant that the boat returned to the
Port of Cebu because of the request of the passengers in view of the waves. That it did
not return because of the defective engines as shown by the fact that fifteen (15)
minutes after the boat docked [at] the Port of Cebu and those who wanted to proceed
to Cagayan de Oro disembarked, it left for Cagayan de Oro City.
The defendant got nothing when the boat returned to Cebu to let those who did not
want to proceed to Cagayan de Oro City including plaintiff disembarked. On the contrary,
this would mean its loss instead because it will have to refund their tickets or they will
use it the next trip without paying anymore. It is hard therefore, to imagine how
defendant by leaving plaintiff in Cebu could have acted in bad faith, negligently, want
only and with malice.
If plaintiff, therefore, was not able to [m]ake the trip that night of November 12, 1991, it
was not because defendant maliciously did it to exclude him [from] the trip. If he was
left, it was because of his fault or negligence.[9]
Unsatisfied, the private respondent appealed to the Court of Appeals (CA-G.R. CV No.
39901) and submitted for its determination the following assignment of errors: (1) the
trial court erred in not finding that the defendant-appellee was guilty of fraud, delay,
negligence, and bad faith; and (2) the trial court erred in not awarding moral and
exemplary damages.[10]
In its decision of 23 November 1994,[11] the Court of Appeals reversed the trial courts
decision by applying Article 1755 in relation to Articles 2201, 2208, 2217, and 2232 of
the Civil Code and, accordingly, awarded compensatory, moral, and exemplary damages
as follows:
WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET
ASIDE and another one is rendered ordering defendant-appellee to pay plaintiff-
appellant:
1. P20,000.00 as moral damages;
2. P10,000.00 as exemplary damages;
3. P5,000.00 as attorneys fees;
4. Cost of suit.
SO ORDERED.[12]
It did not, however, allow the grant of damages for the delay in the performance of the
petitioners obligation as the requirement of demand set forth in Article 1169 of the Civil
Code had not been met by the private respondent. Besides, it found that the private
respondent offered no evidence to prove that his contract of carriage with the petitioner
provided for liability in case of delay in departure, nor that a designation of the time of
departure was the controlling motive for the establishment of the contract. On the
latter, the court a quo observed that the private respondent even admitted he was
unaware of the vessels departure time, and it was only when he boarded the vessel that
he became aware of such. Finally, the respondent Court found no reasonable basis for
the private respondents belief that demand was useless because the petitioner had
rendered it beyond its power to perform its obligation; on the contrary, he even
admitted that the petitioner had been assuring the passengers that the vessel would
leave on time, and that it could still perform its obligation to transport them as
scheduled.
To justify its award of damages, the Court of Appeals ratiocinated as follows:
It is an established and admitted fact that the vessel before the voyage had undergone
some repair work on the cylinder head of the engine. It is likewise admitted by
defendant-appellee that it left the port of Cebu City with only one engine running.
Defendant-appellee averred:
x x x The dropping of the vessels anchor after running slowly on only one engine when it
departed earlier must have alarmed some nervous passengers x x x
The entries in the logbook which defendant-appellee itself offered as evidence
categorically stated therein that the vessel stopped at Kawit Island because of engine
trouble. It reads:
2330 HRS STBD ENGINE EMERGENCY STOP
2350 HRS DROP ANCHOR DUE TO. ENGINE TROUBLE, 2 ENGINE STOP.
The stoppage was not to start and synchronized [sic] the engines of the vessel as claimed
by defendant-appellee. It was because one of the engines of the vessel broke down; it
was because of the disability of the vessel which from the very beginning of the voyage
was known to defendant-appellee.
Defendant-appellee from the very start of the voyage knew for a fact that the vessel was
not yet in its sailing condition because the second engine was still being repaired. Inspite
of this knowledge, defendant-appellee still proceeded to sail with only one engine
running.
Defendant-appellee at that instant failed to exercise the diligence which all common
carriers should exercise in transporting or carrying passengers. The law does not merely
require extraordinary diligence in the performance of the obligation. The law mandates
that common carrier[s] should exercise utmost diligence in the transport of passengers.
Article 1755 of the New Civil Code provides:
ART. 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with
a due regard for all the circumstances.
Utmost diligence of a VERY CAUTIOUS person dictates that defendant-appellee should
have pursued the voyage only when its vessel was already fit to sail. Defendant-appellee
should have made certain that the vessel [could] complete the voyage before starting
[to] sail. Anything less than this, the vessel [could not] sail x x x with so many passengers
on board it.
However, defendant-appellant [sic] in complete disregard of the safety of the
passengers, chose to proceed with its voyage even if only one engine was running as the
second engine was still being repaired during the voyage. Defendant-appellee
disregarded the not very remote possibility that because of the disability of the vessel,
other problems might occur which would endanger the lives of the passengers sailing
with a disabled vessel.
As expected, x x x engine trouble occurred. Fortunate[ly] for defendant-appellee, such
trouble only necessitated the stoppage of the vessel and did not cause the vessel to
capsize. No wonder why some passengers requested to be brought back to Cebu City.
Common carriers which are mandated to exercise utmost diligence should not be taking
these risks.
On this premise, plaintiff-appellant should not be faulted why he chose to disembark
from the vessel with the other passengers when it returned back to Cebu City.
Defendant-appellee may call him a very panicky passenger or a nervous person, but this
will not relieve defendant-appellee from the liability it incurred for its failure to exercise
utmost diligence.[13]
xxx xxx xxx
As to the second assigned error, we find that plaintiff-appellant is entitled to the award
of moral and exemplary damages for the breach committed by defendant-appellee.
As discussed, defendant-appellee in sailing to Cagayan de Oro City with only one engine
and with full knowledge of the true condition of the vessel, acted in bad faith with
malice, in complete disregard for the safety of the passengers and only for its own
personal advancement/interest.
The Civil Code provides:
Art 2201.
xxx xxx xxx
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non-performance of the
obligation.
Plaintiff-appellant is entitled to moral damages for the mental anguish, fright and serious
anxiety he suffered during the voyage when the vessels engine broke down and when he
disembarked from the vessel during the wee hours of the morning at Cebu City when it
returned.[14]
Moral damages are recoverable in a damage suit predicated upon a breach of contract of
carriage where it is proved that the carrier was guilty of fraud or bad faith even if death
does not result.[15]
Fraud and bad faith by defendant-appellee having been established, the award of moral
damages is in order.[16]
To serve as a deterrent to the commission of similar acts in the future, exemplary
damages should be imposed upon defendant-appellee.[17] Exemplary damages are
designed by our civil law to permit the courts to reshape behavior that is socially
deleterious in its consequence by creating x x x negative incentives or deterrents against
such behavior.[18]
Moral damages having been awarded, exemplary damages maybe properly awarded.
When entitlement to moral damages has been established, the award of exemplary
damages is proper.[19]
The petitioner then instituted this petition and submitted the question of law earlier
adverted to.
Undoubtedly, there was, between the petitioner and the private respondent, a contract
of common carriage. The laws of primary application then are the provisions on
common carriers under Section 4, Chapter 3, Title VIII, Book IV of the Civil Code, while
for all other matters not regulated thereby, the Code of Commerce and special laws.[20]
Under Article 1733 of the Civil Code, the petitioner was bound to observe extraordinary
diligence in ensuring the safety of the private respondent. That meant that the
petitioner was, pursuant to Article 1755 of the said Code, bound to carry the private
respondent safely as far as human care and foresight could provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances. In this case,
we are in full accord with the Court of Appeals that the petitioner failed to discharge this
obligation.
Before commencing the contracted voyage, the petitioner undertook some repairs on
the cylinder head of one of the vessels engines. But even before it could finish these
repairs, it allowed the vessel to leave the port of origin on only one functioning engine,
instead of two. Moreover, even the lone functioning engine was not in perfect condition
as sometime after it had run its course, it conked out. This caused the vessel to stop and
remain adrift at sea, thus in order to prevent the ship from capsizing, it had to drop
anchor. Plainly, the vessel was unseaworthy even before the voyage began. For a vessel
to be seaworthy, it must be adequately equipped for the voyage and manned with a
sufficient number of competent officers and crew.[21] The failure of a common carrier to
maintain in seaworthy condition its vessel involved in a contract of carriage is a clear
breach of is duty prescribed in Article 1755 of the Civil Code.
As to its liability for damages to the private respondent, Article 1764 of the Civil Code
expressly provides:
ART. 1764. Damages in cases comprised in this Section shall be awarded in accordance
with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the
death of a passenger caused by the breach of contract by common carrier.
The damages comprised in Title XVIII of the Civil Code are actual or compensatory,
moral, nominal, temperate or moderate, liquidated, and exemplary.
In his complaint, the private respondent claims actual or compensatory, moral, and
exemplary damages.
Actual or compensatory damages represent the adequate compensation for pecuniary
loss suffered and for profits the obligee failed to obtain.[22]
In contracts or quasi-contracts, the obligor is liable for all the damages which may be
reasonably attributed to the non-performance of the obligation if he is guilty of fraud,
bad faith, malice, or wanton attitude.[23]
Moral damages include moral suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, or similar
injury. They may be recovered in the cases enumerated in Article 2219 of the Civil Code,
likewise, if they are the proximate result of, as in this case, the petitioners breach of the
contract of carriage.[24] Anent a breach of a contract of common carriage, moral
damages may be awarded if the common carrier, like the petitioner, acted fraudulently
or in bad faith.[25]
Exemplary damages are imposed by way of example or correction for the public good, in
addition to moral, temperate, liquidated or compensatory damages.[26] In contracts and
quasi-contracts, exemplary damages may be awarded if the defendant acted in a wanton
fraudulent, reckless, oppressive or malevolent manner.[27] It cannot, however, be
considered as a matter of right; the court having to decide whether or not they should
be adjudicated.[28] Before the court may consider an award for exemplary damages, the
plaintiff must first show that he is entitled to moral, temperate or compensatory
damages; but it is not necessary that he prove the monetary value thereof.[29]
The Court of Appeals did not grant the private respondent actual or compensatory
damages, reasoning that no delay was incurred since there was no demand, as required
by Article 1169 of the Civil Code. This article, however, finds no application in this case
because, as found by the respondent Court, there was in fact no delay in the
commencement of the contracted voyage. If any delay was incurred, it was after the
commencement of such voyage, more specifically, when the voyage was subsequently
interrupted when the vessel had to stop near Kawit Island after the only functioning
engine conked out.
As to the rights and duties of the parties strictly arising out of such delay, the Civil Code
is silent. However, as correctly pointed out by the petitioner, Article 698 of the Code of
Commerce specifically provides for such a situation. It reads:

In case a voyage already begun should be interrupted, the passengers shall be obliged to
pay the fare in proportion to the distance covered, without right to recover for losses
and damages if the interruption is due to fortuitous event or force majeure, but with a
right to indemnity if the interruption should have been caused by the captain exclusively.
If the interruption should be caused by the disability of the vessel and a passenger
should agree to await the repairs, he may not be required to pay any increased price of
passage, but his living expenses during the stay shall be for his own account.
This article applies suppletorily pursuant to Article 1766 of the Civil Code.
Of course, this does not suffice for a resolution of the case at bench for, as earlier stated,
the cause of the delay or interruption was the petitioners failure to observe
extraordinary diligence. Article 698 must then be read together with Articles 2199, 2200,
2201, and 2208 in relation to Article 21 of the Civil Code. So read, it means that the
petitioner is liable for any pecuniary loss or loss of profits which the private respondent
may have suffered by reason thereof. For the private respondent, such would be the loss
of income if unable to report to his office on the day he was supposed to arrive were it
not for the delay. This, however, assumes that he stayed on the vessel and was with it
when it thereafter resumed its voyage; but he did not. As he and some passengers
resolved not to complete the voyage, the vessel had to return to its port of origin and
allow them to disembark. The private respondent then took the petitioners other vessel
the following day, using the ticket he had purchased for the previous days voyage.
Any further delay then in the private respondents arrival at the port of destination was
caused by his decision to disembark. Had he remained on the first vessel, he would have
reached his destination at noon of 13 November 1991, thus been able to report to his
office in the afternoon. He, therefore, would have lost only the salary for half of a day.
But actual or compensatory damages must be proved,[30] which the private respondent
failed to do. There is no convincing evidence that he did not receive his salary for 13
November 1991 nor that his absence was not excused.
We likewise fully agree with the Court of Appeals that the petitioner is liable for moral
and exemplary damages. In allowing its unseaworthy M/V Asia Thailand to leave the
port of origin and undertake the contracted voyage, with full awareness that it was
exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise
extraordinary diligence and obviously acted with bad faith and in a wanton and reckless
manner. On this score, however, the petitioner asserts that the safety of the vessel and
passengers was never at stake because the sea was calm in the vicinity where it stopped
as faithfully recorded in the vessels log book (Exhibit 4). Hence, the petitioner concludes,
the private respondent was merely over-reacting to the situation obtaining then.[31]
We hold that the petitioners defense cannot exculpate it nor mitigate its liability. On the
contrary, such a claim demonstrates beyond cavil the petitioners lack of genuine concern
for the safety of its passengers. It was, perhaps, only providential that the sea happened
to be calm. Even so, the petitioner should not expect its passengers to act in the manner
it desired. The passengers were not stoics; becoming alarmed, anxious, or frightened at
the stoppage of a vessel at sea in an unfamiliar zone at nighttime is not the sole
prerogative of the faint-hearted. More so in the light of the many tragedies at sea
resulting in the loss of lives of hopeless passengers and damage to property simply
because common carriers failed in their duty to exercise extraordinary diligence in the
performance of their obligations.
We cannot, however, give our affirmance to the award of attorneys fees. Under Article
2208 of the Civil Code, these are recoverable only in the concept of actual damages,[32]
not as moral damages[33] nor judicial costs.[34] Hence, to merit such an award, it is
settled that the amount thereof must be proven.[35] Moreover, such must be
specifically prayed for - as was not done in this case - and may not be deemed
incorporated within a general prayer for such other relief and remedy as this court may
deem just and equitable.[36] Finally, it must be noted that aside from the following, the
body of the respondent Courts decision was devoid of any statement regarding
attorneys fees:
Plaintiff-appellant was forced to litigate in order that he can claim moral and exemplary
damages for the suffering he encurred [sic]. He is entitled to attorneys fees pursuant to
Article 2208 of the Civil Code. It states:
Article 2208. In the absence of stipulation, attorney s fees and expenses of litigation,
other than judicial costs cannot be recovered except:
1. When exemplary damages are awarded;
2. When the defendants act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest.
This Court holds that the above does not satisfy the benchmark of factual, legal and
equitable justification needed as basis for an award of attorneys fees.[37] In sum, for
lack of factual and legal basis, the award of attorneys fees must be deleted.
WHEREFORE, the instant petition is DENIED and the challenged decision of the Court of
Appeals in CA-G.R. CV No. 39901 is AFFIRMED subject to the modification as to the
award for attorneys fees which is hereby SET ASIDE.
Costs against the petitioner.
SO ORDERED.
9. The facts:

Republic of the Philippines On February 24, 1999, in the RTC of Makati City, respondent PCIBANK filed a
complaint[3] for a sum of money with prayer for a writ of preliminary attachment
Supreme Court against petitioner ASIAKONSTRUKT. Docketed as Civil Case No. 99-432, the complaint
Baguio City alleged, inter alia, as follows:

SECOND DIVISION FIRST CAUSE OF ACTION

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, 2.01 On various occasions, ASIAKONSTRUKT obtained U.S. dollar denominated
credit accommodations from PCIBANK in the amount of Four Million Four Hundred
Petitioner, Eighty Seven Thousand U.S. dollars (US$4,487,000.00), exclusive of interests, charges
and fees thereon and the cost of collecting the same. These credit accommodations are
- versus -
covered by the following promissory notes:
PHILIPPINE COMMERCIAL INTERNATIONAL BANK,
xxx xxx xxx
Respondent.
2.02 Prompt and faithful payment of all the foregoing promissory notes was
G.R. No. 153827 secured by the following deeds of assignment executed by ASIAKONSTRUKT in favor of
PCIBANK:
Present:
(a) Deed of Assignment of Receivables/Contract Proceeds dated 20 July 1994 where
PUNO, J., Chairperson,* ASIAKONSTRUKT assigned its receivables from its Contract with the National Power
Corporation (NPC) in the amount of .P54,500,000;
SANDOVAL-GUTIERREZ,**
(b) Deed of Assignment of Receivables dated 28 June 1995 where ASIAKONSTRUKT
CORONA,
assigned its receivables from its Contract with the NPC in the amount of P26,281,000.00;
AZCUNA, and
(c) Deed of Assignment of Receivables dated 28 August 1995 where ASIAKONSTRUKT
GARCIA, JJ. assigned its receivables from its Sub-Contract with ABB Power, Inc., in the amount of
P43,000,000.00;
Promulgated:
(d) Deed of Assignment of Contract Proceeds dated 27 March 1996 where
April 25, 2006 ASIAKONSTRUKT assigned its receivables from its contracts with PNOC in the aggregate
amount of P46,000,000.00; and
DECISION
(e) Deed of Assignment of Contract Proceeds dated 20 February 1997 where
GARCIA, J.:
ASIAKONSTRUKT assigned its receivables from the Ormat Philippines, Inc., in the
In this petition for review under Rule 45 of the Rules of Court, petitioner Asian aggregate amount of US$3,350,000.00;
Construction and Development Corporation or ASIAKONSTRUKT, seeks the reversal and
2.03 All the foregoing deeds of assignments stipulate, among others, the following
setting aside of the decision[1]dated March 15, 2002 and the Resolution[2] dated June 3,
terms and conditions:
2002 of the Court of Appeals (CA) in CA-G.R. CV No. 68189. The assailed decision affirm
with modification the Summary Judgment rendered by the Regional Trial Court (RTC) of a) The assignment is for the purpose of securing payment of the principal
Makati City in an action for a sum of money thereat commenced by the herein amount and the interests and bank charges accruing thereon, the costs of collecting the
respondent, Philippine Commercial International Bank (PCIBANK) against the petitioner, same and all other expenses which PCIBANK may be put in connection with or as an
while the challenged resolution denied petitioners motion for reconsideration. incident of the assignment;
b) That the assignment secures also any extension or renewal of the credit
which is the subject thereof as any and all other obligations of ASIAKONSTRUKT of
whatever kind and nature as appear in the records of PCIBANK, which ASIAKONSTRUKT
accepts as the final and conclusive evidence of such obligations to PCIBANK, whether
contracted before, during or after the constitution of [the assignment agreement];
c) That PCIBANK authorizes ASIAKONSTRUKT, at the latters expense, to collect
and receive for [PCIBANK] all the Receivables; and
d) That ASIAKONSTRUKT shall have no right, and agrees not to use any of
the proceeds of any collections, it being agreed by the parties that [ASIAKONSTRUKT]
divests itself of all the rights, title and interest in said Receivables and the proceeds of
the collection received thereon.
2.04 The promissory notes have remained not fully paid despite their having
become due and demandable. Repeated verbal and written demands were made upon
ASIAKONSTRUKT, but to no avail. It has failed and refused, and continues to fail and
refuse, to pay its outstanding obligations to PCIBANK;
2.05 As a result of ASIAKONSTRUKTs refusal to pay its outstanding obligations,
PCIBANK was constrained to refer the matter to counsel and thus incur attorneys fees
and legal costs.
2.06 The aggregate unpaid obligation of ASIAKONSTRUKT to PCIBANK, as of 31
December 1998, amounts to US$4,553,446.06, broken down as follows:
Principal US$ 4,067,867.23
Interest US$ 291,263.27
Penalties US$ 194,315.56
TOTAL US$ 4,553,446.06
For its second cause of action, PCIBANK alleged in the same complaint as follows:
SECOND CAUSE OF ACTION
4.02 as a result of the fraudulent acts of ASIAKONSTRUKT, PCIBANK suffered the
following damages, all of which ASIAKONSTRUKT must be held to pay PCIBANK:
4.02.1 Exemplary damages, in the interest of public good and purposes of correction, in
the amount of not less than .P50,000.00;
4.02.2 Attorneys fees in the amount of not less than . P1,800,000.00; and
4.02.3 Costs of suit.
In support of its prayer for a writ of preliminary attachment embodied in the complaint,
plaintiff PCIBANK alleges the following:
3.02 ASIAKONSTRUKT is guilty of fraud in contracting the debt, in the performance
thereof, or both, xxx;
303. PCIBANK agreed to enter into the above-mentioned credit accommodations
primarily because of the existence of the deeds of assignment listed above. However,
from telephone inquiries made with responsible officers of the National Power
Corporation, ABB Power, Inc., PNOC and Ormat Philippines, Inc., PCIBANK was surprised
to learn that ASIAKONSTRUKT had long ago collected the contract proceeds, or portions
thereof, which were previously assigned to PCIBANK. However, to date, it has yet to turn
over these proceeds to PCIBANK. Worse, PCIBANK learned that the contract proceeds
were used by ASIAKONSTRUKT for its own purposes clear evidence of fraud, which has
deprived PCIBANK of its security. ASIAKONSTRUKTs unauthorized use of the contract
proceeds for its own purposes was subsequently confirmed by Mr. Napoleon Garcia,
Vice President for Finance of ASIAKONSTRUKT, in a telephone discussion on 12 January
1999 with Ms. Maricel E. Salaveria of PCIBANK. xxx Needless to say, ASIAKONSTRUKT has
fraudulently collected such receivables to the prejudice of PCIBANK.
3.04 it is evident that ASIAKONSTRUKT never had any intention of complying with the
deeds of assignment. ASIAKONSTRUKT only misled PCIBANK into believing that it had
sufficient security to ensure payment of its loan obligations.
3.05 Alternatively, granting, in argumenti gratia, that ASIAKONSTRUKT, at the time it
executed the foregoing deeds of assignment, really intended to abide by their terms and
conditions, it nevertheless committed manifest fraud when it collected the contract
proceeds, and instead of remitting them to PCIBANK, used them for its own purposes.
In an order[4] dated April 13, 1999, the trial court, after receiving ex parte PCIBANKs
evidence in support of its prayer for preliminary attachment, directed the issuance of
the desired writ, thus:
WHEREFORE, let a writ of preliminary attachment issue against all the property of
defendant not exempt from execution or so much thereof as may be sufficient to satisfy
plaintiffs principal claim of US$4,553,446.06, representing the alleged unpaid obligation
of defendant, inclusive of interest and penalty charges, as of December 31, 1998, which
is equivalent to P174,260,380.72, upon plaintiffs filing of a bond in an equal amount to
answer for all it may sustain by reason of the attachment if the Court shall finally
adjudge that plaintiff was not entitled thereto.
SO ORDERED.
With plaintiff PCIBANK having posted the requisite bond, a writ of preliminary
attachment was thereafter issued by the trial court. Per records, defendant
ASIAKONSTRUKT did not file any motion for the quashal or dissolution of the writ.
Meanwhile, on August 27, 1999, defendant ASIAKONSTRUKT filed its Answer,[5]
thereunder making admissions and denials. Defendant admits, subject to its defenses,
the material allegations of the Complaint as regards its indebtedness to plaintiff
PCIBANK and its execution of the various deeds of assignment enumerated therein. It,
however, denies, for lack of knowledge sufficient to form a belief as to the truth thereof,
the averments in the Complaint that it has not paid, despite demands, its due and
demandable obligations, as well as the amounts due the plaintiff as itemized in
paragraph 2.06, supra, of the Complaint. It likewise denies PCIBANKs allegations in the
same Complaint in support of its prayer for a writ of preliminary attachment, particularly
its having fraudulently misappropriated for its own use the contract
proceeds/receivables under the contracts mentioned in the several deeds of
assignments, claiming in this respect that it has still remaining receivables from those
contracts.
By way of defenses, defendant pleads in its Answer the alleged severe financial and
currency crisis which hit the Philippines in July 1997, which adversely affected and
ultimately put it out of business. Defendant adds that the deeds of assignments it
executed in favor of PCIBANK were standard forms proposed by the bank as pre-
condition for the release of the loans and therefore partake of the nature of contracts of
adhesion, leaving the defendant to the alternative of taking it or leaving it. By way of
counterclaim, defendant prayed for an award of P1,000,000.00 as and for attorneys fees
and P200,000.00 as litigation expenses.
On January 24, 2000, plaintiff PCIBANK filed a verified Motion for Summary Judgment,[6]
therein contending that the defenses interposed by the defendant are sham and
contrived, that the alleged financial crisis pleaded in the Answer is not a fortuitous event
that would excuse debtors from their loan obligations, nor is it an exempting
circumstance under Article 1262 of the New Civil Code where, as here, the same is
attended by bad faith. In the same motion, PCIBANK also asserts that the deeds of
assignments executed in its favor are not contracts of adhesion, and even if they were,
the same are valid.
To the Motion for Summary Judgment, defendant interposed an Opposition[7] insisting
that its Answer tendered or raised genuine and substantial issues of material facts which
require full-blown trial, namely:
1. Whether or not defendant received all or part of the proceeds/receivables due from
the contracts mentioned in the deeds of assignment at the time the complaint was filed;
2. Granting that defendant received those proceeds/receivables, whether or not
defendant fraudulently misappropriated the same;
3. Whether or not defendant is virtually insolvent as a result of the regionwide economic
crisis that hit Asia, causing the Philippine peso to depreciate drastically; and
4. Whether the parties dealt with each other on equal footing with respect to the
execution of the deeds of assignment as to give the defendant an honest opportunity to
reject the onerous terms imposed therein.
Significantly, defendant did not append to its aforementioned Opposition any affidavit in
support of the alleged genuine issues of material facts mentioned therein.
Before the pending incident (motion for summary judgment) could be resolved by the
trial court, plaintiff PCIBANK waived its claim for exemplary damages and agreed to
reduce its claim for attorneys fees from P1,800,000.00 to P1,260,000.00, but made it
clear that its waiver of exemplary damages and reduction of attorneys fees are subject
to the condition that a full and final disposition of the case is obtained via summary
judgment.
On May 16, 2000, the trial court, acting favorably on PCIBANKs motion for summary
judgment, came out with its Summary Judgment,[8] the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff:
1. the sum of US$4,553,446.06, or its equivalent in Philippine currency at the
time of payment, with interest thereon at the rate of 8.27% per annum from February
24, 1999 until fully paid;
2. P1,260,000.00 as and for attorneys fees; and
3. the costs of suit.
SO ORDERED.
Explains the trial court in rendering its Summary Judgment:
A thorough examination of the parties pleadings and their respective stand in the
foregoing motion, the court finds that indeed with defendants admission of the first
cause of action there remains no question of facts in issue. Further, the proffered
defenses are worthless, unsubstantial, sham and contrived.
Considering that there is no more issue to be resolved, the court hereby grants plaintiffs
Motion and renders Judgment in favor of the plaintiff against the defendant based on
their respective pleadings in accordance with Section 4, Rule 35 of the Rules of Court.
In time, petitioner went to the CA whereat its appellate recourse was docketed as CA-
G.R. CV No. 68189. As stated at the threshold hereof, the CA, in its decision[9] of May
15, 2002, affirmed with modification the Summary Judgment rendered by the trial court,
the modification being as regards the award for attorneys fees which the CA reduced to
P1,000,000.00, to wit:
IN THE LIGHT OF ALL THE FOREGOING, the appeal is PARTIALLY GRANTED. The Decision
appealed from is AFFIRMED with the MODIFICATION THAT THE AWARD FOR ATTORNEYS
FEES is reduced to P1,000,000.00.
SO ORDERED.
With its motion for reconsideration having been denied by the CA in its Resolution[10] of
June 3, 2002, petitioner is now with us via the present recourse, raising the following
issues:
I WHETHER OR NOT THERE IS A GENUINE ISSUE AS TO A MATERIAL FACT WHICH RULES
OUT THE PROPRIETY OF A SUMMARY JUDGMENT.
II WHETHER OR NOT THE AWARD OF ATTORNEYS FEES IS EXORBITANT OR
UNCONSCIONABLE.
We DENY.
As in the two courts below, it is petitioners posture that summary judgment is improper
in this case because there are genuine issues of fact which have to be threshed out
during trial, to wit: (a) whether or not petitioner was able to collect only a portion of the
contract proceeds/receivables it was bound to deliver, remit and tender to respondent
under the several deeds of assignment it executed in favor of the latter; and (b) whether
or not petitioner fraudulently misappropriated and used for its benefit the said
proceeds/receivables. Ergo, so petitioner maintains, genuine triable issues of fact are
present in this case, which thereby precludes rendition of summary judgment.
We are not persuaded.
Under Rule 35 of the 1997 Rules of Procedure, as amended, except as to the amount of
damages, when there is no genuine issue as to any material fact and the moving party is
entitled to a judgment as a matter of law, summary judgment may be allowed.[11]
Summary or accelerated judgment is a procedural technique aimed at weeding out sham
claims or defenses at an early stage of litigation thereby avoiding the expense and loss of
time involved in a trial.[12]
Under the Rules, summary judgment is appropriate when there are no genuine issues of
fact which call for the presentation of evidence in a full-blown trial. Even if on their face
the pleadings appear to raise issues, when the affidavits, depositions and admissions
show that such issues are not genuine, then summary judgment as prescribed by the
Rules must ensue as a matter of law. The determinative factor, therefore, in a motion for
summary judgment, is the presence or absence of a genuine issue as to any material
fact.
A genuine issue is an issue of fact which requires the presentation of evidence as
distinguished from a sham, fictitious, contrived or false claim. When the facts as pleaded
appear uncontested or undisputed, then there is no real or genuine issue or question as
to the facts, and summary judgment is called for. The party who moves for summary
judgment has the burden of demonstrating clearly the absence of any genuine issue of
fact, or that the issue posed in the complaint is patently unsubstantial so as not to
constitute a genuine issue for trial. Trial courts have limited authority to render summary
judgments and may do so only when there is clearly no genuine issue as to any material
fact. When the facts as pleaded by the parties are disputed or contested, proceedings
for summary judgment cannot take the place of trial.[13]
The CA, in its challenged decision, stated and we are in full accord with it:
In the present recourse, the [petitioner] relied not only on the judicial admissions in its
pleadings, more specifically its Answer to the complaint, the testimony of Maricel
Salaveria as well as Exhibits A to T-3, adduced in evidence by the [respondent], during
the hearing on its plea for the issuance, by the Court a quo, of a writ of preliminary
attachment. Significantly, the [petitioner] did not bother filing a motion for the quashal
of the Writ issued by the Court a quo.
It must be borne in mind, too, that the [petitioner] admitted, in its Answer the due
execution and authenticity of the documents appended to the complaint . The
[petitioner] did not deny its liability for the principal amount claimed by the
[respondent] in its complaint. The [petitioner] merely alleged, by way of defenses, that it
failed to pay its account because of the region-wide economic crisis that engulfed Asia,
in July, 1997, and the Deeds of Assignment executed by it in favor of the [respondent]
were contracts of adhesion:
The [petitioner] elaborated on and catalogued its defenses in its Appellants Brief what it
believed, as genuine issues.
(i) Whether or not [petitioner] received all or part of the proceeds/receivables due from
the construction contracts at the time the civil action was filed;
(ii) Granting that [petitioner] received the proceeds/receivables from the
construction contracts, whether or not [petitioner] fraudulently misappropriated the
same;
(iii) Whether or not [petitioner] had become virtually insolvent as a result of the
region-wide economic crisis that hit Asia, causing the Philippine peso to depreciate
dramatically; and
(iv) Whether or not [respondent] and [petitioner] dealt with each other on equal
footing with respect to the execution of the deeds of assignment of receivables as to
give [petitioner] an honest opportunity to reject the onerous terms imposed on it.
However, the [petitioner] failed to append, to its Opposition to the Motion for Summary
Judgment, Affidavits showing the factual basis for its defenses of extraordinary deflation,
including facts, figures and data showing its financial condition before and after the which reads: The debtor in obligations to do shall also be released when the prestation
economic crisis and that the crisis was the proximate cause of its financial distress. It becomes legally or physically impossible without the fault of the obligor.
bears stressing that the [petitioner] was burdened to demonstrate, by its Affidavits and
documentary evidence, that, indeed, the Philippines was engulfed in an extraordinary
deflation of the Philippine Peso and that the same was the proximate cause of the
financial distress, it claimed, it suffered.

Where, on the basis of the records, inclusive of the pleadings of the parties, and the
testimonial and documentary evidence adduced by the [respondent], supportive of its
plea for a writ of preliminary attachment, the [respondent] had causes of action against
the [petitioner], it behooved the [petitioner] to controvert the same with
affidavits/documentary evidence showing a prima facie genuine defense. As the
Appellate Court of Illinois so aptly declared:
The defendant must show that he has a bona fide defense to the action, one which he
may be able to establish. It must be a plausible ground of defense, something fairly
arguable and of a substantial character. This he must show by affidavits or other proof.
The trial court, of course, must determine from the affidavits filed whether the
defendant has interposed a sufficiently good defense to entitle it to defend, but where
defendants affidavits present no substantial triable issues of fact, the court will grant the
motion for summary judgment.
The failure of the [petitioner] to append to its Opposition any Affidavits showing that its
defenses were not contrived or cosmetic to delay judgment created a presumption that
the defenses of the [petitioner] were not offered in good faith and that the same could
not be sustained (Unites States versus Fiedler, et al., Federal Reported, 2nd, 578).
If, indeed, the [petitioner] believed it that was prevented from complying with its
obligations to the [respondent], under its contracts, it should have interposed a
counterclaims for rescission of contracts, conformably with the pronouncement of our
Supreme Court, thus:
The [petitioner] did not. This only exposed the barrenness of the pose of the
[petitioner].
Petitioner cannot, however, successfully take refuge in the said article, since it is
applicable only to obligations to do, and not obligations to give. An obligation to do
includes all kinds of work or service; while an obligation to give is a prestation which
consists in the delivery of a movable or an immovable thing in order to create a real
right, or for the use of the recipient, or for its simple possession, or in order to return it
to its owner.
In this case, petitioner wants this Court to believe that the abrupt change in the political
climate of the country after the EDSA Revolution and its poor financial condition
rendered the performance of the lease contract impractical and inimical to the
corporate survival of the petitioner. (Philippine National Construction Corporation versus
Court of Appeals, et al., 272 SCRA 183, at pages 191-192, supra)
The [petitioner] even failed to append any Affidavit to its Opposition showing how much
it had received from its construction contracts and how and to whom the said
collections had been appended. The [petitioner] had personal and sole knowledge of the
aforesaid particulars while the [respondent] did not.
In fine, we rule and so hold that the CA did not commit any reversible error in affirming
the summary judgment rendered by the trial court as, at bottom, there existed no
genuine issue as to any material fact. We also sustain the CAs reduction in the award of
attorneys fees to only P1,000,000.00, given the fact that there was no full-blown trial.
WHEREFORE, the assailed CA decision is AFFIRMED in toto and this petition is DENIED
for lack of merit.
Costs against petitioner.

The [petitioner] may have experienced financial difficulties because of the 1997
economic crisis that ensued in Asia. However, the same does not constitute a valid
justification for the [petitioner] to renege on its obligations to the [respondent]. The SO ORDERED.
[petitioner] cannot even find solace in Articles 1266 and 1267 of the New Civil Code for,
as declared by our Supreme Court:

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. But the law recognizes exceptions to the principle of the
obligatory force of contracts. One exception is laid down in Article 1266 of the Civil Code,
9. QUISUMBING, J., Chairperson,

second DIVISION

CARPIO,

CARPIO MORALES,

FIL-ESTATE PROPERTIES, INC.,

TINGA, and

Petitioner,
VELASCO, JR., JJ.

G.R. No. 165164

SPOUSES GONZALO and CONSUELO GO,

Respondents.

Promulgated:

- versus -

August 17, 2007

Present:
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

QUISUMBING, J.:
For review on certiorari are the Decision[1] dated June 9, 2004 of the Court of Appeals in
CA-G.R. SP No. 79624, and its Resolution[2] dated August 3, 2004, denying the motion
for reconsideration.
any fluctuation in the value of the peso is a daily occurrence which is foreseeable and its
deleterious effects avoided by economic measures. The HLURB went on to say that when
petitioner discontinued the development of its condominium project, it failed to fulfill its
contractual obligations to the spouses. And following Article 1475[3] of the Civil Code,
upon perfection of the contract, the parties, here the spouses Go, may demand
performance. And under Article 1191[4] of the same code, should one of the parties, in
this instance Fil-Estate, fail to comply with the obligation, the aggrieved party may
choose between fulfillment or rescission of the obligation, with damages in either case.
Inasmuch as Fil-Estate could no longer fulfill its obligation, the spouses Go may ask for
rescission of the contract with damages. The dispositive portion of the decision reads:
WHEREFORE, the foregoing considered, judgment is hereby rendered as follows:

The basic facts in this case are undisputed.
On December 29, 1995, petitioner Fil-Estate Properties, Inc. (Fil-Estate) entered into a
contract to sell a condominium unit to respondent spouses Gonzalo and Consuelo Go at
Eight Sto. Domingo Place, a condominium project of petitioner located on Sto. Domingo
Avenue, Quezon City. The spouses paid a total of P3,439,000.07 of the full contract price
set at P3,620,000.00.
1. Ordering the respondent, Fil-Estate Properties, Inc., to refund to the complainants,
P3,439,000.07 (the amount proved) plus 12% interest thereon reckoned from 09 August
1999 (the date the respondent received the demand letter) until the same is fully paid.
2. Ordering the respondent to pay to the complainants P25,000.00 attorneys fees as
and by way of damages.

All other claims and counterclaims are dismissed.

Because petitioner failed to develop the condominium project, on August 4, 1999, the
spouses demanded the refund of the amount they paid, plus interest. When petitioner
did not refund the spouses, the latter filed a complaint against petitioner for
IT IS SO ORDERED.[5]
reimbursement of P3,620,000 representing the lump sum price of the condominium
unit, plus interest, P100,000 attorneys fees, and expenses of litigation before the
Housing and Land Use Regulatory Board (HLURB).
The Board of Commissioners of the HLURB denied petitioners petition for review and
consequent motion for reconsideration.[6] The Office of the President dismissed
petitioners appeal and denied its motion for reconsideration.[7]
In answer, petitioner claimed that respondents had no cause of action since the delay in
the construction of the condominium was caused by the financial crisis that hit the Asian
region, a fortuitous event over which petitioner had no control.
On appeal, asserting that both the HLURB and the Office of the President committed
reversible errors, Fil-Estate asked the Court of Appeals to set aside the orders it is
appealing.
On July 18, 2000, the HLURB Regional Director approved the decision of the Housing and
Land Use Arbiter in favor of the spouses Go. The HLURB ratiocinated that the Asian
financial crisis that resulted in the depreciation of the peso is not a fortuitous event as
The Court of Appeals affirmed the actions taken by the HLURB and the Office of the
President and declared that the Asian financial crisis could not be considered a
fortuitous event and that respondents right is provided for in Section 23[8] of
Presidential Decree (P.D.) No. 957, otherwise known as The Subdivision and
Condominium Buyers Protective Decree. The appellate court also noted that there was
yet no crisis in 1995 and 1996 when the project should have been started, and petitioner
cannot blame the 1997 crisis for failure of the project, nor for even not starting it,
because the project should have been completed by 1997.
The appellate court denied petitioners motion for reconsideration.
Hence, this petition raising two issues for our resolution as follows:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE ASIAN FINANCIAL
CRISIS IS NOT A FORTUITOUS EVENT THAT WOULD EXCUSE THE DELIVERY BY PETITIONER
OF THE SUBJECT CONDOMINIUM UNIT TO RESPONDENTS.
II.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING PETITIONER LIABLE FOR THE
PAYMENT OF ATTORNEYS FEES.[9]
On the first issue, did the Court of Appeals err in ruling that the Asian financial crisis was
not a fortuitous event?
Petitioner, citing Article 1174[10] of the Civil Code, argues that the Asian financial crisis
was a fortuitous event being unforeseen or inevitable. Petitioner likewise cites Servando
v. Philippine Steam Navigation Co.,[11] to bolster its case. Petitioner explains that the
extreme economic exigency and extraordinary currency fluctuations could not have
been reasonably foreseen and were beyond the contemplation of both parties when
they entered the contract. Petitioner further asserts that the resultant economic
collapse of the real estate industry was unforeseen by the whole Asia and if it was
indeed foreseeable, then all those engaged in the real estate business should have
foreseen the impending fiasco. Petitioner adds that it had not committed any fraud; that
it had all the required government permits; and that it had not abandoned the project
but only suspended the work. It also admits its obligation to complete the project. It says
that it had in fact asked the HLURB for extension to complete it.[12]
In their Comment, respondents submit that the instant petition be rejected outright for
the reason that petitioner has not raised any question of law in the instant petition. The
questions of whether or not the Asian financial crisis is a fortuitous event, and whether
or not attorneys fees should be granted, are questions of facts which the Court of
Appeals recognized as such.
Respondent spouses reiterate that contrary to what petitioner avers, the delay in the
construction of the building was not attributable to the Asian financial crisis which
happened in 1997[13] because petitioner did not even start the project in 1995 when it
should have done, so that it could have finished it in 1997, as stipulated in the contract.
Preliminarily, respondents bring to the attention of this Court the strange discrepancy in
the dates of notarization of the Certification of Non-Forum Shopping and the Affidavit of
Service both notarized on September 24, 2004, while the Secretarys Certification was
notarized a day earlier on September 23, 2004. However, we shall not delve into
technicalities, but we shall proceed with the resolution of the issues raised on the
merits.
Indeed, the question of whether or not an event is fortuitous is a question of fact. As a
general rule, questions of fact may not be raised in a petition for review for as long as
there is no variance between the findings of the lower court and the appellate court, as
in this case where the HLURB, the Office of the President, and the Court of Appeals were
agreed on the fact.
Worthy of note, in a previous case, Asian Construction and Development Corporation v.
Philippine Commercial International Bank,[14] the Court had said that the 1997 financial
crisis that ensued in Asia did not constitute a valid justification to renege on obligations.
We emphatically stressed the same view in Mondragon Leisure and Resorts Corporation
v. Court of Appeals,[15] that the Asian financial crisis in 1997 is not among the fortuitous secure the services of counsel over eight years to protect their interest due to
events contemplated under Article 1174 of the Civil Code. petitioners delay in the performance of their clear obligation.

Also, we cannot generalize that the Asian financial crisis in 1997 was unforeseeable and WHEREFORE, the petition is DENIED for lack of merit. Petitioner is hereby ordered (1) to
beyond the control of a business corporation. It is unfortunate that petitioner apparently reimburse respondents P3,439,000.07 at 6% interest starting August 4, 1999 until full
met with considerable difficulty e.g. increase cost of materials and labor, even before the payment, and (2) to pay respondents P100,000.00 attorneys fees. Costs against
scheduled commencement of its real estate project as early as 1995. However, a real petitioner.
estate enterprise engaged in the pre-selling of condominium units is concededly a
master in projections on commodities and currency movements and business risks. The
fluctuating movement of the Philippine peso in the foreign exchange market is an SO ORDERED.
everyday occurrence, and fluctuations in currency exchange rates happen everyday,
thus, not an instance of caso fortuito.

Are respondents entitled to reimbursement of the amount paid, plus interest and
attorneys fees?

Yes. Section 23 of P.D. No. 957 is clear on this point.

It will be noted that respondents sent a demand letter dated August 4, 1999 to Fil-Estate
asking for the return of the total amount paid including amortization interests and legal
interest due thereon.[16] The latter did not respond favorably, and so the spouses filed a
complaint demanding the reimbursement of P3,620,000 representing the lump sum
price of the condominium unit with interest at the legal rate, and P100,000 attorneys
fees. But the respondents actually sought the refund of P3,620,000.00, the lump sum
cost of the condominium, more than their actual payment of P3,439,000.07. We are
thus constrained to award only P3,439,000.07, representing the sum of their actual
payments plus amortization interests and interest at legal rate which is 6% per annum
from the date of demand on August 4, 1999. We are not unaware that the appellate
court pegged the interest rate at 12% on the basis of Resolution No. R-421, Series of
1988 of the HLURB. But, conformably with our ruling in Eastern Shipping Lines, Inc. v.
Court of Appeals,[17] the award of 12% interest on the amount of refund must be
reduced to 6%.

Moreover, we are constrained to modify the Court of Appeals grant of attorneys fees
from P25,000 to P100,000 as just and equitable since respondents were compelled to
10.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6648 July 25, 1955
VICTORIAS PLANTERS ASSOCIATION, INC., NORTH NEGROS PLANTERS ASSOCIATION,
INC., FERNANDO GONZAGA, JOSE GASTON and CESAR L. LOPEZ, on their own behalf and
on behalf of other sugar cane planters in Manapla, Cadiz and Victorias Districts,
petitioners-appellees,
vs.
VICTORIAS MILLING CO., INC., respondent-appellant.
Ross, Selph, Carrascoso and Janda for appellant.
Tañada, Pelaez and Teehankee for appellees.
PADILLA, J.:
This is an action for declaratory judgment under Rule 66. The relief prayed for calls for an
interpretation of contracts entered into by and between the sugar cane planters in the
districts of Manapla, Cadiz and Victorias, Occidental Negros, and the Victorias Milling
Company, Inc. After issues had been joined the parties submitted the case for judgment
upon the testimony of Jesus Jose Ossorio and the following stipulation of facts:
1. That petitioners Victorias Planters Association, Inc. and North Negros Planters
Association, Inc. are non-stock corporations duly established and existing under and by
virtue of the laws of the Philippines, with main offices at Victorias, Negros Occidental,
and Manapla, Negros Occidental, respectively, and were organized by, and are composed
of, sugar cane planters in the districts of Victorias, Manapla and Cadiz, respectively,
having been established principally as the representative entities of the numerous sugar
cane planters in said districts whose sugar cane productions are milled by the
respondent corporation, with the main object of safeguarding their interests and of
taking up with the latter problems and questions which from time to time, may come up
between the said respondent corporation the said sugar cane planters; the other
petitioners are Filipinos, of legal age, and together with numerous other sugar cane
planters who own sugar cane producing properties at Victorias, Manapla, and Cadiz
Districts, Negros Occidental, are bona fide officials and members of either one of the
two petitioner associations; that petitioner Fernando Gonzaga is a resident of Victorias,
Negros Occidental, petitioner Jose Gaston is a resident of Victorias, Negros Occidental,
and petitioner Cesar L. Lopez is a resident of Bacolod City, Negros Occidental; and that
said petitioners bring this action for the benefit and on behalf of all their fellow sugar
cane planters, owners of sugar cane producing lands in the said districts of Victorias,
Manapla, and Cadiz, whose sugar cane productions are milled by respondent
corporation, and who are so numerous that it would be impractical to include them all
as parties herein;
2. That respondent Victorias Milling Co., Inc. is a corporation likewise duly organized and
established under and by virtue of the laws of the Philippines, with main offices at Ayala
Building Manila, where it may be served with summons;
3. That at various dates, from the year 1917 to 1934, the sugar cane planters pertaining
to the districts of Manapla and Cadiz, Negros Occidental, executed identical milling
contracts, setting forth the terms and conditions under which the sugar central "North
Negros Sugar Co. Inc." would mill the sugar produced by the sugar cane planters of the
Manapla and Cadiz districts;
A copy of the standard form of said milling contracts with North Negros Sugar Co., Inc. is
hereto attached and made an integral part hereof as Annex "A.
As may be seen from the said standard form of milling contract, Annex "A," the sugar
cane planters of Manapla and Cadiz, Negros Occidental had executed on November 17,
1916 with Miguel J. Ossorio, a contract entitled "Contrato de la Central Azucarrera de
300 Toneladas," whereby said Miguel J. Ossorio was given a period up to December 31,
1916 within which to make a study of and decide whether he would construct a sugar
central or mill with a capacity of milling 300 tons of sugar cane every 24 hours and
setting forth the mutual obligations and undertakings of such central and the planters
and the terms and conditions under which the sugar cane produced by said sugar can
planters would be milled in the event of the construction of such sugar central by said
Miguel J. Ossorio. Such central was in fact constructed by said Miguel J. Ossorio in
Manapla, Negros Occidental, through the North Negros Sugar Co., Inc., where after the
standard form of milling contracts (Annex "A") were executed, as above stated.
The parties cannot stipulate as to the milling contracts executed by the planters by
Victorias, Negros Occidental, other than as follows; a number of them executed such
milling contracts with the North Negros Sugar Co., Inc., as per the standard forms hereto
attached and made an integral part as Annexes "B" and "B-1," while a number of them
executed milling contracts with the Victorias Milling Co., Inc., which was likewise
organized by Miguel J. Ossorio and which had constructed another Central at Victorias,
Negros Occidental, as per the standard form hereto attached and made an integral part
hereof as Annex "C".
4. The North Negros Sugar Co., Inc. had its first molienda or milling during the 1918-1919
crop year, and the Victorias Milling Co., had its first molienda or milling during the 1921-
1922 crop year.
Subsequent moliendas or millings took place every successive crop year thereafter,
except the 6-year period, comprising 4 years of the last World War II and 2 years of post-
war reconstruction of respondent's central at Victorias, Negros Occidental.
5. That after the liberation, the North Negros Sugar Co., Inc. did not reconstruct its
destroyed central at Manapla, Negros Occidental, and in 1946, it advised the North
Negros Planters Association, Inc. that it had made arrangements with the respondent
Victorias Milling Co., Inc. for said respondent corporation to mill the sugar cane
produced by the planters of Manapla and Cadiz holding milling contracts with it. Thus,
after the war, all the sugar cane produced by the planters of petitioner associations, in
Manapla, Cadiz, as well as in Victorias, who held milling contracts, were milled in only
one central, that of the respondent corporation at Victorias;
6. Beginning with the year 1948, and in the following years, when the planters-members
of the North Negros Planters Association, Inc. considered that the stipulated 30-year
period of their milling contracts executed in the year 1918 had already expired and
terminated in the crop year 1947-1948, and the planters-members of the Victorias
Planters Association, Inc. likewise considered the stipulated 30-year period of their
milling contracts, as having likewise expired and terminated in the crop year 1948-1949,
under the pertinent provisions of the standard milling contract (Annex "A") on the
duration thereof, which provided in Par. 21 thereof as follows:
(a) Que entregaran a la Central de la `North Negros Sugar Co., Inc.' o a la que se
construya en Victorias por Don Miguel J. Ossorio o sus cesionarios por espacio de treinta
(30) años desde la primera molienda, la caña que produzcan sus respectivas haciendas,
obligandose ademas a sembrar anualmente con cañadulce por lo menos en tres quintas
partes de su extension total apropiado para caña, incluyendo en esta denominacion
tanto la siembra con puntas nuevas como el cultivo del retoño o cala-anan y sujetando la
siembra a las epocas convenientes designadas por el comite de hacenderos a fin de
poder proporcionar caña a la Central de conformidad con las clausulas 17 y 18 de esta
escritura.
xxx xxx xxx
(i) Los hacenderos' imponen sobre sus haciendas mencionadas y citadas en esta
escritura servidumbres voluntarias a favor de Don Miguel J. Ossorio de sembrar caña por
lo menos en tres quintas partes (3/5) de su extension superficial y entregar la caña que
produzcan a Don Miguel J. Ossorio, de acuerdo con este contrato, por espacio de treinta
(30) años, a contar un (1) año desde la fecha de la primera molienda. repeated
representation were made with respondent corporation for negotiations regarding the
execution of new milling contracts which would take into consideration the charged
circumstances presently prevailing in the sugar industry as compared with those
prevailing over 30 years ago and would provide for an increased participation in the
milled sugar for the benefit of the planters and their workers.
7. That notwithstanding these repeated representations made by the herein petitioners
with the respondent corporation for the negotiation and execution of new milling
contracts, the herein respondent has refused and still refuses to accede to the same,
contending that under the provisions of the mining contract (Annex "A".) "It is the view
of the majority of the stockholder-investors, that our contracts with the planters call for
30 years of milling — not 30 years in time" and that "as there was no milling during 4
years of the recent war and two years of reconstruction, when these six years are added
on to the earliest of our contracts in Manapla, the contracts by this view terminate in
the autumn of 1952," and the "the contracts for the Victorias Planters would terminate
in 1957, and still later for those in the Cadiz districts," and that "apart from the
contractual agreements, the Company believes these war and reconstruction years
accrue to it in equity.
The trial court rendered judgment the dispositive part of which is —
Wherefore, the Court renders judgment in favor of the petitioners and against the
respondent and declares that the milling contracts executed between the sugar cane
planters of Victorias, Manapla and Cadiz, Negros Occidental, and the respondent
corporation or its predecessors-in-interest, the North Negros Sugar Co., Inc., expired and
terminated upon the lapse of the therein stipulated 30-year period, and that respondent
corporation is not entitled to claim any extension of or addition to the said 30-year term
or period of said milling contracts by virtue of an equivalent to 6 years of the last war
and reconstruction of its central, during which there was no planting and/or milling.
From this judgment the respondent corporation has appealed.
The appellant contends that the term stipulated in the contracts is thirty milling years
and not thirty calendar years and postulates that the planters fulfill their obligation —
the six installments of their indebtedness--which they failed to perform during the six
milling years from 1941-42 to 1946-47. The reason the planters failed to deliver the
sugar cane was the war or a fortuitious event. The appellant ceased to run its mill due to
the same cause.
Fortuitious event relieves the obligor from fulfilling a contractual obligation.1 The fact
that the contracts make reference to "first milling" does not make the period of thirty
years one of thirty milling years. The term "first milling" used in the contracts under
consideration was for the purpose of reckoning the thirty-year period stipulated therein.
Even if the thirty-year period provided for in the contracts be construed as milling years,
the deduction or extension of six years would not be justified. At most on the last year of
the thirty-year period stipulated in the contracts the delivery of sugar cane could be
extended up to a time when all the amount of sugar cane raised and harvested should
have been delivered to the appellant's mill as agreed upon. The seventh paragraph of
Annex "C", not found in the earlier contracts (Annexes "A", "B", and "B-1"), quoted by
the appellant in its brief, where the parties stipulated that in the event of flood,
typhoon, earthquake, or other force majeure, war, insurrection, civil commotion,
organized strike, etc., the contract shall be deemed suspended during said period, does
not mean that the happening of any of those events stops the running of the period
agreed upon. It only relieves the parties from the fulfillment of their respective
obligations during that time — the planters from delivering sugar cane and the central
from milling it. In order that the central, the herein appellant, may be entitled to
demand from the other parties the fulfillment of their part in the contracts, the latter
must have been able to perform it but failed or refused to do so and not when they were
prevented by force majeure such as war. To require the planters to deliver the sugar cane
which they failed to deliver during the four years of the Japanese occupation and the
two years after liberation when the mill was being rebuilt is to demand from the obligors
the fulfillment of an obligation which was impossible of performance at the time it
became due. Nemo tenetur ad impossibilia. The obligee not being entitled to demand
from the obligors the performance of the latters' part of the contracts under those
circumstances cannot later on demand its fulfillment. The performance of what the law
has written off cannot be demanded and required. The prayer that the plaintiffs be
compelled to deliver sugar cane to the appellant for six more years to make up for what
they failed to deliver during those trying years, the fulfillment of which was impossible,
if granted, would in effect be an extension of the term of the contracts entered into by
and between the parties.
In accord with the rule laid down in the case of Lacson vs. Diaz, 47 Off. Gaz., Supp. No.
12, p. 337, where despite the fact that the lease contract stipulated seven sugar crops
and not seven crop years as the term thereof, we held that such stipulation
contemplated seven consecutive agricultural years and affirmed the judgment which
declared that the leasee was not entitled to an extension of the term of the lease for the
number of years the country was occupied by the Japanese Army during which no sugar
cane was planted2 we are of the opinion and so hold that the thirty-year period
stipulated in the contracts expired on the thirtieth agricultural year. The period of six
years — four during the Japanese occupation when the appellant did not operate its mill
and the last two during which the appellant reconstructed its mill — cannot be deducted
from the thirty-year period stipulated in the contracts.
The judgment appealed from is affirmed, with costs against the appellant.
11. respondent's daily production of 8,000 cases. Unlike petitioner, Aren Enterprises
rendered service outside private respondent's plant.
Republic of the Philippines

SUPREME COURT
On April 25, 1990, fire broke out in private respondent's plant, destroying, among other
Manila places, the area where petitioner did its work. As a result, petitioner's work was
stopped.

SECOND DIVISION

G.R. No. 119729 January 21, 1997 On May 15, 1990, petitioner asked private respondent to allow it to resume its service,
but petitioner was advised that on account of the fire, which had "practically burned all .
. . old soft drink bottles and wooden shells," private respondent was terminating their
contract.
ACE-AGRO DEVELOPMENT CORPORATION, petitioner,

vs.
Petitioner expressed surprise at the termination of the contract and requested private
COURT OF APPEALS and COSMOS BOTTLING CORPORATION, respondents.
respondent, on June 13, 1990, to reconsider its decision and allow petitioner to resume
MENDOZA, J.: its work in order to "cushion the sudden impact of the unemployment of many of [its]
workers." As it received no reply from private respondent, petitioner, on June 20, 1990,
informed its employees of the termination of their employment. Petitioner's
memorandum 1 read:
This case originated in a complaint for damages for breach of contract which petitioner
filed against private respondent. From the decision of the Regional Trial Court, Branch
72, Malabon, Metro Manila, finding private respondent guilty of breach of contract and
ordering it to pay damages, private respondent appealed to the Court of Appeals which MEMORANDUM TO : All Workers/Union Members
reversed the trial court's decision and dismissed the complaint for lack of merit.
THRU : Mr. Angelito B. Catalan
Petitioner in turn moved for a reconsideration, but its motion was denied. Hence, this
petition for review on certiorari. Local Chapter President

The facts are as follows: Bisig Manggagawa sa Ace Agro-NAFLU

Petitioner Ace-Agro Development Corporation and private respondent Cosmos Bottling This is to inform you that the Cosmos Bottling Corp. has sent a letter to Ace Agro-
Corporation are corporations duly organized and existing under Philippine laws. Private Development Corp. terminating our contract with them.
respondent Cosmos Bottling Corp. is engaged in the manufacture of soft drinks. Since
1979 petitioner Ace-Agro Development Corp. (Ace-Agro) had been cleaning soft drink
bottles and repairing wooden shells for Cosmos, rendering its services within the However, we are still doing what we can to save our contract and resume our
company premises in San Fernando, Pampanga. The parties entered into service operations, though this might take some time.
contracts which they renewed every year. On January 18, 1990, they signed a contract
covering the period January 1, 1990 to December 31, 1990. Private respondent had
earlier contracted the services of Aren Enterprises in view of the fact that petitioner
could handle only from 2,000 to 2,500 cases a day and could not cope with private We will notify you whatever would be the outcome of our negotiation with them in due
time.
 Our workers, who have been anxiously waiting for the resumption of the operations and
who are the ones most affected by your sudden decision, are now becoming restless due
Truly yours, to the financial difficulties they are now suffering.

ACE AGRO-DEVELOPMENT CORP. We are, therefore, again seeking for the reconsideration of your decision to help
alleviate the sufferings of the displaced workers, which we also have to consider for
humanitarian reason.
(Sgd.) ANTONIO L. ARQUIZA

Manager
Yours very truly,

This led the employees to file a complaint for illegal dismissal before the Labor Arbiter
against petitioner and private respondent. ACE AGRO-DEVELOPMENT CORP.

On July 17, 1990, petitioner sent another letter to private respondent, reiterating its (Sgd.) ANTONIO I. ARQUIZA
request for reconsideration. Its letter 2 read: Manager

COSMOS BOTTLING CORPORATION In response, private respondent advised petitioner on August 28, 1990 that the latter
San Isidro MacArthur Highway could resume the repair of wooden shells under terms similar to those contained in its
contract but work had to be done outside the company premises. Private respondent's
San Fernando, Pampanga letter 3 read:

Attention: Mr. Norman P. Uy MR. ANTONIO I. ARQUIZA

General Services Manager Manager

ACE-AGRO DEVELOPMENT CORPORATION

Gentlemen: 165 J.P. Bautista Street

Malabon, Metro Manila

In our letter to you dated June 13, 1990 seeking your kind reconsideration of your
sudden drastic decision to terminate our mutually beneficial contract of long standing, it
is more than a month now but our office has not received a reply from you. Dear Mr. Arquiza:
We are pleased to inform you that COSMOS BOTTLING CORPORATION, San Fernando
Plant is again accepting job-out contract for the repair of our wooden shells.
This is to officially inform you that you can now resume the repair of wooden shells
inside the plant according to your existing contract with the Company.

Work shall be done outside the premises of the plant and under similar terms you
previously had with the company. We intend to give you priority so please see or contact
me at my office soonest for the particulars regarding the job. Please see Mr. Ener G. Ocampo, OIC-PDGS, on your new job site in the Plant.

Here is looking forward to doing business with you at the earliest possible time. Very truly yours,

(Sgd.) DANILO M. DE CASTRO COSMOS BOTTLING CORPORATION

Plant General Manager

(Sgd.) MICHAEL M. ALBINO

Petitioner refused the offer, claiming that to do its work outside the company's premises VP-Luzon/Plant General Manager
would make it (petitioner) incur additional costs for transportation which "will eat up the
meager profits that [it] realizes from its original contract with Cosmos." In subsequent
meetings with Danilo M. de Castro, Butch Ceña and Norman Uy of Cosmos, petitioner's On November 17, 1990, petitioner rejected private respondent's offer, this time, citing
manager, Antonio I. Arquiza, asked for an extension of the term of the contract in view the fact that there was a pending labor case. Its letter 5 to private respondent stated:
of the suspension of work. But its request was apparently turned down.

Mr. Michael M. Albino

On November 7, 1990, private respondent advised petitioner that the latter could then
VP-Luzon/Plant General Manager
resume its work inside the plant in accordance with its original contract with Cosmos.
Private respondent's letter 4 stated: Cosmos Bottling Corporation

San Fernando, Pampanga

MR. ANTONIO I. ARQUIZA

General Manager Dear Mr. Albino,

Ace-Agro Development Corporation

165 J. P. Bautista St., Malabon This is in connection with your letter dated November 7, 1990 regarding the resumption
of the repair of your wooden shells inside San Fernando, Pampanga Plant according to
Metro Manila
the existing contract with your company.

Dear Mr. Arquiza:

At present, there is a pending case before the Department of Labor and Employment in
San Fernando, Pampanga which was a result of the premature termination of the said
existing contract with your company. In view of that, we find it proper for us to work for
the resolution of the said pending case and include in the Compromise Agreement the
matter of the resumption of the repair of wooden shells in your San Fernando,
Pampanga Plant.
Thank you very much.
Very truly yours,
ACE AGRO-DEVELOPMENT CORP.
(Sgd.) ANTONIO I. ARQUIZA
Manager
On January 3, 1991, petitioner brought this case against private respondent for breach of
contract and damages in the Regional Trial Court of Malabon. It complained that the
termination of its service contract was illegal and arbitrary and that, as a result, it stood
to lose profits and to be held liable to its employees for backwages, damages and/or
separation pay.
On January 16, 1991, a decision was rendered in the labor case, finding petitioner liable
for the claims of its employees. Petitioner was ordered to reinstate the employees and
pay them backwages. However, private respondent Cosmos was absolved from the
employees' claims on the ground that there was no privity of contract between them
and private respondent.
On the other hand, in its decision rendered on November 21, 1991, the RTC found
private respondent guilty of breach of contract and ordered it to pay damages to
petitioner. Petitioner's claim for reimbursement for what it had paid to its employees in
the labor case was denied. The dispositive portion of the trial court's decision read:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff Ace-
Agro Development Corporation and against defendant Cosmos Bottling Corporation,
ordering the latter to pay to the former the following:
a) The amount of P1,008,418.01 as actual damages;
b) P100,000.00 as corrective or exemplary damages;
c) The amount of P50,000.00 as and for attorney's fees; and
d) Costs and expenses of litigation.
Defendant's counterclaims are dismissed.
SO ORDERED.
Private respondent appealed to the Court of Appeals, which on December 29, 1994,
reversed the trial court's decision and dismissed petitioner's complaint. The appellate
court found that it was petitioner which had refused to resume work, after failing to
secure an extension of its contract. Petitioner now seeks a review of the Court of
Appeals' decision.
First. Petitioner claims that the appellate court erred "in ruling that respondent was
justified in unilaterally terminating the contract on account of a force majeure." Quite
possibly it did not understand the appellate court's decision, or it would not be
contending that there was no valid cause for the termination of the contract but only for
its suspension. The following is what the appellate court said: 6
Article 1231 of the New Civil Code on extinguishment of obligations does not specifically
mention unilateral termination as a mode of extinguishment of obligation but, according
to Tolentino, "there are other causes of extinguishment of obligations which are not
expressly provided for in this chapter" (Tolentino, Civil Code of the Phils., Vol. IV, 1986
ed., p. 273). He further said:
But in some contracts, either because of its indeterminate duration or because of the
nature of the prestation which is its object, one of the parties may free himself from the
contractual tie by his own will (unilateral extinguishment); . . . (p. 274-275, Ibid)
And that was just what defendant-appellant did when it unilaterally terminated the
agreement it had with plaintiff-appellee by sending the May 23, 1990 letter. As per its
letter, the reason given by defendant-appellant for unilaterally terminating the
agreement was because the April 25, 1990 fire practically burned all of the softdrink
bottles and wooden shells which plaintiff-appellee was working on under the
agreement. What defendant-appellant was trying to say was that the prestation or the
object of their agreement had been lost and destroyed in the above-described fire.
Apparently, the defendant-appellant would like this situation to fall within what —
according to Tolentino — would be:
. . . (O)bligations may be extinguished by the happening of unforeseen events, under
whose influence the obligation would never have been contracted, because in such
cases, the very basis upon which the existence of the obligation is founded would be
wanting.
Both parties admitted that the April 25, 1990 fire was a force majeure or unforeseen
event and that the same even burned practically all the softdrink bottles and wooden
shells — which are the objects of the agreement. But the story did not end there.
It is true that defendant-appellant still had other bottles that needed cleaning and
wooden shells that needed repairing (pp. 110-111, orig. rec.); therefore, the suspension
of the work of the plaintiff-appellee brought about by the fire is, at best, temporary as
found by the trial court. Hence, plaintiff-appellee's letters of reconsideration of the
termination of the agreement addressed to defendant-appellant dated June 13, 1990
and July 17, 1990.
It is obvious that what petitioner thought was the appellate court's ruling is merely its
summary of private respondent's allegations. Precisely the appellate court, does not
agree with private respondent, that is why, in the last paragraph of the above excerpt,
the court says that there was no cause for terminating the contract but at most a
"temporary suspension of work." The court thus rejects private respondent's claim that,
as a result of the fire, the obligation of contract must be deemed to have been
extinguished.
Nonetheless, the Court of Appeals found that private respondent had reconsidered its
decision to terminate the contract and tried to accommodate the request of petitioner,
first, by notifying petitioner on August 28, 1990 that it could resume work provided that
this was done outside the premises and, later, on November 7, 1990, by notifying
petitioner that it could then work in its premises, under the terms of their contract.
However, petitioner unjustifiably refused the offer because it wanted an extension of the
contract to make up for the period of inactivity. As the Court of Appeals said in its
decision: 7
It took defendant-appellant time to make a reply to plaintiff-appellee's letters. But when
it did on August 28, 1990, it granted plaintiff-appellee priority to resume its work under
the terms of their agreement (but outside its premises), and the plaintiff-appellee
refused the same on the ground that working outside the defendant-appellant's San
Fernando Plant would mean added transportation costs that would offset any profit it
would earn.
The appellee was without legal ground to refuse resumption of work as offered by the
appellant, under the terms of their above agreement. It could not legally insist on
staying inside property it did not own, nor was under lease to
it . . . . In its refusal to resume its work because of the additional transportation costs to
be brought about by working outside the appellant's San Fernando plant, the appellee
could be held liable for damages for breach of contract.
xxx xxx xxx
Thereafter, appellant sent its November 7, 1990 letter to appellee, this time specifically
stating that plaintiff-appellee can now resume work in accordance with their existing
agreement. This time, it could not be denied that by the tenor of the letter, appellant
was willing to honor its agreement with appellee, that it had finally made a
reconsideration of appellee's plea to resume work under the contract. But again,
plaintiff-appellee refused this offer to resume work.
Why did the appellee refuse to resume work? Its November 17, 1990 letter stated that it
had something to do with the settlement of the NLRC case filed against it by its
employees. But that was not the real reason. In his cross-examination, the witness for
appellee stated that its real reason for refusing to resume work with the appellant was
— as in its previous refusal — because it wanted an extension of the period or duration
of the contract beyond December 31, 1991, to cover the period within which it was
unable to work.
The agreement between the appellee and the appellant is with a resolutory period,
beginning from January 1, 1990 and ending on December 31, 1990. When the fire broke
out on April 25, 1990, there resulted a suspension of the appellee's work as per
agreement. But this suspension of work due to force majeure did not merit an automatic
extension of the period of the agreement between them. According to Tolentino:
The stipulation that in the event of a fortuitous event or force majeure the contract shall
be deemed suspended during the said period does not mean that the happening of any
of those events stops the running of the period the contract has been agreed upon to
run. It only relieves the parties from the fulfillment of their respective obligations during
that time. If during six of the thirty years fixed as the duration of a contract, one of the
parties is prevented by force majeure to perform his obligation during those years, he
cannot after the expiration of the thirty-year period, be compelled to perform his
obligation for six more years to make up for what he failed to perform during the said six
years, because it would in effect be an extension of the term of the contract. The
contract is stipulated to run for thirty years, and the period expires on the thirtieth year;
the period of six years during which performance by one of the parties is prevented by
force majeure cannot be deducted from the period stipulated.
In fine, the appellant withdrew its unilateral termination of its agreement with appellee
in its letter dated November 7, 1990. But the appellee's refusal to resume work was, in
effect, a unilateral termination of the parties' agreement — an act that was without
basis. When the appellee asked for an extension of the period of the contract beyond
December 31, 1990 it was, in effect, asking for a new contract which needed the consent
of defendant-appellant. The appellee might be forgiven for its first refusal (pertaining to
defendant-appellant's August 28, 1990 letter), but the second refusal must be construed
as a breach of contract by plaintiff-appellee. . . .
The Court of Appeals was right that petitioner had no basis for refusing private
respondent's offer unless petitioner was allowed to carry out its work in the company
premises. That petitioner would incur additional cost for transportation was not a good
reason for its refusal. Petitioner has not shown that on August 28, 1990, when it was
notified of the private respondent's offer, the latter's premises had so far been restored
so as to permit petitioner to resume work there. In fact, even when petitioner was finally
allowed to resume work within the plant, it was not in the former work place but in a
new one, which shows that private respondent's reason for not granting petitioner's
request was not just a pretext.
Nor was petitioner justified in refusing to resume work on November 7 when it was
again notified by petitioner to work. Although it cited the pending labor case as reason
for turning down private respondent's offer, it would appear that the real reason for
petitioner's refusal was the fact that the term of the contract was expiring in two
months and its request for an extension was not granted. But, as the appellate court
correctly ruled, the suspension of work under the contract was brought about by force
majeure. Therefore, the period during which work was suspended did not justify an
extension of the term of the contract. 8 For the fact is that the contract was subject to a
resolutory period which relieved the parties of their respective obligations but did not
stop the running of the period of their contract.
The truth of the matter is that while private respondent had made efforts towards
accommodation, petitioner was unwilling to make adjustments as it insisted that it
"cannot profitably resume operation under the same terms and conditions [of] the
terminated contract but with an outside work venue [as] transportation costs alone will
eat up the meager profit that Ace-Agro realizes from its original contract." 9 While this
so-called "job-out" offer of private respondent had the effect of varying the terms of the
contract in the sense that it could increase its cost, what petitioner did not seem to
realize was that the change was brought about by circumstances not of private
respondent's making.
Again when private respondent finally advised petitioner on November 7, 1990 to work
under the strict terms of its contract and inside the plant, petitioner thought only of its
interest by insisting that the contract be extended. Petitioner's manager, Antonio I.
Arquiza, testified that he tried to secure a term extension for his company but his
request was turned down because the management of private respondent wanted a
new contract after the expiration of the contract on December 31, 1990. Arquiza
testified. 10
A [Butch Ceña] told me that Cosmos is agreeable to allow us to resume our operation
and when I inquired about the extension of the contract he told me that I better refer
the matter to Mr. Norman Uy.
Q Did you see Mr. Norman Uy?
A Yes, sir, when I went to see Mr. Norman Uy he asked me why I was there and he told
me why I did not start operation I told him that what we are expecting that Mr. Ceña
would give me the formal letter regarding the resumption of the operation and honoring
of contract and he said that our price was so high and if we are willing to use said
contract and when I said yes he told me that we will just send you a letter considering
that another contractor repairing our damaged shells and cleaning of dirty bottles.
When I asked him that does that mean that the meeting I had with Mr. Ceña, he told me
that was null and void and he told me that Mr. Ceña want a new contract.
As already stated, because the suspension of work was due to force majeure, there was
no justification for petitioner's demand for an extension of the terms of the contract.
Private respondent was justified in insisting that after the expiration of the contract, the
parties must negotiate a new one as they had done every year since the start of their
business relations in 1979.
Second. Petitioner slams the Court of Appeals for ruling that "it was [petitioner's]
unjustified refusal which finally terminated the contract between the parties." This
contention is likewise without merit. Petitioner may not be responsible for the
termination of the contract, but neither is private respondent, since the question in this
case is whether private respondent is guilty of breach of contract. The trial court held
that private respondent committed a breach of contract because, even as its August 28,
1990 letter allowed petitioner to resume work, private respondent's offer was limited to
the repairs of wooden shells and this had to be done outside the company's premises.
On the other hand, the final offer made on November 7, 1990, while allowing the "repair
of wooden shells [to be done] inside the plant according to your contract with the
company," was still limited to the repair of the wooden shells, when the fact was that
the parties' contract was both for the repair of wooden crates and for the cleaning of
soft drink bottles.
But this was not the petitioner's complaint. There was never an issue whether the
company's offer included the cleaning of bottles. Both parties understood private
respondent's offer as including the cleaning of empty soft drink bottles and the repair of
the wooden crates. Rather, the discussions between petitioner and private respondent's
representatives focused first, on the insistence of petitioner that it be allowed to work
inside the company plant and, later, on its request for the extension of the life of the
contract.
Petitioner claims that private respondent had a reason to want to terminate the contract
and that was to give the business to Aren Enterprises, as the latter offered its services at
a much lower rate than petitioner. Aren Enterprises' rate was P2.50 per shell while
petitioner's rates were P4.00 and P6.00 per shell for ordinary and super sized bottles,
respectively. 11
The contention has no basis in fact. The contract between private respondent and Aren
Enterprises had been made on March 29, 1990 — before the fire broke out. The contract
between petitioner and private respondent did not prohibit the hiring by private
respondent of another service contractor. With private respondent hitting production at
8,000 bottles of soft drinks per day, petitioner could clearly not handle the business,
since it could clean only 2,500 bottles a day. 12 These facts show that although Aren
Enterprises' rate was lower than petitioner's, they did not affect private respondent's
business relation with petitioner. Despite private respondent's contract with Aren
Enterprises, private respondent continued doing business with petitioner and would
probably have done so were it not for the fire. On the other hand, Aren Enterprises
could not be begrudged for being allowed to continue rendering service even after the
fire because it was doing its work outside private respondent's plant. For that matter,
after the fire, private respondent on August 28, 1990 offered to let petitioner resume its
service provided this was done outside the plant.
Petitioner may not be to blame for the failure to resume work after the fire, but neither
is private respondent. Since the question is whether private respondent is guilty of
breach of contract, the fact that private respondent is blameless can only lead to the
conclusion that the appealed decision is correct.
WHEREFORE, the petition for review is DENIED and the decision of the Court of Appeals
is AFFIRMED.
SO ORDERED.
12. In the early afternoon of August 17, 1960, barge L-1892, owned by the Luzon
Stevedoring Corporation was being towed down the Pasig river by tugboats "Bangus"
Republic of the Philippines and "Barbero"1 also belonging to the same corporation, when the barge rammed
SUPREME COURT against one of the wooden piles of the Nagtahan bailey bridge, smashing the posts and
causing the bridge to list. The river, at the time, was swollen and the current swift, on
Manila account of the heavy downpour of Manila and the surrounding provinces on August 15
and 16, 1960.

EN BANC
Sued by the Republic of the Philippines for actual and consequential damage caused by
its employees, amounting to P200,000 (Civil Case No. 44562, CFI of Manila), defendant
G.R. No. L-21749 September 29, 1967 Luzon Stevedoring Corporation disclaimed liability therefor, on the grounds that it had
exercised due diligence in the selection and supervision of its employees; that the
damages to the bridge were caused by force majeure; that plaintiff has no capacity to
sue; and that the Nagtahan bailey bridge is an obstruction to navigation.
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee,

vs.
After due trial, the court rendered judgment on June 11, 1963, holding the defendant
LUZON STEVEDORING CORPORATION, defendant-appellant.
liable for the damage caused by its employees and ordering it to pay to plaintiff the
actual cost of the repair of the Nagtahan bailey bridge which amounted to P192,561.72,
with legal interest thereon from the date of the filing of the complaint.
Office of the Solicitor General for plaintiff-appellee.

H. San Luis and L.V. Simbulan for defendant-appellant.

Defendant appealed directly to this Court assigning the following errors allegedly
committed by the court a quo, to wit:

I — The lower court erred in not holding that the herein defendant-appellant had
exercised the diligence required of it in the selection and supervision of its personnel to
prevent damage or injury to others.1awphîl.nèt

REYES, J.B.L., J.: II — The lower court erred in not holding that the ramming of the Nagtahan bailey
bridge by barge L-1892 was caused by force majeure.

The present case comes by direct appeal from a decision of the Court of First Instance of
Manila (Case No. 44572) adjudging the defendant-appellant, Luzon Stevedoring III — The lower court erred in not holding that the Nagtahan bailey bridge is an
Corporation, liable in damages to the plaintiff-appellee Republic of the Philippines. obstruction, if not a menace, to navigation in the Pasig river.
IV — The lower court erred in not blaming the damage sustained by the Nagtahan bailey
bridge to the improper placement of the dolphins.
V — The lower court erred in granting plaintiff's motion to adduce further evidence in
chief after it has rested its case.
VI — The lower court erred in finding the plaintiff entitled to the amount of P192,561.72
for damages which is clearly exorbitant and without any factual basis.
However, it must be recalled that the established rule in this jurisdiction is that when a
party appeals directly to the Supreme Court, and submits his case there for decision, he
is deemed to have waived the right to dispute any finding of fact made by the trial Court.
The only questions that may be raised are those of law (Savellano vs. Diaz, L-17441, July
31, 1963; Aballe vs. Santiago, L-16307, April 30, 1963; G.S.I.S. vs. Cloribel, L-22236, June
22, 1965). A converso, a party who resorts to the Court of Appeals, and submits his case
for decision there, is barred from contending later that his claim was beyond the
jurisdiction of the aforesaid Court. The reason is that a contrary rule would encourage
the undesirable practice of appellants' submitting their cases for decision to either court
in expectation of favorable judgment, but with intent of attacking its jurisdiction should
the decision be unfavorable (Tyson Tan, et al. vs. Filipinas Compañia de Seguros) et al., L-
10096, Res. on Motion to Reconsider, March 23, 1966). Consequently, we are limited in
this appeal to the issues of law raised in the appellant's brief.
Taking the aforesaid rules into account, it can be seen that the only reviewable issues in
this appeal are reduced to two:
1) Whether or not the collision of appellant's barge with the supports or piers of the
Nagtahan bridge was in law caused by fortuitous event or force majeure, and
2) Whether or not it was error for the Court to have permitted the plaintiff-appellee to
introduce additional evidence of damages after said party had rested its case.
As to the first question, considering that the Nagtahan bridge was an immovable and
stationary object and uncontrovertedly provided with adequate openings for the
passage of water craft, including barges like of appellant's, it is undeniable that the
unusual event that the barge, exclusively controlled by appellant, rammed the bridge
supports raises a presumption of negligence on the part of appellant or its employees
manning the barge or the tugs that towed it. For in the ordinary course of events, such a
thing does not happen if proper care is used. In Anglo American Jurisprudence, the
inference arises by what is known as the "res ipsa loquitur" rule (Scott vs. London Docks
Co., 2 H & C 596; San Juan Light & Transit Co. vs. Requena, 224 U.S. 89, 56 L. Ed., 680;
Whitwell vs. Wolf, 127 Minn. 529, 149 N.W. 299; Bryne vs. Great Atlantic & Pacific Tea
Co., 269 Mass. 130; 168 N.E. 540; Gribsby vs. Smith, 146 S.W. 2d 719).
The appellant strongly stresses the precautions taken by it on the day in question: that it
assigned two of its most powerful tugboats to tow down river its barge L-1892; that it
assigned to the task the more competent and experienced among its patrons, had the
towlines, engines and equipment double-checked and inspected; that it instructed its
patrons to take extra precautions; and concludes that it had done all it was called to do,
and that the accident, therefore, should be held due to force majeure or fortuitous
event.
These very precautions, however, completely destroy the appellant's defense. For caso
fortuito or force majeure (which in law are identical in so far as they exempt an obligor
from liability)2 by definition, are extraordinary events not foreseeable or avoidable,
"events that could not be foreseen, or which, though foreseen, were inevitable" (Art.
1174, Civ. Code of the Philippines). It is, therefore, not enough that the event should not
have been foreseen or anticipated, as is commonly believed, but it must be one
impossible to foresee or to avoid. The mere difficulty to foresee the happening is not
impossibility to foresee the same: "un hecho no constituye caso fortuito por la sola
circunstancia de que su existencia haga mas dificil o mas onerosa la accion diligente del
presento ofensor" (Peirano Facio, Responsibilidad Extra-contractual, p. 465; Mazeaud
Trait de la Responsibilite Civil, Vol. 2, sec. 1569). The very measures adopted by
appellant prove that the possibility of danger was not only foreseeable, but actually
foreseen, and was not caso fortuito.
Otherwise stated, the appellant, Luzon Stevedoring Corporation, knowing and
appreciating the perils posed by the swollen stream and its swift current, voluntarily
entered into a situation involving obvious danger; it therefore assured the risk, and can
not shed responsibility merely because the precautions it adopted turned out to be
insufficient. Hence, the lower Court committed no error in holding it negligent in not
suspending operations and in holding it liable for the damages caused.
It avails the appellant naught to argue that the dolphins, like the bridge, were improperly
located. Even if true, these circumstances would merely emphasize the need of even
higher degree of care on appellant's part in the situation involved in the present case.
The appellant, whose barges and tugs travel up and down the river everyday, could not
safely ignore the danger posed by these allegedly improper constructions that had been
erected, and in place, for years.

On the second point: appellant charges the lower court with having abused its discretion
in the admission of plaintiff's additional evidence after the latter had rested its case.
There is an insinuation that the delay was deliberate to enable the manipulation of
evidence to prejudice defendant-appellant.

We find no merit in the contention. Whether or not further evidence will be allowed
after a party offering the evidence has rested his case, lies within the sound discretion of
the trial Judge, and this discretion will not be reviewed except in clear case of abuse.3

In the present case, no abuse of that discretion is shown. What was allowed to be
introduced, after plaintiff had rested its evidence in chief, were vouchers and papers to
support an item of P1,558.00 allegedly spent for the reinforcement of the panel of the
bailey bridge, and which item already appeared in Exhibit GG. Appellant, in fact, has no
reason to charge the trial court of being unfair, because it was also able to secure, upon
written motion, a similar order dated November 24, 1962, allowing reception of
additional evidence for the said defendant-appellant.4

WHEREFORE, finding no error in the decision of the lower Court appealed from, the
same is hereby affirmed. Costs against the defendant-appellant.