G.R. No.

L-48006 July 8, 1942

FAUSTO BARREDO, petitioner,

vs.
SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.

Celedonio P. Gloria and Antonio Barredo for petitioner.

Jose G. Advincula for respondents.

BOCOBO, J.:

This case comes up from the Court of Appeals which held the petitioner herein, Fausto Barredo, liable in damages for
the death of Faustino Garcia caused by the negligence of Pedro Fontanilla, a taxi driver employed by said Fausto
Barredo.

At about half past one in the morning of May 3, 1936, on the road between Malabon and Navotas, Province of Rizal,
there was a head-on collision between a taxi of the Malate Taxicab driven by Pedro Fontanilla and a carretela guided
by Pedro Dimapalis. The carretela was overturned, and one of its passengers, 16-year-old boy Faustino Garcia,
suffered injuries from which he died two days later. A criminal action was filed against Fontanilla in the Court of First
Instance of Rizal, and he was convicted and sentenced to an indeterminate sentence of one year and one day to two
years of prision correccional. The court in the criminal case granted the petition that the right to bring a separate civil
action be reserved. The Court of Appeals affirmed the sentence of the lower court in the criminal case. Severino
Garcia and Timotea Almario, parents of the deceased on March 7, 1939, brought an action in the Court of First
Instance of Manila against Fausto Barredo as the sole proprietor of the Malate Taxicab and employer of Pedro
Fontanilla. On July 8, 1939, the Court of First Instance of Manila awarded damages in favor of the plaintiffs for P2,000
plus legal interest from the date of the complaint. This decision was modified by the Court of Appeals by reducing the
damages to P1,000 with legal interest from the time the action was instituted. It is undisputed that Fontanilla 's
negligence was the cause of the mishap, as he was driving on the wrong side of the road, and at high speed. As to
Barredo's responsibility, the Court of Appeals found:

... It is admitted that defendant is Fontanilla's employer. There is proof that he exercised the diligence of a
good father of a family to prevent damage. (See p. 22, appellant's brief.) In fact it is shown he was careless in
employing Fontanilla who had been caught several times for violation of the Automobile Law and speeding
(Exhibit A) — violation which appeared in the records of the Bureau of Public Works available to be public and
to himself. Therefore, he must indemnify plaintiffs under the provisions of article 1903 of the Civil Code.

The main theory of the defense is that the liability of Fausto Barredo is governed by the Revised Penal Code; hence,
his liability is only subsidiary, and as there has been no civil action against Pedro Fontanilla, the person criminally
liable, Barredo cannot be held responsible in the case. The petitioner's brief states on page 10:

... The Court of Appeals holds that the petitioner is being sued for his failure to exercise all the diligence of a
good father of a family in the selection and supervision of Pedro Fontanilla to prevent damages suffered by
the respondents. In other words, The Court of Appeals insists on applying in the case article 1903 of the Civil
Code. Article 1903 of the Civil Code is found in Chapter II, Title 16, Book IV of the Civil Code. This fact makes
said article to a civil liability arising from a crime as in the case at bar simply because Chapter II of Title 16 of
Book IV of the Civil Code, in the precise words of article 1903 of the Civil Code itself, is applicable only to
"those (obligations) arising from wrongful or negligent acts or commission not punishable by law.

The gist of the decision of the Court of Appeals is expressed thus:

... We cannot agree to the defendant's contention. The liability sought to be imposed upon him in this action
is not a civil obligation arising from a felony or a misdemeanor (the crime of Pedro Fontanilla,), but an obligation
imposed in article 1903 of the Civil Code by reason of his negligence in the selection or supervision of his
servant or employee.

The pivotal question in this case is whether the plaintiffs may bring this separate civil action against Fausto Barredo,
thus making him primarily and directly, responsible under article 1903 of the Civil Code as an employer of Pedro
Fontanilla. The defendant maintains that Fontanilla's negligence being punishable by the Penal Code, his
(defendant's) liability as an employer is only subsidiary, according to said Penal code, but Fontanilla has not been
sued in a civil action and his property has not been exhausted. To decide the main issue, we must cut through the
tangle that has, in the minds of many confused and jumbled together delitos and cuasi delitos, or crimes under the
Penal Code and fault or negligence under articles 1902-1910 of the Civil Code. This should be done, because justice
may be lost in a labyrinth, unless principles and remedies are distinctly envisaged. Fortunately, we are aided in our
inquiry by the luminous presentation of the perplexing subject by renown jurists and we are likewise guided by the
decisions of this Court in previous cases as well as by the solemn clarity of the consideration in several sentences of
the Supreme Tribunal of Spain.

Authorities support the proposition that a quasi-delict or "culpa aquiliana " is a separate legal institution under the Civil
Code with a substantivity all its own, and individuality that is entirely apart and independent from delict or crime. Upon
this principle and on the wording and spirit article 1903 of the Civil Code, the primary and direct responsibility of
employers may be safely anchored.

The pertinent provisions of the Civil Code and Revised Penal Code are as follows:

CIVIL CODE

ART. 1089 Obligations arise from law, from contracts and quasi-contracts, and from acts and omissions which
are unlawful or in which any kind of fault or negligence intervenes.

xxx xxx xxx

ART. 1092. Civil obligations arising from felonies or misdemeanors shall be governed by the provisions of the
Penal Code.

ART. 1093. Those which are derived from acts or omissions in which fault or negligence, not punishable by
law, intervenes shall be subject to the provisions of Chapter II, Title XVI of this book.

xxx xxx xxx

ART 1902. Any person who by an act or omission causes damage to another by his fault or negligence shall
be liable for the damage so done.

ART. 1903. The obligation imposed by the next preceding article is enforcible, not only for personal acts and
omissions, but also for those of persons for whom another is responsible.

The father and in, case of his death or incapacity, the mother, are liable for any damages caused by the minor
children who live with them.

Guardians are liable for damages done by minors or incapacitated persons subject to their authority and living
with them.

Owners or directors of an establishment or business are equally liable for any damages caused by their
employees while engaged in the branch of the service in which employed, or on occasion of the performance
of their duties.

The State is subject to the same liability when it acts through a special agent, but not if the damage shall have
been caused by the official upon whom properly devolved the duty of doing the act performed, in which case
the provisions of the next preceding article shall be applicable.

Finally, teachers or directors of arts trades are liable for any damages caused by their pupils or apprentices
while they are under their custody.

The liability imposed by this article shall cease in case the persons mentioned therein prove that they are
exercised all the diligence of a good father of a family to prevent the damage.
 ART. 1904. Any person who pays for damage caused by his employees may recover from the latter what he
may have paid.

REVISED PENAL CODE

ART. 100. Civil liability of a person guilty of felony. — Every person criminally liable for a felony is also civilly
liable.

ART. 101. Rules regarding civil liability in certain cases. — The exemption from criminal liability established
in subdivisions 1, 2, 3, 5, and 6 of article 12 and in subdivision 4 of article 11 of this Code does not include
exemption from civil liability, which shall be enforced to the following rules:

First. In cases of subdivision, 1, 2 and 3 of article 12 the civil liability for acts committed by any imbecile or
insane person, and by a person under nine years of age, or by one over nine but under fifteen years of age,
who has acted without discernment shall devolve upon those having such person under their legal authority
or control, unless it appears that there was no fault or negligence on their part.

Should there be no person having such insane, imbecile or minor under his authority, legal guardianship, or
control, or if such person be insolvent, said insane, imbecile, or minor shall respond with their own property,
excepting property exempt from execution, in accordance with the civil law.

Second. In cases falling within subdivision 4 of article 11, the person for whose benefit the harm has been
prevented shall be civilly liable in proportion to the benefit which they may have received.

The courts shall determine, in their sound discretion, the proportionate amount for which each one shall be liable.

When the respective shares can not be equitably determined, even approximately, or when the liability also attaches
to the Government, or to the majority of the inhabitants of the town, and, in all events, whenever the damage has been
caused with the consent of the authorities or their agents, indemnification shall be made in the manner prescribed by
special laws or regulations.

Third. In cases falling within subdivisions 5 and 6 of article 12, the persons using violence or causing the fear shall be
primarily liable and secondarily, or, if there be no such persons, those doing the act shall be liable, saving always to
the latter that part of their property exempt from execution.

ART. 102. Subsidiary civil liability of innkeepers, tavern keepers and proprietors of establishment. — In default
of persons criminally liable, innkeepers, tavern keepers, and any other persons or corporation shall be civilly
liable for crimes committed in their establishments, in all cases where a violation of municipal ordinances or
some general or special police regulation shall have been committed by them or their employees.

Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their houses
lodging therein, or the person, or for the payment of the value thereof, provided that such guests shall have
notified in advance the innkeeper himself, or the person representing him, of the deposit of such goods within
the inn; and shall furthermore have followed the directions which such innkeeper or his representative may
have given them with respect to the care of and vigilance over such goods. No liability shall attach in case of
robbery with violence against or intimidation against or intimidation of persons unless committed by the
innkeeper's employees.

ART. 103. Subsidiary civil liability of other persons. — The subsidiary liability established in the next preceding
article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for
felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their
duties.

xxx xxx xxx

ART. 365. Imprudence and negligence. — Any person who, by reckless imprudence, shall commit any act
which, had it been intentional, would constitute a grave felony, shall suffer the penalty of arresto mayor in its
 maximum period to prision correccional in its minimum period; if it would have constituted a less grave felony,
the penalty of arresto mayor in its minimum and medium periods shall be imposed.

Any person who, by simple imprudence or negligence, shall commit an act which would otherwise constitute
a grave felony, shall suffer the penalty of arresto mayor in its medium and maximum periods; if it would have
constituted a less serious felony, the penalty of arresto mayor in its minimum period shall be imposed."

It will thus be seen that while the terms of articles 1902 of the Civil Code seem to be broad enough to cover the driver's
negligence in the instant case, nevertheless article 1093 limits cuasi-delitos to acts or omissions "not punishable by
law." But inasmuch as article 365 of the Revised Penal Code punishes not only reckless but even simple imprudence
or negligence, the fault or negligence under article 1902 of the Civil Code has apparently been crowded out. It is this
overlapping that makes the "confusion worse confounded." However, a closer study shows that such a concurrence
of scope in regard to negligent acts does not destroy the distinction between the civil liability arising from a crime and
the responsibility for cuasi-delitos or culpa extra-contractual. The same negligent act causing damages may produce
civil liability arising from a crime under article 100 of the Revised Penal Code, or create an action for cuasi-
delito or culpa extra-contractual under articles 1902-1910 of the Civil Code.

The individuality of cuasi-delito or culpa extra-contractual looms clear and unmistakable. This legal institution is of
ancient lineage, one of its early ancestors being the Lex Aquilia in the Roman Law. In fact, in Spanish legal
terminology, this responsibility is often referred to as culpa aquiliana. The Partidas also contributed to the genealogy
of the present fault or negligence under the Civil Code; for instance, Law 6, Title 15, of Partida 7, says: "Tenudo es
de fazer emienda, porque, como quier que el non fizo a sabiendas en daño al otro, pero acaescio por su culpa."

The distinctive nature of cuasi-delitos survives in the Civil Code. According to article 1089, one of the five sources of
obligations is this legal institution of cuasi-delito or culpa extra-contractual: "los actos . . . en que intervenga cualquier
genero de culpa o negligencia." Then article 1093 provides that this kind of obligation shall be governed by Chapter
II of Title XVI of Book IV, meaning articles 1902-0910. This portion of the Civil Code is exclusively devoted to the legal
institution of culpa aquiliana.

Some of the differences between crimes under the Penal Code and the culpa aquiliana or cuasi-delito under the Civil
Code are:

1. That crimes affect the public interest, while cuasi-delitos are only of private concern.

2. That, consequently, the Penal Code punishes or corrects the criminal act, while the Civil Code, by means of
indemnification, merely repairs the damage.

3. That delicts are not as broad as quasi-delicts, because the former are punished only if there is a penal law clearly
covering them, while the latter, cuasi-delitos, include all acts in which "any king of fault or negligence intervenes."
However, it should be noted that not all violations of the penal law produce civil responsibility, such as begging in
contravention of ordinances, violation of the game laws, infraction of the rules of traffic when nobody is hurt. (See
Colin and Capitant, "Curso Elemental de Derecho Civil," Vol. 3, p. 728.)

Let us now ascertain what some jurists say on the separate existence of quasi-delicts and the employer's primary and
direct liability under article 1903 of the Civil Code.

Dorado Montero in his essay on "Responsibilidad" in the "Enciclopedia Juridica Española" (Vol. XXVII, p. 414) says:

El concepto juridico de la responsabilidad civil abarca diversos aspectos y comprende a diferentes personas.
Asi, existe una responsabilidad civil propiamente dicha, que en ningun casl lleva aparejada responsabilidad
criminal alguna, y otra que es consecuencia indeclinable de la penal que nace de todo delito o falta."

The juridical concept of civil responsibility has various aspects and comprises different persons. Thus, there
is a civil responsibility, properly speaking, which in no case carries with it any criminal responsibility, and
another which is a necessary consequence of the penal liability as a result of every felony or misdemeanor."
Maura, an outstanding authority, was consulted on the following case: There had been a collision between two trains
belonging respectively to the Ferrocarril Cantabrico and the Ferrocarril del Norte. An employee of the latter had been
prosecuted in a criminal case, in which the company had been made a party as subsidiarily responsible in civil
damages. The employee had been acquitted in the criminal case, and the employer, the Ferrocarril del Norte, had
also been exonerated. The question asked was whether the Ferrocarril Cantabrico could still bring a civil action for
damages against the Ferrocarril del Norte. Maura's opinion was in the affirmative, stating in part (Maura, Dictamenes,
Vol. 6, pp. 511-513):

Quedando las cosas asi, a proposito de la realidad pura y neta de los hechos, todavia menos parece
sostenible que exista cosa juzgada acerca de la obligacion civil de indemnizar los quebrantos y menoscabos
inferidos por el choque de los trenes. El titulo en que se funda la accion para demandar el resarcimiento, no
puede confundirse con las responsabilidades civiles nacidas de delito, siquiera exista en este, sea el cual
sea, una culpa rodeada de notas agravatorias que motivan sanciones penales, mas o menos severas. La
lesion causada por delito o falta en los derechos civiles, requiere restituciones, reparaciones o
indemnizaciones, que cual la pena misma atañen al orden publico; por tal motivo vienen encomendadas, de
ordinario, al Ministerio Fiscal; y claro es que si por esta via se enmiendan los quebrantos y menoscabos, el
agraviado excusa procurar el ya conseguido desagravio; pero esta eventual coincidencia de los efectos, no
borra la diversidad originaria de las acciones civiles para pedir indemnizacion.

Estas, para el caso actual (prescindiendo de culpas contractuales, que no vendrian a cuento y que tiene otro
regimen), dimanan, segun el articulo 1902 del Codigo Civil, de toda accion u omision, causante de daños o
perjuicios, en que intervenga culpa o negligencia. Es trivial que acciones semejantes son ejercitadas ante los
Tribunales de lo civil cotidianamente, sin que la Justicia punitiva tenga que mezclarse en los asuntos. Los
articulos 18 al 21 y 121 al 128 del Codigo Penal, atentos al espiritu y a los fines sociales y politicos del mismo,
desenvuelven y ordenan la materia de responsabilidades civiles nacidas de delito, en terminos separados del
regimen por ley comun de la culpa que se denomina aquiliana, por alusion a precedentes legislativos
del Corpus Juris. Seria intempestivo un paralelo entre aquellas ordenaciones, y la de la obligacion de
indemnizar a titulo de culpa civil; pero viene al caso y es necesaria una de las diferenciaciones que en el tal
paralelo se notarian.

Los articulos 20 y 21 del Codigo Penal, despues de distribuir a su modo las responsabilidades civiles, entre
los que sean por diversos conceptos culpables del delito o falta, las hacen extensivas a las empresas y los
establecimientos al servicio de los cuales estan los delincuentes; pero con caracter subsidiario, o sea, segun
el texto literal, en defecto de los que sean responsables criminalmente. No coincide en ello el Codigo Civil,
cuyo articulo 1903, dice; La obligacion que impone el articulo anterior es exigible, no solo por los actos y
omisiones propios, sino por los de aquellas personas de quienes se debe responder; personas en la
enumeracion de las cuales figuran los dependientes y empleados de los establecimientos o empresas, sea
por actos del servicio, sea con ocasion de sus funciones. Por esto acontece, y se observa en la jurisprudencia,
que las empresas, despues de intervenir en las causas criminales con el caracter subsidiario de su
responsabilidad civil por razon del delito, son demandadas y condenadas directa y aisladamente, cuando se
trata de la obligacion, ante los tribunales civiles.

Siendo como se ve, diverso el titulo de esta obligacion, y formando verdadero postulado de nuestro regimen
judicial la separacion entre justicia punitiva y tribunales de lo civil, de suerte que tienen unos y otros normas
de fondo en distintos cuerpos legales, y diferentes modos de proceder, habiendose, por añadidura, abstenido
de asistir al juicio criminal la Compañia del Ferrocarril Cantabrico, que se reservo ejercitar sus acciones,
parece innegable que la de indemnizacion por los daños y perjuicios que le irrogo el choque, no estuvo sub
judice ante el Tribunal del Jurado, ni fue sentenciada, sino que permanecio intacta, al pronunciarse el fallo de
21 de marzo. Aun cuando el veredicto no hubiese sido de inculpabilidad, mostrose mas arriba, que tal accion
quedaba legitimamente reservada para despues del proceso; pero al declararse que no existio delito, ni
responsabilidad dimanada de delito, materia unica sobre que tenian jurisdiccion aquellos juzgadores, se
redobla el motivo para la obligacion civil ex lege, y se patentiza mas y mas que la accion para pedir su
cumplimiento permanece incolume, extraña a la cosa juzgada.

As things are, apropos of the reality pure and simple of the facts, it seems less tenable that there should be res
judicata with regard to the civil obligation for damages on account of the losses caused by the collision of the
trains. The title upon which the action for reparation is based cannot be confused with the civil
responsibilities born of a crime, because there exists in the latter, whatever each nature, a culpa surrounded
 with aggravating aspects which give rise to penal measures that are more or less severe. The injury caused
by a felony or misdemeanor upon civil rights requires restitutions, reparations, or indemnifications which, like
the penalty itself, affect public order; for this reason, they are ordinarily entrusted to the office of the prosecuting
attorney; and it is clear that if by this means the losses and damages are repaired, the injured party no longer
desires to seek another relief; but this coincidence of effects does not eliminate the peculiar nature of civil
actions to ask for indemnity.

Such civil actions in the present case (without referring to contractual faults which are not pertinent and belong
to another scope) are derived, according to article 1902 of the Civil Code, from every act or omission causing
losses and damages in which culpa or negligence intervenes. It is unimportant that such actions are every
day filed before the civil courts without the criminal courts interfering therewith. Articles 18 to 21 and 121 to
128 of the Penal Code, bearing in mind the spirit and the social and political purposes of that Code, develop
and regulate the matter of civil responsibilities arising from a crime, separately from the regime under common
law, of culpa which is known as aquiliana, in accordance with legislative precedent of the Corpus Juris. It
would be unwarranted to make a detailed comparison between the former provisions and that regarding the
obligation to indemnify on account of civil culpa; but it is pertinent and necessary to point out to one of such
differences.

Articles 20 and 21 of the Penal Code, after distriburing in their own way the civil responsibilities among those
who, for different reasons, are guilty of felony or misdemeanor, make such civil responsibilities applicable to
enterprises and establishments for which the guilty parties render service, but with subsidiary character, that
is to say, according to the wording of the Penal Code, in default of those who are criminally responsible. In
this regard, the Civil Code does not coincide because article 1903 says: "The obligation imposed by the next
preceding article is demandable, not only for personal acts and omissions, but also for those of persons for
whom another is responsible." Among the persons enumerated are the subordinates and employees of
establishments or enterprises, either for acts during their service or on the occasion of their functions. It is for
this reason that it happens, and it is so observed in judicial decisions, that the companies or enterprises, after
taking part in the criminal cases because of their subsidiary civil responsibility by reason of the crime, are sued
and sentenced directly and separately with regard to the obligation, before the civil courts.

Seeing that the title of this obligation is different, and the separation between punitive justice and the civil
courts being a true postulate of our judicial system, so that they have different fundamental norms in different
codes, as well as different modes of procedure, and inasmuch as the Compaña del Ferrocarril Cantabrico has
abstained from taking part in the criminal case and has reserved the right to exercise its actions, it seems
undeniable that the action for indemnification for the losses and damages caused to it by the collision was
not sub judice before the Tribunal del Jurado, nor was it the subject of a sentence, but it remained intact when
the decision of March 21 was rendered. Even if the verdict had not been that of acquittal, it has already been
shown that such action had been legitimately reserved till after the criminal prosecution; but because of the
declaration of the non-existence of the felony and the non-existence of the responsibility arising from the crime,
which was the sole subject matter upon which the Tribunal del Jurado had jurisdiction, there is greater reason
for the civil obligation ex lege, and it becomes clearer that the action for its enforcement remain intact and is
not res judicata.

Laurent, a jurist who has written a monumental work on the French Civil Code, on which the Spanish Civil Code is
largely based and whose provisions on cuasi-delito or culpa extra-contractual are similar to those of the Spanish Civil
Code, says, referring to article 1384 of the French Civil Code which corresponds to article 1903, Spanish Civil Code:

The action can be brought directly against the person responsible (for another), without including the author
of the act. The action against the principal is accessory in the sense that it implies the existence of a prejudicial
act committed by the employee, but it is not subsidiary in the sense that it can not be instituted till after the
judgment against the author of the act or at least, that it is subsidiary to the principal action; the action for
responsibility (of the employer) is in itself a principal action. (Laurent, Principles of French Civil Law, Spanish
translation, Vol. 20, pp. 734-735.)

Amandi, in his "Cuestionario del Codigo Civil Reformado" (Vol. 4, pp. 429, 430), declares that the responsibility of the
employer is principal and not subsidiary. He writes:
 Cuestion 1. La responsabilidad declarada en el articulo 1903 por las acciones u omisiones de aquellas
personas por las que se debe responder, es subsidiaria? es principal? Para contestar a esta pregunta es
necesario saber, en primer lugar, en que se funda el precepto legal. Es que realmente se impone una
responsabilidad por una falta ajena? Asi parece a primera vista; pero semejante afirmacion seria contraria a
la justicia y a la maxima universal, segun la que las faltas son personales, y cada uno responde de aquellas
que le son imputables. La responsabilidad de que tratamos se impone con ocasion de un delito o culpa, pero
no por causa de ellos, sino por causa del causi delito, esto es, de la imprudencia o de la negligencia del padre,
del tutor, del dueño o director del establecimiento, del maestro, etc. Cuando cualquiera de las personas que
enumera el articulo citado (menores de edad, incapacitados, dependientes, aprendices) causan un daño, la
ley presume que el padre, el tutor, el maestro, etc., han cometido una falta de negligencia para prevenir o
evitar el daño. Esta falta es la que la ley castiga. No hay, pues, responsabilidad por un hecho ajeno, sino en
la apariencia; en realidad la responsabilidad se exige por un hecho propio. La idea de que esa responsabilidad
sea subsidiaria es, por lo tanto, completamente inadmisible.

Question No. 1. Is the responsibility declared in article 1903 for the acts or omissions of those persons for who
one is responsible, subsidiary or principal? In order to answer this question it is necessary to know, in the first
place, on what the legal provision is based. Is it true that there is a responsibility for the fault of another person?
It seems so at first sight; but such assertion would be contrary to justice and to the universal maxim that all
faults are personal, and that everyone is liable for those faults that can be imputed to him. The responsibility
in question is imposed on the occasion of a crime or fault, but not because of the same, but because of
the cuasi-delito, that is to say, the imprudence or negligence of the father, guardian, proprietor or manager of
the establishment, of the teacher, etc. Whenever anyone of the persons enumerated in the article referred to
(minors, incapacitated persons, employees, apprentices) causes any damage, the law presumes that the
father, guardian, teacher, etc. have committed an act of negligence in not preventing or avoiding the damage.
It is this fault that is condemned by the law. It is, therefore, only apparent that there is a responsibility for the
act of another; in reality the responsibility exacted is for one's own act. The idea that such responsibility is
subsidiary is, therefore, completely inadmissible.

Oyuelos, in his "Digesto: Principios, Doctrina y Jurisprudencia, Referentes al Codigo Civil Español," says in Vol. VII,
p. 743:

Es decir, no responde de hechos ajenos, porque se responde solo de su propia culpa, doctrina del articulo
1902; mas por excepcion, se responde de la ajena respecto de aquellas personas con las que media algun
nexo o vinculo, que motiva o razona la responsabilidad. Esta responsabilidad, es directa o es subsidiaria? En
el orden penal, el Codigo de esta clase distingue entre menores e incapacitados y los demas, declarando
directa la primera (articulo 19) y subsidiaria la segunda (articulos 20 y 21); pero en el orden civil, en el caso
del articulo 1903, ha de entenderse directa, por el tenor del articulo que impone la responsabilidad
precisamente "por los actos de aquellas personas de quienes se deba responder."

That is to say, one is not responsible for the acts of others, because one is liable only for his own faults, this
being the doctrine of article 1902; but, by exception, one is liable for the acts of those persons with whom
there is a bond or tie which gives rise to the responsibility. Is this responsibility direct or subsidiary? In the
order of the penal law, the Penal Code distinguishes between minors and incapacitated persons on the one
hand, and other persons on the other, declaring that the responsibility for the former is direct (article 19), and
for the latter, subsidiary (articles 20 and 21); but in the scheme of the civil law, in the case of article 1903, the
responsibility should be understood as direct, according to the tenor of that articles, for precisely it imposes
responsibility "for the acts of those persons for whom one should be responsible."

Coming now to the sentences of the Supreme Tribunal of Spain, that court has upheld the principles above set forth:
that a quasi-delict or culpa extra-contractual is a separate and distinct legal institution, independent from the civil
responsibility arising from criminal liability, and that an employer is, under article 1903 of the Civil Code, primarily and
directly responsible for the negligent acts of his employee.

One of the most important of those Spanish decisions is that of October 21, 1910. In that case, Ramon Lafuente died
as the result of having been run over by a street car owned by the "compañia Electric Madrileña de Traccion." The
conductor was prosecuted in a criminal case but he was acquitted. Thereupon, the widow filed a civil action against
the street car company, paying for damages in the amount of 15,000 pesetas. The lower court awarded damages; so
the company appealed to the Supreme Tribunal, alleging violation of articles 1902 and 1903 of the Civil Code because
by final judgment the non-existence of fault or negligence had been declared. The Supreme Court of Spain dismissed
the appeal, saying:

Considerando que el primer motivo del recurso se funda en el equivocado supuesto de que el Tribunal a quo,
al condonar a la compañia Electrica Madrileña al pago del daño causado con la muerte de Ramon La fuente
Izquierdo, desconoce el valor y efectos juridicos de la sentencia absolutoria deictada en la causa criminal que
se siguio por el mismo hecho, cuando es lo cierto que de este han conocido las dos jurisdicciones bajo
diferentes as pectos, y como la de lo criminal declrao dentro de los limites de su competencia que el hecho
de que se trata no era constitutivo de delito por no haber mediado descuido o negligencia graves, lo que no
excluye, siendo este el unico fundamento del fallo absolutorio, el concurso de la culpa o negligencia no
califacadas, fuente de obligaciones civiles segun el articulo 1902 del Codigo, y que alcanzan, segun el 1903,
netre otras perosnas, a los Directores de establecimientos o empresas por los daños causados por sus
dependientes en determinadas condiciones, es manifesto que la de lo civil, al conocer del mismo hehco baho
este ultimo aspecto y al condenar a la compañia recurrente a la indemnizacion del daño causado por uno de
sus empleados, lejos de infringer los mencionados textos, en relacion con el articulo 116 de la Ley de
Enjuciamiento Criminal, se ha atenido estrictamente a ellos, sin invadir atribuciones ajenas a su jurisdiccion
propia, ni contrariar en lo mas minimo el fallo recaido en la causa.

Considering that the first ground of the appeal is based on the mistaken supposition that the trial court, in
sentencing the Compañia Madrileña to the payment of the damage caused by the death of Ramon Lafuente
Izquierdo, disregards the value and juridical effects of the sentence of acquittal rendered in the criminal case
instituted on account of the same act, when it is a fact that the two jurisdictions had taken cognizance of the
same act in its different aspects, and as the criminal jurisdiction declared within the limits of its authority that
the act in question did not constitute a felony because there was no grave carelessness or negligence, and
this being the only basis of acquittal, it does no exclude the co-existence of fault or negligence which is not
qualified, and is a source of civil obligations according to article 1902 of the Civil Code, affecting, in accordance
with article 1903, among other persons, the managers of establishments or enterprises by reason of the
damages caused by employees under certain conditions, it is manifest that the civil jurisdiccion in taking
cognizance of the same act in this latter aspect and in ordering the company, appellant herein, to pay an
indemnity for the damage caused by one of its employees, far from violating said legal provisions, in relation
with article 116 of the Law of Criminal Procedure, strictly followed the same, without invading attributes which
are beyond its own jurisdiction, and without in any way contradicting the decision in that cause. (Emphasis
supplied.)

It will be noted, as to the case just cited:

First. That the conductor was not sued in a civil case, either separately or with the street car company. This is precisely
what happens in the present case: the driver, Fontanilla, has not been sued in a civil action, either alone or with his
employer.

Second. That the conductor had been acquitted of grave criminal negligence, but the Supreme Tribunal of Spain said
that this did not exclude the co-existence of fault or negligence, which is not qualified, on the part of the conductor,
under article 1902 of the Civil Code. In the present case, the taxi driver was found guilty of criminal negligence, so
that if he had even sued for his civil responsibility arising from the crime, he would have been held primarily liable for
civil damages, and Barredo would have been held subsidiarily liable for the same. But the plaintiffs are directly suing
Barredo, on his primary responsibility because of his own presumed negligence — which he did not overcome —
under article 1903. Thus, there were two liabilities of Barredo: first, the subsidiary one because of the civil liability of
the taxi driver arising from the latter's criminal negligence; and, second, Barredo's primary liability as an employer
under article 1903. The plaintiffs were free to choose which course to take, and they preferred the second remedy. In
so doing, they were acting within their rights. It might be observed in passing, that the plaintiff choose the more
expeditious and effective method of relief, because Fontanilla was either in prison, or had just been released, and
besides, he was probably without property which might be seized in enforcing any judgment against him for damages.

Third. That inasmuch as in the above sentence of October 21, 1910, the employer was held liable civilly,
notwithstanding the acquittal of the employee (the conductor) in a previous criminal case, with greater reason should
Barredo, the employer in the case at bar, be held liable for damages in a civil suit filed against him because his taxi
driver had been convicted. The degree of negligence of the conductor in the Spanish case cited was less than that of
the taxi driver, Fontanilla, because the former was acquitted in the previous criminal case while the latter was found
guilty of criminal negligence and was sentenced to an indeterminate sentence of one year and one day to two years
of prision correccional.

(See also Sentence of February 19, 1902, which is similar to the one above quoted.)

In the Sentence of the Supreme Court of Spain, dated February 14, 1919, an action was brought against a railroad
company for damages because the station agent, employed by the company, had unjustly and fraudulently, refused
to deliver certain articles consigned to the plaintiff. The Supreme Court of Spain held that this action was properly
under article 1902 of the Civil Code, the court saying:

Considerando que la sentencia discutida reconoce, en virtud de los hechos que consigna con relacion a las
pruebas del pleito: 1.º, que las expediciones facturadas por la compañia ferroviaria a la consignacion del actor
de las vasijas vacias que en su demanda relacionan tenian como fin el que este las devolviera a sus
remitentes con vinos y alcoholes; 2.º, que llegadas a su destino tales mercanias no se quisieron entregar a
dicho consignatario por el jefe de la estacion sin motivo justificado y con intencion dolosa, y 3.º, que la falta
de entrega de estas expediciones al tiempo de reclamarlas el demandante le originaron daños y perjuicios en
cantidad de bastante importancia como expendedor al por mayor que era de vinos y alcoholes por las
ganancias que dejo de obtener al verse privado de servir los pedidos que se le habian hecho por los
remitentes en los envases:

Considerando que sobre esta base hay necesidad de estimar los cuatro motivos que integran este recurso,
porque la demanda inicial del pleito a que se contrae no contiene accion que nazca del incumplimiento del
contrato de transporte, toda vez que no se funda en el retraso de la llegada de las mercancias ni de ningun
otro vinculo contractual entre las partes contendientes, careciendo, por tanto, de aplicacion el articulo 371 del
Codigo de Comercio, en que principalmente descansa el fallo recurrido, sino que se limita a pedir la
reparaction de los daños y perjuicios producidos en el patrimonio del actor por la injustificada y dolosa
negativa del porteador a la entrega de las mercancias a su nombre consignadas, segun lo reconoce la
sentencia, y cuya responsabilidad esta claramente sancionada en el articulo 1902 del Codigo Civil, que obliga
por el siguiente a la Compañia demandada como ligada con el causante de aquellos por relaciones de
caracter economico y de jurarquia administrativa.

Considering that the sentence, in question recognizes, in virtue of the facts which it declares, in relation to the
evidence in the case: (1) that the invoice issued by the railroad company in favor of the plaintiff contemplated
that the empty receptacles referred to in the complaint should be returned to the consignors with wines and
liquors; (2) that when the said merchandise reached their destination, their delivery to the consignee was
refused by the station agent without justification and with fraudulent intent, and (3) that the lack of delivery of
these goods when they were demanded by the plaintiff caused him losses and damages of considerable
importance, as he was a wholesale vendor of wines and liquors and he failed to realize the profits when he
was unable to fill the orders sent to him by the consignors of the receptacles:

Considering that upon this basis there is need of upholding the four assignments of error, as the original
complaint did not contain any cause of action arising from non-fulfillment of a contract of transportation,
because the action was not based on the delay of the goods nor on any contractual relation between the
parties litigant and, therefore, article 371 of the Code of Commerce, on which the decision appealed from is
based, is not applicable; but it limits to asking for reparation for losses and damages produced on the
patrimony of the plaintiff on account of the unjustified and fraudulent refusal of the carrier to deliver the goods
consigned to the plaintiff as stated by the sentence, and the carrier's responsibility is clearly laid down in article
1902 of the Civil Code which binds, in virtue of the next article, the defendant company, because the latter is
connected with the person who caused the damage by relations of economic character and by administrative
hierarchy. (Emphasis supplied.)

The above case is pertinent because it shows that the same act may come under both the Penal Code and the Civil
Code. In that case, the action of the agent was unjustified and fraudulent and therefore could have been the subject
of a criminal action. And yet, it was held to be also a proper subject of a civil action under article 1902 of the Civil
Code. It is also to be noted that it was the employer and not the employee who was being sued.

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

In the leading case of Rakes vs. Atlantic Gulf and Pacific Co. (7 Phil., 359, 362-365 [year 1907]), the trial court
awarded damages to the plaintiff, a laborer of the defendant, because the latter had negligently failed to repair a
tramway in consequence of which the rails slid off while iron was being transported, and caught the plaintiff whose leg
was broken. This Court held:

It is contended by the defendant, as its first defense to the action that the necessary conclusion from these
collated laws is that the remedy for injuries through negligence lies only in a criminal action in which the official
criminally responsible must be made primarily liable and his employer held only subsidiarily to him. According
to this theory the plaintiff should have procured the arrest of the representative of the company accountable
for not repairing the track, and on his prosecution a suitable fine should have been imposed, payable primarily
by him and secondarily by his employer.

This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093 of the Civil Code
makes obligations arising from faults or negligence not punished by the law, subject to the provisions of
Chapter II of Title XVI. Section 1902 of that chapter reads:

"A person who by an act or omission causes damage to another when there is fault or negligence shall
be obliged to repair the damage so done.

"SEC. 1903. The obligation imposed by the preceeding article is demandable, not only for personal
acts and omissions, but also for those of the persons for whom they should be responsible.

"The father, and on his death or incapacity, the mother, is liable for the damages caused by the minors
who live with them.

xxx xxx xxx

"Owners or directors of an establishment or enterprise are equally liable for the damages caused by
their employees in the service of the branches in which the latter may be employed or in the
performance of their duties.

xxx xxx xxx

"The liability referred to in this article shall cease when the persons mentioned therein prove that they
employed all the diligence of a good father of a family to avoid the damage."

As an answer to the argument urged in this particular action it may be sufficient to point out that nowhere in
our general statutes is the employer penalized for failure to provide or maintain safe appliances for his
workmen. His obligation therefore is one 'not punished by the laws' and falls under civil rather than criminal
jurisprudence. But the answer may be a broader one. We should be reluctant, under any conditions, to adopt
a forced construction of these scientific codes, such as is proposed by the defendant, that would rob some of
these articles of effect, would shut out litigants against their will from the civil courts, would make the assertion
of their rights dependent upon the selection for prosecution of the proper criminal offender, and render
recovery doubtful by reason of the strict rules of proof prevailing in criminal actions. Even if these articles had
always stood alone, such a construction would be unnecessary, but clear light is thrown upon their meaning
by the provisions of the Law of Criminal Procedure of Spain (Ley de Enjuiciamiento Criminal), which, though
never in actual force in these Islands, was formerly given a suppletory or explanatory effect. Under article 111
of this law, both classes of action, civil and criminal, might be prosecuted jointly or separately, but while the
penal action was pending the civil was suspended. According to article 112, the penal action once started, the
civil remedy should be sought therewith, unless it had been waived by the party injured or been expressly
reserved by him for civil proceedings for the future. If the civil action alone was prosecuted, arising out of a
crime that could be enforced only on private complaint, the penal action thereunder should be extinguished.
These provisions are in harmony with those of articles 23 and 133 of our Penal Code on the same subject.

An examination of this topic might be carried much further, but the citation of these articles suffices to show
that the civil liability was not intended to be merged in the criminal nor even to be suspended thereby, except
as expressly provided in the law. Where an individual is civilly liable for a negligent act or omission, it is not
 required that the injured party should seek out a third person criminally liable whose prosecution must be a
condition precedent to the enforcement of the civil right.

Under article 20 of the Penal Code the responsibility of an employer may be regarded as subsidiary in respect
of criminal actions against his employees only while they are in process of prosecution, or in so far as they
determine the existence of the criminal act from which liability arises, and his obligation under the civil law and
its enforcement in the civil courts is not barred thereby unless by the election of the injured person. Inasmuch
as no criminal proceeding had been instituted, growing our of the accident in question, the provisions of the
Penal Code can not affect this action. This construction renders it unnecessary to finally determine here
whether this subsidiary civil liability in penal actions has survived the laws that fully regulated it or has been
abrogated by the American civil and criminal procedure now in force in the Philippines.

The difficulty in construing the articles of the code above cited in this case appears from the briefs before us
to have arisen from the interpretation of the words of article 1093, "fault or negligence not punished by law,"
as applied to the comprehensive definition of offenses in articles 568 and 590 of the Penal Code. It has been
shown that the liability of an employer arising out of his relation to his employee who is the offender is not to
be regarded as derived from negligence punished by the law, within the meaning of articles 1902 and 1093.
More than this, however, it cannot be said to fall within the class of acts unpunished by the law, the
consequence of which are regulated by articles 1902 and 1903 of the Civil Code. The acts to which these
articles are applicable are understood to be those not growing out of pre-existing duties of the parties to one
another. But where relations already formed give rise to duties, whether springing from contract or quasi
contract, then breaches of those duties are subject to articles 1101, 1103, and 1104 of the same code. A
typical application of this distinction may be found in the consequences of a railway accident due to defective
machinery supplied by the employer. His liability to his employee would arise out of the contract of
employment, that to the passengers out of the contract for passage, while that to the injured bystander would
originate in the negligent act itself.

In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the mother of the 8 of 9-year-old child Salvador Bona brought a
civil action against Moreta to recover damages resulting from the death of the child, who had been run over by an
automobile driven and managed by the defendant. The trial court rendered judgment requiring the defendant to pay
the plaintiff the sum of P1,000 as indemnity: This Court in affirming the judgment, said in part:

If it were true that the defendant, in coming from the southern part of Solana Street, had to stop his auto before
crossing Real Street, because he had met vehicles which were going along the latter street or were coming
from the opposite direction along Solana Street, it is to be believed that, when he again started to run his auto
across said Real Street and to continue its way along Solana Street northward, he should have adjusted the
speed of the auto which he was operating until he had fully crossed Real Street and had completely reached
a clear way on Solana Street. But, as the child was run over by the auto precisely at the entrance of Solana
Street, this accident could not have occurred if the auto had been running at a slow speed, aside from the fact
that the defendant, at the moment of crossing Real Street and entering Solana Street, in a northward direction,
could have seen the child in the act of crossing the latter street from the sidewalk on the right to that on the
left, and if the accident had occurred in such a way that after the automobile had run over the body of the
child, and the child's body had already been stretched out on the ground, the automobile still moved along a
distance of about 2 meters, this circumstance shows the fact that the automobile entered Solana Street from
Real Street, at a high speed without the defendant having blown the horn. If these precautions had been taken
by the defendant, the deplorable accident which caused the death of the child would not have occurred.

It will be noticed that the defendant in the above case could have been prosecuted in a criminal case because his
negligence causing the death of the child was punishable by the Penal Code. Here is therefore a clear instance of the
same act of negligence being a proper subject-matter either of a criminal action with its consequent civil liability arising
from a crime or of an entirely separate and independent civil action for fault or negligence under article 1902 of the
Civil Code. Thus, in this jurisdiction, the separate individually of a cuasi-delito or culpa aquiliana under the Civil Code
has been fully and clearly recognized, even with regard to a negligent act for which the wrongdoer could have been
prosecuted and convicted in a criminal case and for which, after such a conviction, he could have been sued for this
civil liability arising from his crime.

Years later (in 1930) this Court had another occasion to apply the same doctrine. In Bernal and Enverso vs. House
and Tacloban Electric & Ice Plant, Ltd., 54 Phil., 327, the parents of the five-year-old child, Purificacion Bernal, brought
a civil action to recover damages for the child's death as a result of burns caused by the fault and negligence of the
defendants. On the evening of April 10, 1925, the Good Friday procession was held in Tacloban, Leyte. Fortunata
Enverso with her daughter Purificacion Bernal had come from another municipality to attend the same. After the
procession the mother and the daughter with two others were passing along Gran Capitan Street in front of the offices
of the Tacloban Electric & Ice Plant, Ltd., owned by defendants J. V. House, when an automobile appeared from the
opposite direction. The little girl, who was slightly ahead of the rest, was so frightened by the automobile that she
turned to run, but unfortunately she fell into the street gutter where hot water from the electric plant was flowing. The
child died that same night from the burns. The trial courts dismissed the action because of the contributory negligence
of the plaintiffs. But this Court held, on appeal, that there was no contributory negligence, and allowed the parents
P1,000 in damages from J. V. House who at the time of the tragic occurrence was the holder of the franchise for the
electric plant. This Court said in part:

Although the trial judge made the findings of fact hereinbefore outlined, he nevertheless was led to order the
dismissal of the action because of the contributory negligence of the plaintiffs. It is from this point that a majority
of the court depart from the stand taken by the trial judge. The mother and her child had a perfect right to be
on the principal street of Tacloban, Leyte, on the evening when the religious procession was held. There was
nothing abnormal in allowing the child to run along a few paces in advance of the mother. No one could foresee
the coincidence of an automobile appearing and of a frightened child running and falling into a ditch filled with
hot water. The doctrine announced in the much debated case of Rakes vs. Atlantic Gulf and Pacific Co.
([1907]), 7 Phil., 359), still rule. Article 1902 of the Civil Code must again be enforced. The contributory
negligence of the child and her mother, if any, does not operate as a bar to recovery, but in its strictest sense
could only result in reduction of the damages.

It is most significant that in the case just cited, this Court specifically applied article 1902 of the Civil Code. It is thus
that although J. V. House could have been criminally prosecuted for reckless or simple negligence and not only
punished but also made civilly liable because of his criminal negligence, nevertheless this Court awarded damages
in an independent civil action for fault or negligence under article 1902 of the Civil Code.

In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915), the action was for damages for the death of the plaintiff's
daughter alleged to have been caused by the negligence of the servant in driving an automobile over the child. It
appeared that the cause of the mishap was a defect in the steering gear. The defendant Leynes had rented the
automobile from the International Garage of Manila, to be used by him in carrying passengers during the fiesta of Tuy,
Batangas. Leynes was ordered by the lower court to pay P1,000 as damages to the plaintiff. On appeal this Court
reversed the judgment as to Leynes on the ground that he had shown that the exercised the care of a good father of
a family, thus overcoming the presumption of negligence under article 1903. This Court said:

As to selection, the defendant has clearly shown that he exercised the care and diligence of a good father of
a family. He obtained the machine from a reputable garage and it was, so far as appeared, in good condition.
The workmen were likewise selected from a standard garage, were duly licensed by the Government in their
particular calling, and apparently thoroughly competent. The machine had been used but a few hours when
the accident occurred and it is clear from the evidence that the defendant had no notice, either actual or
constructive, of the defective condition of the steering gear.

The legal aspect of the case was discussed by this Court thus:

Article 1903 of the Civil Code not only establishes liability in cases of negligence, but also provides when the
liability shall cease. It says:

"The liability referred to in this article shall cease when the persons mentioned therein prove that they
employed all the diligence of a good father of a family to avoid the damage."

From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or
employee there instantly arises a presumption of law that there was negligence on the part of the matter or
employer either in the selection of the servant or employee, or in supervision over him after the selection, or
both; and (2) that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It
follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision
he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is
relieve from liability.
 This theory bases the responsibility of the master ultimately on his own negligence and not on that of his
servant.

The doctrine of the case just cited was followed by this Court in Cerf vs. Medel (33 Phil., 37 [year 1915]). In the latter
case, the complaint alleged that the defendant's servant had so negligently driven an automobile, which was operated
by defendant as a public vehicle, that said automobile struck and damaged the plaintiff's motorcycle. This Court,
applying article 1903 and following the rule in Bahia vs. Litonjua and Leynes, said in part (p. 41) that:

The master is liable for the negligent acts of his servant where he is the owner or director of a business or
enterprise and the negligent acts are committed while the servant is engaged in his master's employment as
such owner.

Another case which followed the decision in Bahia vs. Litonjua and Leynes was Cuison vs. Norton & Harrison Co., 55
Phil., 18 (year 1930). The latter case was an action for damages brought by Cuison for the death of his seven-year-
old son Moises. The little boy was on his way to school with his sister Marciana. Some large pieces of lumber fell from
a truck and pinned the boy underneath, instantly killing him. Two youths, Telesforo Binoya and Francisco Bautista,
who were working for Ora, an employee of defendant Norton & Harrison Co., pleaded guilty to the crime of homicide
through reckless negligence and were sentenced accordingly. This Court, applying articles 1902 and 1903, held:

The basis of civil law liability is not respondent superior but the relationship of pater familias. This theory bases
the liability of the master ultimately on his own negligence and not on that of his servant. (Bahia vs. Litonjua
and Leynes [1915], 30 Phil., 624; Cangco vs. Manila Railroad Co. [1918], 38 Phil., 768.)

In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517 (year 1930) the plaintiff brought an action
for damages for the demolition of its wharf, which had been struck by the steamer Helen C belonging to the defendant.
This Court held (p. 526):

The evidence shows that Captain Lasa at the time the plaintiff's wharf collapsed was a duly licensed captain,
authorized to navigate and direct a vessel of any tonnage, and that the appellee contracted his services
because of his reputation as a captain, according to F. C. Cadwallader. This being so, we are of the opinion
that the presumption of liability against the defendant has been overcome by the exercise of the care and
diligence of a good father of a family in selecting Captain Lasa, in accordance with the doctrines laid down by
this court in the cases cited above, and the defendant is therefore absolved from all liability.

It is, therefore, seen that the defendant's theory about his secondary liability is negatived by the six cases above set
forth. He is, on the authority of these cases, primarily and directly responsible in damages under article 1903, in
relation to article 1902, of the Civil Code.

Let us now take up the Philippine decisions relied upon by the defendant. We study first, City of Manila vs. Manila
Electric Co., 52 Phil., 586 (year 1928). A collision between a truck of the City of Manila and a street car of the Manila
Electric Co. took place on June 8, 1925. The truck was damaged in the amount of P1,788.27. Sixto Eustaquio, the
motorman, was prosecuted for the crime of damage to property and slight injuries through reckless imprudence. He
was found guilty and sentenced to pay a fine of P900, to indemnify the City of Manila for P1,788.27, with subsidiary
imprisonment in case of insolvency. Unable to collect the indemnity from Eustaquio, the City of Manila filed an action
against the Manila Electric Company to obtain payment, claiming that the defendant was subsidiarily liable. The main
defense was that the defendant had exercised the diligence of a good father of a family to prevent the damage. The
lower court rendered judgment in favor of the plaintiff. This Court held, in part, that this case was governed by the
Penal Code, saying:

With this preliminary point out of the way, there is no escaping the conclusion that the provisions of the Penal
Code govern. The Penal Code in easily understandable language authorizes the determination of subsidiary
liability. The Civil Code negatives its application by providing that civil obligations arising from crimes or
misdemeanors shall be governed by the provisions of the Penal Code. The conviction of the motorman was a
misdemeanor falling under article 604 of the Penal Code. The act of the motorman was not a wrongful or
negligent act or omission not punishable by law. Accordingly, the civil obligation connected up with the Penal
Code and not with article 1903 of the Civil Code. In other words, the Penal Code affirms its jurisdiction while
the Civil Code negatives its jurisdiction. This is a case of criminal negligence out of which civil liability arises
and not a case of civil negligence.
 xxx xxx xxx

Our deduction, therefore, is that the case relates to the Penal Code and not to the Civil Code. Indeed, as
pointed out by the trial judge, any different ruling would permit the master to escape scot-free by simply alleging
and proving that the master had exercised all diligence in the selection and training of its servants to prevent
the damage. That would be a good defense to a strictly civil action, but might or might not be to a civil action
either as a part of or predicated on conviction for a crime or misdemeanor. (By way of parenthesis, it may be
said further that the statements here made are offered to meet the argument advanced during our deliberations
to the effect that article 0902 of the Civil Code should be disregarded and codal articles 1093 and 1903
applied.)

It is not clear how the above case could support the defendant's proposition, because the Court of Appeals based its
decision in the present case on the defendant's primary responsibility under article 1903 of the Civil Code and not on
his subsidiary liability arising from Fontanilla's criminal negligence. In other words, the case of City of Manila vs. Manila
Electric Co., supra, is predicated on an entirely different theory, which is the subsidiary liability of an employer arising
from a criminal act of his employee, whereas the foundation of the decision of the Court of Appeals in the present
case is the employer's primary liability under article 1903 of the Civil Code. We have already seen that this is a proper
and independent remedy.

Arambulo vs. Manila Electric Co. (55 Phil., 75), is another case invoked by the defendant. A motorman in the employ
of the Manila Electric Company had been convicted o homicide by simple negligence and sentenced, among other
things, to pay the heirs of the deceased the sum of P1,000. An action was then brought to enforce the subsidiary
liability of the defendant as employer under the Penal Code. The defendant attempted to show that it had exercised
the diligence of a good father of a family in selecting the motorman, and therefore claimed exemption from civil liability.
But this Court held:

In view of the foregoing considerations, we are of opinion and so hold, (1) that the exemption from civil liability
established in article 1903 of the Civil Code for all who have acted with the diligence of a good father of a
family, is not applicable to the subsidiary civil liability provided in article 20 of the Penal Code.

The above case is also extraneous to the theory of the defendant in the instant case, because the action there had
for its purpose the enforcement of the defendant's subsidiary liability under the Penal Code, while in the case at bar,
the plaintiff's cause of action is based on the defendant's primary and direct responsibility under article 1903 of the
Civil Code. In fact, the above case destroys the defendant's contention because that decision illustrates the principle
that the employer's primary responsibility under article 1903 of the Civil Code is different in character from his
subsidiary liability under the Penal Code.

In trying to apply the two cases just referred to, counsel for the defendant has failed to recognize the distinction
between civil liability arising from a crime, which is governed by the Penal Code, and the responsibility for cuasi-
delito or culpa aquiliana under the Civil Code, and has likewise failed to give the importance to the latter type of civil
action.

The defendant-petitioner also cites Francisco vs. Onrubia (46 Phil., 327). That case need not be set forth. Suffice it to
say that the question involved was also civil liability arising from a crime. Hence, it is as inapplicable as the two cases
above discussed.

The foregoing authorities clearly demonstrate the separate individuality of cuasi-delitos or culpa aquiliana under the
Civil Code. Specifically they show that there is a distinction between civil liability arising from criminal negligence
(governed by the Penal Code) and responsibility for fault or negligence under articles 1902 to 1910 of the Civil Code,
and that the same negligent act may produce either a civil liability arising from a crime under the Penal Code, or a
separate responsibility for fault or negligence under articles 1902 to 1910 of the Civil Code. Still more concretely, the
authorities above cited render it inescapable to conclude that the employer — in this case the defendant-petitioner —
is primarily and directly liable under article 1903 of the Civil Code.

The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose of this case. But
inasmuch as we are announcing doctrines that have been little understood in the past, it might not be inappropriate
to indicate their foundations.
Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple negligence. If we were to
hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not punished by law, according to the
literal import of article 1093 of the Civil Code, the legal institution of culpa aquiliana would have very little scope and
application in actual life. Death or injury to persons and damage to property through any degree of negligence — even
the slightest — would have to be indemnified only through the principle of civil liability arising from a crime. In such a
state of affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We are loath to impute to the lawmaker
any intention to bring about a situation so absurd and anomalous. Nor are we, in the interpretation of the laws,
disposed to uphold the letter that killeth rather than the spirit that giveth life. We will not use the literal meaning of the
law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa
aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code.

Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is required, while in a
civil case, preponderance of evidence is sufficient to make the defendant pay in damages. There are numerous cases
of criminal negligence which can not be shown beyond reasonable doubt, but can be proved by a preponderance of
evidence. In such cases, the defendant can and should be made responsible in a civil action under articles 1902 to
1910 of the Civil Code. Otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi remedium.

Thirdly, to hold that there is only one way to make defendant's liability effective, and that is, to sue the driver and
exhaust his (the latter's) property first, would be tantamount to compelling the plaintiff to follow a devious and
cumbersome method of obtaining relief. True, there is such a remedy under our laws, but there is also a more
expeditious way, which is based on the primary and direct responsibility of the defendant under article 1903 of the
Civil Code. Our view of the law is more likely to facilitate remedy for civil wrongs, because the procedure indicated by
the defendant is wasteful and productive of delay, it being a matter of common knowledge that professional drivers of
taxis and similar public conveyance usually do not have sufficient means with which to pay damages. Why, then,
should the plaintiff be required in all cases to go through this roundabout, unnecessary, and probably useless
procedure? In construing the laws, courts have endeavored to shorten and facilitate the pathways of right and justice.

At this juncture, it should be said that the primary and direct responsibility of employers and their presumed negligence
are principles calculated to protect society. Workmen and employees should be carefully chosen and supervised in
order to avoid injury to the public. It is the masters or employers who principally reap the profits resulting from the
services of these servants and employees. It is but right that they should guarantee the latter's careful conduct for the
personnel and patrimonial safety of others. As Theilhard has said, "they should reproach themselves, at least, some
for their weakness, others for their poor selection and all for their negligence." And according to Manresa, "It is much
more equitable and just that such responsibility should fall upon the principal or director who could have chosen a
careful and prudent employee, and not upon the injured person who could not exercise such selection and who used
such employee because of his confidence in the principal or director." (Vol. 12, p. 622, 2nd Ed.) Many jurists also base
this primary responsibility of the employer on the principle of representation of the principal by the agent. Thus,
Oyuelos says in the work already cited (Vol. 7, p. 747) that before third persons the employer and employee "vienen
a ser como una sola personalidad, por refundicion de la del dependiente en la de quien le emplea y utiliza." ("become
as one personality by the merging of the person of the employee in that of him who employs and utilizes him.") All
these observations acquire a peculiar force and significance when it comes to motor accidents, and there is need of
stressing and accentuating the responsibility of owners of motor vehicles.

Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on this subject,
which has given rise to the overlapping or concurrence of spheres already discussed, and for lack of understanding
of the character and efficacy of the action for culpa aquiliana, there has grown up a common practice to seek damages
only by virtue of the civil responsibility arising from a crime, forgetting that there is another remedy, which is by invoking
articles 1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it has nevertheless
rendered practically useless and nugatory the more expeditious and effective remedy based on culpa
aquiliana or culpa extra-contractual. In the present case, we are asked to help perpetuate this usual course. But we
believe it is high time we pointed out to the harm done by such practice and to restore the principle of responsibility
for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is high time we caused the stream
of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no longer be diverted into
that of a crime under the Penal Code. This will, it is believed, make for the better safeguarding of private rights because
it re-establishes an ancient and additional remedy, and for the further reason that an independent civil action, not
depending on the issues, limitations and results of a criminal prosecution, and entirely directed by the party wronged
or his counsel, is more likely to secure adequate and efficacious redress.
In view of the foregoing, the judgment of the Court of Appeals should be and is hereby affirmed, with costs against
the defendant-petitioner.

Yulo, C.J., Moran, Ozaeta and Paras, JJ., concur.

G.R. No. L-24803 May 26, 1977

PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito Elcano,
deceased, plaintiffs-appellants,
vs.
REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of said minor, defendants-appellees.

Cruz & Avecilla for appellants.

Marvin R. Hill & Associates for appellees.

BARREDO, J.:

Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in Civil Case No. Q-8102,
Pedro Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to dismiss of defendants, the complaint of plaintiffs
for recovery of damages from defendant Reginald Hill, a minor, married at the time of the occurrence, and his father,
the defendant Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald of the son of
the plaintiffs, named Agapito Elcano, of which, when criminally prosecuted, the said accused was acquitted on the
ground that his act was not criminal, because of "lack of intent to kill, coupled with mistake."

Actually, the motion to dismiss based on the following grounds:

1. The present action is not only against but a violation of section 1, Rule 107, which is now Rule III,
of the Revised Rules of Court;

2. The action is barred by a prior judgment which is now final and or in res-adjudicata;

3. The complaint had no cause of action against defendant Marvin Hill, because he was relieved as
guardian of the other defendant through emancipation by marriage.

(P. 23, Record [p. 4, Record on Appeal.])

was first denied by the trial court. It was only upon motion for reconsideration of the defendants of such denial,
reiterating the above grounds that the following order was issued:

Considering the motion for reconsideration filed by the defendants on January 14, 1965 and after
thoroughly examining the arguments therein contained, the Court finds the same to be meritorious and
well-founded.

WHEREFORE, the Order of this Court on December 8, 1964 is hereby reconsidered by ordering the
dismissal of the above entitled case.

SO ORDERED.

Quezon City, Philippines, January 29, 1965. (p. 40, Record [p. 21, Record on Appeal.)

Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our resolution the following
assignment of errors:

THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING THE CLAIM OF
DEFENDANTS THAT -

I
 THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION OF SECTION 1, RULE
107, NOW RULE 111, OF THE REVISED RULES OF COURT, AND THAT SECTION 3(c) OF RULE
111, RULES OF COURT IS APPLICABLE;

II

THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINAL OR RES-ADJUDICTA;

III

THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE CIVIL CODE, ARE
INAPPLICABLE IN THE INSTANT CASE; and

IV

THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST DEFENDANT MARVIN HILL
BECAUSE HE WAS RELIEVED AS GUARDIAN OF THE OTHER DEFENDANT THROUGH
EMANCIPATION BY MARRIAGE. (page 4, Record.)

It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant- appellee Reginald Hill was
prosecuted criminally in Criminal Case No. 5102 of the Court of First Instance of Quezon City. After due trial, he was
acquitted on the ground that his act was not criminal because of "lack of intent to kill, coupled with mistake."
Parenthetically, none of the parties has favored Us with a copy of the decision of acquittal, presumably because
appellants do not dispute that such indeed was the basis stated in the court's decision. And so, when appellants filed
their complaint against appellees Reginald and his father, Atty. Marvin Hill, on account of the death of their son, the
appellees filed the motion to dismiss above-referred to.

As We view the foregoing background of this case, the two decisive issues presented for Our resolution are:

1. Is the present civil action for damages barred by the acquittal of Reginald in the criminal case wherein the action
for civil liability, was not reversed?

2. May Article 2180 (2nd and last paragraphs) of the Civil Code he applied against Atty. Hill, notwithstanding the
undisputed fact that at the time of the occurrence complained of. Reginald, though a minor, living with and getting
subsistenee from his father, was already legally married?

The first issue presents no more problem than the need for a reiteration and further clarification of the dual character,
criminal and civil, of fault or negligence as a source of obligation which was firmly established in this jurisdiction
in Barredo vs. Garcia, 73 Phil. 607. In that case, this Court postulated, on the basis of a scholarly dissertation by
Justice Bocobo on the nature of culpa aquiliana in relation to culpa criminal or delito and mere culpa or fault, with
pertinent citation of decisions of the Supreme Court of Spain, the works of recognized civilians, and earlier
jurisprudence of our own, that the same given act can result in civil liability not only under the Penal Code but also
under the Civil Code. Thus, the opinion holds:

The, above case is pertinent because it shows that the same act machinist. come under both the Penal
Code and the Civil Code. In that case, the action of the agent killeth unjustified and fraudulent and
therefore could have been the subject of a criminal action. And yet, it was held to be also a proper
subject of a civil action under article 1902 of the Civil Code. It is also to be noted that it was the
employer and not the employee who was being sued. (pp. 615-616, 73 Phil.). 1

It will be noticed that the defendant in the above case could have been prosecuted in a criminal case
because his negligence causing the death of the child was punishable by the Penal Code. Here is
therefore a clear instance of the same act of negligence being a proper subject matter either of a
criminal action with its consequent civil liability arising from a crime or of an entirely separate and
independent civil action for fault or negligence under article 1902 of the Civil Code. Thus, in this
jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana, under the Civil Code has
been fully and clearly recognized, even with regard to a negligent act for which the wrongdoer could
 have been prosecuted and convicted in a criminal case and for which, after such a conviction, he could
have been sued for this civil liability arising from his crime. (p. 617, 73 Phil.) 2

It is most significant that in the case just cited, this Court specifically applied article 1902 of the Civil Code.
It is thus that although J. V. House could have been criminally prosecuted for reckless or simple negligence
and not only punished but also made civilly liable because of his criminal negligence, nevertheless this
Court awarded damages in an independent civil action for fault or negligence under article 1902 of the Civil
Code. (p. 618, 73 Phil.) 3

The legal provisions, authors, and cases already invoked should ordinarily be sufficient to dispose of
this case. But inasmuch as we are announcing doctrines that have been little understood, in the past,
it might not he inappropriate to indicate their foundations.

Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also simple negligence.
If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not
punished by law, accordingly to the literal import of article 1093 of the Civil Code, the legal institution
of culpa aquiliana would have very little scope and application in actual life. Death or injury to persons
and damage to property- through any degree of negligence - even the slightest - would have to be
Idemnified only through the principle of civil liability arising from a crime. In such a state of affairs, what
sphere would remain for cuasi-delito or culpa aquiliana? We are loath to impute to the lawmaker any
intention to bring about a situation so absurd and anomalous. Nor are we, in the interpretation of the
laws, disposed to uphold the letter that killeth rather than the spirit that giveth life. We will not use the
literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and
such full-grown development as culpa aquiliana or cuasi-delito, which is conserved and made
enduring in articles 1902 to 1910 of the Spanish Civil Code.

Secondary, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is
required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay in
damages. There are numerous cases of criminal negligence which can not be shown beyond
reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the defendant
can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code.
Otherwise. there would be many instances of unvindicated civil wrongs. "Ubi jus Idemnified
remedium." (p. 620,73 Phil.)

Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on
this subject, which has given rise to the overlapping or concurrence of spheres already discussed, and
for lack of understanding of the character and efficacy of the action for culpa aquiliana, there has
grown up a common practice to seek damages only by virtue of the civil responsibility arising from a
crime, forgetting that there is another remedy, which is by invoking articles 1902-1910 of the Civil
Code. Although this habitual method is allowed by, our laws, it has nevertheless rendered practically
useless and nugatory the more expeditious and effective remedy based on culpa aquiliana or culpa
extra-contractual. In the present case, we are asked to help perpetuate this usual course. But we
believe it is high time we pointed out to the harms done by such practice and to restore the principle
of responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is
high time we caused the stream of quasi-delict or culpa aquiliana to flow on its own natural channel,
so that its waters may no longer be diverted into that of a crime under the Penal Code. This will, it is
believed, make for the better safeguarding or private rights because it realtor, an ancient and additional
remedy, and for the further reason that an independent civil action, not depending on the issues,
limitations and results of a criminal prosecution, and entirely directed by the party wronged or his
counsel, is more likely to secure adequate and efficacious redress. (p. 621, 73 Phil.)

Contrary to an immediate impression one might get upon a reading of the foregoing excerpts from the opinion in
Garcia that the concurrence of the Penal Code and the Civil Code therein referred to contemplate only acts of
negligence and not intentional voluntary acts - deeper reflection would reveal that the thrust of the pronouncements
therein is not so limited, but that in fact it actually extends to fault or culpa. This can be seen in the reference made
therein to the Sentence of the Supreme Court of Spain of February 14, 1919, supra, which involved a case of fraud
or estafa, not a negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force here at the time of Garcia,
provided textually that obligations "which are derived from acts or omissions in which fault or negligence, not
punishable by law, intervene shall be the subject of Chapter II, Title XV of this book (which refers to quasi-delicts.)"
And it is precisely the underline qualification, "not punishable by law", that Justice Bocobo emphasized could lead to
an ultimo construction or interpretation of the letter of the law that "killeth, rather than the spirit that giveth lift- hence,
the ruling that "(W)e will not use the literal meaning of the law to smother and render almost lifeless a principle of such
ancient origin and such full-grown development as culpa aquiliana or quasi-delito, which is conserved and made
enduring in articles 1902 to 1910 of the Spanish Civil Code." And so, because Justice Bacobo was Chairman of the
Code Commission that drafted the original text of the new Civil Code, it is to be noted that the said Code, which was
enacted after the Garcia doctrine, no longer uses the term, 11 not punishable by law," thereby making it clear that the
concept of culpa aquiliana includes acts which are criminal in character or in violation of the penal law, whether
voluntary or matter. Thus, the corresponding provisions to said Article 1093 in the new code, which is Article 1162,
simply says, "Obligations derived from quasi-delicto shall be governed by the provisions of Chapter 2, Title XVII of
this Book, (on quasi-delicts) and by special laws." More precisely, a new provision, Article 2177 of the new code
provides:

ART. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and
distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot
recover damages twice for the same act or omission of the defendant.

According to the Code Commission: "The foregoing provision (Article 2177) through at first sight startling, is not so
novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of
the criminal law, while the latter is a "culpa aquiliana" or quasi-delict, of ancient origin, having always had its own
foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and
"culpa extracontractual" or "cuasi-delito" has been sustained by decision of the Supreme Court of Spain and
maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the
proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall
not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to
a quasi-delict or 'culpa aquiliana'. But said article forestalls a double recovery.", (Report of the Code) Commission, p.
162.)

Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of Justice
Bacobo about construction that upholds "the spirit that giveth lift- rather than that which is literal that killeth the intent
of the lawmaker should be observed in applying the same. And considering that the preliminary chapter on human
relations of the new Civil Code definitely establishes the separability and independence of liability in a civil action for
acts criminal in character (under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100
of the Revised Penal Code, and, in a sense, the Rules of Court, under Sections 2 and 3 (c), Rule 111, contemplate
also the same separability, it is "more congruent with the spirit of law, equity and justice, and more in harmony with
modern progress"- to borrow the felicitous relevant language in Rakes vs. Atlantic. Gulf and Pacific Co., 7 Phil. 359,
to hold, as We do hold, that Article 2176, where it refers to "fault or negligencia covers not only acts "not punishable
by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate
civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or
acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages
on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards
made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111,
refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the
same act considered as a quasi-delict only and not as a crime is not estinguished even by a declaration in the criminal
case that the criminal act charged has not happened or has not been committed by the accused. Briefly stated, We
here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable
by law.4

It results, therefore, that the acquittal of Reginal Hill in the criminal case has not extinguished his liability for quasi-
delict, hence that acquittal is not a bar to the instant action against him.

Coming now to the second issue about the effect of Reginald's emancipation by marriage on the possible civil liability
of Atty. Hill, his father, it is also Our considered opinion that the conclusion of appellees that Atty. Hill is already free
from responsibility cannot be upheld.

While it is true that parental authority is terminated upon emancipation of the child (Article 327, Civil Code), and under
Article 397, emancipation takes place "by the marriage of the minor (child)", it is, however, also clear that pursuant to
Article 399, emancipation by marriage of the minor is not really full or absolute. Thus "(E)mancipation by marriage or
by voluntary concession shall terminate parental authority over the child's person. It shall enable the minor to
administer his property as though he were of age, but he cannot borrow money or alienate or encumber real property
without the consent of his father or mother, or guardian. He can sue and be sued in court only with the assistance of
his father, mother or guardian."

Now under Article 2180, "(T)he obligation imposed by article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity,
the mother, are responsible. The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the minor children who live in their company." In the instant case, it is not controverted that
Reginald, although married, was living with his father and getting subsistence from him at the time of the occurrence
in question. Factually, therefore, Reginald was still subservient to and dependent on his father, a situation which is
not unusual.

It must be borne in mind that, according to Manresa, the reason behind the joint and solidary liability of presuncion
with their offending child under Article 2180 is that is the obligation of the parent to supervise their minor children in
order to prevent them from causing damage to third persons. 5 On the other hand, the clear implication of Article 399, in
providing that a minor emancipated by marriage may not, nevertheless, sue or be sued without the assistance of the parents,
is that such emancipation does not carry with it freedom to enter into transactions or do any act that can give rise to judicial
litigation. (See Manresa, Id., Vol. II, pp. 766-767, 776.) And surely, killing someone else invites judicial action. Otherwise
stated, the marriage of a minor child does not relieve the parents of the duty to see to it that the child, while still a minor,
does not give answerable for the borrowings of money and alienation or encumbering of real property which cannot be done
by their minor married child without their consent. (Art. 399; Manresa, supra.)

Accordingly, in Our considered view, Article 2180 applies to Atty. Hill notwithstanding the emancipation by marriage
of Reginald. However, inasmuch as it is evident that Reginald is now of age, as a matter of equity, the liability of Atty.
Hill has become milling, subsidiary to that of his son.

WHEREFORE, the order appealed from is reversed and the trial court is ordered to proceed in accordance with the
foregoing opinion. Costs against appellees.

Separate Opinions

AQUINO, J, concurring:

Article 2176 of the Civil Code comprehends any culpable act, which is blameworthy, when judged by accepted legal
standards. "The Idea thus expressed is undoubtedly board enough to include any rational conception of liability for
the tortious acts likely to be developed in any society." (Street, J. in Daywalt vs. Corporacion de PP. Agustinos
Recoletos, 39 Phil. 587, 600). See article 38, Civil Code and the ruling that "the infant tortfeasor is liable in a civil
action to the injured person in the same manner and to the same extent as an adult" (27 Am. Jur. 812 cited by Bocobo,
J., in Magtibay vs. Tiangco, 74 Phil. 576, 579).

Separate Opinions

AQUINO, J, concurring:

Article 2176 of the Civil Code comprehends any culpable act, which is blameworthy, when judged by accepted legal
standards. "The Idea thus expressed is undoubtedly board enough to include any rational conception of liability for
the tortious acts likely to be developed in any society." (Street, J. in Daywalt vs. Corporacion de PP. Agustinos
Recoletos, 39 Phil. 587, 600). See article 38, Civil Code and the ruling that "the infant tortfeasor is liable in a civil
action to the injured person in the same manner and to the same extent as an adult" (27 Am. Jur. 812 cited by Bocobo,
J., in Magtibay vs. Tiangco, 74 Phil. 576, 579).
G.R. No. 108017 April 3, 1995

MARIA BENITA A. DULAY, in her own behalf and in behalf of the minor children KRIZTEEN ELIZABETH,
BEVERLY MARIE and NAPOLEON II, all surnamed DULAY, petitioners,
vs.
THE COURT OF APPEALS, Former Eighth Division, HON. TEODORO P. REGINO, in his capacity as Presiding
Judge of the Regional Trial Court National Capital Region, Quezon City, Br. 84, SAFEGUARD INVESTIGATION
AND SECURITY CO., INC., and SUPERGUARD SECURITY CORPORATION, respondents.

BIDIN, J.:

This petition for certiorari prays for the reversal of the decision of the Court of Appeals dated October 29, 1991 in CA-
G.R. CV No. 24646 which affirmed the order of the Regional Trial Court dismissing Civil Case No. Q-89-1751, and its
resolution dated November 17, 1991 denying herein, petitioner's motion for reconsideration.

The antecedent facts of the case are as follows:

On December 7, 1988, an altercation between Benigno Torzuela and Atty. Napoleon Dulay occurred at the "Big Bang
Sa Alabang," Alabang Village, Muntinlupa as a result of which Benigno Torzuela, the security guard on duty at the
said carnival, shot and killed Atty. Napoleon Dulay.

Herein petitioner Maria Benita A. Dulay, widow of the deceased Napoleon Dulay, in her own behalf and in behalf of
her minor children, filed on February 8, 1989 an action for damages against Benigno Torzuela and herein private
respondents Safeguard Investigation and Security Co., Inc., ("SAFEGUARD") and/or Superguard Security Corp.
("SUPERGUARD"), alleged employers of defendant Torzuela. The complaint, docketed as Civil Case No. Q-89-1751
among others alleges the following:

1. . . .

Defendants SAFEGUARD INVESTIGATION AND SECURITY CO., INC., (Defendant Safeguard) and
SUPERGUARD SECURITY CORPORATION (Defendant Superguard) are corporations duly
organized and existing in accordance with Philippine laws, with offices at 10th Floor, Manufacturers
Building, Inc., Plaza Santa Cruz, Manila. They are impleaded as alternative defendants for, while the
former appears to be the employer of defendant BENIGNO TORZUELA (defendant TORZUELA), the
latter impliedly acknowledged responsibility for the acts of defendant TORZUELA by extending its
sympathies to plaintiffs.

Defendant BENIGNO TORZUELA is of legal age, an employee of defendant SAFEGUARD and/or

defendant SUPERGUARD and, at the time of the incident complained of, was under their control and
supervision. . . .

3. On December 7, 1988 at around 8:00 a.m., defendant TORZUELA, while he was on duty as security
guard at the "Big Bang sa Alabang," Alabang Village, Muntinlupa, Metro Manila shot and killed
NAPOLEON V. DULAY with a .38 caliber revolver belonging to defendant SAFEGUARD, and/or
SUPERGUARD (per Police Report dated January 7, 1989, copy attached as Annex A);

4. The incident resulting in the death of NAPOLEON V. DULAY was due to the concurring negligence
of the defendants. Defendant TORZUELA'S wanton and reckless discharge of the firearm issued to
him by defendant SAFEGUARD and/or SUPERGUARD was the immediate and proximate cause of
the injury, while the negligence of defendant SAFEGUARD and/or SUPERGUARD consists in its
having failed to exercise the diligence of a good father of a family in the supervision and control of its
employee to avoid the injury.

xxx xxx xxx

 (Rollo, pp. 117-118)

Petitioners prayed for actual, compensatory, moral and exemplary damages, and attorney's fees. The said Civil Case
No. Q-89-1751 was raffled to Branch 84 of the Regional Trial Court of Quezon City, presided by respondent Judge
Teodoro Regino.

On March 2, 1989, private respondent SUPERGUARD filed a Motion to Dismiss on the ground that the complaint
does not state a valid cause of action. SUPERGUARD claimed that Torzuela's act of shooting Dulay was beyond the
scope of his duties, and that since the alleged act of shooting was committed with deliberate intent (dolo), the civil
liability therefor is governed by Article 100 of the Revised Penal Code, which states:

Art. 100. Civil liability of a person guilty of a felony. — Every person criminally liable for a felony is also
civilly liable.

Respondent SUPERGUARD further alleged that a complaint for damages based on negligence under Article 2176 of
the New Civil Code, such as the one filed by petitioners, cannot lie, since the civil liability under Article 2176 applies
only to quasi-offenses under Article 365 of the Revised Penal Code. In addition, the private respondent argued that
petitioners' filing of the complaint is premature considering that the conviction of Torzuela in a criminal case is a
condition sine qua non for the employer's subsidiary liability (Rollo, p. 55-59).

Respondent SAFEGUARD also filed a motion praying that it be excluded as defendant on the ground that defendant
Torzuela is not one of its employees (Rollo, p. 96).

Petitioners opposed both motions, stating that their cause of action against the private respondents is based on their
liability under Article 2180 of the New Civil Code, which provides:

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
an industry.

xxx xxx xxx

(Emphasis supplied)

Petitioners contended that a suit against alternative defendants is allowed under Rule 3, Section 13 of the Rules of
Court. Therefore, the inclusion of private respondents as alternative defendants in the complaint is justified by the
following: the Initial Investigation Report prepared by Pat. Mario Tubon showing that Torzuela is an employee of
SAFEGUARD; and through overt acts, SUPERGUARD extended its sympathies to petitioners (Rollo, pp. 64 and 98).

Meanwhile, an Information dated March 21, 1989 charging Benigno Torzuela with homicide was filed before the
Regional Trial Court of Makati and was docketed as Criminal Case No. 89-1896.

On April 13, 1989, respondent Judge Regino issued an order granting SUPERGUARD'S motion to dismiss and
SAFEGUARD'S motion for exclusion as defendant. The respondent judge held that the complaint did not state facts
necessary or sufficient to constitute a quasi-delict since it does not mention any negligence on the part of Torzuela in
shooting Napoleon Dulay or that the same was done in the performance of his duties. Respondent judge ruled that
mere allegations of the concurring negligence of the defendants (private respondents herein) without stating the facts
showing such negligence are mere conclusions of law (Rollo, p. 106). Respondent judge also declared that the
complaint was one for damages founded on crimes punishable under Articles 100 and 103 of the Revised Penal Code
as distinguished from those arising from, quasi-delict. The dispositive portion of the order dated April 13, 1989 states:
 WHEREFORE, this Court holds that in view of the material and ultimate facts alleged in the verified
complaint and in accordance with the applicable law on the matter as well as precedents laid down by
the Supreme Court, the complaint against the alternative defendants Superguard Security Corporation
and Safeguard Investigation and Security Co., Inc., must be and (sic) it is hereby dismissed. (Rollo, p.
110)

The above order was affirmed by the respondent court and petitioners' motion for reconsideration thereof was denied.

Petitioners take exception to the assailed decision and insist that quasi-delicts are not limited to acts of negligence
but also cover acts that are intentional and voluntary, citing Andamo v. IAC (191 SCRA 195 [1990]). Thus, petitioners
insist that Torzuela' s act of shooting Napoleon Dulay constitutes a quasi-delict actionable under Article 2176 of the
New Civil Code.

Petitioners further contend that under Article 2180 of the New Civil Code, private respondents are primarily liable for
their negligence either in the selection or supervision of their employees. This liability is independent of the employee's
own liability for fault or negligence and is distinct from the subsidiary civil liability under Article 103 of the Revised
Penal Code. The civil action against the employer may therefore proceed independently of the criminal action pursuant
to Rule 111 Section 3 of the Rules of Court. Petitioners submit that the question of whether Torzuela is an employee
of respondent SUPERGUARD or SAFEGUARD would be better resolved after trial.

Moreover, petitioners argue that Torzuela's act of shooting Dulay is also actionable under Article 33 of the New Civil
Code, to wit:

Art. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely
separate and distinct from the criminal action, may be brought by the injured party. Such civil action
shall proceed independently of the criminal prosecution, and shall require only a preponderance of
evidence. (Emphasis supplied)

In the same vein, petitioners cite Section 3, Rule 111 of the Rules of Court which provides:

Rule 111. . . . .

Sec. 3. When civil action may proceed independently — In the cases provided for in Articles 32, 33,
34 and 2176 of the Civil Code of the Philippines, the independent civil action which has been reserved
may be brought by the offended party, shall proceed independently of the criminal action, and shall
require only a preponderance of evidence. (Emphasis supplied)

The term "physical injuries" under Article 33 has been held to include consummated, frustrated and attempted
homicide. Thus, petitioners maintain that Torzuela's prior conviction is unnecessary since the civil action can proceed
independently of the criminal action. On the other hand, it is the private respondents' argument that since the act was
not committed with negligence, the petitioners have no cause of action under Articles 2116 and 2177 of the New Civil
Code. The civil action contemplated in Article 2177 is not applicable to acts committed with deliberate intent, but only
applies to quasi-offenses under Article 365 of the Revised Penal Code. Torzuela's act of shooting Atty. Dulay to death,
aside from being purely personal, was done with deliberate intent and could not have been part of his duties as security
guard. And since Article 2180 of the New Civil Code covers only: acts done within the scope of the employee's
assigned tasks, the private respondents cannot be held liable for damages.

We find for petitioners.

It is undisputed that Benigno Torzuela is being prosecuted for homicide for the fatal shooting of Napoleon Dulay. Rule
111 of the Rules on Criminal Procedure provides:

Sec. 1. Institution of criminal and civil actions. When a criminal action is instituted, the civil action for
the recovery of civil liability is impliedly instituted with the criminal action, unless the offended party
waives the civil action , reserves his right to institute it separately or institutes the civil action prior to
the criminal action.
 Such civil action includes recovery of indemnity under the Revised Penal Code, and damages under
Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising from the same act or omission
of the accused. (Emphasis supplied)

It is well-settled that the filing of an independent civil action before the prosecution in the criminal action presents
evidence is even far better than a compliance with the requirement of express reservation (Yakult Philippines v. Court
of Appeals, 190 SCRA 357 [1990]). This is precisely what the petitioners opted to do in this case. However, the private
respondents opposed the civil action on the ground that the same is founded on a delict and not on a quasi-delict as
the shooting was not attended by negligence. What is in dispute therefore is the nature of the petitioner's cause of
action.

The nature of a cause of action is determined by the facts alleged in the complaint as constituting the cause of action
(Republic v. Estenzo, 158 SCRA 282 [1988]). The purpose of an action or suit and the law to govern it is to be
determined not by the claim of the party filing the action, made in his argument or brief, but rather by the complaint
itself, its allegations and prayer for relief. (De Tavera v. Philippine Tuberculosis Society, 112 SCRA 243 [1982]). An
examination of the complaint in the present case would show that the plaintiffs, petitioners herein, are invoking their
right to recover damages against the private respondents for their vicarious responsibility for the injury caused by
Benigno Torzuela's act of shooting and killing Napoleon Dulay, as stated in paragraphs 1 and 2 of the complaint.

Article 2176 of the New Civil Code provides:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties is called a quasi-delict and is governed by the provisions of this Chapter.

Contrary to the theory of private respondents, there is no justification for limiting the scope of Article 2176 of the Civil
Code to acts or omissions resulting from negligence. Well-entrenched is the doctrine that article 2176 covers not only
acts committed with negligence, but also acts which are voluntary and intentional. As far back as the definitive case
of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that:

. . . Article 2176, where it refers to "fault or negligence," covers not only acts "not punishable by law"
but also acts criminal in character; whether intentional and voluntary or negligent. Consequently, a
separate civil action against the offender in a criminal act, whether or not he is criminally prosecuted
and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged
also criminally, to recover damages on both scores, and would be entitled in such eventuality only to
the bigger award of the two, assuming the awards made in the two cases vary. In other words, the
extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability
founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act
considered as quasi-delict only and not as a crime is not extinguished even by a declaration in the
criminal case that the criminal act charged has not happened or has not been committed by the
accused. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary
and negligent acts which may be punishable by law. (Emphasis supplied)

The same doctrine was echoed in the case of Andamo v. Intermediate Appellate Court (191 SCRA 195 [1990]),
wherein the Court held:

Article 2176, whenever it refers to "fault or negligence," covers not only acts criminal in character,
whether intentional and voluntary or negligent. Consequently, a civil action lies against the offender in
a criminal act, whether or not he is prosecuted or found guilty or acquitted, provided that the offended
party is not allowed, (if the tortfeasor is actually also charged criminally), to recover damages on both
scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the
awards made in the two cases vary. [citing Virata v. Ochoa, 81 SCRA 472] (Emphasis supplied)

Private respondents submit that the word "intentional" in the Andamo case is inaccurate obiter, and should be read
as "voluntary" since intent cannot be coupled with negligence as defined by Article 365 of the Revised Penal Code.
In the absence of more substantial reasons, this Court will not disturb the above doctrine on the coverage of Article
2176.
Private respondents further aver that Article 33 of the New Civil Code applies only to injuries intentionally committed
pursuant to the ruling in Marcia v. CA (120 SCRA 193 [1983]), and that the actions for damages allowed thereunder
are ex-delicto. However, the term "physical injuries" in Article 33 has already been construed to include bodily injuries
causing death (Capuno v. Pepsi-Cola Bottling Co. of the Philippines, 121 Phil. 638 [1965); Carandang v. Santiago, 97
Phil. 94 [1955]). It is not the crime of physical injuries defined in the Revised Penal Code. It includes not only physical
injuries but also consummated, frustrated, and attempted homicide (Madeja v. Caro, 126 SCRA 293 [1983]). Although
in the Marcia case (supra), it was held that no independent civil action may be filed under Article 33 where the crime
is the result of criminal negligence, it must be noted however, that Torzuela, the accused in the case at bar, is charged
with homicide, not with reckless imprudence, whereas the defendant in Marcia was charged with reckless imprudence.
Therefore, in this case, a civil action based on Article 33 lies.

Private respondents also contend that their liability is subsidiary under the Revised Penal Code; and that they are not
liable for Torzuela's act which is beyond the scope of his duties as a security guard. It having been established that
the instant action is not ex-delicto, petitioners may proceed directly against Torzuela and the private respondents.
Under Article 2180 of the New Civil Code as aforequoted, when an injury is caused by the negligence of the employee,
there instantly arises a presumption of law that there was negligence on the part of the master or employer either in
the selection of the servant or employee, or in supervision over him after selection or both (Layugan v. Intermediate
Appellate Court, 167 SCRA 363 [1988]). The liability of the employer under Article 2180 is direct and immediate; it is
not conditioned upon prior recourse against the negligent employee and a prior showing of the insolvency of such
employee (Kapalaran Bus Lines v. Coronado, 176 SCRA 792 [1989]). Therefore, it is incumbent upon the private
respondents to prove that they exercised the diligence of a good father of a family in the selection and supervision of
their employee.

Since Article 2176 covers not only acts of negligence but also acts which are intentional and voluntary, it was therefore
erroneous on the part of the trial court to dismiss petitioner's complaint simply because it failed to make allegations of
attendant negligence attributable to private respondents.

With respect to the issue of whether the complaint at hand states a sufficient cause of action, the general rule is that
the allegations in a complaint are sufficient to constitute a cause of action against the defendants if, admitting the facts
alleged, the court can render a valid judgment upon the same in accordance with the prayer therein. A cause of action
exist if the following elements are present, namely: (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate
such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting
a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of
damages (Del Bros Hotel Corporation v. CA, 210 SCRA 33 [1992]); Development Bank of the Philippines v. Pundogar,
218 SCRA 118 [1993])

This Court finds, under the foregoing premises, that the complaint sufficiently alleged an actionable breach on the part
of the defendant Torzuela and respondents SUPERGUARD and/or SAFEGUARD. It is enough that the complaint
alleged that Benigno Torzuela shot Napoleon Dulay resulting in the latter's death; that the shooting occurred while
Torzuela was on duty; and that either SUPERGUARD and/or SAFEGUARD was Torzuela's employer and responsible
for his acts. This does not operate however, to establish that the defendants below are liable. Whether or not the
shooting was actually reckless and wanton or attended by negligence and whether it was actually done within the
scope of Torzuela's duties; whether the private respondents SUPERGUARD and/or SAFEGUARD failed to exercise
the diligence of a good father of a family; and whether the defendants are actually liable, are questions which can be
better resolved after trial on the merits where each party can present evidence to prove their respective allegations
and defenses. In determining whether the allegations of a complaint are sufficient to support a cause of action, it must
be borne in mind that the complaint does not have to establish or allege the facts proving the existence of a cause of
action at the outset; this will have to be done at the trial on the merits of the case (Del Bros Hotel Corporation v.
CA, supra). If the allegations in a complaint can furnish a sufficient basis by which the complaint can be maintained,
the same should not be dismissed regardless of the defenses that may be assessed by the defendants (Rava Dev't.
Corp. v. CA, 211 SCRA 152 [1992] citing Consolidated Bank & Trust Corporation v. Court of Appeals, 197 SCRA 663
[1991]). To sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief
does not exist rather than that a claim has been defectively stated, is ambiguous, indefinite or uncertain (Azur v.
Provincial Board, 27 SCRA 50 [1969]). Since the petitioners clearly sustained an injury to their rights under the law, it
would be more just to allow them to present evidence of such injury.
WHEREFORE, premises considered, the petition for review is hereby GRANTED. The decision of the Court of
Appeals as well as the Order of the Regional Trial Court dated April 13, 1989 are hereby REVERSED and SET ASIDE.
Civil Case No. Q-89-1751 is remanded to the Regional Trial Court for trial on the merits. This decision is immediately
executory.

SO ORDERED.
G.R. No. 74761 November 6, 1990

NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT (First Civil Cases Division) and MISSIONARIES OF OUR LADY OF LA
SALETTE, INC., respondents.

Lope E. Adriano for petitioners.

Padilla Law Office for private respondent.

FERNAN, C.J.:

The pivotal issue in this petition for certiorari, prohibition and mandamus is whether a corporation, which has built
through its agents, waterpaths, water conductors and contrivances within its land, thereby causing inundation and
damage to an adjacent land, can be held civilly liable for damages under Articles 2176 and 2177 of the Civil Code on
quasi-delicts such that the resulting civil case can proceed independently of the criminal case.

The antecedent facts are as follows:

Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in Biga (Biluso)
Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a religious
corporation.

Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake, were constructed,
which allegedly inundated and eroded petitioners' land, caused a young man to drown, damaged petitioners' crops
and plants, washed away costly fences, endangered the lives of petitioners and their laborers during rainy and stormy
seasons, and exposed plants and other improvements to destruction.

In July 1982, petitioners instituted a criminal action, docketed as Criminal Case No. TG-907-82, before the Regional
Trial Court of Cavite, Branch 4 (Tagaytay City), against Efren Musngi, Orlando Sapuay and Rutillo Mallillin, officers
and directors of herein respondent corporation, for destruction by means of inundation under Article 324 of the Revised
Penal Code.

Subsequently, on February 22, 1983, petitioners filed another action against respondent corporation, this time a civil
case, docketed as Civil Case No. TG-748, for damages with prayer for the issuance of a writ of preliminary injunction
before the same court. 1

On March 11, 1983, respondent corporation filed its answer to the complaint and opposition to the issuance of a writ
of preliminary injunction. Hearings were conducted including ocular inspections on the land. However, on April 26,
1984, the trial court, acting on respondent corporation's motion to dismiss or suspend the civil action, issued an
order suspending further hearings in Civil Case No, TG-748 until after judgment in the related Criminal Case No. TG-
907-82.

Resolving respondent corporation's motion to dismiss filed on June 22, 1984, the trial court issued on August 27, 1984
the disputed order dismissing Civil Case No. TG-748 for lack of jurisdiction, as the criminal case which was instituted
ahead of the civil case was still unresolved. Said order was anchored on the provision of Section 3 (a), Rule III of the
Rules of Court which provides that "criminal and civil actions arising from the same offense may be instituted
separately, but after the criminal action has been commenced the civil action cannot be instituted until final judgment
has been rendered in the criminal action." 2

Petitioners appealed from that order to the Intermediate Appellate Court. 3

On February 17, 1986, respondent Appellate Court, First Civil Cases Division, promulgated a decision 4 affirming the
questioned order of the trial court. 5 A motion for reconsideration filed by petitioners was denied by the Appellate Court
in its resolution dated May 19, 1986. 6

Directly at issue is the propriety of the dismissal of Civil Case No. TG-748 in accordance with Section 3 (a) of Rule
111 of the Rules of Court. Petitioners contend that the trial court and the Appellate Court erred in dismissing Civil
Case No. TG-748 since it is predicated on a quasi-delict. Petitioners have raised a valid point.

It is axiomatic that the nature of an action filed in court is determined by the facts alleged in the complaint as
constituting the cause of action. 7 The purpose of an action or suit and the law to govern it, including the period of
prescription, is to be determined not by the claim of the party filing the action, made in his argument or brief, but rather
by the complaint itself, its allegations and prayer for relief. 8 The nature of an action is not necessarily determined or
controlled by its title or heading but the body of the pleading or complaint itself. To avoid possible denial of substantial
justice due to legal technicalities, pleadings as well as remedial laws should be liberally construed so that the litigants
may have ample opportunity to prove their respective claims. 9

Quoted hereunder are the pertinent portions of petitioners' complaint in Civil Case No. TG-748:

4) That within defendant's land, likewise located at Biga (Biluso), Silang, Cavite, adjacent on the right
side of the aforesaid land of plaintiffs, defendant constructed waterpaths starting from the middle-right
portion thereof leading to a big hole or opening, also constructed by defendant, thru the lower portion
of its concrete hollow-blocks fence situated on the right side of its cemented gate fronting the provincial
highway, and connected by defendant to a man height inter-connected cement culverts which were
also constructed and lain by defendant cross-wise beneath the tip of the said cemented gate, the left-
end of the said inter-connected culverts again connected by defendant to a big hole or opening thru
the lower portion of the same concrete hollowblocks fence on the left side of the said cemented gate,
which hole or opening is likewise connected by defendant to the cemented mouth of a big canal, also
constructed by defendant, which runs northward towards a big hole or opening which was also built
by defendant thru the lower portion of its concrete hollow-blocks fence which separates the land of
plaintiffs from that of defendant (and which serves as the exit-point of the floodwater coming from the
land of defendant, and at the same time, the entrance-point of the same floodwater to the land of
plaintiffs, year after year, during rainy or stormy seasons.

5) That moreover, on the middle-left portion of its land just beside the land of plaintiffs, defendant also
constructed an artificial lake, the base of which is soil, which utilizes the water being channeled thereto
from its water system thru inter-connected galvanized iron pipes (No. 2) and complimented by rain
water during rainy or stormy seasons, so much so that the water below it seeps into, and the excess
water above it inundates, portions of the adjoining land of plaintiffs.

6) That as a result of the inundation brought about by defendant's aforementioned water conductors,
contrivances and manipulators, a young man was drowned to death, while herein plaintiffs suffered
and will continue to suffer, as follows:

a) Portions of the land of plaintiffs were eroded and converted to deep, wide and long
canals, such that the same can no longer be planted to any crop or plant.

b) Costly fences constructed by plaintiffs were, on several occasions, washed away.

c) During rainy and stormy seasons the lives of plaintiffs and their laborers are always
in danger.

d) Plants and other improvements on other portions of the land of plaintiffs are exposed
to destruction. ... 10

A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of
the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the
plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the
connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the
plaintiff. 11

Clearly, from petitioner's complaint, the waterpaths and contrivances built by respondent corporation are alleged to
have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act of
building these waterpaths and the damage sustained by petitioners. Such action if proven constitutes fault or
negligence which may be the basis for the recovery of damages.

In the case of Samson vs. Dionisio, 12 the Court applied Article 1902, now Article 2176 of the Civil Code and held that
"any person who without due authority constructs a bank or dike, stopping the flow or communication between a creek
or a lake and a river, thereby causing loss and damages to a third party who, like the rest of the residents, is entitled
to the use and enjoyment of the stream or lake, shall be liable to the payment of an indemnity for loss and damages
to the injured party.

While the property involved in the cited case belonged to the public domain and the property subject of the instant
case is privately owned, the fact remains that petitioners' complaint sufficiently alleges that petitioners have sustained
and will continue to sustain damage due to the waterpaths and contrivances built by respondent corporation. Indeed,
the recitals of the complaint, the alleged presence of damage to the petitioners, the act or omission of respondent
corporation supposedly constituting fault or negligence, and the causal connection between the act and the damage,
with no pre-existing contractual obligation between the parties make a clear case of a quasi delict or culpa aquiliana.

It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code provides that
"the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person." SIC UTERE
TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require
that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others.
Although we recognize the right of an owner to build structures on his land, such structures must be so constructed
and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand
the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner or a third
person, the latter can claim indemnification for the injury or damage suffered.

Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission constituting
fault or negligence, thus:

Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this chapter.

Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by law" but also acts
criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against
the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that
the offended party is not allowed, (if the tortfeasor is actually charged also criminally), to recover damages on both
scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in
the two cases vary. 13

The distinctness of quasi-delicta is shown in Article 2177 of the Civil Code, which states:

Article 2177. Responsibility for fault or negligence under the preceding article is entirely separate and
distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot
recover damages twice for the same act or omission of the defendant.

According to the Report of the Code Commission "the foregoing provision though at first sight startling, is not so novel
or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the
criminal law, while the latter is a distinct and independent negligence, which is a "culpa aquiliana" or quasi-delict, of
ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such
distinction between criminal negligence and "culpa extra-contractual" or "cuasi-delito" has been sustained by
decisions of the Supreme Court of Spain ... 14
In the case of Castillo vs. Court of Appeals, 15 this Court held that a quasi-delict or culpa aquiliana is a separate legal
institution under the Civil Code with a substantivity all its own, and individuality that is entirely apart and independent
from a delict or crime — a distinction exists between the civil liability arising from a crime and the responsibility for
quasi-delicts or culpa extra-contractual. The same negligence causing damages may produce civil liability arising from
a crime under the Penal Code, or create an action for quasi-delicts or culpa extra-contractual under the Civil Code.
Therefore, the acquittal or conviction in the criminal case is entirely irrelevant in the civil case, unless, of course, in
the event of an acquittal where the court has declared that the fact from which the civil action arose did not exist, in
which case the extinction of the criminal liability would carry with it the extinction of the civil liability.

In Azucena vs. Potenciano, 16 the Court declared that in quasi-delicts, "(t)he civil action is entirely independent of the
criminal case according to Articles 33 and 2177 of the Civil Code. There can be no logical conclusion than this, for to
subordinate the civil action contemplated in the said articles to the result of the criminal prosecution — whether it be
conviction or acquittal — would render meaningless the independent character of the civil action and the clear
injunction in Article 31, that his action may proceed independently of the criminal proceedings and regardless of the
result of the latter."

WHEREFORE, the assailed decision dated February 17, 1986 of the then Intermediate Appellate Court affirming the
order of dismissal of the Regional Trial Court of Cavite, Branch 18 (Tagaytay City) dated August 17, 1984 is hereby
REVERSED and SET ASIDE. The trial court is ordered to reinstate Civil Case No. TG-748 entitled "Natividad V.
Andamo and Emmanuel R. Andamo vs. Missionaries of Our Lady of La Salette Inc." and to proceed with the hearing
of the case with dispatch. This decision is immediately executory. Costs against respondent corporation.

SO ORDERED.
G.R. No. L-50959 July 23, 1980

HEIRS OF PEDRO TAYAG, SR., petitioners,

vs.
HONORABLE FERNANDO S. ALCANTARA, PHILIPPINE RABBIT BUS LINES, INC. and ROMEO VILLA Y
CUNANAN, respondents.

CONCEPCION JR., J.:

This is a petition for certiorari, premised upon the following facts:

On September 25, 1974, the petitioners, heirs of Pedro Tayag, Sr., namely: Crisanta Salazar, Pedro Tayag, Jr.,
Renato Tayag, Gabriel Tayag, Corazon Tayag and Rodolfo Tayag, filed with the Court of First Instance of Tarlac,
Branch I, presided over by the respondent Judge, a complaint 1 for damages against the private respondents
Philippine Rabbit Bus Lines, Inc. and Romeo Villa y Cunanan — docketed therein as Civil Case No. 5114 — alleging
among others that in the afternoon of September 2, 1974, while Pedro Tayag Sr. was riding on a bicycle along
MacArthur Highway at Bo. San Rafael, Tarlac, Tarlac on his way home, he was bumped and hit by a Philippine Rabbit
Bus bearing Body No. 1107 and Plate No. YL 604 PUB '74, driven by Romeo Villa, as a result of which he sustained
injuries which caused his instantaneous death. In due time, the private respondents filed their answer, 2 admitting
some allegations and denying the other allegations of the complaint

Thereafter, the private respondents filed a motion to suspend the trial 3 dated April 30, 1975, on the ground that the
criminal case 4 against the driver of the bus Romeo Villa was still pending in said court, and that Section 3, Rule Ill of
the Revised Rules of Court enjoins the suspension of the civil action until the criminal action is terminated. The
respondent Judge granted the motion, and consequently, suspended the hearing of Civil Case No. 5114. 5

On October 25, 1977, the respondent Judge rendered a decision 6 in Criminal Case No. 836, acquitting the accused
Romeo Villa of the crime of homicide on the ground of reasonable doubt.

Thereafter, the private respondents filed a motion to dismiss 7 Civil Case No. 5114 on the ground that the petitioners
have no cause of action against them the driver of the bus having been acquitted in the criminal action. The petitioners
opposed the motions 8 alleging that their cause of action is not based on crime but on quasi-delict.

Acting upon the said motion as well as the opposition thereto, the respondent Judge issued an order 9 dated April 13,
1978, dismissing the complaint in Civil Case No. 5114.

The petitioners moved to reconsider; 10 however, the same was denied by respondent Judge in his order 11 dated May
30, 1979.

Hence, the petitioners interposed the present petition for certiorari, to annul and set aside the order of respondent
Judge dated April 13, 1977, claiming that the respondent Judge acted without or in excess of his jurisdiction and for
with grave abuse of discretion in issuing the disputed order, and that there is no plain, speedy and adequate remedy
in the ordinary course of law except thru the present petition.

After the private respondents had filed their comment, 12 this Court Resolved to consider the said comment as answer
to the petition, and the case was deemed submitted for decision on September 3, 1979.

The only issue to be resolved in the instant case is whether or not the respondent Judge acted without or in excess
of his jurisdiction and/or with grave abuse of discretion in dismissing Civil Case No. 5114.

The petition is meritorious. Article 31 of the Civil Code provides as follows:

Art. 31. When the civil action is based on an obligation not arising from the act or commission
complained of as a felony. such civil action may proceed independently of the criminal proceedings
and regardless of the result of the latter.
Evidently, the above quoted provision of the Civil Code refers to a civil action based, not on the act or omission
charged as a felony in a criminal case, but one based on an obligation arising from other sources, 13 like quasi delict. 14

In the case at bar, the allegations of the complaint clearly show that petitioners' cause of action was based upon
a quasi delict. 15 Thus, the complaint alleged among others:

xxxxxxxxx

4. That on September 2, 1974, at about 6:00 o'clock in the afternoon at Sitio Pag-asa, Bo. San Rafael
Tarlac, Tarlac, along MacArthur Highway and while riding on a bicycle on his way home to Bo. San
Sebastian, Tarlac, Tarlac, Pedro Tayag, Sr. was bumped and hit by a Philippine Rabbit Bus bearing
Body No. 1107 and Plate No. YL 604 PUB '74 and as result of which he sustained physical injuries
which cause his instantaneous death and the bicycle he was riding on was damaged and destroyed;

5. That the Philippine Rabbit Bus ... was at the time of the accident being driven by defendant Romeo
Villa y Cunanan in a faster and greater speed than what was reasonable and proper and in a gray
negligent, careless, reckless and imprudent manner, without due regards to injuries to persons and
damage to properties and in violation of traffic rules and regulations;

6. That defendant Philippine Rabbit Bus Lines Inc. has failed to exercise the diligence of a good father
of a family in the selection and supervision of its employees, particularly defendant Romeo Villa y
Cunanan otherwise the accident in question which resulted in the death of Pedro Tayag, Sr. and
damage to his property would not have occurred.

xxxxxxxxx

All the essential averments for a quasi delictual action are present, namely: (1) an act or omission constituting fault or
negligence on the part of private respondent; (2) damage caused by the said act or commission; (3) direct causal
relation between the damage and the act or commission; and (4) no pre-existing contractual relation between the
parties. In the case of Elcano vs. Hill, 16 this Court held that:

... a separate civil action lies against the offender in a criminal act, whether or not he is criminality
prosecuted and found guilty or acquitted, provided that the offended party is not snowed, if he is
actually charged also criminally, to receiver damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In
other words, the extinction of civil liability referred to in Par. (e), Section 3, Rule III, refers exclusively
to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the
same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration
in the criminal case that the criminal act charged has not happened or has not been committed by the
accused. Briefly stated, We here hold, in reiteration of Garcia that culpa aquiliana includes voluntary
and negligent acts which may be punishable by law.

The petitioners' cause of action being based on a quasi delict the acquittal of the driver, private respondent Romeo
Villa, of the crime charged in Criminal Case No. 836 is not a bar to the prosecution of Civil Case No. 5114 for damages
based on quasi-delict.17

In the light of the foregoing, We hold that respondent Judge acted with grave abuse of discretion amounting to lack of
jurisdiction in dismissing Civil Case No. 5114.

WHEREFORE, the order of dismissal should be, as it is hereby set aside, and the case is remanded to the lower court
for further proceedings, with costs against the private respondents.

SO ORDERED.

Abad Santos and De Castillo * JJ., concur.

Separate Opinions

BARREDO, J., concurring:

I concur and also in the opinion of Justice Aquino. I just like to add that in my view the proceeding and trial in Civil
Case No. 5114 should not have been suspended at all just because of the filing of the criminal case. Aquino, J., see
concurrence below.

I concur because petitioners' action for damages is based on article 2177 of the Civil Code, under which, according
to the Code Commission, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not,
shag not be a bar to a subsequent civil action, not for civil liability from criminal negligence, but for damages due to a
quasi-delict or culpa aquiliana.

Article 33 Of the Civil Code also justifies the petitioners' independent civil action for damages since the term "physical
in. juries" therein embraces death Dyogi vs. Yateo, 100 Phil 1095).

Moreover, the acquittal of Romeo Villa was base on reasonable doubt. The petitioners, as plaintiffs in the civil case,
can amend their complaint and base their action also on article 29 of the Civil Code which allows an independent civil
action for damages in case of acquittal on the ground of reasonable doubt.

The requirement in section 2, Rule III of the Rules of Court that there should be a reservation in the criminal cases of
the right to institute an independent civil action is contrary to law (Garcia vs. Florida L-35095, August 31, 1973, 52
SCRA 420, 429).

Separate Opinions

BARREDO, J., concurring:

I concur and also in the opinion of Justice Aquino. I just like to add that in my view the proceeding and trial in Civil
Case No. 5114 should not have been suspended at all just because of the filing of the criminal case. A Aquino, J.,
see concurrence below.

I concur because petitioners' action for damages is based on article 2177 of the Civil Code, under which, according
to the Code Commission, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not,
shag not be a bar to a subsequent civil action, not for civil liability from criminal negligence, but for damages due to a
quasi-delict or culpa aquiliana.

Article 33 Of the Civil Code also justifies the petitioners' independent civil action for damages since the term "physical
in. juries" therein embraces death Dyogi vs. Yateo, 100 Phil 1095).

Moreover, the acquittal of Romeo Villa was base on reasonable doubt. The petitioners, as plaintiffs in the civil case,
can amend their complaint and base their action also on article 29 of the Civil Code which allows an independent civil
action for damages in case of acquittal on the ground of reasonable doubt.

The requirement in section 2, Rule III of the Rules of Court that there should be a reservation in the criminal cases of
the right to institute an independent civil action is contrary to law (Garcia vs. Florida L-35095, August 31, 1973, 52
SCRA 420, 429).

G.R. No. L-35095 August 31, 1973

GERMAN C. GARCIA, LUMINOSA L. GARCIA, and ESTER FRANCISCO, petitioners,
vs.
THE HONORABLE MARIANO M. FLORIDO OF THE COURT OF FIRST INSTANCE OF MISAMIS OCCIDENTAL,
MARCELINO INESIN, RICARDO VAYSON, MACTAN TRANSIT CO., INC., and PEDRO TUMALA Y
DIGAL, respondents.

Paulino A. Conol for petitioners.

Dominador M. Canastra and Wilfredo C. Martinez for private respondents.

Hon. Mariano M. Florido for and in his own behalf.

ANTONIO, J.:

Appeal by certiorari from the decision of the Court of First Instance of Misamis Occidental, Branch III, in Civil Case
No. 2850 (German C. Garcia, et al. vs. Marcelino Inesin et al.) dated October 21, 1971, dismissing petitioners' action
for damages against respondents, Mactan Transit Co., Inc. and Pedro Tumala "without prejudice to refiling the said
civil action after conviction of the defendants in the criminal case filed by the Chief of Police of Sindangan Zamboanga
del Norte", and from the order of said Court dated January 21, 1972, denying petitioners' motion for reconsideration.

On August 4, 1971, petitioners, German C. Garcia, Chief of the Misamis Occidental Hospital, together with his wife,
Luminosa L. Garcia, and Ester Francisco, bookkeeper of said hospital, hired and boarded a PU car with plate No.
241-8 G Ozamis 71 owned and operated by respondent, Marcelino Inesin, and driven by respondent, Ricardo Vayson,
for a round-trip from Oroquieta City to Zamboanga City, for the purpose of attending a conference of chiefs of
government hospitals, hospital administrative officers, and bookkeepers of Regional Health Office No. 7 at
Zamboanga City. At about 9:30 a.m., while the PU car was negotiating a slight curve on the national highway at
kilometer 21 in Barrio Guisukan, Sindangan, Zamboanga del Norte, said car collided with an oncoming passenger
bus (No. 25) with plate No. 77-4 W Z.N. 71 owned and operated by the Mactan Transit Co., Inc. and driven by
defendant, Pedro Tumala. As a result of the aforesaid collision, petitioners sustained various physical injuries which
necessitated their medical treatment and hospitalization.

Alleging that both drivers of the PU car and the passenger bus were at the time of the accident driving their respective
vehicles at a fast clip, in a reckless, grossly negligent and imprudent manner in gross violation of traffic rules and
without due regard to the safety of the passengers aboard the PU car, petitioners, German C. Garcia, Luminosa L.
Garcia, and Ester Francisco, filed on September 1, 1971 with respondent Court of First Instance of Misamis Occidental
an action for damages (Civil Case No. 2850) against the private respondents, owners and drivers, respectively, of the
PU car and the passenger bus that figured in the collision, with prayer for preliminary attachment.

On September 16, 1971, Marcelino Inesin and Ricardo Vayson filed their answer in the aforementioned Civil Case
No. 2850 admitting the contract of carriage with petitioners but alleged, by way of defense, that the accident was due
to the negligence and reckless imprudence of the bus driver, as when Ricardo Vayson, driver of the PU car, saw the
oncoming passenger bus No. 25 coming from the opposite direction ascending the incline at an excessive speed,
chasing another passenger bus, he had to stop the PU car in order to give way to the passenger bus, but, in spite of
such precaution, the passenger bus bumped the PU car, thus causing the accident in question, and, therefore, said
private respondents could not be held liable for the damages caused on petitioners.

On September 29, 1971, respondents, Mactan Transit Co., Inc. and Pedro Tumala, filed a motion to dismiss on three
(3) grounds, namely: 1) that the plaintiffs (petitioners) had no cause of action; 2) that the complaint carries with it a
prayer for attachment but without the requisite verification, hence defective under the provision of Sec. 3, Rule 57 of
the Rules of Court; and 3) that the defendants (respondents), Mactan Transit Co., Inc. and its driver, accused Pedro
Tumala, had operated said passenger bus with maximum care and prudence.

The principal argument advanced in said motion to dismiss was that the petitioners had no cause of action for on
August 11, 1971, or 20 days before the filing of the present action for damages, respondent Pedro Tumala was
charged in Criminal Case No. 4960 of the Municipal Court of Sindangan, Zamboanga del Norte, in a complaint filed
by the Chief of Police for "double serious and less serious physical injuries through reckless imprudence", and that,
with the filing of the aforesaid criminal case, no civil action could be filed subsequent thereto unless the criminal case
has been finally adjudicated, pursuant to Sec. 3 of Rule 111 of the Rules of Court, and, therefore, the filing of the
instant civil action is premature, because the liability of the employer is merely subsidiary and does not arise until after
final judgment has been rendered finding the driver, Pedro Tumala guilty of negligence; that Art. 33 of the New Civil
Code, is not applicable because Art. 33 applied only to the crimes of physical injuries or homicide, not to the negligent
act or imprudence of the driver.

On October 14, 1971, petitioners filed an opposition to said motion to dismiss alleging that the aforesaid action for
damages was instituted not to enforce the civil liability of the respondents under Art. 100 of the Revised Penal Code
but for their civil liability on quasi-delicts pursuant to Articles 2176-2194, as the same negligent act causing damages
may produce civil liability arising from a crime under the Revised Penal Code or create an action for quasi-delict or
culpa extra-contractual under the Civil Code, and the party seeking recovery is free to choose which remedy to
enforce.

In dismissing the complaint for damages in Civil Case No. 2850, the lower court sustained the arguments of
respondents, Mactan Transit Co., Inc. and Pedro Tumala, and declared that whether or not "the action for damages
is based on criminal negligence or civil negligence known as culpa aquiliana in the Civil Code or tort under American
law" there "should be a showing that the offended party expressly waived the civil action or reserved his right to
institute it separately" and that "the allegations of the complaint in culpa aquiliana must not be tainted by any assertion
of violation of law or traffic rules or regulations" and because of the prayer in the complaint asking the Court to declare
the defendants jointly and severally liable for moral, compensatory and exemplary damages, the Court is of the opinion
that the action was not based on "culpa aquiliana or quasi-delict."

Petitioners' motion for reconsideration was denied by the trial court on January 21, 1972, hence this appeal
on certiorari.

There is no question that from a careful consideration of the allegations contained in the complaint in Civil Case No.
2850, the essential averments for a quasi-delictual action under Articles 2176-2194 of the New Civil Code are present,
namely: a) act or omission of the private respondents; b) presence of fault or negligence or the lack of due care in the
operation of the passenger bus No. 25 by respondent Pedro Tumala resulting in the collision of the bus with the
passenger car; c) physical injuries and other damages sustained by petitioners as a result of the collision; d) existence
of direct causal connection between the damage or prejudice and the fault or negligence of private respondents; and
e) the absence of pre-existing contractual relations between the parties. The circumstance that the complaint alleged
that respondents violated traffic rules in that the driver drove the vehicle "at a fast clip in a reckless, grossly negligent
and imprudent manner in violation of traffic rules and without due regard to the safety of the passengers aboard the
PU car" does not detract from the nature and character of the action, as one based on culpa aquiliana. The violation
of traffic rules is merely descriptive of the failure of said driver to observe for the protection of the interests of others,
that degree of care, precaution and vigilance which the circumstances justly demand, which failure resulted in the
injury on petitioners. Certainly excessive speed in violation of traffic rules is a clear indication of negligence. Since the
same negligent act resulted in the filing of the criminal action by the Chief of Police with the Municipal Court (Criminal
Case No. 4960) and the civil action by petitioners, it is inevitable that the averments on the drivers' negligence in both
complaints would substantially be the same. It should be emphasized that the same negligent act causing damages
may produce a civil liability arising from a crime under Art. 100 of the Revised Penal Code or create an action for
quasi-delict or culpa extra-contractual under Arts. 2176-2194 of the New Civil Code. This distinction has been amply
explained in Barredo vs. Garcia, et al. (73 Phil. 607, 620-621).1

It is true that under Sec. 2 in relation to Sec. 1 of Rule 111 of the Revised Rules of Court which became effective on
January 1, 1964, in the cases provided for by Articles 31, 33, 39 and 2177 of the Civil Code, an independent civil
action entirely separate and distinct from the civil action, may be instituted by the injured party during the pendency
of the criminal case, provided said party has reserved his right to institute it separately, but it should be noted, however,
that neither Section 1 nor Section 2 of Rule 111 fixes a time limit when such reservation shall be made. In Tactaquin
v. Palileo,2 where the reservation was made after the tort-feasor had already pleaded guilty and after the private
prosecutor had entered his appearance jointly with the prosecuting attorney in the course of the criminal proceedings,
and the tort-feasor was convicted and sentenced to pay damages to the offended party by final judgment in said
criminal case, We ruled that such reservation is legally ineffective because the offended party cannot recover damages
twice for the same act or omission of the defendant. We explained in Meneses vs. Luat3 that when the criminal action
for physical injuries against the defendant did not proceed to trial as he pleaded guilty upon arraignment and the Court
made no pronouncement on the matter or damages suffered by the injured party, the mere appearance of private
counsel in representation of the offended party in said criminal case does not constitute such active intervention as
could impart an intention to press a claim for damages in the same action, and, therefore, cannot bar a separate civil
action for damages subsequently instituted on the same ground under Article 33 of the New Civil Code.

In the case at bar, there is no question that petitioners never intervened in the criminal action instituted by the Chief
of Police against respondent Pedro Tumala, much less has the said criminal action been terminated either by
conviction or acquittal of said accused.

It is, therefore, evident that by the institution of the present civil action for damages, petitioners have in effect
abandoned their right to press recovery for damages in the criminal case, and have opted instead to recover them in
the present civil case.

As a result of this action of petitioners the civil liability of private respondents to the former has ceased to be involved
in the criminal action. Undoubtedly an offended party loses his right to intervene in the prosecution of a criminal case,
not only when he has waived the civil action or expressly reserved his right to institute, but also when he has actually
instituted the civil action. For by either of such actions his interest in the criminal case has disappeared.

As we have stated at the outset, the same negligent act causing damages may produce a civil liability arising from
crime or create an action for quasi-delict or culpa extra-contractual. The former is a violation of the criminal law, while
the latter is a distinct and independent negligence, having always had its own foundation and individuality. Some legal
writers are of the view that in accordance with Article 31, the civil action based upon quasi-delict may proceed
independently of the criminal proceeding for criminal negligence and regardless of the result of the latter. Hence, "the
proviso in Section 2 of Rule 111 with reference to ... Articles 32, 33 and 34 of the Civil Code is contrary to the letter
and spirit of the said articles, for these articles were drafted ... and are intended to constitute as exceptions to the
general rule stated in what is now Section 1 of Rule 111. The proviso which is procedural, may also be regarded as
an unauthorized amendment of substantive law, Articles 32, 33 and 34 of the Civil Code, which do not provide for the
reservation required in the proviso."4 But in whatever way We view the institution of the civil action for recovery of
damages under quasi-delict by petitioners, whether as one that should be governed by the provisions of Section 2 of
Rule 111 of the Rules which require reservation by the injured party considering that by the institution of the civil action
even before the commencement of the trial of the criminal case, petitioners have thereby foreclosed their right to
intervene therein, or one where reservation to file the civil action need not be made, for the reason that the law itself
(Article 33 of the Civil Code) already makes the reservation and the failure of the offended party to do so does not bar
him from bringing the action, under the peculiar circumstances of the case, We find no legal justification for respondent
court's order of dismissal.

WHEREFORE, the decision and order appealed from are hereby reversed and set aside, and the court a quo is
directed to proceed with the trial of the case. Costs against private respondents.

Zaldivar, Castro Fernando, Teehankee, Makasiar and Esguerra, JJ., concur.

Makalintal, Actg., C.J., concurs in the result.

G.R. No. 145391 August 26, 2002

AVELINO CASUPANAN and ROBERTO CAPITULO, petitioners,

vs.
MARIO LLAVORE LAROYA, respondent.

CARPIO, J.:

The Case

This is a petition for review on certiorari to set aside the Resolution1 dated December 28, 1999 dismissing the petition
for certiorari and the Resolution2 dated August 24, 2000 denying the motion for reconsideration, both issued by the
Regional Trial Court of Capas, Tarlac, Branch 66, in Special Civil Action No. 17-C (99).

The Facts

Two vehicles, one driven by respondent Mario Llavore Laroya ("Laroya" for brevity) and the other owned by petitioner
Roberto Capitulo ("Capitulo" for brevity) and driven by petitioner Avelino Casupanan ("Casupanan" for brevity), figured
in an accident. As a result, two cases were filed with the Municipal Circuit Trial Court ("MCTC" for brevity) of Capas,
Tarlac. Laroya filed a criminal case against Casupanan for reckless imprudence resulting in damage to property,
docketed as Criminal Case No. 002-99. On the other hand, Casupanan and Capitulo filed a civil case against Laroya
for quasi-delict, docketed as Civil Case No. 2089.

When the civil case was filed, the criminal case was then at its preliminary investigation stage. Laroya, defendant in
the civil case, filed a motion to dismiss the civil case on the ground of forum-shopping considering the pendency of
the criminal case. The MCTC granted the motion in the Order of March 26, 1999 and dismissed the civil case.

On Motion for Reconsideration, Casupanan and Capitulo insisted that the civil case is a separate civil action which
can proceed independently of the criminal case. The MCTC denied the motion for reconsideration in the Order of May
7, 1999. Casupanan and Capitulo filed a petition for certiorari under Rule 65 before the Regional Trial Court ("Capas
RTC" for brevity) of Capas, Tarlac, Branch 66,3 assailing the MCTC’s Order of dismissal.

The Trial Court’s Ruling

The Capas RTC rendered judgment on December 28, 1999 dismissing the petition for certiorari for lack of merit. The
Capas RTC ruled that the order of dismissal issued by the MCTC is a final order which disposes of the case and
therefore the proper remedy should have been an appeal. The Capas RTC further held that a special civil action for
certiorari is not a substitute for a lost appeal. Finally, the Capas RTC declared that even on the premise that the MCTC
erred in dismissing the civil case, such error is a pure error of judgment and not an abuse of discretion.

Casupanan and Capitulo filed a Motion for Reconsideration but the Capas RTC denied the same in the Resolution of
August 24, 2000.

Hence, this petition.

The Issue

The petition premises the legal issue in this wise:

"In a certain vehicular accident involving two parties, each one of them may think and believe that the accident
was caused by the fault of the other. x x x [T]he first party, believing himself to be the aggrieved party, opted
to file a criminal case for reckless imprudence against the second party. On the other hand, the second party,
together with his operator, believing themselves to be the real aggrieved parties, opted in turn to file a civil
case for quasi-delict against the first party who is the very private complainant in the criminal case."4
Thus, the issue raised is whether an accused in a pending criminal case for reckless imprudence can validly file,
simultaneously and independently, a separate civil action for quasi-delict against the private complainant in the
criminal case.

The Court’s Ruling

Casupanan and Capitulo assert that Civil Case No. 2089, which the MCTC dismissed on the ground of forum-
shopping, constitutes a counterclaim in the criminal case. Casupanan and Capitulo argue that if the accused in a
criminal case has a counterclaim against the private complainant, he may file the counterclaim in a separate civil
action at the proper time. They contend that an action on quasi-delict is different from an action resulting from the
crime of reckless imprudence, and an accused in a criminal case can be an aggrieved party in a civil case arising from
the same incident. They maintain that under Articles 31 and 2176 of the Civil Code, the civil case can proceed
independently of the criminal action. Finally, they point out that Casupanan was not the only one who filed the
independent civil action based on quasi-delict but also Capitulo, the owner-operator of the vehicle, who was not a
party in the criminal case.

In his Comment, Laroya claims that the petition is fatally defective as it does not state the real antecedents. Laroya
further alleges that Casupanan and Capitulo forfeited their right to question the order of dismissal when they failed to
avail of the proper remedy of appeal. Laroya argues that there is no question of law to be resolved as the order of
dismissal is already final and a petition for certiorari is not a substitute for a lapsed appeal.

In their Reply, Casupanan and Capitulo contend that the petition raises the legal question of whether there is forum-
shopping since they filed only one action - the independent civil action for quasi-delict against Laroya.

Nature of the Order of Dismissal

The MCTC dismissed the civil action for quasi-delict on the ground of forum-shopping under Supreme Court
Administrative Circular No. 04-94. The MCTC did not state in its order of dismissal5 that the dismissal was with
prejudice. Under the Administrative Circular, the order of dismissal is without prejudice to refiling the complaint, unless
the order of dismissal expressly states it is with prejudice.6 Absent a declaration that the dismissal is with prejudice,
the same is deemed without prejudice. Thus, the MCTC’s dismissal, being silent on the matter, is a dismissal without
prejudice.

Section 1 of Rule 417 provides that an order dismissing an action without prejudice is not appealable. The remedy of
the aggrieved party is to file a special civil action under Rule 65. Section 1 of Rule 41 expressly states that "where the
judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule
65." Clearly, the Capas RTC’s order dismissing the petition for certiorari, on the ground that the proper remedy is an
ordinary appeal, is erroneous.

Forum-Shopping

The essence of forum-shopping is the filing of multiple suits involving the same parties for the same cause of action,
either simultaneously or successively, to secure a favorable judgment.8 Forum-shopping is present when in the two
or more cases pending, there is identity of parties, rights of action and reliefs sought.9 However, there is no forum-
shopping in the instant case because the law and the rules expressly allow the filing of a separate civil action which
can proceed independently of the criminal action.

Laroya filed the criminal case for reckless imprudence resulting in damage to property based on the Revised Penal
Code while Casupanan and Capitulo filed the civil action for damages based on Article 2176 of the Civil Code.
Although these two actions arose from the same act or omission, they have different causes of action. The criminal
case is based on culpa criminal punishable under the Revised Penal Code while the civil case is based on culpa
aquiliana actionable under Articles 2176 and 2177 of the Civil Code. These articles on culpa aquiliana read:

"Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged
to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
 Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct
from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages
twice for the same act or omission of the defendant."

Any aggrieved person can invoke these articles provided he proves, by preponderance of evidence, that he has
suffered damage because of the fault or negligence of another. Either the private complainant or the accused can file
a separate civil action under these articles. There is nothing in the law or rules that state only the private complainant
in a criminal case may invoke these articles.

Moreover, paragraph 6, Section 1, Rule 111 of the 2000 Rules on Criminal Procedure ("2000 Rules" for brevity)
expressly requires the accused to litigate his counterclaim in a separate civil action, to wit:

"SECTION 1. Institution of criminal and civil actions. – (a) x x x.

No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but
any cause of action which could have been the subject thereof may be litigated in a separate civil action."
(Emphasis supplied)

Since the present Rules require the accused in a criminal action to file his counterclaim in a separate civil action, there
can be no forum-shopping if the accused files such separate civil action.

Filing of a separate civil action

Section 1, Rule 111 of the 1985 Rules on Criminal Procedure ("1985 Rules" for brevity), as amended in 1988, allowed
the filing of a separate civil action independently of the criminal action provided the offended party reserved the right
to file such civil action. Unless the offended party reserved the civil action before the presentation of the evidence for
the prosecution, all civil actions arising from the same act or omission were deemed "impliedly instituted" in the
criminal case. These civil actions referred to the recovery of civil liability ex-delicto, the recovery of damages for quasi-
delict, and the recovery of damages for violation of Articles 32, 33 and 34 of the Civil Code on Human Relations.

Thus, to file a separate and independent civil action for quasi-delict under the 1985 Rules, the offended party had to
reserve in the criminal action the right to bring such action. Otherwise, such civil action was deemed "impliedly
instituted" in the criminal action. Section 1, Rule 111 of the 1985 Rules provided as follows:

"Section 1. – Institution of criminal and civil actions. – When a criminal action is instituted, the civil action for
the recovery of civil liability is impliedly instituted with the criminal action, unless the offended party waives the
action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action.

Such civil action includes recovery of indemnity under the Revised Penal Code, and damages under
Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act or omission
of the accused.

A waiver of any of the civil actions extinguishes the others. The institution of, or the reservation of the right to
file, any of said civil actions separately waives the others.

The reservation of the right to institute the separate civil actions shall be made before the prosecution starts
to present its evidence and under circumstances affording the offended party a reasonable opportunity to
make such reservation.

In no case may the offended party recover damages twice for the same act or omission of the accused.

x x x." (Emphasis supplied)

Section 1, Rule 111 of the 1985 Rules was amended on December 1, 2000 and now provides as follows:

"SECTION 1. Institution of criminal and civil actions. – (a) When a criminal action is instituted, the civil action
for the recovery of civil liability arising from the offense charged shall be deemed instituted with the
 criminal action unless the offended party waives the civil action, reserves the right to institute it separately
or institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts
presenting its evidence and under circumstances affording the offended party a reasonable opportunity to
make such reservation.

xxx

(b) x x x

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be
consolidated with the criminal action upon application with the court trying the latter case. If the application is
granted, the trial of both actions shall proceed in accordance with section 2 of this rule governing consolidation
of the civil and criminal actions." (Emphasis supplied)

Under Section 1 of the present Rule 111, what is "deemed instituted" with the criminal action is only the action to
recover civil liability arising from the crime or ex-delicto. All the other civil actions under Articles 32, 33, 34 and 2176
of the Civil Code are no longer "deemed instituted," and may be filed separately and prosecuted independently even
without any reservation in the criminal action. The failure to make a reservation in the criminal action is not a waiver
of the right to file a separate and independent civil action based on these articles of the Civil Code. The prescriptive
period on the civil actions based on these articles of the Civil Code continues to run even with the filing of the criminal
action. Verily, the civil actions based on these articles of the Civil Code are separate, distinct and independent of the
civil action "deemed instituted" in the criminal action.10

Under the present Rule 111, the offended party is still given the option to file a separate civil action to recover civil
liability ex-delicto by reserving such right in the criminal action before the prosecution presents its evidence. Also, the
offended party is deemed to make such reservation if he files a separate civil action before filing the criminal action.
If the civil action to recover civil liability ex-delicto is filed separately but its trial has not yet commenced, the civil action
may be consolidated with the criminal action. The consolidation under this Rule does not apply to separate civil actions
arising from the same act or omission filed under Articles 32, 33, 34 and 2176 of the Civil Code.11

Suspension of the Separate Civil Action

Under Section 2, Rule 111 of the amended 1985 Rules, a separate civil action, if reserved in the criminal action, could
not be filed until after final judgment was rendered in the criminal action. If the separate civil action was filed before
the commencement of the criminal action, the civil action, if still pending, was suspended upon the filing of the criminal
action until final judgment was rendered in the criminal action. This rule applied only to the separate civil action filed
to recover liability ex-delicto. The rule did not apply to independent civil actions based on Articles 32, 33, 34 and 2176
of the Civil Code, which could proceed independently regardless of the filing of the criminal action.

The amended provision of Section 2, Rule 111 of the 2000 Rules continues this procedure, to wit:

"SEC. 2. When separate civil action is suspended. – After the criminal action has been commenced, the
separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal
action.

If the criminal action is filed after the said civil action has already been instituted, the latter shall be
suspended in whatever stage it may be found before judgment on the merits. The suspension shall
last until final judgment is rendered in the criminal action. Nevertheless, before judgment on the merits
is rendered in the civil action, the same may, upon motion of the offended party, be consolidated with the
criminal action in the court trying the criminal action. In case of consolidation, the evidence already adduced
in the civil action shall be deemed automatically reproduced in the criminal action without prejudice to the right
of the prosecution to cross-examine the witnesses presented by the offended party in the criminal case and
of the parties to present additional evidence. The consolidated criminal and civil actions shall be tried and
decided jointly.
 During the pendency of the criminal action, the running of the period of prescription of the civil action which
cannot be instituted separately or whose proceeding has been suspended shall be tolled.

x x x." (Emphasis supplied)

Thus, Section 2, Rule 111 of the present Rules did not change the rule that the separate civil action, filed to recover
damages ex-delicto, is suspended upon the filing of the criminal action. Section 2 of the present Rule 111 also prohibits
the filing, after commencement of the criminal action, of a separate civil action to recover damages ex-delicto.

When civil action may proceed independently

The crucial question now is whether Casupanan and Capitulo, who are not the offended parties in the criminal case,
can file a separate civil action against the offended party in the criminal case. Section 3, Rule 111 of the 2000 Rules
provides as follows:

"SEC 3. When civil action may proceed independently. - In the cases provided in Articles 32, 33, 34 and 2176
of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall
proceed independently of the criminal action and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same act or omission charged in the criminal
action." (Emphasis supplied)

Section 3 of the present Rule 111, like its counterpart in the amended 1985 Rules, expressly allows the "offended
party" to bring an independent civil action under Articles 32, 33, 34 and 2176 of the Civil Code. As stated in Section 3
of the present Rule 111, this civil action shall proceed independently of the criminal action and shall require only a
preponderance of evidence. In no case, however, may the "offended party recover damages twice for the same act
or omission charged in the criminal action."

There is no question that the offended party in the criminal action can file an independent civil action for quasi-delict
against the accused. Section 3 of the present Rule 111 expressly states that the "offended party" may bring such an
action but the "offended party" may not recover damages twice for the same act or omission charged in the criminal
action. Clearly, Section 3 of Rule 111 refers to the offended party in the criminal action, not to the accused.

Casupanan and Capitulo, however, invoke the ruling in Cabaero vs. Cantos12 where the Court held that the accused
therein could validly institute a separate civil action for quasi-delict against the private complainant in the criminal
case. In Cabaero, the accused in the criminal case filed his Answer with Counterclaim for malicious prosecution. At
that time the Court noted the "absence of clear-cut rules governing the prosecution on impliedly instituted civil actions
and the necessary consequences and implications thereof." Thus, the Court ruled that the trial court should
confine itself to the criminal aspect of the case and disregard any counterclaim for civil liability. The Court further ruled
that the accused may file a separate civil case against the offended party "after the criminal case is terminated and/or
in accordance with the new Rules which may be promulgated." The Court explained that a cross-claim, counterclaim
or third-party complaint on the civil aspect will only unnecessarily complicate the proceedings and delay the resolution
of the criminal case.

Paragraph 6, Section 1 of the present Rule 111 was incorporated in the 2000 Rules precisely to address
the lacuna mentioned in Cabaero. Under this provision, the accused is barred from filing a counterclaim, cross-claim
or third-party complaint in the criminal case. However, the same provision states that "any cause of action which could
have been the subject (of the counterclaim, cross-claim or third-party complaint) may be litigated in a separate civil
action." The present Rule 111 mandates the accused to file his counterclaim in a separate civil actiosn which shall
proceed independently of the criminal action, even as the civil action of the offended party is litigated in the criminal
action.

Conclusion

Under Section 1 of the present Rule 111, the independent civil action in Articles 32, 33, 34 and 2176 of the Civil Code
is not deemed instituted with the criminal action but may be filed separately by the offended party even without
reservation. The commencement of the criminal action does not suspend the prosecution of the independent civil
action under these articles of the Civil Code. The suspension in Section 2 of the present Rule 111 refers only to the
civil action arising from the crime, if such civil action is reserved or filed before the commencement of the criminal
action.

Thus, the offended party can file two separate suits for the same act or omission. The first a criminal case where the
civil action to recover civil liability ex-delicto is deemed instituted, and the other a civil case for quasi-delict - without
violating the rule on non-forum shopping. The two cases can proceed simultaneously and independently of each other.
The commencement or prosecution of the criminal action will not suspend the civil action for quasi-delict. The only
limitation is that the offended party cannot recover damages twice for the same act or omission of the defendant. In
most cases, the offended party will have no reason to file a second civil action since he cannot recover damages twice
for the same act or omission of the accused. In some instances, the accused may be insolvent, necessitating the filing
of another case against his employer or guardians.

Similarly, the accused can file a civil action for quasi-delict for the same act or omission he is accused of in the criminal
case. This is expressly allowed in paragraph 6, Section 1 of the present Rule 111 which states that the counterclaim
of the accused "may be litigated in a separate civil action." This is only fair for two reasons. First, the accused is
prohibited from setting up any counterclaim in the civil aspect that is deemed instituted in the criminal case. The
accused is therefore forced to litigate separately his counterclaim against the offended party. If the accused does not
file a separate civil action for quasi-delict, the prescriptive period may set in since the period continues to run until the
civil action for quasi-delict is filed.

Second, the accused, who is presumed innocent, has a right to invoke Article 2177 of the Civil Code, in the same way
that the offended party can avail of this remedy which is independent of the criminal action. To disallow the accused
from filing a separate civil action for quasi-delict, while refusing to recognize his counterclaim in the criminal case, is
to deny him due process of law, access to the courts, and equal protection of the law.

Thus, the civil action based on quasi-delict filed separately by Casupanan and Capitulo is proper. The order of
dismissal by the MCTC of Civil Case No. 2089 on the ground of forum-shopping is erroneous.

We make this ruling aware of the possibility that the decision of the trial court in the criminal case may vary with the
decision of the trial court in the independent civil action. This possibility has always been recognized ever since the
Civil Code introduced in 1950 the concept of an independent civil action under Articles 32, 33, 34 and 2176 of the
Code. But the law itself, in Article 31 of the Code, expressly provides that the independent civil action "may proceed
independently of the criminal proceedings and regardless of the result of the latter." In Azucena vs. Potenciano,13 the
Court declared:

"x x x. There can indeed be no other logical conclusion than this, for to subordinate the civil action
contemplated in the said articles to the result of the criminal prosecution — whether it be conviction or acquittal
— would render meaningless the independent character of the civil action and the clear injunction in Article
31 that this action 'may proceed independently of the criminal proceedings and regardless of the result of the
latter.’"

More than half a century has passed since the Civil Code introduced the concept of a civil action separate and
independent from the criminal action although arising from the same act or omission. The Court, however, has yet to
encounter a case of conflicting and irreconcilable decisions of trial courts, one hearing the criminal case and the other
the civil action for quasi-delict. The fear of conflicting and irreconcilable decisions may be more apparent than real. In
any event, there are sufficient remedies under the Rules of Court to deal with such remote possibilities.

One final point. The Revised Rules on Criminal Procedure took effect on December 1, 2000 while the MCTC issued
the order of dismissal on December 28, 1999 or before the amendment of the rules. The Revised Rules on Criminal
Procedure must be given retroactive effect considering the well-settled rule that -

"x x x statutes regulating the procedure of the court will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that extent."14

WHEREFORE, the petition for review on certiorari is hereby GRANTED. The Resolutions dated December 28, 1999
and August 24, 2000 in Special Civil Action No. 17-C (99) are ANNULLED and Civil Case No. 2089 is REINSTATED.
SO ORDERED.
SUPREME TRANSPORTATION LINER, INC. and FELIX Q. RUZ, Petitioners
vs.
ANTONIO SAN ANDRES, Respondent

DECISION

BERSAMIN, J.:

The requirement for the reservation of the civil action does not anymore apply to the independent civil actions under
Articles 32, 33, 34 and 2176 of the Civil Code. Such actions may be filed at anytime, provided the plaintiff does not
recover twice upon the same act or omission.

The Case

Petitioners Supreme Transportation Liner Inc. and Felix Q. Ruz hereby assail the decision promulgated on January
27, 2011,1 whereby the Court of Appeals (CA) affirmed the judgment rendered in Civil Case No. T- 2240 on November
24, 2008 by the Regional Trial Court in Tabaco City dismissing their counterclaim on the ground that to allow their
counterclaim was tantamount to double recovery of damages, considering that the same was not prosecuted in the
criminal action against the respondent's driver.2

Antecedents

The relevant factual background was summarized by the CA thusly:

On November 5, 2002, at around 5:00 in the morning, Ernesto Belchez was driving a passenger bus, Mabel Tours
Bus with body number 1896-C and plate Number TB EBJ (old)/TB EVL-648 (new), owned by [respondent] Antonio
San Andres, along Maharlika Highway in Barangay Malabanban Norte, Candelaria, Quezon, going towards the
direction of Manila. While traversing Maharlika Highway, the Mabel Tours Bus sideswiped a Toyota Revo it was
overtaking. The Mabel Tours Bus immediately swerved to the left lane but in the process, it hit head-on the Supreme
Bus owned and registered in the name of [petitioner] Supreme Bus Transportation Line, Inc., and driven by [petitioner]
Felix G. Ruz, that was negotiating in the opposite lane. Because of the strong impact of the incident, the Supreme
Bus was pushed to the side of the road and the Mabel Tour Bus continuously moved until it hit a passenger jeepney
that was parked on the side of the road which later on fell on the canal. Nobody died but all the vehicles were damaged.

Investigation of the incident and photographs of the damaged buses as well as the other two (2) vehicles were
conducted and undertaken by SPO1 Rafael Ausa of Candelaria, Municipal Police Station.

[Respondent] then brought the Mabel Tours Bus to the RMB Assembler and Body Builder to have it repaired. The
cost of repair was estimated in the amount of One Hundred Forty Four Thousand and Five Hundred Pesos
(Phpl44,500.00).

On December 12, 2002, a complaint for damages before the Court a quo was instituted by [respondent] Antonio San
Andres against [petitioners] alleging actual damage to Mabel Tours Bus and unrealized profits for the non-use of the
Mabel Tours Bus at the time it underwent repairs in the amount of ₱144,500.00 and ₱150,000.00, respectively. Claims
for attorney's fees of ₱30,000.00, appearance fee of ₱l,000.00, litigation expenses of ₱20,000.00 and cost of the suit
were also lodged in the complaint.

xxxx

Subsequently, [petitioners] filed their Answer with Counterclaim. They alleged among others that plaintiff has no cause
of action against them; the proximate cause of the vehicular accident is the reckless imprudence of the [respondent's]
driver, Ernesto Belchez operated the Mabel Tours Bus recklessly and in violation of traffic laws and regulations in
negotiating the overtaking of another vehicle without regard to the rightful vehicle occupying the right lane coming
from the opposite direction resulting to head on collision on the lane of defendant Supreme Bus and, at the time of
the accident, [respondent] operated the Mabel Tours Bus outside his franchise and without a registered plate.
By way of counterclaim, [petitioner] Supreme Transportation Liner, Inc. alleged that it suffered damages in the
aggregate amount of ₱500,000.00 and another ₱l00,000.00 for the medical expenses of its employees and
passengers. The unwarranted filing of the case forced them to secure the services of a counsel for ₱50,000.00 plus
appearance fee of ₱5,000.00 and litigation expenses in the amount of ₱3,000.00 including traveling expenses.

xxxx

After all the issues have been joined, the case was set for pre-trial conference wherein the parties, in an effort to
amicably settle the case, referred the case to conciliation. The parties, however, failed to hammer out an amicable
settlement. Hence, trial on the merits ensued.

[The parties] presented oral and documentary evidence to support their claims and contentions. [Respondent]
presented himself and Ernesto Belchez who later became a hostile witness. On the part of [petitioner and Ruz], Felix
Ruz, SPOl Rafael B. Ausa and Assistant for Operations of [petitioner] Supreme Transportation Liner, Inc., Jessi
Alvarez, were presented.

In the course of trial, Jessi Alvarez stated that he filed a criminal complaint for reckless imprudence resulting to damage
to property against Ernesto Belchez before the Court in Candelaria, Quezon. The case is now terminated and the
accused was convicted because of his admission of the crime charged. In the said criminal complaint, he did not
reserve their civil claim or asked (sic) the fiscal to reserve it, which, if itemized, would also be the amount of their
counterclaim in the present civil action filed by [respondent]. He added that they did not receive any compensation for
the civil aspect of the criminal case, and although the Supreme Bus was covered by insurance, they did not claim for
any reimbursement in connection with the subject incident.3

Judgment of the RTC

On November 24, 2008, the RTC rendered judgment dismissing the respondent's complaint as well as the petitioners'
counterclaim,4 decreeing:

From the foregoing, the instant complaint for damages filed by the plaintiff is hereby dismissed for having failed to
prove liability on the part of the defendant. The counterclaim that was filed by the defendants hereof is also dismissed
for failure to adhere to procedural requirements.

SO ORDERED.5

The RTC opined that the respondent was not able to prove the petitioners' liability;6 and that the petitioners'
counterclaim should also be dismissed pursuant to Section 1, Rule 111 of the Rules of Court,7 whose pertinent
portions the RTC quoted in its judgment as follows:

Section 1. Institution of criminal and civil actions. -When a criminal action is instituted, the civil action for the recovery
of civil liability is impliedly instituted with the criminal action, unless the offended party waives the civil action, reserves
his right to institute it separately, or institute the civil action prior to the criminal action.

Such civil action includes recovery of indemnity under the Revised Penal Code, and damages under Article 32, 33,
34 and 2176 of the Civil Code of the Philippines arising from the same act or omission of the accused.

xxxx

The reservation of the right to institute the separate civil actions shall be made before the prosecution starts to present
its evidence and under circumstances affording the offended party a reasonable opportunity to make such
reservation.8

The RTC indicated that the petitioners' failure to reserve the right to institute a separate civil action precluded their
right to recover damages from the respondent through their counterclaim.9

Aggrieved, the petitioners appealed, submitting that:

I.

THE TRIAL COURT ERRED IN NOT GRANTING THE COUNTERCLAIM.

II.

THE TRIAL COURT ERRED IN DENYING THE COUNTERCLAIM BECAUSE NO RESERVATION WAS MADE IN
CRIMINAL CASE NO. 02-253 FILED AGAINST PLAINTIFF-APPELLEE'S DRIVER ERNESTO BELCHEZ.10

Decision of the CA

In the assailed decision promulgated on January 27, 2011,11 the CA dismissed the petitioners' appeal, stating that the
RTC had correctly ruled that the counterclaim could not prosper because their recourse was limited to the enforcement
of the respondent's subsidiary liability under Article 103 of the Revised Penal Code;12 that "to allow the counterclaim
of [petitioners] is tantamount to double recovery of damages, a prohibition under Article 2177 of the New Civil Code
and Sec. 3, Rule 111 of the Rules;"13 and that their failure to reserve the separate civil action meant that their right to
recover under Article 2176 of the Civil Code was deemed instituted with the criminal action.14

The CA denied the petitioners' motion for reconsideration through the resolution promulgated on January 26, 2012.15

Hence, this appeal.

Issue

The Court is called upon to decide whether or not the petitioners' counterclaim was correctly denied by the RTC.

Ruling of the Court

The appeal is meritorious.

The petitioners' counterclaim is allowed and should not have been dismissed by the RTC and the CA despite their
failure to reserve the right to file a separate civil action in the criminal case they had brought against respondent's
driver. However, whether or not they could recover damages upon their counterclaim presents a different story, as
they should first show that they will not recover damages twice for the same incident.

1.
Petitioners' counterclaim, being in the
nature of an independent civil action,
required no prior reservation

As we see it, the CA concluded that the petitioners' cause of action should be limited to the recovery of civil liability ex
delicto by virtue of their having initiated against the respondent's driver the criminal complaint for criminal negligence
under Article 365 of the Revised Penal Code. The CA was seemingly of the opinion that the petitioners' recourse
against the respondent was limited to recovering from him, as the driver's employer, his subsidiary liability under and
pursuant to Article 10316 of the Revised Penal Code. Moreover, the CA pointed out that the petitioners' failure to
reserve the civil aspect of the criminal case proscribed them from instituting a separate civil action based on Article
2176 of the Civil Code, to wit:

Corollary, appellants should have reserved the civil aspect of the criminal case they have filed. Without so doing, they
were deemed to have elected to recover damages from the bus driver on the basis of the crime. Therefore, the right
of appellants to institute a separate civil case to recover liability from appellee based under Article 2176 of the Civil
Code is deemed instituted with the criminal action. Evidently, appellant's cause of action against appellee will be
limited to the recovery of the latter's subsidiary liability under Art. 103 of the Revised Penal Code. x x x17

The CA thereby erred. It incorrectly appreciated the nature of the petitioners' cause of action as presented in their
counterclaim.
We only need to look at the facts alleged in the petitioners' counterclaim to determine the correct nature of their cause
of action.18 The purpose of an action or suit and the law to govern the suit are to be determined not by the claim of the
party filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and prayer for
relief.19

The counterclaim relevantly reads:

xxxx

5. That the proximate cause of the subject vehicular accident is the reckless imprudence of the plaintiffs driver, one
ERNESTO BELCHEZ, by operating said Mabel Tours bus recklessly and in violation of traffic laws and regulations in
negotiating the overtaking of another vehicle without regards (sic) to the rightful vehicle occupying the right lane
coming from the opposite direction resulting to head on collision (sic) on the lane of defendant's SUPREME bus;

6. That at the time of the accident, plaintiff operated the subject Mabel Tour bus outside his franchise, hence, in
violation of his franchise and allied rules and regulations; operated the same without registered plate and using the
route of another franchise holder; and

COUNTERCLAIM

7. Defendants replead the proceedings (sic) paragraphs as they may be relevant;

8. That as a result of plaintiffs violation of his franchise and gross negligence of his driver, the defendant's SUPREME
bus suffered damage in the aggregate amount of ₱500,000.00; medical expenses for its employee and passengers
in the amount of ₱100,000.00;20

xxxx

Contrary to the conclusion thereon by the CA, the petitioners' cause of action was upon a quasi-delict. As such, their
counterclaim against the respondent was based on Article 2184,21 in relation to Article 218022 and Article 2176,23 all of
the Civil Code. It is relevant to state that even the RTC itself acknowledged that the counterclaim was upon a quasi-
delict, as its ratiocination bears out, to wit:

The question is whether despite the absence of such reservation, private respondent may nonetheless bring an action
for damages against the plaintiff under the pertinent provisions of the Civil Code, to wit:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this Chapter.

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also
for those of persons for whom one is responsible.

xxxx

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope
of their assigned task, even though the former are not engaged in any business or industry.

Art. 2177 states that responsibility for fault or negligence under the above-quoted provisions is entirely separate and
distinct from the civil liability arising from negligence under the Revised Penal Code.

However, Rule III of the Revised Rules of Criminal Procedure, while reiterating that a civil action under the above
quoted provisions of the New Civil Code may be brought separately from the criminal action, provides that the right to
bring it must be reserved.24
Yet, the RTC likewise erred on its outcome because its ratiocination was founded on the obsolete version of the Rules
of Court. By the time when the RTC rendered judgment on November 24, 2008, the revised relevant rule of procedure
had already been promulgated and taken effect,25 and it had specifically deleted the erstwhile reservation requirement
vis-a-vis the independent civil actions, as follows:

Section 1. Institution of Criminal and Civil Actions. - (a) When a criminal action is instituted, the civil action for the
recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the
offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to
the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts presenting
its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation.

When the offended party seeks to enforce civil liability against the accused by way of moral, nominal, temperate, or
exemplary dan1ages without specifying the amount thereof in the complaint or information, the filing fees therefore
shall constitute a first lien on the judgment awarding such damages.

Where the amount of damages, other than actual, is specified in the complaint or information, the corresponding filing
fees shall be paid by the offended party upon the filing thereof in court.

Except as otherwise provided in these Rules, no filing fees shall be required for actual damages.

No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but any cause
of action which could have been the subject thereof may be litigated in a separate civil action. (la)

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil
action. No reservation to file such civil action separately shall be allowed.

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on
the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or
information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party
shall pay additional filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of
these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute
a first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with
the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both
actions shall proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal
actions.1awp++i1

The error committed by the CA emanated from its failure to take into consideration that the omission of the driver in
violation of Article 365 of the Revised Penal Code could give rise not only to the obligation ex delicto,26 but also to the
obligation based on culpa aquiliana under Article 2176 of the Civil Code. Under the factual antecedents herein, both
obligations rested on the common element of negligence. Article 217727 of the Civil Code and Section 3,28 Rule 111 of
the Rules of Court allow the injured party to prosecute both criminal and civil actions simultaneously. As clarified
in Casupanan v. Laroya:29

Under Section 1 of the present Rule 111, what is "deemed instituted" with the criminal action is only the action to
recover civil liability arising from the crime or ex-delicto. All the other civil actions under Articles 32, 33, 34 and 2176
of the Civil Code are no longer "deemed instituted," and may be filed separately and prosecuted independently even
without any reservation in the criminal action. The failure to make a reservation in the criminal action is not a waiver
of the right to file a separate and independent civil action based on these articles of the Civil Code. The prescriptive
period on the civil actions based on these articles of the Civil Code continues to run even with the filing of the criminal
action. Verily, the civil actions based on these articles of the Civil Code are separate, distinct and independent of the
civil action "deemed instituted" in the criminal action. (Bold emphasis supplied)
The foregoing notwithstanding, the petitioners as the injured parties have to choose the remedy by which to enforce
their claim in the event of favorable decisions in both actions. This is because Article 2177 of the Civil Code bars them
from recovering damages twice upon the same act or omission. As ruled in Safeguard Security Agency, Inc. v.
Tangco:30

An act or omission causing damage to another may give rise to two separate civil liabilities on the part of the
offender, i.e., ( 1) civil liability ex delicto, under Article 100 of the Revised Penal Code; and (2) independent civil
liabilities, such as those (a) not arising from an act or omission complained of as a felony, e.g., culpa contractual or
obligations arising from law under Article 31 of the Civil Code, intentional torts under Articles 32 and 34, and culpa
aquiliana under Article 2176 of the Civil Code; or (b) where the injured party is granted a right to file an action
independent and distinct from the criminal action under Article 33 of the Civil Code. Either of these liabilities may be
enforced against the offender subject to the caveat under Article 2177 of the Civil Code that the offended party cannot
recover damages twice for the same act or omission or under both causes.

As can be seen, the latest iteration of Rule III, unlike the predecessor, no longer includes the independent civil actions
under Articles 32, 33, 34, and 2176 of the Civil Code as requiring prior reservation to be made in a previously instituted
criminal action. Had it been cautious and circumspect, the RTC could have avoided the error.

2.
Petitioners should first show that
they would not recover damages
twice from the same act or omission.

Nonetheless, we are constrained not to award outright the damages prayed for by the petitioners in their counterclaim.

Article 2177 of the Civil Code and the present version of Section 3, Rule 111 of the Rules of Court, which is the
applicable rule of procedure, expressly prohibit double recovery of damages arising from the same act or omission.
The petitioners' allegation that they had not yet recovered damages from the respondent was not controlling
considering that the criminal case against the respondent's driver had already been concluded. It remains for the
petitioners to still demonstrate that the RTC as the trial court did not award civil damages in the criminal case.
Consequently, Civil Case No. T-2240 should be remanded to the RTC for further proceedings, if only to afford to the
petitioners the opportunity to present evidence on their counterclaim subject to the prohibition against double recovery
of damages.

WHEREFORE, the Court GRANTS the appeal; REVERSES and SETS ASIDE the decision promulgated on January
27, 2011; and REMANDS Civil Case No. T-2240 to the Regional Trial Court in Tabaco City for further proceedings to
allow the petitioners to present evidence on their counterclaim, subject to the foregoing clarifications.

No pronouncement on costs of suit.

SO ORDERED.
G.R. No. L-33171 May 31, 1979

PORFIRIO P. CINCO, petitioner-appellant,

vs.
HON. MATEO CANONOY, Presiding Judge of the Third Branch of the Court of First Instance of Cebu, HON.
LORENZO B. BARRIA City Judge of Mandaue City, Second Branch ROMEO HILOT, VALERIANA PEPITO and
CARLOS PEPITO, respondents-appellees.

Eriberto Seno for appellant.

Jose M. Mesina for appellees.

MELENCIO-HERRERA, J.:

This is a Petition for Review on certiorari of the Decision of the Court of First Instance of Cebu rendered on November
5, 1970.

The background facts to the controversy may be set forth as follows:

Petitioner herein filed, on February 25, 1970, a Complaint in the City Court of Mandaue City, Cebu, Branch II, for the
recovery of damages on account of a vehicular accident involving his automobile and a jeepney driven by Romeo
Hilot and operated by Valeriana Pepito and Carlos Pepito, the last three being the private respondents in this suit.
Subsequent thereto, a criminal case was filed against the driver, Romeo Hilot, arising from the same accident. At the
pre-trial in the civil case, counsel for private respondents moved to suspend the civil action pending the final
determination of the criminal suit, invoking Rule 111, Section 3 (b) of the Rules of Court, which provides:

(b) After a criminal action has been commenced. no civil action arising from the same offense can be
prosecuted, and the same shall be suspended, in whatever stage it may be found, until final judgment
in the criminal proceeding has been rendered;

The City Court of Mandaue City in an Order dated August 11, 1970, ordered the suspension of the civil case.
Petitioner's Motion for Reconsideration thereof, having been denied on August 25, 1970, 1 petitioner elevated the
matter on certiorari to the Court of First Instance of Cebu, respondent Judge presiding, on September 11, 1970,
alleging that the City Judge had acted with grave abuse of discretion in suspending the civil action for being contrary
to law and jurisprudence. 2

On November 5, 1970, respondent Judge dismissed the Petition for certiorari on the ground that there was no grave
abuse of discretion on the part of the City Court in suspending the civil action inasmuch as damage to property is not
one of the instances when an independent civil action is proper; that petitioner has another plain, speedy, and
adequate remedy under the law, which is to submit his claim for damages in the criminal case; that the resolution of
the City Court is interlocutory and, therefore, certiorari is improper; and that the Petition is defective inasmuch as what
petitioner actually desires is a Writ of mandamus (Annex "R"). Petitioner's Motion for Reconsideration was denied by
respondent Judge in an Order dated November 14,1970 (Annex "S" and Annex "U").

Hence, this Petition for Review before this Tribunal, to which we gave due course on February 25, 1971. 3

Petitioner makes these:

ASSIGNMENTS OF ERROR

1. THE TRIAL COURT, RESPONDENT JUDGE MATEO CANONOY, ERRED IN HOLDING THAT
THE TRIAL OF THE CIVIL CASE NO. 189 FILED IN THE CITY COURT OF MANDAUE SHOULD BE
SUSPENDED UNTIL AFTER A FINAL JUDGMENT IS RENDERED IN THE CRIMINAL CASE.
 2. THAT THE COURT ERRED IN HOLDING THAT IN ORDER TO AVOID DELAY THE OFFENDED
PARTY MAY SUBMIT HIS CLAIM FOR DAMAGES IN THE CRIMINAL CASE.

3. THAT THE COURT ERRED IN HOLDING THAT THE PETITION FOR certiorari IS NOT PROPER,
BECAUSE THE RESOLUTION IN QUESTION IS INTERLOCUTORY.

4. THAT THE COURT ERRED IN HOLDING THAT THE PETITION IS DEFECTIVE. 4

all of which can be synthesized into one decisive issue: whether or not there can be an independent civil action for
damage to property during the pendency of the criminal action.

From the Complaint filed by petitioner before the City Court of Mandaue City, Cebu, it is evident that the nature and
character of his action was quasi-delictual predicated principally on Articles 2176 and 2180 of the Civil Code, which
provide:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is caned a quasi-delict and is governed by the provisions of this Chapter.
(1902a)

Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or
omissions but also for those of persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages cause by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry.

xxx xxx xxx

The responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damage. (1903a)

Thus, plaintiff made the essential averments that it was the fault or negligence of the driver, Romeo Hilot, in the
operation of the jeepney owned by the Pepitos which caused the collision between his automobile and said jeepney;
that damages were sustained by petitioner because of the collision; that there was a direct causal connection between
the damages he suffered and the fault and negligence of private respondents.

Similarly, in the Answer, private respondents contended, among others, that defendant, Valeriana Pepito, observed
due diligence in the selection and supervision of her employees, particularly of her co-defendant Romeo Hilot, a
defense peculiar to actions based on quasi-delict. 5

Liability being predicated on quasi-delict the civil case may proceed as a separate and independent civil action, as
specifically provided for in Article 2177 of the Civil Code.

Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and
distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot
recover damages twice for the same act or omission of the defendant. (n)

The crucial distinction between criminal negligence and quasi-delict, which is readily discernible from
the foregoing codal provision, has been expounded in Barredo vs. Garcia, et al., 73 Phil. 607, 620-
621, 6 thus:

Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple imprudence.
if we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or negligence not
punished by law, according to the literal import of article 1093 of the Civil Code, the legal institution
of culpa aquiliana would have very little scope and application in actual life. Death or injury to
persons and damage to property through any degree of negligence — even the slightest would have
to be indemnified only through the principle of civil hability arising from crime. In such a state of affairs,
what sphere would remain for quasidelito or culpa aquiliana We are loath to impute to the lawmaker
any intention to bring about a situation so absurd and anomalous. Nor are we, in the interpretation of
the laws, disposed to uphold the letter that killeth rather than the spirit that giveth life. We will not use
the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin
and such full-grown development as culpa aquiliana or quasi-delito, which is conserved and made
enduring in articles 1902 to 11910 of the Spanish Civil Code.

Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is
required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay in
damages. There are numerous cases of criminal negligence which cannot be shown beyond
reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the defendant
can and should be made responsible in a civil action under articles 1902 to 1910 of the Civil Code,
otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi remedium.

Thirdly, to hold that there is only one way to make defendants liability effective, and that is, to sue the
driver and exhaust his (the latter's) property first, would be tantamount to compelling the plaintiff to
follow a devious and cumbersome method of obtaining a reliel True, there is such a remedy under our
laws, but there is also a more expeditious way, which is based on the primary and direct responsibility
of the defendant under article 1903 of the Civil Code. Our view of the law is more likely to facilitate
remedy for civil wrongs because the procedure indicated by the defendant is wasteful and productive
of delay, it being a matter of common knowledge that professional drivers of taxis and similar public
conveyances usually do not have sufficient means with which to pay damages. Why, then, should the
plaintiff be required in all cases to go through this round-about, unnecessary, and probably useless
procedure? In construing the laws, courts have endeavored to shorten and facilitate the pathways of
right and justice.

At this juncture, it should be said that the primary and direct responsibility of employers and their
presumed negligence are principles calculated to protect society. Workmen and employees should be
carefully chosen and supervised in order to avoid injury to the public. It is the masters or employers
who principally reap the profits resulting from the services of these servants and employees. It is but
right that they should guarantee the latter's careful conduct for the personnel and patrimonial safety of
others. As Theilhard has said, "they should reproach themselves, at least, some for their weakness,
others for their poor selection and all for their negligence." And according to Manresa, "It is much more
equitable and just that such responsibility should fail upon the principal or director who could have
chosen a careful and prudent employee, and not upon the such employee because of his confidence
in the principal or director." (Vol. 12, p. 622, 2nd Ed.) Many jurists also base this primary responsibility
of the employer on the principle of representation of the principal by the agent. Thus, Oyuelos says in
the work already cited (Vol. 7, p. 747) that before third persons the employer and employee vienen a
ser como una sola personalidad, por refundicion de la del dependiente en la de quien la emplea y
utihza (become as one personality by the merging of the person of the employee in that of him who
employs and utilizes him.) All these observations acquire a peculiar force and significance when it
comes to motor accidents, and there is need of stressing and accentuating the responsibility of owners
of motor vehicles.

Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil Code on
this subject, which has given rise to overlapping or concurrence of spheres already discussed, and for
lack of understanding of the character and efficacy of the action for culpaaquiliana there has grown up
a common practice to seek damages only by virtue of the Civil responsibility arising from crime,
forgetting that there is another remedy, which is by invoking articles 1902-1910 of the Civil Code.
Although this habitual method is allowed by our laws, it has nevertheless rendered practically useless
and nugatory the more expeditious and effective remedy based on culpa aquiliana or culpa extra-
contractual. In the present case, we are asked to help perpetuate this usual course. But we believe it
is high time we pointed out to the harm done by such practice and to restore the principle of
responsibility for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is
high time we cause the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so
 that its waters may no longer be diverted into that of a crime under the Penal Code. This will, it is
believed, make for the bet ter safeguarding of private rights because it re-establishes an ancient and
additional remedy, and for the further reason that an independent civil action, not depending on the
issues, stations and results of a criminal prosecution, and entirely directed by the party wronged or his
counsel is more likely to secure adequate and efficacious redress. (Garcia vs. Florida 52 SCRA 420,
424-425, Aug. 31, 1973). (Emphasis supplied)

The separate and independent civil action for a quasi-delict is also clearly recognized in section 2, Rule 111 of the
Rules of Court, reading:

Sec. 2. Independent civil action. — In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the
Civil Code of the Philippines, Are independent civil action entirely separate and distinct from the c
action, may be brought by the injured party during the pendency of the criminal case, provided the
right is reserved as required in the preceding section. Such civil action shag proceed independently of
the criminal prosecution, and shall require only a preponderance of evidence.

Significant to note is the fact that the foregoing section categorically lists cases provided for in Article 2177 of the Civil
Code, supra, as allowing of an "independent civil action."

Tested by the hereinabove-quoted legal tenets, it has to be held that the City Court, in surrounding the civil action,
erred in placing reliance on section 3 (b) of Rule 111 of the Rules of Court, supra which refers to "other civil actions
arising from cases not included in the section just cited" (i.e., Section 2, Rule 111 above quoted), in which case 6
once the criminal action has being commenced, no civil action arising from the same offense can be prosecuted and
the same shall be suspended in whatever stage it may be found, until final judgment in the criminal proceeding has
been rendered." Stated otherwise, the civil action referred to in Secs. 3(a) and 3(b) of Rule 111 of the Rules of Court,
which should be suspended after the criminal action has been instituted is that arising from the criminal offense not
the civil action based on quasi-delict

Article 31 of the Civil Code then clearly assumes relevance when it provides:

Art. 31. When the civil action is based on an obligation not arising from the act or omission complained
of as a felony, such civil action may proceed independently of the criminal proceedings and regardless
of the result of the latter.

For obviously, the jural concept of a quasi-delict is that of an independent source of obligation "not arising from the
act or omission complained of as a felony." Article 1157 of the Civil Code bolsters this conclusion when it specifically
recognizes that:

Art. 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts. (1089a)

(Emphasis supplied)

It bears emphasizing that petitioner's cause of action is based on quasi-delict. The concept of quasidelica as
enunciated in Article 2176 of the Civil Code (supra), is so broad that it includes not only injuries to persons but also
damage to property. 7 It makes no distinction between "damage to persons" on the one hand and "damage to property"
on the other. Indeed, the word "damage" is used in two concepts: the "harm" done and "reparation" for the harm done.
And with respect to harm it is plain that it includes both injuries to person and property since "harm" is not limited to
personal but also to property injuries. In fact, examples of quasi-delict in the law itself include damage to property. An
instance is Article 2191(2) of the Civil Code which holds proprietors responsible for damages caused by excessive
smoke which may be harmful to persons or property."

In the light of the foregoing disquisition, we are constrained to hold that respondent Judge gravely abused his
discretion in upholding the Decision of the City Court of Mandaue City, Cebu, suspending the civil action based on
a quasi-delict until after the criminal case is finally terminated. Having arrived at this conclusion, a discussion of the
other errors assigned becomes unnecessary.

WHEREFORE, granting the Writ of certiorari prayed for, the Decision of the Court of First Instance of Cebu sought to
be reviewed is hereby set aside, and the City Court of Mandaue City, Cebu, Branch 11, is hereby ordered to proceed
with the hearing of Civil Case No. 189 of that Court.

Without pronouncement as to costs.

SO ORDERED.
G.R. No. L-12191 October 14, 1918

JOSE CANGCO, plaintiff-appellant,

vs.
MANILA RAILROAD CO., defendant-appellee.

Ramon Sotelo for appellant.

Kincaid & Hartigan for appellee.

FISHER, J.:

At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the employment of
Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He lived in the pueblo of San Mateo,
in the province of Rizal, which is located upon the line of the defendant railroad company; and in coming daily by train
to the company's office in the city of Manila where he worked, he used a pass, supplied by the company, which entitled
him to ride upon the company's trains free of charge. Upon the occasion in question, January 20, 1915, the plaintiff
arose from his seat in the second class-car where he was riding and, making, his exit through the door, took his
position upon the steps of the coach, seizing the upright guardrail with his right hand for support.

On the side of the train where passengers alight at the San Mateo station there is a cement platform which begins to
rise with a moderate gradient some distance away from the company's office and extends along in front of said office
for a distance sufficient to cover the length of several coaches. As the train slowed down another passenger, named
Emilio Zuñiga, also an employee of the railroad company, got off the same car, alighting safely at the point where the
platform begins to rise from the level of the ground. When the train had proceeded a little farther the plaintiff Jose
Cangco stepped off also, but one or both of his feet came in contact with a sack of watermelons with the result that
his feet slipped from under him and he fell violently on the platform. His body at once rolled from the platform and was
drawn under the moving car, where his right arm was badly crushed and lacerated. It appears that after the plaintiff
alighted from the train the car moved forward possibly six meters before it came to a full stop.

The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was lighted dimly by a
single light located some distance away, objects on the platform where the accident occurred were difficult to discern
especially to a person emerging from a lighted car.

The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is found in the fact
that it was the customary season for harvesting these melons and a large lot had been brought to the station for the
shipment to the market. They were contained in numerous sacks which has been piled on the platform in a row one
upon another. The testimony shows that this row of sacks was so placed of melons and the edge of platform; and it
is clear that the fall of the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment
he stepped upon the platform. His statement that he failed to see these objects in the darkness is readily to be credited.

The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the injuries which he had
received were very serious. He was therefore brought at once to a certain hospital in the city of Manila where an
examination was made and his arm was amputated. The result of this operation was unsatisfactory, and the plaintiff
was then carried to another hospital where a second operation was performed and the member was again amputated
higher up near the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of
medical and surgical fees and for other expenses in connection with the process of his curation.

Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of Manila to recover
damages of the defendant company, founding his action upon the negligence of the servants and employees of the
defendant in placing the sacks of melons upon the platform and leaving them so placed as to be a menace to the
security of passenger alighting from the company's trains. At the hearing in the Court of First Instance, his Honor, the
trial judge, found the facts substantially as above stated, and drew therefrom his conclusion to the effect that, although
negligence was attributable to the defendant by reason of the fact that the sacks of melons were so placed as to
obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself had failed to use due caution in
alighting from the coach and was therefore precluded form recovering. Judgment was accordingly entered in favor of
the defendant company, and the plaintiff appealed.

It can not be doubted that the employees of the railroad company were guilty of negligence in piling these sacks on
the platform in the manner above stated; that their presence caused the plaintiff to fall as he alighted from the train;
and that they therefore constituted an effective legal cause of the injuries sustained by the plaintiff. It necessarily
follows that the defendant company is liable for the damage thereby occasioned unless recovery is barred by the
plaintiff's own contributory negligence. In resolving this problem it is necessary that each of these conceptions of
liability, to-wit, the primary responsibility of the defendant company and the contributory negligence of the plaintiff
should be separately examined.

It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the
obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by
reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and
immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its
servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their
selection and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only
to extra-contractual obligations — or to use the technical form of expression, that article relates only to culpa aquiliana
and not to culpa contractual.

Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code, clearly points out this
distinction, which was also recognized by this Court in its decision in the case of Rakes vs. Atlantic, Gulf and Pacific
Co. (7 Phil. rep., 359). In commenting upon article 1093 Manresa clearly points out the difference between "culpa,
substantive and independent, which of itself constitutes the source of an obligation between persons not formerly
connected by any legal tie" and culpa considered as an accident in the performance of an obligation already existing
. . . ."

In the Rakes case (supra) the decision of this court was made to rest squarely upon the proposition that article 1903
of the Civil Code is not applicable to acts of negligence which constitute the breach of a contract.

Upon this point the Court said:

The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are understood to be those
not growing out of pre-existing duties of the parties to one another. But where relations already formed give
rise to duties, whether springing from contract or quasi-contract, then breaches of those duties are subject to
article 1101, 1103, and 1104 of the same code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at
365.)

This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in certain cases imposed
upon employers with respect to damages occasioned by the negligence of their employees to persons to whom they
are not bound by contract, is not based, as in the English Common Law, upon the principle of respondeat superior
— if it were, the master would be liable in every case and unconditionally — but upon the principle announced in
article 1902 of the Civil Code, which imposes upon all persons who by their fault or negligence, do injury to another,
the obligation of making good the damage caused. One who places a powerful automobile in the hands of a servant
whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of an act of negligence
which makes him liable for all the consequences of his imprudence. The obligation to make good the damage arises
at the very instant that the unskillful servant, while acting within the scope of his employment causes the injury. The
liability of the master is personal and direct. But, if the master has not been guilty of any negligence whatever in the
selection and direction of the servant, he is not liable for the acts of the latter, whatever done within the scope of his
employment or not, if the damage done by the servant does not amount to a breach of the contract between the
master and the person injured.

It is not accurate to say that proof of diligence and care in the selection and control of the servant relieves the master
from liability for the latter's acts — on the contrary, that proof shows that the responsibility has never existed. As
Manresa says (vol. 8, p. 68) the liability arising from extra-contractual culpa is always based upon a voluntary act or
omission which, without willful intent, but by mere negligence or inattention, has caused damage to another. A master
who exercises all possible care in the selection of his servant, taking into consideration the qualifications they should
possess for the discharge of the duties which it is his purpose to confide to them, and directs them with equal diligence,
thereby performs his duty to third persons to whom he is bound by no contractual ties, and he incurs no liability
whatever if, by reason of the negligence of his servants, even within the scope of their employment, such third person
suffer damage. True it is that under article 1903 of the Civil Code the law creates a presumption that he has been
negligent in the selection or direction of his servant, but the presumption is rebuttable and yield to proof of due care
and diligence in this respect.

The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico Code, has held that
these articles are applicable to cases of extra-contractual culpa exclusively. (Carmona vs. Cuesta, 20 Porto Rico
Reports, 215.)

This distinction was again made patent by this Court in its decision in the case of Bahia vs. Litonjua and Leynes, (30
Phil. rep., 624), which was an action brought upon the theory of the extra-contractual liability of the defendant to
respond for the damage caused by the carelessness of his employee while acting within the scope of his employment.
The Court, after citing the last paragraph of article 1903 of the Civil Code, said:

From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or
employee there instantly arises a presumption of law that there was negligence on the part of the master or
employer either in selection of the servant or employee, or in supervision over him after the selection, or both;
and (2) that that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It
follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision
he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is
relieved from liability.

This theory bases the responsibility of the master ultimately on his own negligence and not on that of his
servant. This is the notable peculiarity of the Spanish law of negligence. It is, of course, in striking contrast to
the American doctrine that, in relations with strangers, the negligence of the servant in conclusively the
negligence of the master.

The opinion there expressed by this Court, to the effect that in case of extra-contractual culpa based upon negligence,
it is necessary that there shall have been some fault attributable to the defendant personally, and that the last
paragraph of article 1903 merely establishes a rebuttable presumption, is in complete accord with the authoritative
opinion of Manresa, who says (vol. 12, p. 611) that the liability created by article 1903 is imposed by reason of the
breach of the duties inherent in the special relations of authority or superiority existing between the person called upon
to repair the damage and the one who, by his act or omission, was the cause of it.

On the other hand, the liability of masters and employers for the negligent acts or omissions of their servants or agents,
when such acts or omissions cause damages which amount to the breach of a contact, is not based upon a mere
presumption of the master's negligence in their selection or control, and proof of exercise of the utmost diligence and
care in this regard does not relieve the master of his liability for the breach of his contract.

Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual obligation has its source
in the breach or omission of those mutual duties which civilized society imposes upon it members, or which arise from
these relations, other than contractual, of certain members of society to others, generally embraced in the concept
of status. The legal rights of each member of society constitute the measure of the corresponding legal duties, mainly
negative in character, which the existence of those rights imposes upon all other members of society. The breach of
these general duties whether due to willful intent or to mere inattention, if productive of injury, give rise to an obligation
to indemnify the injured party. The fundamental distinction between obligations of this character and those which arise
from contract, rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act or
omission itself which creates the vinculum juris, whereas in contractual relations the vinculum exists independently of
the breach of the voluntary duty assumed by the parties when entering into the contractual relation.

With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is competent for the
legislature to elect — and our Legislature has so elected — whom such an obligation is imposed is morally culpable,
or, on the contrary, for reasons of public policy, to extend that liability, without regard to the lack of moral culpability,
so as to include responsibility for the negligence of those person who acts or mission are imputable, by a legal fiction,
to others who are in a position to exercise an absolute or limited control over them. The legislature which adopted our
Civil Code has elected to limit extra-contractual liability — with certain well-defined exceptions — to cases in which
moral culpability can be directly imputed to the persons to be charged. This moral responsibility may consist in having
failed to exercise due care in the selection and control of one's agents or servants, or in the control of persons who,
by reason of their status, occupy a position of dependency with respect to the person made liable for their conduct.

The position of a natural or juridical person who has undertaken by contract to render service to another, is wholly
different from that to which article 1903 relates. When the sources of the obligation upon which plaintiff's cause of
action depends is a negligent act or omission, the burden of proof rests upon plaintiff to prove the negligence — if he
does not his action fails. But when the facts averred show a contractual undertaking by defendant for the benefit of
plaintiff, and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff to
specify in his pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the
defendant, or of his servants or agents. Proof of the contract and of its nonperformance is sufficient prima facie to
warrant a recovery.

As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor should assume the
burden of proof of its existence, as the only fact upon which his action is based; while on the contrary, in a
case of negligence which presupposes the existence of a contractual obligation, if the creditor shows that it
exists and that it has been broken, it is not necessary for him to prove negligence. (Manresa, vol. 8, p. 71
[1907 ed., p. 76]).

As it is not necessary for the plaintiff in an action for the breach of a contract to show that the breach was due to the
negligent conduct of defendant or of his servants, even though such be in fact the actual cause of the breach, it is
obvious that proof on the part of defendant that the negligence or omission of his servants or agents caused the
breach of the contract would not constitute a defense to the action. If the negligence of servants or agents could be
invoked as a means of discharging the liability arising from contract, the anomalous result would be that person acting
through the medium of agents or servants in the performance of their contracts, would be in a better position than
those acting in person. If one delivers a valuable watch to watchmaker who contract to repair it, and the bailee, by a
personal negligent act causes its destruction, he is unquestionably liable. Would it be logical to free him from his
liability for the breach of his contract, which involves the duty to exercise due care in the preservation of the watch, if
he shows that it was his servant whose negligence caused the injury? If such a theory could be accepted, juridical
persons would enjoy practically complete immunity from damages arising from the breach of their contracts if caused
by negligent acts as such juridical persons can of necessity only act through agents or servants, and it would no doubt
be true in most instances that reasonable care had been taken in selection and direction of such servants. If one
delivers securities to a banking corporation as collateral, and they are lost by reason of the negligence of some clerk
employed by the bank, would it be just and reasonable to permit the bank to relieve itself of liability for the breach of
its contract to return the collateral upon the payment of the debt by proving that due care had been exercised in the
selection and direction of the clerk?

This distinction between culpa aquiliana, as the source of an obligation, and culpa contractual as a mere incident to
the performance of a contract has frequently been recognized by the supreme court of Spain. (Sentencias of June 27,
1894; November 20, 1896; and December 13, 1896.) In the decisions of November 20, 1896, it appeared that plaintiff's
action arose ex contractu, but that defendant sought to avail himself of the provisions of article 1902 of the Civil Code
as a defense. The Spanish Supreme Court rejected defendant's contention, saying:

These are not cases of injury caused, without any pre-existing obligation, by fault or negligence, such as
those to which article 1902 of the Civil Code relates, but of damages caused by the defendant's failure to carry
out the undertakings imposed by the contracts . . . .

A brief review of the earlier decision of this court involving the liability of employers for damage done by the negligent
acts of their servants will show that in no case has the court ever decided that the negligence of the defendant's
servants has been held to constitute a defense to an action for damages for breach of contract.

In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the owner of a carriage was not liable for the
damages caused by the negligence of his driver. In that case the court commented on the fact that no evidence had
been adduced in the trial court that the defendant had been negligent in the employment of the driver, or that he had
any knowledge of his lack of skill or carefulness.

In the case of Baer Senior & Co's Successors vs. Compania Maritima (6 Phil. Rep., 215), the plaintiff sued the
defendant for damages caused by the loss of a barge belonging to plaintiff which was allowed to get adrift by the
negligence of defendant's servants in the course of the performance of a contract of towage. The court held, citing
Manresa (vol. 8, pp. 29, 69) that if the "obligation of the defendant grew out of a contract made between it and the
plaintiff . . . we do not think that the provisions of articles 1902 and 1903 are applicable to the case."

In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to recover damages for the
personal injuries caused by the negligence of defendant's chauffeur while driving defendant's automobile in which
defendant was riding at the time. The court found that the damages were caused by the negligence of the driver of
the automobile, but held that the master was not liable, although he was present at the time, saying:

. . . unless the negligent acts of the driver are continued for a length of time as to give the owner a reasonable
opportunity to observe them and to direct the driver to desist therefrom. . . . The act complained of must be
continued in the presence of the owner for such length of time that the owner by his acquiescence, makes the
driver's acts his own.

In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil. Rep., 8), it is true that
the court rested its conclusion as to the liability of the defendant upon article 1903, although the facts disclosed that
the injury complaint of by plaintiff constituted a breach of the duty to him arising out of the contract of transportation.
The express ground of the decision in this case was that article 1903, in dealing with the liability of a master for the
negligent acts of his servants "makes the distinction between private individuals and public enterprise;" that as to the
latter the law creates a rebuttable presumption of negligence in the selection or direction of servants; and that in the
particular case the presumption of negligence had not been overcome.

It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as though founded in tort
rather than as based upon the breach of the contract of carriage, and an examination of the pleadings and of the
briefs shows that the questions of law were in fact discussed upon this theory. Viewed from the standpoint of the
defendant the practical result must have been the same in any event. The proof disclosed beyond doubt that the
defendant's servant was grossly negligent and that his negligence was the proximate cause of plaintiff's injury. It also
affirmatively appeared that defendant had been guilty of negligence in its failure to exercise proper discretion in the
direction of the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of the
duty were to be regarded as constituting culpa aquiliana or culpa contractual. As Manresa points out (vol. 8, pp. 29
and 69) whether negligence occurs an incident in the course of the performance of a contractual undertaking or its
itself the source of an extra-contractual undertaking obligation, its essential characteristics are identical. There is
always an act or omission productive of damage due to carelessness or inattention on the part of the defendant.
Consequently, when the court holds that a defendant is liable in damages for having failed to exercise due care, either
directly, or in failing to exercise proper care in the selection and direction of his servants, the practical result is identical
in either case. Therefore, it follows that it is not to be inferred, because the court held in the Yamada case that
defendant was liable for the damages negligently caused by its servants to a person to whom it was bound by contract,
and made reference to the fact that the defendant was negligent in the selection and control of its servants, that in
such a case the court would have held that it would have been a good defense to the action, if presented squarely
upon the theory of the breach of the contract, for defendant to have proved that it did in fact exercise care in the
selection and control of the servant.

The true explanation of such cases is to be found by directing the attention to the relative spheres of contractual and
extra-contractual obligations. The field of non- contractual obligation is much more broader than that of contractual
obligations, comprising, as it does, the whole extent of juridical human relations. These two fields, figuratively
speaking, concentric; that is to say, the mere fact that a person is bound to another by contract does not relieve him
from extra-contractual liability to such person. When such a contractual relation exists the obligor may break the
contract under such conditions that the same act which constitutes the source of an extra-contractual obligation had
no contract existed between the parties.

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and to
provide safe means of entering and leaving its trains (civil code, article 1258). That duty, being contractual, was direct
and immediate, and its non-performance could not be excused by proof that the fault was morally imputable to
defendant's servants.

The railroad company's defense involves the assumption that even granting that the negligent conduct of its servants
in placing an obstruction upon the platform was a breach of its contractual obligation to maintain safe means of
approaching and leaving its trains, the direct and proximate cause of the injury suffered by plaintiff was his own
contributory negligence in failing to wait until the train had come to a complete stop before alighting. Under the doctrine
of comparative negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's own
negligence, no liability is imposed upon defendant's negligence and plaintiff's negligence merely contributed to his
injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of
negligence.

It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular injury
suffered by him could not have occurred. Defendant contends, and cites many authorities in support of the contention,
that it is negligence per se for a passenger to alight from a moving train. We are not disposed to subscribe to this
doctrine in its absolute form. We are of the opinion that this proposition is too badly stated and is at variance with the
experience of every-day life. In this particular instance, that the train was barely moving when plaintiff alighted is
shown conclusively by the fact that it came to stop within six meters from the place where he stepped from it.
Thousands of person alight from trains under these conditions every day of the year, and sustain no injury where the
company has kept its platform free from dangerous obstructions. There is no reason to believe that plaintiff would
have suffered any injury whatever in alighting as he did had it not been for defendant's negligent failure to perform its
duty to provide a safe alighting place.

We are of the opinion that the correct doctrine relating to this subject is that expressed in Thompson's work on
Negligence (vol. 3, sec. 3010) as follows:

The test by which to determine whether the passenger has been guilty of negligence in attempting to alight
from a moving railway train, is that of ordinary or reasonable care. It is to be considered whether an ordinarily
prudent person, of the age, sex and condition of the passenger, would have acted as the passenger acted
under the circumstances disclosed by the evidence. This care has been defined to be, not the care which may
or should be used by the prudent man generally, but the care which a man of ordinary prudence would use
under similar circumstances, to avoid injury." (Thompson, Commentaries on Negligence, vol. 3, sec. 3010.)

Or, it we prefer to adopt the mode of exposition used by this court in Picart vs. Smith (37 Phil. rep., 809), we may say
that the test is this; Was there anything in the circumstances surrounding the plaintiff at the time he alighted from the
train which would have admonished a person of average prudence that to get off the train under the conditions then
existing was dangerous? If so, the plaintiff should have desisted from alighting; and his failure so to desist was
contributory negligence. 1awph!l.net

As the case now before us presents itself, the only fact from which a conclusion can be drawn to the effect that plaintiff
was guilty of contributory negligence is that he stepped off the car without being able to discern clearly the condition
of the platform and while the train was yet slowly moving. In considering the situation thus presented, it should not be
overlooked that the plaintiff was, as we find, ignorant of the fact that the obstruction which was caused by the sacks
of melons piled on the platform existed; and as the defendant was bound by reason of its duty as a public carrier to
afford to its passengers facilities for safe egress from its trains, the plaintiff had a right to assume, in the absence of
some circumstance to warn him to the contrary, that the platform was clear. The place, as we have already stated,
was dark, or dimly lighted, and this also is proof of a failure upon the part of the defendant in the performance of a
duty owing by it to the plaintiff; for if it were by any possibility concede that it had right to pile these sacks in the path
of alighting passengers, the placing of them adequately so that their presence would be revealed.

As pertinent to the question of contributory negligence on the part of the plaintiff in this case the following
circumstances are to be noted: The company's platform was constructed upon a level higher than that of the roadbed
and the surrounding ground. The distance from the steps of the car to the spot where the alighting passenger would
place his feet on the platform was thus reduced, thereby decreasing the risk incident to stepping off. The nature of the
platform, constructed as it was of cement material, also assured to the passenger a stable and even surface on which
to alight. Furthermore, the plaintiff was possessed of the vigor and agility of young manhood, and it was by no means
so risky for him to get off while the train was yet moving as the same act would have been in an aged or feeble person.
In determining the question of contributory negligence in performing such act — that is to say, whether the passenger
acted prudently or recklessly — the age, sex, and physical condition of the passenger are circumstances necessarily
affecting the safety of the passenger, and should be considered. Women, it has been observed, as a general rule are
less capable than men of alighting with safety under such conditions, as the nature of their wearing apparel obstructs
the free movement of the limbs. Again, it may be noted that the place was perfectly familiar to the plaintiff as it was
his daily custom to get on and of the train at this station. There could, therefore, be no uncertainty in his mind with
regard either to the length of the step which he was required to take or the character of the platform where he was
alighting. Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly under
way was not characterized by imprudence and that therefore he was not guilty of contributory negligence.

The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a copyist clerk, and
that the injuries he has suffered have permanently disabled him from continuing that employment. Defendant has not
shown that any other gainful occupation is open to plaintiff. His expectancy of life, according to the standard mortality
tables, is approximately thirty-three years. We are of the opinion that a fair compensation for the damage suffered by
him for his permanent disability is the sum of P2,500, and that he is also entitled to recover of defendant the additional
sum of P790.25 for medical attention, hospital services, and other incidental expenditures connected with the
treatment of his injuries.

The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of P3,290.25, and for
the costs of both instances. So ordered.

Arellano, C.J., Torres, Street and Avanceña, JJ., concur.

G.R. No. 180440 December 5, 2012

DR. GENEVIEVE L. HUANG, Petitioner,

vs.
PHILIPPINE HOTELIERS, INC., DUSIT THANI PUBLIC CO., LTD. And FIRST LEPANTO TAISHO INSURANCE
CORPORATION, Respondents.

DECISION

PEREZ, J.:

For this Court’s resolution is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
Decision1 of the Court of Appeals in CA-G.R. CV No. 87065 dated 9 August 2007, affirming the Decision2 of Branch 56
of the Regional Trial Court (RTC) of Makati City in Civil Case No. 96-1367 dated 21 February 2006, dismissing for
lack of merit herein petitioner Dr. Genevieve L. Huang’s Complaint for Damages. Assailed as well is the Court of
Appeals’ Resolution3 dated 5 November 2007 denying for lack of merit petitioner’s Motion for Reconsideration.

This case stemmed from a Complaint for Damages filed on 28 August 1996 by petitioner Dr. Genevieve L.
Huang4 against herein respondents Philippine Hoteliers, Inc. (PHI)5 and Dusit Thani Public Co., Ltd. (DTPCI),6 as
owners of Dusit Thani Hotel Manila (Dusit Hotel);7 and co-respondent First Lepanto Taisho Insurance Corporation
(First Lepanto),8 as insurer of the aforesaid hotel. The said Complaint was premised on the alleged negligence of
respondents PHI and DTPCI’s staff, in the untimely putting off all the lights within the hotel’s swimming pool area, as
well as the locking of the main entrance door of the area, prompting petitioner to grope for a way out. While doing so,
a folding wooden counter top fell on her head causing her serious brain injury. The negligence was allegedly
compounded by respondents PHI and DTPCI’s failure to render prompt and adequate medical assistance.

Petitioner’s version of the antecedents of this case is as follows:

On 11 June 1995, Delia Goldberg (Delia), a registered guest of Dusit Hotel, invited her friend, petitioner Dr. Genevieve
L. Huang, for a swim at the hotel’s swimming pool facility. They started bathing at around 5:00 p.m. At around 7:00
p.m., the hotel’s swimming pool attendant informed them that the swimming pool area was about to be closed. The
two subsequently proceeded to the shower room adjacent to the swimming pool to take a shower and dress up.
However, when they came out of the bathroom, the entire swimming pool area was already pitch black and there was
no longer any person around but the two of them. They carefully walked towards the main door leading to the hotel
but, to their surprise, the door was locked.9

Petitioner and Delia waited for 10 more minutes near the door hoping someone would come to their rescue but they
waited in vain. Delia became anxious about their situation so petitioner began to walk around to look for a house
phone. Delia followed petitioner. After some time, petitioner saw a phone behind the lifeguard’s counter. While slowly
walking towards the phone, a hard and heavy object, which later turned out to be the folding wooden counter top, fell
on petitioner’s head that knocked her down almost unconscious.10

Delia immediately got hold of the house phone and notified the hotel telephone operator of the incident. Not long after,
the hotel staff arrived at the main entrance door of the swimming pool area but it took them at least 20 to 30 minutes
to get inside. When the door was finally opened, three hotel chambermaids assisted petitioner by placing an ice pack
and applying some ointment on her head. After petitioner had slightly recovered, she requested to be assisted to the
hotel’s coffee shop to have some rest. Petitioner demanded the services of the hotel physician.11

Dr. Violeta Dalumpines (Dr. Dalumpines) arrived. She approached petitioner and introduced herself as the hotel
physician. However, instead of immediately providing the needed medical assistance, Dr. Dalumpines presented a
"Waiver" and demanded that it be signed by petitioner, otherwise, the hotel management will not render her any
assistance. Petitioner refused to do so.12

After eating her dinner and having rested for a while, petitioner left the hotel’s coffee shop and went home. Thereupon,
petitioner started to feel extraordinary dizziness accompanied by an uncomfortable feeling in her stomach, which
lasted until the following day. Petitioner was constrained to stay at home, thus, missing all her important appointments
with her patients. She also began experiencing "on" and "off" severe headaches that caused her three (3) sleepless
nights.13

Petitioner, thus, decided to consult a certain Dr. Perry Noble (Dr. Noble), a neurologist from Makati Medical Center,
who required her to have an X-ray and a Magnetic Resonance Imaging (MRI) tests.14 The MRI Report15 dated 23 August
1995 revealed the following findings:

CONSULTATION REPORT:

MRI examination of the brain shows scattered areas of intraparenchymal contusions and involving mainly the left
middle and posterior temporal and slightly the right anterior temporal lobe.

Other small areas of contusions with suggestive pertechiae are seen in the left fronto-parietal, left parieto-occipital
and with deep frontal periventricular subcortical and cortical regions. There is no mass effect nor signs of localized
hemorrhagic extravasation.

The ventricles are not enlarged, quite symmetrical without shifts or deformities; the peripheral sulci are within normal
limits.

The C-P angles, petromastoids, sella, extrasellar and retro orbital areas appear normal.

The brainstem is unremarkable.

IMPRESSION: Scattered small intraparenchymal contusions mainly involving the left middle-posterior temporal lobe
and also right medial anterior temporal, both deep frontal subcortical, left parieto-occipital subcortical and cortical
regions. Ischemic etiology not ruled out. No localized intra - or extracerebral hemorrhage.16

Petitioner claimed that the aforesaid MRI result clearly showed that her head was bruised. Based also on the same
MRI result, Dr. Noble told her that she has a very serious brain injury. In view thereof, Dr. Noble prescribed the
necessary medicine for her condition.17

Petitioner likewise consulted a certain Dr. Ofelia Adapon, also a neurologist from Makati Medical Center, who required
her to undergo an Electroencephalogram examination (EEG) to measure the electrostatic in her brain.18 Based on its
result,19 Dr. Ofelia Adapon informed her that she has a serious condition—a permanent one. Dr. Ofelia Adapon similarly
prescribed medicines for her brain injury.20

Petitioner’s condition did not get better. Hence, sometime in September 1995, she consulted another neuro-surgeon
by the name of Dr. Renato Sibayan (Dr. Sibayan), who required her to have an X-ray test.21 According to petitioner,
Dr. Sibayan’s finding was the same as those of the previous doctors that she had consulted—she has a serious brain
injury.22

By reason of the unfortunate 11 June 1995 incident inside the hotel’s swimming pool area, petitioner also started to
feel losing her memory, which greatly affected and disrupted the practice of her chosen profession.23 Thus, on 25
October 1995, petitioner, through counsel, sent a demand letter24 to respondents PHI and DTPCI seeking payment of
an amount not less than P100,000,000.00 representing loss of earnings on her remaining life span. But, petitioner’s
demand was unheeded.

In November 1995, petitioner went to the United States of America (USA) for further medical treatment. She consulted
a certain Dr. Gerald Steinberg and a certain Dr. Joel Dokson25 from Mount Sinai Hospital who both found that she has
"post traumatic-post concussion/contusion cephalgias-vascular and neuralgia."26 She was then prescribed to take
some medications for severe pain and to undergo physical therapy. Her condition did not improve so she returned to
the Philippines.27

Petitioner, once again, consulted Dr. Sibayan, who simply told her to just relax and to continue taking her medicines.
Petitioner also consulted other neurologists, who all advised her to just continue her medications and to undergo
physical therapy for her neck pain.28
Sometime in 1996, petitioner consulted as well a certain Dr. Victor Lopez (Dr. Lopez), an ophthalmologist from the
Makati Medical Center, because of her poor vision, which she has experienced for several months.29 Petitioner’s Eye
Report dated 5 March 199630 issued by Dr. Lopez stated: "IMPRESSION: Posterior vitreous detachment, right eye of
floaters." Dr. Lopez told petitioner that her detached eye is permanent and very serious. Dr. Lopez then prescribed an
eye drop to petitioner.31

For petitioner’s frustration to dissipate and to regain her former strength and physical well-being, she consulted
another neuro-surgeon from Makati Medical Center by the name of Dr. Leopoldo P. Pardo, Jr. (Dr. Pardo, Jr.).32 She
disclosed to Dr. Pardo, Jr. that at the age of 18 she suffered a stroke due to mitral valve disease and that she was
given treatments, which also resulted in thrombocytopenia. In Dr. Pardo, Jr.’s medical evaluation of petitioner dated
15 May 1996,33 he made the following diagnosis and opinion:

DIAGNOSIS AND OPINION:

This patient sustained a severe head injury in (sic) 11 June 1995 and as a result of which she developed the following
injuries:

1. Cerebral Concussion and Contusion

2. Post-traumatic Epilepsy

3. Post-concussional Syndrome

4. Minimal Brain Dysfunction

5. Cervical Sprain, chronic recurrent

It is my opinion that the symptoms she complained of in the foregoing history are all related to and a result of the injury
sustained on 11 June 1995.

It is further my opinion that the above diagnosis and complaints do materially affect her duties and functions as a
practicing physician and dermatologist, and that she will require treatment for an undetermined period of time.

The percentage of disability is not calculated at this time and will require further evaluation and observation.34

Dr. Pardo, Jr. then advised petitioner to continue her medications.35

Petitioner likewise consulted a certain Dr. Tenchavez36 for her follow-up EEG.37 He similarly prescribed medicine for
petitioner’s deep brain injury. He also gave her pain killer for her headache and advised her to undergo physical
therapy. Her symptoms, however, persisted all the more.38

In 1999, petitioner consulted another neurologist at the Makati Medical Center by the name of Dr. Martesio Perez (Dr.
Perez) because of severe fleeting pains in her head, arms and legs; difficulty in concentration; and warm sensation of
the legs, which symptoms also occurred after the 11 June 1995 incident. Upon examination, Dr. Perez observed that
petitioner has been experiencing severe pains and she has a slight difficulty in concentration. He likewise noted that
there was a slight spasm of petitioner’s neck muscle but, otherwise, there was no objective neurologic finding. The
rest of petitioner’s neurologic examination was essentially normal.39

Dr. Perez’s neurologic evaluation40 of petitioner reflected, among others: (1) petitioner’s past medical history, which
includes, among others, mitral valve stenosis; (2) an interpretation of petitioner’s EEG results in October 1995 and in
January 1999, i.e., the first EEG showed sharp waves seen bilaterally more on the left while the second one was
normal; and (3) interpretation of petitioner’s second MRI result, i.e., petitioner has a permanent damage in the brain,
which can happen either after a head injury or after a stroke. Dr. Perez concluded that petitioner has post-traumatic
or post concussion syndrome.41

Respondents, on the other hand, denied all the material allegations of petitioner and, in turn, countered the latter’s
statement of facts, thus:
According to respondents PHI and DTPCI, a sufficient notice had been posted on the glass door of the hotel leading
to the swimming pool area to apprise the people, especially the hotel guests, that the swimming pool area is open
only from 7:00 a.m. to 7:00 p.m.42 Though the hotel’s swimming pool area is open only between the aforestated time,
the lights thereon are kept on until 10:00 p.m. for, (1) security reasons; (2) housekeeping personnel to do the cleaning
of the swimming pool surroundings; and (3) people doing their exercise routine at the Slimmer’s World Gym adjacent
to the swimming pool area, which was then open until 10:00 p.m., to have a good view of the hotel’s swimming pool.
Even granting that the lights in the hotel’s swimming pool area were turned off, it would not render the area completely
dark as the Slimmer’s World Gym near it was well-illuminated.43

Further, on 11 June 1995, at round 7:00 p.m., the hotel’s swimming pool attendant advised petitioner and Delia to
take their showers as it was already closing time. Afterwards, at around 7:40 p.m., Pearlie Benedicto-Lipana (Ms.
Pearlie), the hotel staff nurse, who was at the hotel clinic located at the mezzanine floor, received a call from the hotel
telephone operator informing her that there was a guest requiring medical assistance at the hotel’s swimming pool
area located one floor above the clinic.44

Immediately, Ms. Pearlie got hold of her medical kit and hurriedly went to the hotel’s swimming pool area. There she
saw Delia and petitioner, who told her that she was hit on the head by a folding wooden counter top. Although petitioner
looked normal as there was no indication of any blood or bruise on her head, Ms. Pearlie still asked her if she needed
any medical attention to which petitioner replied that she is a doctor, she was fine and she did not need any medical
attention. Petitioner, instead, requested for a hirudoid cream to which Ms. Pearlie acceded.45

At about 8:00 p.m., after attending to petitioner, Ms. Pearlie went back to the hotel clinic to inform Dr. Dalumpines of
the incident at the hotel’s swimming pool area. But before she could do that, Dr. Dalumpines had already chanced
upon Delia and petitioner at the hotel’s coffee shop and the latter reported to Dr. Dalumpines that her head was hit by
a folding wooden counter top while she was inside the hotel’s swimming pool area. When asked by Dr. Dalumpines
how she was, petitioner responded she is a doctor, she was fine and she was already attended to by the hotel nurse,
who went at the hotel’s swimming pool area right after the accident. Dr. Dalumpines then called Ms. Pearlie to verify
the same, which the latter confirmed.46

Afterwards, Dr. Dalumpines went back to petitioner and checked the latter’s condition. Petitioner insisted that she was
fine and that the hirudoid cream was enough. Having been assured that everything was fine, Dr. Dalumpines
requested petitioner to execute a handwritten certification47 regarding the incident that occurred that night. Dr.
Dalumpines then suggested to petitioner to have an X-ray test. Petitioner replied that it was not necessary. Petitioner
also refused further medical attention.48

On 13 June 1995, petitioner called up Dr. Dalumpines. The call, however, had nothing to do with the 11 June 1995
incident. Instead, petitioner merely engaged in small talk with Dr. Dalumpines while having her daily massage. The
two talked about petitioner’s personal matters, i.e., past medical history, differences with siblings and family over
inheritance and difficulty in practice. Petitioner even disclosed to Dr. Dalumpines that she once fell from a horse; that
she had a stroke; had hysterectomy and is incapable of having children for her uterus had already been removed; that
she had blood disorder, particularly lack of platelets, that can cause bleeding; and she had an "on" and "off"
headaches. Petitioner oftentimes called Dr. Dalumpines at the hotel clinic to discuss topics similar to those discussed
during their 13 June 1995 conversation.49

Also, during one of their telephone conversations, petitioner requested for a certification regarding the 11 June 1995
incident inside the hotel’s swimming pool area. Dr. Dalumpines accordingly issued Certification dated 7 September
1995, which states that:50

CERTIFICATION

This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to an accident at the poolside at
7:45PM on 11 June 1995.

Same records show that there, she saw petitioner who claimed the folding countertop fell on her head when she lifted
it to enter the lifeguard’s counter to use the phone. She asked for Hirudoid.
The same evening petitioner met Dr. Dalumpines at the Coffee Shop. After narrating the poolside incident and
declining Dr. Dalumpines’ offer of assistance, she reiterated that the Hirudoid cream was enough and that petitioner
being a doctor herself, knew her condition and she was all right.

This certification is given upon the request of petitioner for whatever purpose it may serve, 7 September 1995 at
Makati City.51 (Emphasis supplied).

Petitioner personally picked up the afore-quoted Certification at the hotel clinic without any objection as to its
contents.52

From 11 June 1995 until 7 September 1995, the hotel clinic never received any complaint from petitioner regarding
the latter’s condition. The hotel itself neither received any written complaint from petitioner.53

After trial, the court a quo in its Decision dated 21 February 2006 dismissed petitioner’s Complaint for lack of merit.

The trial court found petitioner’s testimony self-serving, thus, devoid of credibility. Petitioner failed to present any
evidence to substantiate her allegation that the lights in the hotel’s swimming pool area were shut off at the time of
the incident. She did not even present her friend, Delia, to corroborate her testimony. More so, petitioner’s testimony
was contradicted by one of the witnesses presented by the respondents who positively declared that it has been a
normal practice of the hotel management not to put off the lights until 10:00 p.m. to allow the housekeepers to do the
cleaning of the swimming pool surroundings, including the toilets and counters. Also, the lights were kept on for
security reasons and for the people in the nearby gym to have a good view of the swimming pool while doing their
exercise routine. Besides, there was a remote possibility that the hotel’s swimming pool area was in complete
darkness as the aforesaid gym was then open until 10:00 p.m., and the lights radiate to the hotel’s swimming pool
area. As such, petitioner would not have met the accident had she only acted with care and caution.54

The trial court further struck down petitioner’s contention that the hotel management did not extend medical assistance
to her in the aftermath of the accident. Records showed that the hotel management immediately responded after being
notified of the accident. The hotel nurse and the two chambermaids placed an ice pack on petitioner’s head. They
were willing to extend further emergency assistance but petitioner refused and merely asked for a hirudoid cream.
Petitioner even told them she is a doctor and she was fine. Even the medical services offered by the hotel physician
were turned down by petitioner. Emphatically, petitioner cannot fault the hotel for the injury she sustained as she
herself did not heed the warning that the swimming pool area is open only from 7:00 a.m. to 7:00 p.m. As such, since
petitioner’s own negligence was the immediate and proximate cause of her injury, she cannot recover damages.55

The trial court similarly observed that the records revealed no indication that the head injury complained of by petitioner
was the result of the alleged 11 June 1995 accident. Firstly, petitioner had a past medical history which might have
been the cause of her recurring brain injury. Secondly, the findings of Dr. Perez did not prove a causal relation between
the 11 June 1995 accident and the brain damage suffered by petitioner. Even Dr. Perez himself testified that the
symptoms being experienced by petitioner might have been due to factors other than the head trauma she allegedly
suffered. It bears stressing that petitioner had been suffering from different kinds of brain problems since she was 18
years old, which may have been the cause of the recurring symptoms of head injury she is experiencing at present.
Absent, therefore, of any proof establishing the causal relation between the injury she allegedly suffered on 11 June
1995 and the head pains she now suffers, her claim must fail. Thirdly, Dr. Teresita Sanchez’s (Dr. Sanchez) testimony
cannot be relied upon since she testified on the findings and conclusions of persons who were never presented in
court. Ergo, her testimony thereon was hearsay. Fourthly, the medical reports/evaluations/certifications issued by
myriads of doctors whom petitioner sought for examination or treatment were neither identified nor testified to by those
who issued them. Being deemed as hearsay, they cannot be given probative value. Even assuming that petitioner
suffered head injury as a consequence of the 11 June 1995 accident, she cannot blame anyone but herself for staying
at the hotel’s swimming pool area beyond its closing hours and for lifting the folding wooden counter top that eventually
hit her head.56

For petitioner’s failure to prove that her serious and permanent injury was the result of the 11 June 1995 accident,
thus, her claim for actual or compensatory damages, loss of income, moral damages, exemplary damages and
attorney’s fees, must all fail.57
With regard to respondent First Lepanto’s liability, the trial court ruled that under the contract of insurance, suffice it
to state that absent any cause for any liability against respondents PHI and DTPCI, respondent First Lepanto cannot
be made liable thereon.

Dissatisfied, petitioner elevated the matter to the Court of Appeals with the following assignment of errors: (1) the trial
court erred in finding that the testimony of petitioner is self-serving and thus void of credibility; (2) the trial court erred
in applying the doctrine of proximate cause in cases of breach of contract and even assuming arguendo that the
doctrine is applicable, petitioner was able to prove by sufficient evidence the causal connection between her injuries
and respondents PHI and DTPCI’s negligent act; and (3) the trial court erred in holding that petitioner is not entitled
to damages.58

On 9 August 2007, the Court of Appeals rendered a Decision affirming the findings and conclusions of the trial court.

The Court of Appeals ratiocinated in this wise:

At the outset, it is necessary for our purpose to determine whether to decide this case on the theory that herein
respondents PHI and DTPCI are liable for breach of contract or on the theory of quasi-delict.

xxxx

It cannot be gainsaid that herein petitioner’s use of the hotel’s pool was only upon the invitation of Delia, the hotel’s
registered guest. As such, she cannot claim contractual relationship between her and the hotel. Since the
circumstances of the present case do not evince a contractual relation between petitioner and respondents, the rules
on quasi-delict , thus, govern.

The pertinent provision of Art. 2176 of the Civil Code which states: "Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties, is called quasi-delict."

A perusal of Article 2176 shows that obligations arising from quasi-delict or tort, also known as extra-contractual
obligations, arise only between parties not otherwise bound by contract, whether express or implied. Thus, to sustain
a claim liability under quasi-delict, the following requisites must concur: (a) damages suffered by the plaintiff; (b) fault
or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of
cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff.

Viewed from the foregoing, the question now is whether respondents PHI and DTPCI and its employees were
negligent? We do not think so. Several factors militate against petitioner’s contention.

One. Petitioner recognized the fact that the pool area’s closing time is 7:00 p.m.. She, herself, admitted during
her testimony that she was well aware of the sign when she and Delia entered the pool area. Hence, upon
knowing, at the outset, of the pool’s closing time, she took the risk of overstaying when she decided to take
shower and leave the area beyond the closing hour. In fact, it was only upon the advise of the pool attendants
that she thereafter took her shower.

Two. She admitted, through her certification that she lifted the wooden bar countertop, which then fell onto her
head. The admission in her certificate proves the circumstances surrounding the occurrence that transpired
on the night of 11 June 1995. This is contrary to her assertion in the complaint and testimony that, while she
was passing through the counter door, she was suddenly knocked out by a hard and heavy object. In view of
the fact that she admitted having lifted the counter top, it was her own doing, therefore, that made the counter
top fell on to her head.

Three. We cannot likewise subscribe to petitioner’s assertion that the pool area was totally dark in that she
herself admitted that she saw a telephone at the counter after searching for one. It must be noted that petitioner
and Delia had walked around the pool area with ease since they were able to proceed to the glass entrance
door from shower room, and back to the counter area where the telephone was located without encountering
any untoward incident. Otherwise, she could have easily stumbled over, or slid, or bumped into something
 while searching for the telephone. This negates her assertion that the pool area was completely dark, thereby,
totally impairing her vision.

xxxx

The aforementioned circumstances lead us to no other conclusion than that the proximate and immediate cause of
the injury of petitioner was due to her own negligence.

Moreover, petitioner failed to sufficiently substantiate that the medical symptoms she is currently experiencing are the
direct result of the head injury she sustained on 11 June 1995 as was aptly discussed in the lower court’s findings.

xxxx

It bears stressing that in civil cases, the law requires that the party who alleges a fact and substantially asserts the
affirmative of the issue has the burden of proving it. Hence, for petitioner to be entitled to damages, she must show
that she had suffered an actionable injury. Regrettably, petitioner failed in this regard.59 (Emphasis supplied).

Petitioner’s Motion for Reconsideration was denied for lack of merit in a Resolution dated 5 November 2007.

Hence, this Petition raising the following issues:

(1) Whether or not the findings of fact of the trial court and of the Court of Appeals are conclusive in this case.

(2) Whether or not herein respondents PHI and DTPCI are responsible by implied contract to exercise due
care for the safety and welfare of the petitioner.

(3) Whether or not the cause of action of the petitioner can be based on both breach of contract and tort.

(4) Whether or not it is respondents PHI and DTPCI and its employees who are liable to the petitioner for
negligence, applying the well-established doctrines of res ipsa loquitur and respondeat superior.

(5) Whether the petitioner’s debilitating and permanent injuries were a result of the accident she suffered at
the hotel on 11 June 1995.

(6) Whether or not the petitioner is entitled to the payment of damages, attorney’s fees, interest, and the costs
of suit.

(7) Whether or not the respondent insurance company is liable, even directly, to the petitioner.

(8) Whether or not petitioner’s motion for reconsideration of the decision of the Court of Appeals is pro forma.60

Petitioner argues that the rule that "findings of fact of the lower courts are conclusive and must be respected on
appeal" finds no application herein because this case falls under the jurisprudentially established exceptions.
Moreover, since the rationale behind the afore-mentioned rule is that "the trial judge is in a vantage point to appreciate
the conduct and behavior of the witnesses and has the unexcelled opportunity to evaluate their testimony," one logical
exception to the rule that can be deduced therefrom is when the judge who decided the case is not the same judge
who heard and tried the case.

Petitioner further faults the Court of Appeals in ruling that no contractual relationship existed between her and
respondents PHI and DTPCI since her use of the hotel’s swimming pool facility was only upon the invitation of the
hotel’s registered guest. On the contrary, petitioner maintains that an implied contract existed between them in view
of the fact that the hotel guest status extends to all those who avail of its services—its patrons and invitees. It follows
then that all those who patronize the hotel and its facilities, including those who are invited to partake of those facilities,
like petitioner, are generally regarded as guests of the hotel. As such, respondents PHI and DTPCI are responsible
by implied contract for the safety and welfare of petitioner while the latter was inside their premises by exercising due
care, which they failed to do.
Petitioner even asserts that the existence of a contract between the parties does not bar any liability for tort since the
act that breaks a contract may also be a tort. Hence, the concept of change of theory of cause of action pointed to by
respondents is irrelevant.

Petitioner similarly avows that the doctrines of res ipsa loquitur and respondeat superior are applicable in this case.
She argues that a person who goes in a hotel without a "bukol" or hematoma and comes out of it with a "bukol" or
hematoma is a clear case of res ipsa loquitur. It was an accident caused by the fact that the hotel staff was not present
to lift the heavy counter top for petitioner as is normally expected of them because they negligently locked the main
entrance door of the hotel’s swimming pool area. Following the doctrine of res ipsa loquitur, respondents PHI and
DTPCI’s negligence is presumed and it is incumbent upon them to prove otherwise but they failed to do so. Further,
respondents PHI and DTPCI failed to observe all the diligence of a good father of a family in the selection and
supervision of their employees, hence, following the doctrine of respondeat superior, they were liable for the negligent
acts of their staff in not verifying if there were still people inside the swimming pool area before turning off the lights
and locking the door. Had respondents PHI and DTPCI’s employees done so, petitioner would not have been injured.
Since respondents PHI and DTPCI’s negligence need not be proved, the lower courts erred in shifting the burden to
petitioner and, thereafter, holding the hotel and its employees not negligent for petitioner’s failure to prove their
negligence. Moreover, petitioner alleges that there was no contributory negligence on her part for she did not do
anything that could have contributed to her injury. And, even if there was, the same does not bar recovery.

Petitioner equally declares that the evidence on record, including the objective medical findings, had firmly established
that her permanent debilitating injuries were the direct result of the 11 June 1995 accident inside the hotel’s swimming
pool area. This fact has not been totally disputed by the respondents. Further, the medical experts who had been
consulted by petitioner were in unison in their diagnoses of her condition. Petitioner was also able to prove that the
falling of the folding wooden counter top on her head while she was at the hotel’s swimming pool area was the cause
of her head, eye and neck injuries.

Petitioner reiterates her claim for an award of damages, to wit: actual, including loss of income; moral, exemplary; as
well as attorney’s fees, interest and costs of suit. She states that respondents PHI and DTPCI are liable for quasi-
delict under Articles 19, 2176 and 2180 of the New Civil Code. At the same time, they are liable under an implied
contract for they have a public duty to give due courtesy, to exercise reasonable care and to provide safety to hotel
guests, patrons and invitees. Respondent First Lepanto, on the other hand, is directly liable under the express contract
of insurance.

Lastly, petitioner contends that her Motion for Reconsideration before the Court of Appeals was not pro forma for it
specifically pointed out the alleged errors in the Court of Appeals Decision.

The instant Petition is devoid of merit.

Primarily, only errors of law and not of facts are reviewable by this Court in a Petition for Review on Certiorari under
Rule 45 of the Rules of Court.61 This Court is not a trier of facts and it is beyond its function to re-examine and weigh
anew the respective evidence of the parties.62 Besides, this Court adheres to the long standing doctrine that the factual
findings of the trial court, especially when affirmed by the Court of Appeals, are conclusive on the parties and this
Court.63 Nonetheless, this Court has, at times, allowed exceptions thereto, to wit:

(a) When the findings are grounded entirely on speculation, surmises, or conjectures;

(b) When the inference made is manifestly mistaken, absurd, or impossible;

(c) When there is grave abuse of discretion;

(d) When the judgment is based on a misapprehension of facts;

(e) When the findings of facts are conflicting;

(f) When in making its findings the Court of Appeals went beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant and the appellee;
 (g) When the Court of Appeals’ findings are contrary to those by the trial court;

(h) When the findings are conclusions without citation of specific evidence on which they are based;

(i) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed
by the respondent;

(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the
evidence on record; or

(k) When the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which,
if properly considered, would justify a different conclusion.64

Upon meticulous perusal of the records, however, this Court finds that none of these exceptions is obtaining in this
case. No such justifiable or compelling reasons exist for this Court to depart from the general rule. This Court will not
disturb the factual findings of the trial court as affirmed by the Court of Appeals and adequately supported by the
evidence on record.

Also, this Court will not review the factual findings of the trial court simply because the judge who heard and tried the
case was not the same judge who penned the decision. This fact alone does not diminish the veracity and correctness
of the factual findings of the trial court.65 Indeed, "the efficacy of a decision is not necessarily impaired by the fact that
its writer only took over from a colleague who had earlier presided at the trial, unless there is showing of grave abuse
of discretion in the factual findings reached by him."66 In this case, there was none.

It bears stressing that in this jurisdiction there is a disputable presumption that the trial court’s decision is rendered by
the judge in the regular performance of his official duties. While the said presumption is only disputable, it is
satisfactory unless contradicted or overcame by other evidence. Encompassed in this presumption of regularity is the
presumption that the trial court judge, in resolving the case and drafting the decision, reviewed, evaluated, and
weighed all the evidence on record. That the said trial court judge is not the same judge who heard the case and
received the evidence is of little consequence when the records and transcripts of stenographic notes (TSNs) are
complete and available for consideration by the former,67 just like in the present case.

Irrefragably, the fact that the judge who penned the trial court’s decision was not the same judge who heard the case
and received the evidence therein does not render the findings in the said decision erroneous and unreliable. While
the conduct and demeanor of witnesses may sway a trial court judge in deciding a case, it is not, and should not be,
his only consideration. Even more vital for the trial court judge’s decision are the contents and substance of the
witnesses’ testimonies, as borne out by the TSNs, as well as the object and documentary evidence submitted and
made part of the records of the case.68

This Court examined the records, including the TSNs, and found no reason to disturb the factual findings of both lower
courts. This Court, thus, upholds their conclusiveness.

In resolving the second and third issues, a determination of the cause of action on which petitioner’s Complaint for
Damages was anchored upon is called for.

Initially, petitioner was suing respondents PHI and DTPCI mainly on account of their negligence but not on any breach
of contract. Surprisingly, when the case was elevated on appeal to the Court of Appeals, petitioner had a change of
heart and later claimed that an implied contract existed between her and respondents PHI and DTPCI and that the
latter were liable for breach of their obligation to keep her safe and out of harm. This allegation was never an issue
before the trial court. It was not the cause of action relied upon by the petitioner not until the case was before the
Court of Appeals. Presently, petitioner claims that her cause of action can be based both on quasi-delict and breach
of contract.

A perusal of petitioner’s Complaint evidently shows that her cause of action was based solely on quasi-delict. Telling
are the following allegations in petitioner’s Complaint:
 6. THAT, in the evening of 11 June 1995, between the hours from 7:00 to 8:00 o’clock, after herein petitioner
and her friend from New York, Delia, the latter being then a Hotel guest, were taking their shower after having
a dip in the hotel’s swimming pool, without any notice or warning, the Hotel’s staff put off all the lights within
the pool area including the lights on the hallway and also locked the main entrance door of the pool area, x x
x;

7. THAT, Hotel guest Delia started to panic while petitioner pacified her by telling her not to worry as they
would both find their way out. Petitioner knowing that within the area there is a house phone, started to look
around while Delia was following her, eventually petitioner saw a phone behind the counter x x x, that while
slowly moving on towards the phone on a stooping manner due to the darkness CAUSED BY UNTIMELY
AND NEGLIGENTLY PUTTING OFF WITH THE LIGHTS BY THE HEREIN RESPONDENTS PHI AND
DTPCI’S EMPLOYEE while passing through the open counter door with its Folding Counter Top also opened,
x x x, a hard and heavy object fell onto the head of the petitioner that knocked her down almost unconscious
which hard and heavy object turned out to be the Folding Counter Top;

8. THAT, Delia immediately got hold of the house phone and notified the Hotel Telephone Operator about the
incident, immediately the hotel staffs (sic) arrived but they were stranded behind the main door of the pool
entrance and it too (sic) them more than twenty (20) minutes to locate the hotel maintenance employee who
holds the key of the said main entrance door;

9. THAT, when the door was opened, two Hotel Chamber Maids assisted the petitioner to get out of the counter
door. Petitioner being a Physician tried to control her feelings although groggy and requested for a HURIDOID,
a medicine for HEMATOMA, as a huge lump developed on her head while the two Chamber Maids assisted
petitioner by holding the bag of ice on her head and applying the medicine on the huge lump;

10. THAT, petitioner after having recovered slightly from her nightmare, though still feeling weak, asked to be
assisted to the Hotel Coffee Shop to take a rest but requested for the hotel’s Physician. Despite her insistent
requests, the Dusit Hotel refused to lift a finger to assists petitioner who was then in distress until a lady
approached and introduced herself as the Hotel’s house Doctor. Instead however of assisting petitioner by
asking her what kind of assistance the Hotel could render, in a DISCOURTEOUS MANNER presented instead
a paper and demanding petitioner to affix her signature telling her that the Hotel Management would only
assists and answer for all expenses incurred if petitioner signs the paper presented, but she refused and
petitioner instead wrote a marginal note on the said paper stating her reason therefore, said paper later on
turned out to be a WAIVER OF RIGHT or QUIT CLAIM;

xxxx

14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCI’s gross negligence despite
medical assistance, petitioner started to feel losing her memory that greatly affected and disrupted the practice
of her chosen profession x x x.

xxxx

19. THAT, due to respondents PHI and DTPCI’s gross negligence as being narrated which caused petitioner
to suffer sleepless nights, depression, mental anguish, serious anxiety, wounded feelings, and embarrassment
with her Diplomate friends in the profession and industry, her social standing in the community was greatly
affected and hence, respondents PHI and DTPCI must be imposed the hereunder damages, prayed for x x x
and Artile (sic) 2176 and 2199 of the New Civil Code of the Philippines x x x.

xxxx

22. THAT, as to Moral, Exemplary and Actual Damages, as well as petitioner’s Loss of Income, the amounts
are stated in its prayer hereunder.69

It is clear from petitioner’s allegations that her Complaint for Damages was predicated on the alleged negligence of
respondents PHI and DTPCI’s staff in the untimely putting off of all the lights within the hotel’s swimming pool area,
as well as the locking of its main door, prompting her to look for a way out leading to the fall of the folding wooden
counter top on her head causing her serious brain injury. The said negligence was allegedly compounded by
respondents PHI and DTPCI’s failure to render prompt and adequate medical assistance. These allegations in
petitioner’s Complaint constitute a cause of action for quasi-delict, which under the New Civil Code is defined as an
act, or omission which causes damage to another, there being fault or negligence.70

It is evident from petitioner’s Complaint and from her open court testimony that the reliance was on the alleged tortious
acts committed against her by respondents PHI and DTPCI, through their management and staff. It is now too late in
the day to raise the said argument for the first time before this Court.71

Petitioner’s belated reliance on breach of contract as her cause of action cannot be sanctioned by this Court. Well-
settled is the rule that a party is not allowed to change the theory of the case or the cause of action on appeal. Matters,
theories or arguments not submitted before the trial court cannot be considered for the first time on appeal or
certiorari.72 When a party adopts a certain theory in the court below, he will not be permitted to change his theory on
appeal for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic
rules of fair play, justice and due process.73 Hence, a party is bound by the theory he adopts and by the cause of action
he stands on and cannot be permitted after having lost thereon to repudiate his theory and cause of action and adopt
another and seek to re-litigate the matter anew either in the same forum or on appeal.74

In that regard, this Court finds it significant to take note of the following differences between quasi-delict (culpa
aquilina) and breach of contract (culpa contractual). In quasi-delict, negligence is direct, substantive and independent,
while in breach of contract, negligence is merely incidental to the performance of the contractual obligation; there is a
pre-existing contract or obligation.75 In quasi-delict, the defense of "good father of a family" is a complete and proper
defense insofar as parents, guardians and employers are concerned, while in breach of contract, such is not a
complete and proper defense in the selection and supervision of employees.76 In quasi- delict , there is no presumption
of negligence and it is incumbent upon the injured party to prove the negligence of the defendant, otherwise, the
former’s complaint will be dismissed, while in breach of contract, negligence is presumed so long as it can be proved
that there was breach of the contract and the burden is on the defendant to prove that there was no negligence in the
carrying out of the terms of the contract; the rule of respondeat superior is followed.77

Viewed from the foregoing, petitioner’s change of theory or cause of action from quasi-delict to breach of contract only
on appeal would necessarily cause injustice to respondents PHI and DTPCI. First, the latter will have no more
opportunity to present evidence to contradict petitioner’s new argument. Second, the burden of proof will be shifted
from petitioner to respondents PHI and DTPCI. Petitioner’s change of theory from quasi-delict to breach ofcontract
must be repudiated.

As petitioner’s cause of action is based on quasi-delict, it is incumbent upon her to prove the presence of the following
requisites before respondents PHI and DTPCI can be held liable, to wit: (a) damages suffered by the plaintiff; (b) fault
or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of
cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff.78 Further,
since petitioner’s case is for quasi-delict , the negligence or fault should be clearly established as it is the basis of her
action.79 The burden of proof is upon petitioner. Section 1, Rule 131 of the Rules of Court provides that "burden of
proof is the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by
the amount of evidence required by law." It is then up for the plaintiff to establish his cause of action or the defendant
to establish his defense. Therefore, if the plaintiff alleged in his complaint that he was damaged because of the
negligent acts of the defendant, he has the burden of proving such negligence. It is even presumed that a person
takes ordinary care of his concerns. The quantum of proof required is preponderance of evidence.80

In this case, as found by the trial court and affirmed by the Court of Appeals, petitioner utterly failed to prove the
alleged negligence of respondents PHI and DTPCI. Other than petitioner’s self-serving testimony that all the lights in
the hotel’s swimming pool area were shut off and the door was locked, which allegedly prompted her to find a way out
and in doing so a folding wooden counter top fell on her head causing her injury, no other evidence was presented to
substantiate the same. Even her own companion during the night of the accident inside the hotel’s swimming pool
area was never presented to corroborate her allegations. Moreover, petitioner’s aforesaid allegations were
successfully rebutted by respondents PHI and DTPCI. Here, we quote with conformity the observation of the trial
court, thus:

x x x Besides not being backed up by other supporting evidence, said statement is being contradicted by the testimony
of Engineer Dante L. Costas,81 who positively declared that it has been a normal practice of the Hotel management
not to put off the lights until 10:00P.M. in order to allow the housekeepers to do the cleaning of the pool’s surrounding,
the toilets and the counters. It was also confirmed that the lights were kept on for security reasons and so that the
people exercising in the nearby gym may be able to have a good view of the swimming pool. This Court also takes
note that the nearby gymnasium was normally open until 10:00 P.M. so that there was a remote possibility the pool
area was in complete darkness as was alleged by herein petitioner, considering that the illumination which reflected
from the gym. Ergo, considering that the area were sufficient (sic) illuminated when the alleged incident occurred,
there could have been no reason for the petitioner to have met said accident, much less to have been injured as a
consequence thereof, if she only acted with care and caution, which every ordinary person is expected to do.82

More telling is the ratiocination of the Court of Appeals, to wit:

Viewed from the foregoing, the question now is whether respondents PHI and DTPCI and its employees were
negligent? We do not think so. Several factors militate against petitioner’s contention.

One. Petitioner recognized the fact that the pool area’s closing time is 7:00 p.m.. She, herself, admitted during her
testimony that she was well aware of the sign when she and Delia entered the pool area. Hence, upon knowing, at
the outset, of the pool’s closing time, she took the risk of overstaying when she decided to take shower and leave the
area beyond the closing hour. In fact, it was only upon the advise of the pool attendants that she thereafter took her
shower.

Two. She admitted, through her certification, that she lifted the wooden bar countertop, which then fell on to her head.
The admission in her certificate proves the circumstances surrounding the occurrence that transpired on the night of
11 June 1995. This is contrary to her assertion in the complaint and testimony that, while she was passing through
the counter door, she was suddenly knocked out by a hard and heavy object. In view of the fact that she admitted
having lifted the countertop, it was her own doing, therefore, that made the counter top fell on to her head.

Three. We cannot likewise subscribe to petitioner’s assertion that the pool area was totally dark in that she herself
admitted that she saw a telephone at the counter after searching for one. It must be noted that petitioner and Delia
had walked around the pool area with ease since they were able to proceed to the glass entrance door from the
shower room, and back to the counter area where the telephone was located without encountering any untoward
incident. Otherwise, she could have easily stumbled over, or slid, or bumped into something while searching for the
telephone. This negates her assertion that the pool area was completely dark, thereby, totally impairing her vision.

xxxx

The aforementioned circumstances lead us to no other conclusion than that the proximate and immediate cause of
the injury of petitioner was due to her own negligence.83 (Emphasis supplied).

Even petitioner’s assertion of negligence on the part of respondents PHI and DTPCI in not rendering medical
assistance to her is preposterous. Her own Complaint affirmed that respondents PHI and DTPCI afforded medical
assistance to her after she met the unfortunate accident inside the hotel’s swimming pool facility. Below is the portion
of petitioner’s Complaint that would contradict her very own statement, thus:

14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCI’s gross negligence despite medical
assistance, petitioner started to feel losing her memory that greatly affected and disrupted the practice of her chosen
profession. x x x.84 (Emphasis supplied).

Also, as observed by the trial court, respondents PHI and DTPCI, indeed, extended medical assistance to petitioner
but it was petitioner who refused the same. The trial court stated, thus:

Further, herein petitioner’s asseverations that the Hotel Management did not extend medical assistance to her in the
aftermath of the alleged accident is not true. Again, this statement was not supported by any evidence other that the
sole and self-serving testimony of petitioner. Thus, this Court cannot take petitioner’s statement as a gospel truth. It
bears stressing that the Hotel Management immediately responded after it received notice of the incident. As a matter
of fact, Ms. Pearlie, the Hotel nurse, with two chambermaids holding an ice bag placed on petitioner’s head came to
the petitioner to extend emergency assistance when she was notified of the incident, but petitioner merely asked for
Hirudoid, saying she was fine, and that she was a doctor and know how to take care of herself. Also, the Hotel, through
its in-house physician, Dr. Dalumpines offered its medical services to petitioner when they met at the Hotel’s coffee
shop, but again petitioner declined the offer. Moreover, the Hotel as a show of concern for the petitioner’s welfare,
shouldered the expenses for the MRI services performed on petitioner at the Makati Medical Center. Emphatically,
petitioner herself cannot fault the Hotel for the injury she allegedly suffered because she herself did not heed the
warning at the pool to the effect that it was only open from 7:00 to 7:00 P.M. Thus, when the petitioner’s own
negligence was the immediate and proximate cause of his injury, shecannot recover damages x x x.85

With the foregoing, the following were clearly established, to wit: (1) petitioner stayed in the hotel’s swimming pool
facility beyond its closing hours; (2) she lifted the folding wooden counter top that eventually hit her head; and (3)
respondents PHI and DTPCI extended medical assistance to her. As such, no negligence can be attributed either to
respondents PHI and DTPCI or to their staff and/or management. Since the question of negligence is one of fact, this
Court is bound by the said factual findings made by the lower courts. It has been repeatedly held that the trial court's
factual findings, when affirmed by the Court of Appeals, are conclusive and binding upon this Court, if they are not
tainted with arbitrariness or oversight of some fact or circumstance of significance and influence. Petitioner has not
presented sufficient ground to warrant a deviation from this rule.86

With regard to petitioner’s contention that the principles of res ipsa loquitur and respondeat superior are applicable in
this case, this Court holds otherwise.

Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks for itself." It relates to the
fact of an injury that sets out an inference to the cause thereof or establishes the plaintiff’s prima facie case. The
doctrine rests on inference and not on presumption. The facts of the occurrence warrant the supposition of negligence
and they furnish circumstantial evidence of negligence when direct evidence is lacking.87 Simply stated, this doctrine
finds no application if there is direct proof of absence or presence of negligence. If there is sufficient proof showing
the conditions and circumstances under which the injury occurred, then the creative reason for the said doctrine
disappears.88

Further, the doctrine of res ipsa loquitur applies where, (1) the accident was of such character as to warrant an
inference that it would not have happened except for the defendant’s negligence; (2) the accident must have been
caused by an agency or instrumentality within the exclusive management or control of the person charged with the
negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the
part of the person injured.89

In the case at bench, even granting that respondents PHI and DTPCI’s staff negligently turned off the lights and locked
the door, the folding wooden counter top would still not fall on petitioner’s head had she not lifted the same. Although
the folding wooden counter top is within the exclusive management or control of respondents PHI and DTPCI, the
falling of the same and hitting the head of petitioner was not due to the negligence of the former. As found by both
lower courts, the folding wooden counter top did not fall on petitioner’s head without any human intervention. Records
showed that petitioner lifted the said folding wooden counter top that eventually fell and hit her head. The same was
evidenced by the, (1) 11 June 1995 handwritten certification of petitioner herself; (2) her Letter dated 30 August 1995
addressed to Mr. Yoshikazu Masuda (Mr. Masuda), General Manager of Dusit Hotel; and, (3) Certification dated 7
September 1995 issued to her by Dr. Dalumpines upon her request, which contents she never questioned.

Here, we, respectively, quote the 11 June 1995 handwritten certification of petitioner; her letter to Mr. Masuda dated
30 August 1995; and Dr. Dalumpines’ Certification dated 7 September 1995, to wit:

Petitioner’s 11 June 1995 Handwritten Certification:

I was requested by Dr. Dalumpines to write that I was assured of assistance should it be necessary with regard an
accident at the pool. x x x The phone was in an enclosed area on a chair – I lifted the wooden bar counter top which
then fell on my head producing a large hematoma x x x.90

Petitioner’s Letter addressed to Mr. Masuda dated 30 August 1995:

Dear Mr. Masuda,

xxxx
x x x We searched and saw a phone on a chair behind a towel counter. However, in order to get behind the counter I
had to lift a hinged massive wooden section of the counter which subsequently fell and knocked me on my head x x
x.91

Dr. Dalumpines’ Certification dated 7 September 1995:

CERTIFICATION

This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to an accident at the poolside at
7:45PM on 11 June 1995.

Same records show that there, she saw petitioner who claimed the folding countertop fell on her head when she lifted
it to enter the lifeguard’s counter to use the phone. She asked for Hirudoid.

The same evening petitioner met Dr. Dalumpnes at the Coffee Shop. After narrating the poolside incident and declining
Dr. Dalumpines’ offer of assistance, she reiterated that the Hirudoid cream was enough and that petitioner]being a
doctor herself, knew her condition and she was all right.

This certification is given upon the request of petitioner for whatever purpose it may serve, 7 September 1995 at
Makati City.92 (Emphasis supplied).

This Court is not unaware that in petitioner’s Complaint and in her open court testimony, her assertion was, "while she
was passing through the counter door, she was suddenly knocked out by a hard and heavy object, which turned out
to be the folding wooden counter top." However, in her open court testimony, particularly during cross-examination,
petitioner confirmed that she made such statement that "she lifted the hinge massive wooden section of the counter
near the swimming pool."93 In view thereof, this Court cannot acquiesce petitioner’s theory that her case is one of res
ipsa loquitur as it was sufficiently established how petitioner obtained that "bukol" or "hematoma."

The doctrine of respondeat superior finds no application in the absence of any showing that the employees of
respondents PHI and DTPCI were negligent. Since in this case, the trial court and the appellate court found no
negligence on the part of the employees of respondents PHI and DTPCI, thus, the latter cannot also be held liable for
negligence and be made to pay the millions of pesos damages prayed for by petitioner.

The issue on whether petitioner’s debilitating and permanent injuries were the result of the accident she suffered at
the hotel’s swimming pool area on 11 June 1995 is another question of fact, which is beyond the function of this Court
to resolve. More so, this issue has already been properly passed upon by the trial court and the Court of Appeals. To
repeat, this Court is bound by the factual findings of the lower courts and there is no cogent reason to depart from the
said rule.

The following observations of the trial court are controlling on this matter:

Firstly, petitioner had a past medical history which might have been the cause of her recurring brain injury.

Secondly, the findings of Dr. Perez did not prove a causal relation between the 11 June 1995 accident and the brain
damage suffered by petitioner. Dr. Perez himself testified that the symptoms being experienced by petitioner might
have been due to factors other than the head trauma she allegedly suffered. Emphasis must be given to the fact that
petitioner had been suffering from different kinds of brain problems since she was 18 years old, which may have been
the cause of the recurring symptoms of head injury she is experiencing at present.

Thirdly, Dr. Sanchez’s testimony cannot be relied upon since she testified on the findings and conclusions of persons
who were never presented in court. Ergo, her testimony thereon was hearsay. A witness can testify only with regard
to facts of which they have personal knowledge. Testimonial or documentary evidence is hearsay if it is based, not on
the personal knowledge of the witness, but on the knowledge of some other person not on the witness stand.
Consequently, hearsay evidence -- whether objected to or not -- has no probative value.94
Fourthly, the medical reports/evaluations/certifications issued by myriads of doctors whom petitioner sought for
examination or treatment were neither identified nor testified to by those who issued them. Being deemed as hearsay,
they cannot be given probative value. 1âwphi1

The aforesaid medical reports/evaluations/certifications of different doctors in favor of petitioner cannot be given
probative value and their contents cannot be deemed to constitute proof of the facts stated therein. It must be stressed
that a document or writing which is admitted not as independent evidence but merely as part of the testimony of a
witness does not constitute proof of the facts related therein.95 In the same vein, the medical certificate which was
identified and interpreted in court by another doctor was not accorded probative value because the doctor who
prepared it was not presented for its identification. Similarly, in this case, since the doctors who examined petitioner
were not presented to testify on their findings, the medical certificates issued on their behalf and identified by another
doctor cannot be admitted as evidence. Since a medical certificate involves an opinion of one who must first be
established as an expert witness, it cannot be given weight or credit unless the doctor who issued it is presented in
court to show his qualifications.96 Thus, an unverified and unidentified private document cannot be accorded probative
value. It is precluded because the party against whom it is presented is deprived of the right and opportunity to cross-
examine the person to whom the statements or writings are attributed. Its executor or author should be presented as
a witness to provide the other party to the litigation the opportunity to question its contents. Being mere hearsay
evidence, failure to present the author of the letter renders its contents suspect and of no probative value.97

All told, in the absence of negligence on the part of respondents PHI and DTPCI, as well as their management and
staff, they cannot be made Iiable to pay for the millions of damages prayed for by the petitioner. Since respondents
PHI and DTPCI arc not liable, it necessarily follows that respondent First Lepanto cannot also be made liable under
the contract or Insurance.

WHEREFORE, premises considered, the Decision and Resolution or the Court of Appeals in CA-G.R. CV No. 87065
dated 9 August 2007 and 5 November 2007, respectively, are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
G.R. No. L-21438 September 28, 1966

AIR FRANCE, petitioner,

vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.

Lichauco, Picazo and Agcaoili for petitioner.

Bengzon Villegas and Zarraga for respondent R. Carrascoso.

SANCHEZ, J.:

The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way
of moral damages; P10,000.00 as exemplary damages; P393.20 representing the difference in fare between first class
and tourist class for the portion of the trip Bangkok-Rome, these various amounts with interest at the legal rate, from
the date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of suit.

On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket from P393.20 to
P383.10, and voted to affirm the appealed decision "in all other respects", with costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March
30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued
to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff
travelled in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first
class" seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a "white
man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat,
the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken over
his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of the Filipino
passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot
discussion with the white man [manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso
to give his seat to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave
his "first class" seat in the plane.3

1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent Court of Appeals.
Petitioner charges that respondent court failed to make complete findings of fact on all the issues properly laid before
it. We are asked to consider facts favorable to petitioner, and then, to overturn the appellate court's decision.

Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of record without
expressing therein clearly and distinctly the facts and the law on which it is based". 5 This is echoed in the statutory
demand that a judgment determining the merits of the case shall state "clearly and distinctly the facts and the law on
which it is based"; 6 and that "Every decision of the Court of Appeals shall contain complete findings of fact on all
issues properly raised before it". 7

A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 The law, however, solely insists
that a decision state the "essential ultimate facts" upon which the court's conclusion is drawn. 9 A court of justice is not
hidebound to write in its decision every bit and piece of evidence 10 presented by one party and the other upon the
issues raised. Neither is it to be burdened with the obligation "to specify in the sentence the facts" which a party
"considered as proved". 11 This is but a part of the mental process from which the Court draws the essential ultimate
facts. A decision is not to be so clogged with details such that prolixity, if not confusion, may result. So long as the
decision of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said court to
withhold therefrom "any specific finding of facts with respect to the evidence for the defense". Because as this Court
well observed, "There is no law that so requires". 12 Indeed, "the mere failure to specify (in the decision) the contentions
of the appellant and the reasons for refusing to believe them is not sufficient to hold the same contrary to the
requirements of the provisions of law and the Constitution". It is in this setting that in Manigque, it was held that the
mere fact that the findings "were based entirely on the evidence for the prosecution without taking into consideration
or even mentioning the appellant's side in the controversy as shown by his own testimony", would not vitiate the
judgment. 13 If the court did not recite in the decision the testimony of each witness for, or each item of evidence
presented by, the defeated party, it does not mean that the court has overlooked such testimony or such item of
evidence. 14 At any rate, the legal presumptions are that official duty has been regularly performed, and that all the
matters within an issue in a case were laid before the court and passed upon by it. 15

Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written statement of the
ultimate facts as found by the court ... and essential to support the decision and judgment rendered thereon". 16 They
consist of the court's "conclusions" with respect to the determinative facts in issue". 17 A question of law, upon the
other hand, has been declared as "one which does not call for an examination of the probative value of the evidence
presented by the parties." 18

2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the Court of
Appeals. 19 That judgment is conclusive as to the facts. It is not appropriately the business of this Court to alter the
facts or to review the questions of fact. 20

With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals support its
judgment.

3. Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class ticket. But
petitioner asserts that said ticket did not represent the true and complete intent and agreement of the parties; that said
respondent knew that he did not have confirmed reservations for first class on any specific flight, although he had
tourist class protection; that, accordingly, the issuance of a first class ticket was no guarantee that he would have a
first class ride, but that such would depend upon the availability of first class seats.

These are matters which petitioner has thoroughly presented and discussed in its brief before the Court of Appeals
under its third assignment of error, which reads: "The trial court erred in finding that plaintiff had confirmed reservations
for, and a right to, first class seats on the "definite" segments of his journey, particularly that from Saigon to Beirut". 21

And, the Court of Appeals disposed of this contention thus:

Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no guarantee that
the passenger to whom the same had been issued, would be accommodated in the first-class compartment,
for as in the case of plaintiff he had yet to make arrangements upon arrival at every station for the necessary
first-class reservation. We are not impressed by such a reasoning. We cannot understand how a reputable
firm like defendant airplane company could have the indiscretion to give out tickets it never meant to honor at
all. It received the corresponding amount in payment of first-class tickets and yet it allowed the passenger to
be at the mercy of its employees. It is more in keeping with the ordinary course of business that the company
should know whether or riot the tickets it issues are to be honored or not.22

Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus:

On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart from his
testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and defendant's own witness, Rafael
Altonaga, confirmed plaintiff's testimony and testified as follows:

Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?
 A. That the space is confirmed.

Q. Confirmed for first class?

A. Yes, "first class". (Transcript, p. 169)

xxx xxx xxx

Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that although plaintiff
paid for, and was issued a "first class" airplane ticket, the ticket was subject to confirmation in Hongkong. The court
cannot give credit to the testimony of said witnesses. Oral evidence cannot prevail over written evidence, and plaintiff's
Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said witnesses, and clearly show that the plaintiff
was issued, and paid for, a first class ticket without any reservation whatever.

Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the reservation for a "first
class" accommodation for the plaintiff was confirmed. The court cannot believe that after such confirmation defendant
had a verbal understanding with plaintiff that the "first class" ticket issued to him by defendant would be subject to
confirmation in Hongkong. 23

We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount refunded on
Carrascoso's ticket, the decision of the Court of First Instance was affirmed by the Court of Appeals in all other
respects. We hold the view that such a judgment of affirmance has merged the judgment of the lower court. 24 Implicit
in that affirmance is a determination by the Court of Appeals that the proceeding in the Court of First Instance was
free from prejudicial error and "all questions raised by the assignments of error and all questions that might have been
raised are to be regarded as finally adjudicated against the appellant". So also, the judgment affirmed "must be
regarded as free from all error". 25 We reached this policy construction because nothing in the decision of the Court of
Appeals on this point would suggest that its findings of fact are in any way at war with those of the trial court. Nor was
said affirmance by the Court of Appeals upon a ground or grounds different from those which were made the basis of
the conclusions of the trial court. 26

If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat, notwithstanding the fact that
seat availability in specific flights is therein confirmed, then an air passenger is placed in the hollow of the hands of
an airline. What security then can a passenger have? It will always be an easy matter for an airline aided by its
employees, to strike out the very stipulations in the ticket, and say that there was a verbal agreement to the contrary.
What if the passenger had a schedule to fulfill? We have long learned that, as a rule, a written document speaks a
uniform language; that spoken word could be notoriously unreliable. If only to achieve stability in the relations between
passenger and air carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower courts
refused to believe the oral evidence intended to defeat the covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are facts upon which the Court of Appeals
predicated the finding that respondent Carrascoso had a first class ticket and was entitled to a first class seat at
Bangkok, which is a stopover in the Saigon to Beirut leg of the flight. 27 We perceive no "welter of distortions by the
Court of Appeals of petitioner's statement of its position", as charged by petitioner. 28 Nor do we subscribe to
petitioner's accusation that respondent Carrascoso "surreptitiously took a first class seat to provoke an issue". 29 And
this because, as petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat
and because from Saigon I was told again to see the Manager". 30 Why, then, was he allowed to take a first class seat
in the plane at Bangkok, if he had no seat? Or, if another had a better right to the seat?

4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that Carrascoso's
action is planted upon breach of contract; that to authorize an award for moral damages there must be an averment
of fraud or bad faith;31 and that the decision of the Court of Appeals fails to make a finding of bad faith. The pivotal
allegations in the complaint bearing on this issue are:

3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a valuable
consideration, the latter acting as general agents for and in behalf of the defendant, under which said contract,
plaintiff was entitled to, as defendant agreed to furnish plaintiff, First Class passage on defendant's plane
during the entire duration of plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's
return trip to Manila, ... .
 4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok, defendant
furnished to the plaintiff First Class accommodation but only after protestations, arguments and/or insistence
were made by the plaintiff with defendant's employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff
only Tourist Class accommodations from Bangkok to Teheran and/or Casablanca, ... the plaintiff has
been compelled by defendant's employees to leave the First Class accommodation berths at Bangkok after
he was already seated.

6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments brought
by defendant's breach of contract was forced to take a Pan American World Airways plane on his return trip
from Madrid to Manila.32

xxx xxx xxx

2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid, plaintiff suffered
inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental anguish, serious anxiety,
wounded feelings, social humiliation, and the like injury, resulting in moral damages in the amount of P30,000.00. 33

xxx xxx xxx

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a first class passage
covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was breached when petitioner failed
to furnish first class transportation at Bangkok; and Third, that there was bad faith when petitioner's employee
compelled Carrascoso to leave his first class accommodation berth "after he was already, seated" and to take a seat
in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations, thereby causing
him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true
that there is no specific mention of the term bad faith in the complaint. But, the inference of bad faith is there, it may
be drawn from the facts and circumstances set forth therein. 34 The contract was averred to establish the relation
between the parties. But the stress of the action is put on wrongful expulsion.

Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed petitioner on guard on
what Carrascoso intended to prove: That while sitting in the plane in Bangkok, Carrascoso was ousted by petitioner's
manager who gave his seat to a white man; 35 and (b) evidence of bad faith in the fulfillment of the contract was
presented without objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to whether or not
there is sufficient averment in the complaint to justify an award for moral damages. Deficiency in the complaint, if any,
was cured by the evidence. An amendment thereof to conform to the evidence is not even required. 36 On the question
of bad faith, the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the
defendant Air France while at Bangkok, and was transferred to the tourist class not only without his consent
but against his will, has been sufficiently established by plaintiff in his testimony before the court, corroborated
by the corresponding entry made by the purser of the plane in his notebook which notation reads as follows:

"First-class passenger was forced to go to the tourist class against his will, and that the captain refused
to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of the
plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do so.
It is noteworthy that no one on behalf of defendant ever contradicted or denied this evidence for the plaintiff.
It could have been easy for defendant to present its manager at Bangkok to testify at the trial of the case, or
yet to secure his disposition; but defendant did neither. 37

The Court of appeals further stated —

Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if the
employees of the defendant at Bangkok sold a first-class ticket to him when all the seats had already been
 taken, surely the plaintiff should not have been picked out as the one to suffer the consequences and to be
subjected to the humiliation and indignity of being ejected from his seat in the presence of others. Instead of
explaining to the white man the improvidence committed by defendant's employees, the manager adopted the
more drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are
strengthened in our belief that this probably was what happened there, by the testimony of defendant's witness
Rafael Altonaga who, when asked to explain the meaning of the letters "O.K." appearing on the tickets of
plaintiff, said "that the space is confirmed for first class. Likewise, Zenaida Faustino, another witness for
defendant, who was the chief of the Reservation Office of defendant, testified as follows:

"Q How does the person in the ticket-issuing office know what reservation the passenger has arranged
with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)

In this connection, we quote with approval what the trial Judge has said on this point:

Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to the
seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not prove "any better",
nay, any right on the part of the "white man" to the "First class" seat that the plaintiff was occupying
and for which he paid and was issued a corresponding "first class" ticket.

If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant
could have easily proven it by having taken the testimony of the said Manager by deposition, but
defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if
produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is constrained to
find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat because
the said Manager wanted to accommodate, using the words of the witness Ernesto G. Cuento, the
"white man".38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the term
"bad faith". But can it be doubted that the recital of facts therein points to bad faith? The manager not only
prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his arbitrary will; he
forcibly ejected him from his seat, made him suffer the humiliation of having to go to the tourist class
compartment - just to give way to another passenger whose right thereto has not been established. Certainly,
this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is understood in law.
For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with some motive
of self-interest or will or for ulterior purpose." 39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment of the
Court of First Instance, thus:

The evidence shows that the defendant violated its contract of transportation with plaintiff in bad faith,
with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of
threatening the plaintiff in the presence of many passengers to have him thrown out of the airplane to
give the "first class" seat that he was occupying to, again using the words of the witness Ernesto G.
Cuento, a "white man" whom he (defendant's Manager) wished to accommodate, and the defendant
has not proven that this "white man" had any "better right" to occupy the "first class" seat that the
plaintiff was occupying, duly paid for, and for which the corresponding "first class" ticket was issued
by the defendant to him.40

5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well settled in
law. 41 For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the
Civil Code says:

ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage.
In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article 2219
(10), Civil Code, moral damages are recoverable. 42

6. A contract to transport passengers is quite different in kind and degree from any other contractual relation. 43 And
this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore,
generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could
give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with
kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct on the
part of employees towards a passenger gives the latter an action for damages against the carrier. 44

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract and a tort,
giving a right of action for its agent in the presence of third persons to falsely notify her that the check was worthless
and demand payment under threat of ejection, though the language used was not insulting and she was not
ejected." 46 And this, because, although the relation of passenger and carrier is "contractual both in origin and nature"
nevertheless "the act that breaks the contract may be also a tort". 47 And in another case, "Where a passenger on a
railroad train, when the conductor came to collect his fare tendered him the cash fare to a point where the train was
scheduled not to stop, and told him that as soon as the train reached such point he would pay the cash fare from that
point to destination, there was nothing in the conduct of the passenger which justified the conductor in using insulting
language to him, as by calling him a lunatic," 48 and the Supreme Court of South Carolina there held the carrier liable
for the mental suffering of said passenger. 1awphîl.nèt

Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have
said, is placed upon his wrongful expulsion. This is a violation of public duty by the petitioner air carrier — a case
of quasi-delict. Damages are proper.

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —

Q You mentioned about an attendant. Who is that attendant and purser?

A When we left already — that was already in the trip — I could not help it. So one of the flight attendants
approached me and requested from me my ticket and I said, What for? and she said, "We will note that you
transferred to the tourist class". I said, "Nothing of that kind. That is tantamount to accepting my transfer." And
I also said, "You are not going to note anything there because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I stood
up and I went to the pantry that was next to me and the purser was there. He told me, "I have recorded the
incident in my notebook." He read it and translated it to me — because it was recorded in French — "First
class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene."

Mr. VALTE —

I move to strike out the last part of the testimony of the witness because the best evidence would be the notes.
Your Honor.

COURT —

I will allow that as part of his testimony. 49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook reading "First
class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene" is
predicated upon evidence [Carrascoso's testimony above] which is incompetent. We do not think so. The subject of
inquiry is not the entry, but the ouster incident. Testimony on the entry does not come within the proscription of the
best evidence rule. Such testimony is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the startling
occurrence was still fresh and continued to be felt. The excitement had not as yet died down. Statements then, in this
environment, are admissible as part of the res gestae. 50 For, they grow "out of the nervous excitement and mental
and physical condition of the declarant". 51 The utterance of the purser regarding his entry in the notebook was
spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has been guaranteed. 52 It
thus escapes the operation of the hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would have been an
easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really true that no such entry was
made, the deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary damages
— in contracts and quasi- contracts. The only condition is that defendant should have "acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner." 53 The manner of ejectment of respondent Carrascoso from his first class
seat fits into this legal precept. And this, in addition to moral damages.54

9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar judgment for
attorneys' fees. The least that can be said is that the courts below felt that it is but just and equitable that attorneys'
fees be given. 55 We do not intend to break faith with the tradition that discretion well exercised — as it was here —
should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus:
P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as attorneys' fees. The
task of fixing these amounts is primarily with the trial court. 56 The Court of Appeals did not interfere with the same.
The dictates of good sense suggest that we give our imprimatur thereto. Because, the facts and circumstances point
to the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We accordingly
vote to affirm the same. Costs against petitioner. So ordered.
G.R. No. 138550 October 14, 2005

AMERICAN EXPRESS INTERNATIONAL, INC., Petitioner,

vs.
NOEL CORDERO, Defendant.

DECISION

SANDOVAL-GUTIERREZ, J.:

This is a petition for review on certiorari of the Decision1 of the Court of Appeals dated April 30, 1999 in CA-G.R. CV
No. 51671, entitled, "Noel Cordero, Plaintiff-Appellee versus American Express International, Inc., Defendant-
Appellant."

Petitioner is a foreign corporation that issues charge cards to its customers, which the latter then use to purchase
goods and services at accredited merchants worldwide. Sometime in 1988, Nilda Cordero, wife of respondent Noel
Cordero, applied for and was issued an American Express charge card with No. 3769-895901-010020. The issuance
of the charge card was covered by an Amex Cardmember Agreement. As cardholder, Nilda, upon signing the back
portion of the card, manifested her acceptance of the terms of the Agreement.

An extension charge card, with No. 3769-895901-01010, was likewise issued to respondent Noel Cordero which he
also signed.2

On November 29, 1991, respondent, together with his wife, Nilda, daughter, sisters-in-law and uncle-in-law, went on
a three-day holiday trip to Hong Kong. In the early evening of November 30, 1991, at about 7:00 o’clock, the group
went to the Watson’s Chemist Shop located at 277C Ocean Gallery, Kowloon, Hong Kong. Noel picked up some
chocolate candies and handed to the sales clerk his American Express extension charge card to pay for his purchases.
The sales clerk verified the card by making a telephone call to the American Express Office in Hong Kong. Moments
later, Susan Chong, the store manager, emerged from behind the counter and informed respondent that she had to
confiscate the card. Thereupon, she cut respondent’s American Express card in half with a pair of scissors. This,
according to respondent, caused him embarrassment and humiliation considering that it was done in front of his family
and the other customers lined up at the check-out counter. Hence, Nilda had to pay for the purchases using her own
American Express charge card.3

When they returned to the Excelsior Hotel, Nilda called up petitioner’s Office in Hong Kong. She was able to talk to
Senior Authorizer Johnny Chen, who informed her that on November 1, 1991, a person in Hong Kong attempted to
use a charge card with the same number as respondent’s card. The Hong Kong American Express Office called up
respondent and after determining that he was in Manila and not in Hong Kong, placed his card in the "Inspect Airwarn
Support System." This is the system utilized by petitioner as a protection both for the company and the cardholders
against the fraudulent use of their charge cards. Once a card suspected of unauthorized use is placed in the system,
the person to whom the card is tendered must verify the identity of the holder. If the true identity of the card owner is
established, the card is honored and the charges are approved. Otherwise, the card is revoked or confiscated.4

When the Watson’s sales clerk called up petitioner’s Hong Kong Office, its representative said he wants to talk to
respondent in order to verify the latter’s identity, pursuant to the procedure observed under the "Inspect Airwarn
Support System." However, respondent refused. Consequently, petitioner’s representative was unable to establish
the identity of the cardholder.5 This led to the confiscation of respondent’s card.

On March 31, 1992, respondent filed with the Regional Trial Court, Branch V, Manila, a complaint for damages against
petitioner, docketed as Civil Case No. 92-60807. He prayed for the award of moral damages and exemplary damages,
as well as attorney’s fees as a result of the humiliation he suffered.

The trial court found that "the inexcusable failure of defendant (petitioner herein) to inform plaintiff (respondent herein)
of the November 1, 1991 incident despite sufficient time was the proximate cause of the confiscation and cutting of
plaintiff’s extension card which exposed the latter to public humiliation for which defendant should be held liable."6 On
February 20, 1995, the trial court promulgated its Decision, the dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the latter to
pay the former the following amounts, namely:

a) The sum of ₱300,000.00 as and by way of moral damages;

b) The sum of ₱200,000.00 as exemplary damages;

c) The sum of ₱100,000.00 as and for reasonable attorney’s fees; and

d) The costs of the suit.

SO ORDERED."7

Upon appeal, the Court of Appeals rendered the assailed Decision affirming the trial court’s Decision with modification
in the sense that the amounts of damages awarded were reduced, thus:

"WHEREFORE, in view of the foregoing, the appealed decision dated February 20, 1995 of the Regional Trial Court
of Manila, Branch V, in Civil Case No. 92-60807 is hereby AFFIRMED, subject to modifications with respect to the
amount of damages awarded, which are reduced as follows:

(a) Moral damages from ₱300,000.00 to ₱150,000.00; and

(b) Exemplary damages from ₱200,000.00 to ₱100,000.00.

No pronouncement as to costs.

SO ORDERED."

Hence, the instant petition raising the following issues:

"A. Whether the lower courts gravely erred in attributing the ‘public humiliation’ allegedly suffered by Cordero to Amex.

B. Whether the lower courts gravely erred in holding Amex liable to Cordero for moral damages, exemplary damages
and attorney’s fees."8

Respondent filed his comment contending in the main that the petition raises questions of fact beyond this Court’s
domain.

While it is true that under Rule 45 of the 1997 Rules of Civil Procedure, as amended, this Court may review only errors
of law, however, this rule admits of well-known recognized exceptions, thus:

". . . (1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made
is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting; (6) the Court of Appeals went beyond the issues of the case and its findings are
contrary to the admissions of both parties; (7) the findings of fact of the Court of Appeals are contrary to those of the
trial court; (8) said findings of fact are conclusions without citation of specific evidence on which they are based; (9)
the facts set forth in the petition are not disputed by the respondents; and (10) the findings of fact of the Court of
Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record."9

In this case, the inference made by the courts below is manifestly mistaken. Therefore, we are justified in reviewing
the records of this case and rendering judgment based on our own findings.

In his complaint, respondent claimed that he suffered embarrassment and humiliation because his card was
unceremoniously confiscated and cut in half by Susan Chong of Watson’s Chemist Shop.

Respondent anchors his cause of action on the following provision of the Civil Code:
"Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this Chapter."10

In order that an obligation based on quasi-delict may arise, there must be no pre-existing contractual relation between
the parties. But there are exceptions. There may be an action for quasi-delict notwithstanding that there is a subsisting
contract between the parties. A liability for tort may arise even under a contract, where tort is that which breaches the
contract. Stated differently, when an act which constitutes a breach of contract would have itself constituted the source
of a quasi-delictual liability, the contract can be said to have been breached by tort, thereby allowing the rules on tort
to apply.11

Furthermore, to constitute quasi-delict, the fault or negligence must be the proximate cause of the damage or injury
suffered by the plaintiff. Proximate cause is that cause which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury and without which the result would not have occurred. Proximate cause
is determined by the facts of each case upon mixed considerations of logic, common sense, policy and precedent.12

According to the trial court, petitioner should have informed respondent that on November 1, 1991, a person in Hong
Kong attempted to use a charge card bearing similar number to that of respondent’s card; and that petitioner’s
inexcusable failure to do so is the proximate cause of the "confiscation and cutting of [respondent’s] extension card
which exposed the latter to public humiliation for which [petitioner] should be held liable."13

We cannot sustain the trial court’s conclusion.

As explained by respondent himself, he could have used his card upon verification by the sales clerk of Watson that
indeed he is the authorized cardholder. This could have been accomplished had respondent talked to petitioner’s
representative, enabling the latter to determine that respondent is indeed the true holder of the card. Clearly, no
negligence which breaches the contract can be attributed to petitioner. If at all, the cause of respondent’s humiliation
and embarrassment was his refusal to talk to petitioner’s representative.

That respondent refused to talk to petitioner’s representative can be gleaned from the testimony of Mr. Chen Heng
Kun a.k.a. Johnny Chen during the deposition in Hong Kong,14 thus:

"Question No 9 : Was AEII required under its existing policies and/or membership agreement with its cardholders to
advise said cardholders of their card have been put under the support INSPECT – Strictly Question (for identification)
cardmembers before approving any charge?

Mr. Johnny Chen : Under the existing policies of AEII, we don’t have to inform the cardholders if they have to pass
the INSPECT –Strictly Questions (for identification).

Question No 10 : If the answer to Q9 is in the negative, please explain why not?

Mr. Johnny Chen : The reason why we don’t have to are because, first, we are not terminating the service to the
cardholder. Second, it doesn’t mean that we are going to limit the service to the cardholder. Third, as long as the
cardholder can present an identification card of his membership, we allow him to use the card. He can show this by
telephoning the company or by presenting us his passport or travel document. When Watson Company called AEII
for authorization, AEII representative requested that he talk to Mr. Cordero but he refused to talk to any
representative of AEII. AEII could not prove then that he is really the real card holder."

Mr. Chen Heng Kun was briefly cross-examined by respondent’s counsel, thus:

"Question No 10 : Question 9 is objected to since the best evidence would be the membership agreement between
plaintiffs and AEII."

Significantly, paragraph 16 of the Cardmember Agreement signed by respondent provides:

"16. THE CARD REMAINS OUR PROPERTY

"The Card remains our property and we can revoke your right and the right of ay Additional Cardmember to use it at
any time, we can do this with or without giving you notice. If we have revoked the Card without cause, we will refund
a proportion of your annual Card Account fee. We may list revoked Cards in our "Cancellation Bulletin", or otherwise
inform Establishments that the Card issued to you and, if you are the basic Cardmember, any Additional Cards have
been revoked or cancelled.

"If we revoke the card or it expires, you must return it to us if we request. Also, if any Establishment asks you to
surrender an expired or revoked Card, you must do so. You may not use the Card after it has expired or after it has
been revoked.

"The revocation, repossession or request for the return of the Card is not, and shall not constitute any reflection of
your character or credit-worthiness and we shall not be liable in any way for any statement made by any person
requesting the return or surrender of the Card."15

To be sure, pursuant to the above stipulation, petitioner can revoke respondent’s card without notice, as was done
here. It bears reiterating that the subject card would not have been confiscated and cut had respondent talked to
petitioner’s representative and identified himself as the genuine cardholder. It is thus safe to conclude that there was
no negligence on the part of petitioner and that, therefore, it cannot be held liable to respondent for damages.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. CV No. 51671
is REVERSED.

SO ORDERED.
ORIENT FREIGHT INTERNATIONAL, INC., PETITIONER, V. KEIHIN-EVERETT FORWARDING
COMPANY, INC., RESPONDENT.

DECISION
LEONEN, J.:
Article 2176 of the Civil Code does not apply when the party's negligence occurs in the performance of an obligation. The negligent act
would give rise to a quasi-delict only when it may be the basis for an independent action were the parties not otherwise bound by a
contract.
This resolves a Petition for Review[1] on Certiorari under Rule 45 of the Rules of Court, assailing the January 21, 2010 Decision[2] and
April 21, 2010 Resolution[3] of the Court of Appeals, which affirmed the Regional Trial Court February 27, 2008 Decision.[4] The Regional
Trial Court found that petitioner Orient Freight International, Inc.'s (Orient Freight) negligence caused the cancellation of Keihin-Everett
Forwarding Company, Inc.'s (Keihin-Everett) contract with Matsushita Communication Industrial Corporation of the Philippines
(Matsushita).[5]
On October 16, 2001, Keihin-Everett entered into a Trucking Service Agreement with Matsushita. Under the Trucking Service Agreement,
Keihin-Everett would provide services for Matsushita's trucking requirements. These services were subcontracted by Keihin-Everett to
Orient Freight, through their own Trucking Service Agreement executed on the same day.[6]
When the Trucking Service Agreement between Keihin-Everett and Matsushita expired on December 31, 2001, Keihin-Everett executed
an In-House Brokerage Service Agreement for Matsushita's Philippine Economic Zone Authority export operations. Keihin-Everett
continued to retain the services of Orient Freight, which sub-contracted its work to Schmitz Transport and Brokerage Corporation.[7]
In April 2002, Matsushita called Keihin-Everett's Sales Manager, Salud Rizada, about a column in the April 19, 2002 issue of the tabloid
newspaper Tempo. This news narrated the April 17, 2002 interception by Caloocan City police of a stolen truck filled with shipment of
video monitors and CCTV systems owned by Matsushita.[8]
When contacted by Keihin-Everett about this news, Orient Freight stated that the tabloid report had blown the incident out of proportion.
They claimed that the incident simply involved the breakdown and towing of the truck, which was driven by Ricky Cudas (Cudas), with
truck helper, Rubelito Aquino[9] (Aquino). The truck was promptly released and did not miss the closing time of the vessel intended for the
shipment.[10]
Keihin-Everett directed Orient Freight to investigate the matter. During its April 20, 2002 meeting with Keihin-Everett and Matsushita, as
well as in its April 22, 2002 letter addressed to Matsushita, Orient Freight reiterated that the truck merely broke down and had to be
towed.[11]
However, when the shipment arrived in Yokohama, Japan on May 8, 2002, it was discovered that 10 pallets of the shipment's 218 cartons,
worth US$34,226.14, were missing.[12]
Keihin-Everett independently investigated the incident. During its investigation, it obtained a police report from the Caloocan City Police
Station. The report stated, among others, that at around 2:00 p.m. on April 17, 2002, somewhere in Plaza Dilao, Paco Street, Manila,
Cudas told Aquino to report engine trouble to Orient Freight. After Aquino made the phone call, he informed Orient Freight that the truck
had gone missing. When the truck was intercepted by the police along C3 Road near the corner of Dagat-Dagatan Avenue in Caloocan
City, Cudas escaped and became the subject of a manhunt.[13]
When confronted with Keihin-Everett's findings, Orient Freight wrote back on May 15, 2002 to admit that its previous report was erroneous
and that pilferage was apparently proven.[14]
In its June 6, 2002 letter, Matsushita terminated its In-House Brokerage Service Agreement with Keihin-Everett, effective July 1, 2002.
Matsushita cited loss of confidence for terminating the contract, stating that Keihin-Everett's way of handling the April 17, 2002 incident
and its nondisclosure of this incident's relevant facts "amounted to fraud and signified an utter disregard of the rule of law."[15]
Keihin-Everett, by counsel, sent a letter dated September 16, 2002 to Orient Freight, demanding P2,500,000.00 as indemnity for lost
income. It argued that Orient Freight's mishandling of the situation caused the termination of Keihin-Everett's contract with Matsushita.[16]
When Orient Freight refused to pay, Keihin-Everett filed a complaint dated October 24, 2002 for damages with Branch 10, Regional Trial
Court, Manila. The case was docketed as Civil Case No. 02-105018.[17] In its complaint, Keihin-Everett alleged that Orient Freight's
"misrepresentation, malice, negligence and fraud" caused the termination of its In-House Brokerage Service Agreement with Matsushita.
Keihin-Everett prayed for compensation for lost income, with legal interest, exemplary damages, attorney's fees, litigation expenses, and
the costs of the suit.[18]
In its December 20, 2002 Answer, Orient Freight claimed, among others, that its initial ruling of pilferage was in good faith as manifested
by the information from its employees and the good condition and the timely shipment of the cargo. It also alleged that the contractual
termination was a prerogative of Matsushita. Further, by its own Audited Financial Statements on file with the Securities and Exchange
Commission, Keihin-Everett derived income substantially less than what it sued for. Along with the dismissal of the complaint, Orient
Freight also asserted counterclaims for compensatory and exemplary damages, attorney's fees, litigation expenses, and the costs of the
suit.[19]
The Regional Trial Court rendered its February 27, 2008 Decision,[20] in favor of Keihin-Everett. It found that Orient Freight was "negligent
in failing to investigate properly the incident and make a factual report to Keihin[-Everett] and Matsushita," despite having enough time to
properly investigate the incident.[21]
The trial court also ruled that Orient Freight's failure to exercise due diligence in disclosing the true facts of the incident to Keihin-Everett
and Matsushita caused Keihin-Everett to suffer income losses due to Matsushita's cancellation of their contract.[22] The trial court ordered
Orient Freight "to pay [Keihin-Everett] the amount of [P] 1,666,667.00 as actual damages representing net profit loss incurred" and
P50,000.00 in attorney's fees.[23] However, it denied respondent's prayer for exemplary damages, finding that petitioner did not act with
gross negligence.[24]
Orient Freight appealed the Regional Trial Court Decision to the Court of Appeals. On January 21, 2010, the Court of Appeals issued its
Decision[25] affirming the trial court's decision. It ruled that Orient Freight "not only had knowledge of the foiled hijacking of the truck
carrying the . . . shipment but, more importantly, withheld [this] information from [Keihin-Everett]."[26]
The Court of Appeals ruled that the oral and documentary evidence has established both the damage suffered by Keihin-Everett and
Orient Freight's fault or negligence. Orient Freight was negligent in not reporting and not thoroughly investigating the April 17, 2002
incident despite Keihin-Everett's instruction to do so.[27] It further ruled that while Keihin-Everett sought to establish its claim for lost income
of P2,500,000.00 by submitting its January 2002 to June 2002 net income statement,[28] this was refuted by Orient Freight by presenting
Keihin-Everett's own audited financial statements. The Court of Appeals held that the trial court correctly arrived at the amount of
P1,666,667.00 as the award of lost income.[29]
The Court of Appeals denied Orient Freight's Motion for Reconsideration in its April 21, 2010 Resolution.[30]
On June 9, 2010, Orient Freight filed this Petition for Review on Certiorari under Rule 45 with this Court, arguing that the Court of Appeals
incorrectly found it negligent under Article 2176 of the Civil Code.[31] As there was a subsisting Trucking Service Agreement between
Orient Freight itself and Keihin-Everett, petitioner avers that there was a pre-existing contractual relation between them, which would
preclude the application of the laws on quasi-delicts.[32]
Applying the test in Far East Bank and Trust Company v. Court of Appeals,[33] petitioner claims that its failure to inform respondent Keihin-
Everett about the hijacking incident could not give rise to a quasi-delict since the Trucking Service Agreement between the parties did
not include this obligation. It argues that there being no obligation under the Trucking Service Agreement to inform Keihin-Everett of the
hijacking incident, its report to Keihin-Everett was done in good faith and did not constitute negligence. Its representations regarding the
hijacking incident were a sound business judgment and not a negligent act.[34] Finally, it claims that the Court of Appeals incorrectly upheld
the award of damages, as the trial court had based its computation on, among others, Keihin-Everett's profit and loss statement.[35]
On August 2, 2010, Keihin-Everett filed its Comment,[36] arguing that the petition does not contain the names of the parties in violation of
Rule 45, Section 4 of the Rules of Court. It contends that the issues and the arguments raised in this petition are the same issues it raised
in the Regional Trial Court and the Court of Appeals.[37] It claims that the findings of fact and law of the Court of Appeals are in accord
with this Court's decisions.[38]
On October 7, 2010, Orient Freight filed its Reply.[39] It notes that a cursory reading of the petition would readily show the parties to the
case. It claims that what is being contested and appealed is the application of the law on negligence by lower courts and, while the
findings of fact by the lower courts are entitled to great weight, the exceptions granted by jurisprudence apply to this case. It reiterates
that the pre-existing contractual relation between the parties should bar the application of the principles of quasi-delict. Because of this,
the terms and conditions of the contract between the parties must be applied. It also claimed that the Regional Trial Court's computation
of the award included figures from respondent's Profit and Loss Statement, which the trial court had allegedly rejected. It rendered the
computation unreliable.[40]
This Court issued a Resolution[41] dated February 16, 2011, requiring petitioner to submit a certified true copy of the Regional Trial Court
February 27, 2008 Decision.
On March 31, 2011, petitioner filed its Compliance,[42] submitting a certified true copy of the Regional Trial Court Decision.
The issues for this Court's resolution are:

First, whether the failure to state the names of the parties in this Petition for Review, in accordance with Rule 45, Section 4 of the Rules
of Court, is a fatal defect;

Second, whether the Court of Appeals, considering the existing contracts in this case, erred in applying Article 2176 of the Civil Code;

Third, whether Orient Freight, Inc. was negligent for failing to disclose the facts surrounding the hijacking incident on April 17, 2002, which
led to the termination of the Trucking Service Agreement between Keihin-Everett Forwarding Co., Inc. and Matsushita Communication
Industrial Corporation of the Philippines; and

Finally, whether the trial court erred in the computation of the awarded actual and pecuniary loss by basing it on, among others, the Profit
and Loss Statement submitted by Keihin-Everett Forwarding Co., Inc.

The petition is denied.

I
The petition does not violate Rule 45, Section 4 of the Rules of Court[43] for failing to state the names of the parties in the body. The
names of the parties are readily discernable from the caption of the petition, clearly showing the appealing party as the petitioner and the
adverse party as the respondent. The Court of Appeals had also been erroneously impleaded in the petition. However, this Court in Aguilar
v. Court of Appeals, et al.[44] ruled that inappropriately impleading the lower court as respondent does not automatically mean the dismissal
of the appeal. This is a mere formal defect.[45]
II
Negligence may either result in culpa aquiliana or culpa contractual.[46] Culpa aquiliana is the "the wrongful or negligent act or omission
which creates a vinculum juris and gives rise to an obligation between two persons not formally bound by any other obligation,"[47] and is
governed by Article 2176 of the Civil Code:
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed
by the provisions of this Chapter.

Negligence in culpa contractual, on the other hand, is "the fault or negligence incident in the performance of an obligation which already-
existed, and which increases the liability from such already existing obligation."[48] This is governed by Articles 1170 to 1174 of the Civil
Code:[49]
Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.

Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.
Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability
may be regulated by the courts, according to the circumstances.

Article 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation
and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions
of articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of
a family shall be required.

Article 1174. 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.

Actions based on contractual negligence and actions based on quasi-delicts differ in terms of conditions, defenses, and proof. They
generally cannot co-exist.[50] Once a breach of contract is proved, the defendant is presumed negligent and must prove not being at fault.
In a quasi-delict, however, the complaining party has the burden of proving the other party's negligence.[51] In Huang v. Phil. Hoteliers,
Inc.:[52]
[T]his Court finds it significant to take note of the following differences between quasi-delict (culpa aquilina) and breach of contract (culpa
contractual). In quasi-delict, negligence is direct, substantive and independent, while in breach of contract, negligence is merely incidental
to the performance of the contractual obligation; there is a pre-existing contract or obligation, In quasi-delict, the defense of "good father
of a family" is a complete and proper defense insofar as parents, guardians and employers are concerned, while in breach of contract,
such is not a complete and proper defense in the selection and supervision of employees. In quasi-delict, there is no presumption of
negligence and it is incumbent upon the injured party to prove the negligence of the defendant, otherwise, the former's complaint will be
dismissed, while in breach of contract, negligence is presumed so long as it can be proved that there was breach of the contract and the
burden is on the defendant to prove that there was no negligence in the carrying out of the terms of the contract; the rule of respondeat
superior is followed.[53] (Emphasis in the original, citations omitted)
In Government Service Insurance System v. Spouses Labung-Deang,[54] since the petitioner's obligation arose from a contract, this Court
applied the Civil Code provisions on contracts, instead of those of Article 2176:
The trial court and the Court of Appeals treated the obligation of GSIS as one springing from quasi-delict. We do not agree. Article 2176
of the Civil Code defines quasi-delict as follows:
"Whoever by act or omission causes damages to another, there being fault or negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter (italics ours)."
Under the facts, there was a pre-existing contract between the parties. GSIS and the spouses Deang had a loan agreement secured by
a real estate mortgage. The duty to return the owner's duplicate copy of title arose as soon as the mortgage was released. GSIS insists
that it was under no obligation to return the owner's duplicate copy of the title immediately. This insistence is not warranted. Negligence
is obvious as the owners' duplicate copy could not be returned to the owners. Thus, the more applicable provisions of the Civil Code are:

"Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those who in any manner
contravene the tenor thereof are liable for damages."

"Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are
the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably
foreseen at the time the obligation was constituted . .."

Since good faith is presumed and bad faith is a matter of fact which should be proved, we shall treat GSIS as a party who defaulted in its
obligation to return the owners' duplicate copy of the title. As an obligor in good faith, GSIS is liable for all the "natural and probable
consequences of the breach of the obligation." The inability of the spouses Deang to secure another loan and the damages they suffered
thereby has its roots in the failure of the GSIS to return the owners' duplicate copy of the title.[55] (Citations omitted)
Similarly, in Syquia v. Court of Appeals,[56] this Court ruled that private respondent would have been held liable for a breach of its contract
with the petitioners, and not for quasi-delict, had it been found negligent:
With respect to herein petitioners' averment that private respondent has committed culpa aquiliana, the Court of Appeals found no
negligent act on the part of private respondent to justify an award of damages against it. Although a pre-existing contractual relation
between the parties does not preclude the existence of a culpa aquiliana, We find no reason to disregard the respondent's Court finding
that there was no negligence.
....

In this case, it has been established that the Syquias and the Manila Memorial Park Cemetery, Inc., entered into a contract entitled "Deed
of Sale and Certificate of Perpetual Care" on August 27, 1969. That agreement governed the relations of the parties and defined their
respective rights and obligations. Hence, had there been actual negligence on the part of the Manila Memorial Park Cemetery, Inc., it
would be held liable not for a quasi-delict or culpa aquiliana, but for culpa contractual as provided by Article 1170 of the Civil Code[.][57]
However, there are instances when Article 2176 may apply even when there is a pre-existing contractual relation. A party may still commit
a tort or quasi-delict against another, despite the existence of a contract between them.[58]
In Cangco v. Manila Railroad,[59] this Court explained why a party may be held liable for either a breach of contract or an extra-contractual
obligation for a negligent act:
It is evident, therefore, that in its decision in the Yamada case, the court treated plaintiff's action as though founded in tort rather than as
based upon the breach of the contract of carriage, and an examination of the pleadings and of the briefs shows that the questions of law
were in fact discussed upon this theory. Viewed from the standpoint of the defendant the practical result must have been the same in any
event. The proof disclosed beyond doubt that the defendant's servant was grossly negligent and that his negligence was the proximate
cause of plaintiff's injury. It also affirmatively appeared that defendant had been guilty of negligence in its failure to exercise proper
discretion in the direction of the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of the duty
were to be regarded as constituting culpa aquilina or culpa contractual. As Manresa points out . . . whether negligence occurs as an
incident in the course of the performance of a contractual undertaking or is itself (he source of an extra-contractual obligation, its essential
characteristics are identical. There is always an act or omission productive of damage due to carelessness or inattention on the part of
the defendant. Consequently, when the court holds that a defendant is liable in damages for having failed to exercise due care, either
directly, or in failing to exercise proper care in the selection and direction of his servants, the practical result is identical in either case . .
,
The true explanation of such cases is to be found by directing the attention to the relative spheres of contractual and extra-contractual
obligations. The field of non-contractual obligation is much more broader [sic] than that of contractual obligation, comprising, as it does,
the whole extent of juridical human relations. These two fields, figuratively speaking, concentric; that is to say, the mere fact that a person
is bound to another by contract does not relieve him from extra-contractual liability to such person. When such a contractual relation
exists the obligor may break the contract under such conditions that the same act which constitutes a breach of the contract would have
constituted the source of an extra-contractual obligation had no contract existed between the parties.[60] (Emphasis supplied, citation
omitted)
If a contracting party's act that breaches the contract would have given rise to an extra-contractual liability had there been no contract,
the contract would be deemed breached by a tort,[61] and the party may be held liable under Article 2176 and its related provisions.[62]
In Singson v. Bank of the Philippine Islands,[63] this Court upheld the petitioners' claim for damages based on a quasi-delict, despite the
parties' relationship being contractual in nature:
After appropriate proceedings, the Court of First Instance of Manila rendered judgment dismissing the complaint upon the ground that
plaintiffs cannot recover from the defendants upon the basis of a quasi-delict, because the relation between the parties is contractual in
nature; because this case does not fall under Article 2219 of our Civil Code, upon which plaintiffs rely; and because plaintiffs have not
established the amount of damages allegedly sustained by them.

The lower court held that plaintiffs' claim for damages cannot be based upon a tort or quasi-delict, their relation with the defendants being
contractual in nature. We have repeatedly held, however, that the existence of a contract between the parties does not bar the commission
of a tort by the one against the order and the consequent recovery of damages therefor. Indeed, this view has been in effect, reiterated
in a comparatively recent case. Thus, in Air France vs. Carrascoso, involving an airplane passenger who, despite his first-class ticket,
had been illegally ousted from his first-class accommodation, and compelled to take a seat in the tourist compartment, was held entitled
to recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between a passenger and
the carrier is "contractual both in origin and nature . . . the act that breaks the contract may also be a tort".[64] (Citations omitted)
However, if the act complained of would not give rise to a cause of action for a quasi-delict independent of the contract, then the provisions
on quasi-delict or tort would be inapplicable.[65]
In Philippine School of Business Administration v. Court of Appeals,[66] petitioner's obligation to maintain peace and order on campus was
based on a contract with its students. Without this contract, the obligation does not exist. Therefore, the private respondents' cause of
action must be founded on the breach of contract and cannot be based on Article 2176:
Because the circumstances of the present case evince a contractual relation between the PSBA and Carlitos Bautista, the rules on quasi-
delict do not really govern. A perusal of Article 2176 shows that obligations arising from quasi-delicts or tort, also known as extra-
contractual obligations, arise only between parties not otherwise bound by contract, whether express or implied. However, this impression
has not prevented this Court from determining the existence of a tort even when there obtains a contract. In Air France vs.
Carroscoso (124 Phil. 722), the private respondent was awarded damages for his unwarranted expulsion from a first-class seat aboard
the petitioner airline. It is noted, however, that the Court referred to the petitioner-airline's liability as one arising from tort, not one arising
from a contract of carriage. In effect, Air France is authority for the view that liability from tort may exist even if there is a contract, for the
act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248 Fed. 231).
This view was not all that revolutionary, for even as early as 1918, this Court was already of a similar mind. In Cangco vs. Manila
Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:
"The field of non-contractual obligation is much more broader [sic] than that of contractual obligation, comprising, as it does, the whole
extent of juridical human relations. These two fields, figuratively speaking, concentric; that is to say, the mere fact that a person is bound
to another by contract does not relieve him from extra-contractual liability to such person. When such a contractual relation exists the
obligor may break the contract under such conditions that the same act which constitutes a breach of the contract would have constituted
the source of an extra-contractual obligation had no contract existed between the parties."
Immediately what comes to mind is the chapter of the Civil Code on Human Relations, particularly Article 21, which provides:

"Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage." (Italics supplied)
Air France penalized the racist policy of the airline which emboldened the petitioner's employee to forcibly oust the private respondent to
cater to the comfort of a white man who allegedly "had a better right to the seat." In Austro-American, supra, the public embarrassment
caused to the passenger was the justification for the Circuit Court of Appeals, (Second Circuit), to award damages to the latter. From the
foregoing, it can be concluded that should the act which breaches a contract be done in bad faith and be violative of Article 21, then there
is a cause to view the act as constituting a quasi-delict.
In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the contract between the school and Bautista
had been breached thru the former's negligence in providing proper security measures. This would be for the trial court to determine.
And, even if there be a finding of negligence, the same could give rise generally to a breach of contractual obligation only. Using the test
of Cangco, supra, the negligence of the school would not be relevant absent a contract. In fact, that negligence becomes material only
because of the contractual relation between PSBA and Bautista. In other words, a contractual relation is a condition sine qua non to the
school's liability. The negligence of the school cannot exist independently on the contract, unless the negligence occurs under the
circumstances set out in Article 21 of the Civil Code.[67] (Citations omitted)
In situations where the contractual relation is indispensable to hold a party liable, there must be a finding that the act or omission
complained of was done in bad faith and in violation of Article 21 of the Civil Code to give rise to an action based on tort.[68]
In Far East Bank and Trust Company v. Court of Appeals,[69] as the party's claim for damages was based on a contractual relationship,
the provisions on quasi-delict generally did not apply. In this case, this Court did not award moral damages to the private respondent
because the applicable Civil Code provision was Article 2220,[70] not Article 21, and neither fraud nor bad faith was proved:
We are not unaware of the previous rulings of this Court, such as in American Express International, Inc. vs. Intermediate Appellate
Court (167 SCRA 209) and Bank of [the] Philippine Islands vs. Intermediate Appellate Court (206 SCRA 408), sanctioning the application
of Article 21, in relation to Article 2217 and Article 2219 of the Civil Code to a contractual breach similar to the case at bench. Article 21
states:
"Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage."

Article 21 of the Code, it should be observed, contemplates a conscious act to cause harm. Thus, even if we are to assume that the
provision could properly relate to a breach of contract, its application can be warranted only when the defendant's disregard of his
contractual obligation is so deliberate as to approximate a degree of misconduct certainly no less worse [sic] than fraud or bad faith. Most
importantly, Article 21 is a mere declaration of a general principle in human relations that clearly must, in any case, give way to the specific
provision of Article 2220 of the Civil Code authorizing the grant of moral damages in culpa contractual solely when the breach is due to
fraud or bad faith.
....

The Court has not in the process overlooked another rule that a quasi-delict can be the cause for breaching a contract that might thereby
permit the application of applicable principles on tort even where there is a pre-existing contract between the plaintiff and the defendant
(Phil. Airlines vs. Court of Appeals, 106 SCRA 143; Singson vs. Bank of the Phil. Islands, 23 SCRA 1117; and Air France vs. Carrascoso,
18 SCRA 155). This doctrine, unfortunately, cannot improve private respondents' case for it can aptly govern only where the act or
omission complained of would constitute an actionable tort independently of the contract. The test (whether a quasi-delict can be deemed
to underlie the breach of a contract) can be stated thusly: Where, without a pre-existing contract between two parties, an act or omission
can nonetheless amount to an actionable tort by itself, the fact that the parties are contractually bound is no bar to the application of
quasi-delict provisions to the case. Here, private respondents' damage claim is predicated solely on their contractual relationship; without
such agreement, the act or omission complained of cannot by itself be held to stand as a separate cause of action or as an independent
actionable tort.[71] (Citations omitted)
Here, petitioner denies that it was obliged to disclose the facts regarding the hijacking incident since this was not among the provisions
of its Trucking Service Agreement with respondent. There being no contractual obligation, respondent had no cause of action against
petitioner:

Applying said test, assuming for the sake of argument that petitioner indeed failed to inform respondent of the incident where the truck
was later found at the Caloocan Police station, would an independent action prosper based on such omission? Assuming that there is no
contractual relation between the parties herein, would petitioner's omission of not informing respondent that the truck was impounded
gives [sic] rise to a quasi-delict? Obviously not, because the obligation, if there is any in the contract, that is to inform plaintiff of said
incident, could have been spelled out in the very contract itself duly executed by the parties herein specifically in the Trucking Service
Agreement. It is a fact that no such obligation or provision existed in the contract. Absent said terms and obligations, applying the principles
on tort as a cause for breaching a contract would therefore miserably fail as the lower Court erroneously did in this case.[72]
The obligation to report what happened during the hijacking incident, admittedly, does not appear on the plain text of the Trucking Service
Agreement. Petitioner argues that it is nowhere in the agreement. Respondent does not dispute this claim. Neither the Regional Trial
Court nor the Court of Appeals relied on the provisions of the Trucking Service Agreement to arrive at their respective conclusions. Breach
of the Trucking Service Agreement was neither alleged nor proved.

While petitioner and respondent were contractually bound under the Trucking Service Agreement and the events at the crux of this
controversy occurred during the performance of this contract, it is apparent that the duty to investigate and report arose subsequent to
the Trucking Service Agreement. When respondent discovered the news report on the hijacking incident, it contacted petitioner,
requesting information on the incident.[73] Respondent then requested petitioner to investigate and report on the veracity of the news
report. Pursuant to respondent's request, petitioner met with respondent and Matsushita on April 20, 2002 and issued a letter dated April
22, 2002, addressed to Matsushita.[74] Respondent's claim was based on petitioner's negligent conduct when it was required to investigate
and report on the incident:
The defendant claimed that it should not be held liable for damages suffered by the plaintiff considering that the proximate cause of the
damage done to plaintiff is the negligence by employees of Schmitz trucking. This argument is untenable because the defendant is being
sued in this case not for the negligence of the employees of Schmitz trucking but based on defendant's own negligence in failing to
disclose the true facts of the hijacking incident to plaintiff Keihin and Matsushita.[75]
Both the Regional Trial Court and Court of Appeals erred in finding petitioner's negligence of its obligation to report to be an action based
on a quasi-delict Petitioner's negligence did not create the vinculum juris or legal relationship with the respondent, which would have
otherwise given rise to a quasi-delict. Petitioner's duty to respondent existed prior to its negligent act. When respondent contacted
petitioner regarding the news report and asked it to investigate the incident, petitioner's obligation was created. Thereafter, petitioner was
alleged to have performed its obligation negligently, causing damage to respondent.
The doctrine "the act that breaks the contract may also be a tort," on which the lower courts relied, is inapplicable here. Petitioner's
negligence, arising as it does from its performance of its obligation to respondent, is dependent on this obligation. Neither do the facts
show that Article 21 of the Civil Code applies, there being no finding that petitioner's act was a conscious one to cause harm, or be of
such a degree as to approximate fraud or bad faith:

To be sure, there was inaction on the part of the defendant which caused damage to the plaintiff, but there is nothing to show that the
defendant intended to conceal the truth or to avoid liability. When the facts became apparent to defendant, the latter readily apologized
to Keihin and Matsushita for their mistake.[76]
Consequently, Articles 1170, 1172, and 1173 of the Civil Code on negligence in the performance of an obligation should apply.

III
Under Article 1170 of the Civil Code, liability for damages arises when those in the performance of their obligations are guilty of negligence,
among others. Negligence here has been defined as "the failure to observe that degree of care, precaution and vigilance that the
circumstances just demand, whereby that other person suffers injury."[77] If the law or contract does not provide for the degree of diligence
to be exercised, then the required diligence is that of a good father of a family.[78] The test to determine a party's negligence is if the party
used "the reasonable care and caution which an ordinarily prudent person would have used in the same situation"[79] when it performed
the negligent act. If the party did not exercise reasonable care and caution, then it is guilty of negligence.
In this case, both the Regional Trial Court and the Court of Appeals found that petitioner was negligent in failing to adequately report the
April 17, 2002 hijacking incident to respondent and not conducting a thorough investigation despite being directed to do so. The trial
court's factual findings, when affirmed by the Court of Appeals, are binding on this Court and are generally conclusive.[80]
The Regional Trial Court found that petitioner's conduct showed its negligent handling of the investigation and its failure to timely disclose
the facts of the incident to respondent and Matsushita:

[Orient Freight] was clearly negligent in failing to investigate properly the incident and make a factual report to Keihin and Matsushita.
[Orient Freight] claimed that it was pressed for time considering that they were given only about one hour and a half to investigate the
incident before making the initial report. They claimed that their employees had no reason to suspect that the robbery occurred considering
that the seal of the van remained intact. Moreover, the priority they had at that time was to load the cargo to the carrying vessel on time
for shipment on April 19, 200[2]. They claimed that they made arrangement with the Caloocan Police Station for the release of the truck
and the cargo and they were able to do that and the objective was achieved. This may be true but the Court thinks that [Orient Freight]
had enough time to investigate properly the incident. The hijacking incident happened on April 17, 200[2] and the tabloid Tempo published
the hijacking incident only on April 19, 200[2]. This means that [Orient Freight] had about two (2) days to conduct a diligent inquiry about
the incident. It took them until May 15, 200[2] to discover that a robbery indeed occurred resulting in the loss of ten pallets or 218 cartons
valued at US $34,226.14. They even denied that there was no police report only to find out that on May 15, 200[2] that there was such a
report. It was [Orient Freight] 's duty to inquire from the Caloocan Police Station and to find out if they issued a police report, Yet, it was
plaintiff Keihin which furnished them a copy of the police report. The failure of [Orient Freight] to investigate properly the incident and
make a timely report constitutes negligence. Evidently, [Orient Freight] failed to exercise due diligence in disclosing the true facts of the
incident to plaintiff Keihin and Matsushita. As a result, plaintiff Keihin suffered income losses by reason of Matsushita's cancellation of
their contract which primarily was caused by the negligence of [Orient Freight].[81]
The Court of Appeals affirmed the trial court's finding of negligence:

From the foregoing account, it is evident that [Orient Freight] not only had knowledge of the foiled hijacking of the truck carrying the
subject shipment but, more importantly, withheld said information from [Keihin-Everett], Confronted with the April 19, 2002 tabloid account
thereof, [Orient Freight] appears to have further compounded its omission by misleading [Keihin-Everett] and Matsu[s]hita into believing
that the subject incident was irresponsibly reported and merely involved a stalled vehicle which was towed to avoid obstruction of traffic.
Given that the police report subsequently obtained by [Keihin-Everett] was also dated April 17, 2002, [Orient Freight's insistence on its
good faith on the strength of the information it gathered from its employees as well as the timely shipment and supposed good condition
of the cargo clearly deserve scant consideration.[82]
Petitioner's argument that its acts were a "sound business judgment which the court cannot supplant or question nor can it declare as a
negligent act"[83] lacks merit. The Regional Trial Court found that the circumstances should have alerted petitioner to investigate the
incident in a more circumspect and careful manner:
On this score, [Orient Freight] itself presented the circumstances which should have alerted [Orient Freight] that there was more to the
incident than simply a case of mechanical breakdown or towing of the container truck to the police station. [Orient Freight] pointed to
specific facts that would naturally arouse suspicion that something was wrong when the container was found in the premises of the
Caloocan Police Station and that driver Ricky Cudas was nowhere to be found. The police does [sic] not ordinarily impound a motor
vehicle if the problem is merely a traffic violation. More important, driver Ricky Cudas disappeared and was reported missing. When the
Caloocan Police chanced upon the container van, it was found straying at C-3 which is outside its usual route. All these circumstances
should have been enough for [Orient Freight] to inquire deeper on the real circumstances of the incident.

....

[Orient Freight] talked to Rubelito Aquino and apparently failed to listen closely to the statement given by their truck helper to the Caloocan
Police. The truck helper recounted how the engine of the truck stalled and the driver was able to start the engine but thereafter, he was
nowhere to be seen. By this circumstance alone, it should have become apparent to [Orient Freight] that the truck driver gypped the truck
helper into calling the company and had a different intention which was to run away with the container van. It readily shows that Ricky
Cudas intended to hijack the vehicle by feigning or giving the false appearance of an engine breakdown. Yet, [Orient Freight] dismissed
the incident as a simple case of a unit breakdown and towing of vehicle allegedly due to traffic violation. Under the circumstances,
therefore, the defendant failed to exercise the degree of care, precaution and vigilance which the situation demands.[84]
Despite the circumstances which would have cautioned petitioner to act with care while investigating and reporting the hijacking incident,
petitioner failed to do so. Petitioner is responsible for the damages that respondent incurred due to the former's negligent performance of
its obligation.

IV
Articles 2200 and 2201 of the Civil Code provide for the liability for damages in contractual obligations:

Article 2200. Indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the
obligee failed to obtain.

Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are
the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably
foreseen at the time the obligation was constituted.

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.

In Central Bank of the Philippines v. Court of Appeals,[85] this Court explained the principles underlying Articles 2200 and 2201:
Construing these provisions, the following is what this Court held in Cerrano vs. Tan Chuco, 38 Phil. 392:
"... Article 1106 (now 2200) of the Civil Code establishes the rule that prospective profits may be recovered as damages, while article
1107 (now 2201) of the same Code provides that the damages recoverable for the breach of obligations not originating in fraud (dolo) are
those which were or might have been foreseen at the time the contract was entered into. Applying these principles to the facts in this
case, we think that it is unquestionable that defendant must be deemed to have foreseen at the time he made the contract that in the
event of his failure to perform it, the plaintiff would be damaged by the loss of the profit he might reasonably have expected to derive from
its use.
"When the existence of a loss is established, absolute certainty as to its amount is not required. The benefit to be derived from a contract
which one of the parties has absolutely failed to perform is of necessity to some extent, a matter of speculation, but the injured party is
not to be denied all remedy for that reason alone. He must produce the best evidence of which his case is susceptible and if that evidence
warrants the inference that he has been damaged by the loss of profits which he might with reasonable certainty have anticipated but for
the defendant's wrongful act, he is entitled to recover. As stated in Sedgwick on Damages (Ninth Ed., par. 177):

'The general rule is, then, that a plaintiff may recover compensation for any gain which he can make it appear with reasonable certainty
the defendant's wrongful act prevented him from acquiring, . . .' (See also Algarra vs. Sandejas, 27 Phil. Rep., 284, 289; Hicks vs. Manila
Hotel Co., 28 Phil, Rep., 325.)" (At pp. 398-399.)[86]
The lower courts established that petitioner's negligence resulted in Matsushita's cancellation of its contract with respondent. The
Regional Trial Court found:

In the letter dated June 6, 2002, Matsushita pre-terminated its In-House Brokerage Service Agreement with plaintiff Keihin for violation of
the terms of said contract. Its President, KenGo Toda, stated that because of the incident that happened on April 17, 2002 involving
properties which the plaintiff failed to inform them, Matsushita has lost confidence in plaintiff's capability to handle its brokerage and
forwarding requirements. There was clearly a breach of trust as manifested by plaintiff's failure to disclose facts when it had the duty to
reveal them and it constitutes fraud. Moreover, the negligence of plaintiff personnel cannot be tolerated as Matsushita is bound to protect
the integrity of the company.[87]
It could be reasonably foreseen that the failure to disclose the true facts of an incident, especially when it turned out that a crime might
have been committed, would lead to a loss of trust and confidence in the party which was bound to disclose these facts. Petitioner caused
the loss of trust and confidence when it misled respondent and Matsushita into believing that the incident had been irresponsibly reported
and merely involved a stalled truck.[88] Thus, petitioner is liable to respondent for the loss of profit sustained due to Matsushita's termination
of the In-House Brokerage Service Agreement.
As regards the amount of damages, this Court cannot rule on whether the Regional Trial Court erred in using the Profit and Loss Statement
submitted by respondent for its computation. The amount of the award of damages is a factual matter generally not reviewable in a Rule
45 petition,[89] The damages awarded by the Regional Trial Court, as affirmed by the Court of Appeals, were supported by documentary
evidence such as respondent's audited financial statement. The trial court clearly explained how it reduced the respondent's claimed loss
of profit and arrived at the damages to be awarded:
The difference between the total gross revenue of plaintiff for 2002 as reported in the monthly profit and loss statement of [P]14,801,744.00
and the audited profit and loss statement of the amount of [P]10,434,144.00 represents 1/3 of the total gross revenues of the plaintiff for
the six months period. Accordingly, the net profit loss of [P]2.5 million pesos as reported in the monthly profit and loss statement of the
plaintiff should be reduced by 1/3 or the amount of [P]833,333.33. Therefore, the net profit loss of the plaintiff for the remaining period of
six months should only be the amount of [P] 1,666,667.70 and not [P]2.5 million as claimed.[90]
Petitioner has not sufficiently shown why the computation made by the trial court should be disturbed.

WHEREFORE, the petition is DENIED. The January 21, 2010 Decision and April 21, 2010 Resolution of the Court of Appeals in CA-G.R.
CV No. 91889 are AFFIRMED.
SO ORDERE
G.R. No. 129029 April 3, 2000

RAFAEL REYES TRUCKING CORPORATION, petitioner,

vs.
PEOPLE OF THE PHILIPPINES and ROSARIO P. DY (for herself and on behalf of the minors Maria Luisa,
Francis Edward, Francis Mark and Francis Rafael, all surnamed Dy), respondents.

PARDO, J.:

The case is an appeal via certiorari from the amended decision 1 of the Court of Appeals2 affirming the decision and
supplemental decision of the trial court,3 as follows:

IN VIEW OF THE FOREGOING, judgment is hereby rendered dismissing the appeals interposed by both
accused and Reyes Trucking Corporation and affirming the Decision and Supplemental Decision dated June
6, 1992 and October 26, 1992 respectively.

SO ORDERED.4

The facts are as follows:

On October 10, 1989, Provincial Prosecutor Patricio T. Durian of Isabela filed with the Regional Trial Court, Isabela,
Branch 19, Cauayan an amended information charging Romeo Dunca y de Tumol with reckless imprudence resulting
in double homicide and damage to property, reading as follows:

That on or about the 20th day of June, 1989, in the Municipality of Cauayan, Province of Isabela, Philippines,
and within the jurisdiction of this Honorable Court, the said accused being the driver and person-in-charge of
a Trailer Truck Tractor bearing Plate No. N2A-867 registered in the name of Rafael Reyes Trucking
Corporation, with a load of 2,000 cases of empty bottles of beer grande, willfully, unlawfully and feloniously
drove and operated the same while along the National Highway of Barangay Tagaran, in said Municipality, in
a negligent, careless and imprudent manner, without due regard to traffic laws, rules and ordinances and
without taking the necessary precautions to prevent injuries to persons and damage to property, causing by
such negligence, carelessness and imprudence the said trailer truck to hit and bump a Nissan Pick-up bearing
Plate No. BBG-957 driven by Feliciano Balcita and Francisco Dy, Jr., @ Pacquing, due to irreversible shock,
internal and external hemorrhage and multiple injuries, open wounds, abrasions, and further causing damages
to the heirs of Feliciano Balcita in the amount of P100,000.00 and to the death of Francisco Dy, Jr.; @
Pacquing and damages to his Nissan Pick-Up bearing Plate No. BBG-957 in the total amount of
P2,000,000.00.

CONTRARY TO LAW.

Cauayan, Isabela, October 10, 1989.

(Sgd.) FAUSTO C. CABANTAC

Third Assistant Provincial Prosecutor

Upon arraignment on October 23, 1989, the accused entered a plea of not guilty. On the same occasion, the offended
parties (Rosario P. Dy and minor children and Angelina M. Balcita and minor son Paolo) made a reservation to file a
separate civil action against the accused arising from the offense charged.5 On November 29, 1989, the offended
parties actually filed with the Regional Trial Court, Isabela, Branch 19, Cauayan a complaint against petitioner Rafael
Reyes Trucking Corporation, as employer of driver Romeo Dunca y de Tumol, based on quasi delict. The petitioner
settled the claim of the heirs of Feliciano Balcita (the driver of the other vehicle involved in the accident). The private
respondents opted to pursue the criminal action but did not withdraw the civil case quasi ex delicto they filed against
petitioner. On December 15, 1989, private respondents withdrew the reservation to file a separate civil action against
the accused and manifested that they would prosecute the civil aspect ex delicto in the criminal action.6 However, they
did not withdraw the separate civil action based on quasi delict against petitioner as employer arising from the same
act or omission of the accused driver.7
Upon agreement of the parties, the trial court consolidated both criminal and civil cases and conducted a joint trial of
the same.

The facts, as found by the trial court, which appear to be undisputed, are as follows:

The defendant Rafael Reyes Trucking Corporation is a domestic corporation engaged in the business of
transporting beer products for the San Miguel Corporation (SMC for Short) from the latter's San Fernando,
Pampanga plant to its various sales outlets in Luzon. Among its fleets of vehicles for hire is the white truck
trailer described above driven by Romeo Dunca y Tumol, a duly licensed driver. Aside from the Corporation's
memorandum to all its drivers and helpers to physically inspect their vehicles before each trip (Exh. 15, pars.
4 & 5), the SMC's Traffic Investigator-Inspector certified the roadworthiness of this White Truck trailer prior to
June 20, 1989 (Exh. 17). In addition to a professional driver's license, it also conducts a rigid examination of
all driver applicants before they are hired.

In the early morning of June 20, 1989, the White Truck driven by Dunca left Tuguegarao, Cagayan bound to
San Fernando, Pampanga loaded with 2,000 cases of empty beer "Grande" bottles. Seated at the front right
seat beside him was Ferdinand Domingo, his truck helper ("pahinante" in Pilipino). At around 4:00 o'clock that
same morning while the truck was descending at a slight downgrade along the national road at Tagaran,
Cauayan, Isabela, it approached a damaged portion of the road covering the full width of the truck's right lane
going south and about six meters in length. These made the surface of the road uneven because the potholes
were about five to six inches deep. The left lane parallel to this damaged portion is smooth. As narrated by
Ferdinand Domingo, before approaching the potholes, he and Dunca saw the Nissan with its headlights on
coming from the opposite direction. They used to evade this damaged road by taking the left lance but at that
particular moment, because of the incoming vehicle, they had to run over it. This caused the truck to bounce
wildly. Dunca lost control of the wheels and the truck swerved to the left invading the lane of the Nissan. As a
result, Dunca's vehicle rammed the incoming Nissan dragging it to the left shoulder of the road and climbed a
ridge above said shoulder where it finally stopped. (see Exh. A-5, p. 8, record). The Nissan was severely
damaged (Exhs. A-7, A-8, A-9 and A-14, pp. 9-11 record), and its two passengers, namely: Feliciano Balcita
and Francisco Dy, Jr. died instantly (Exh. A-19) from external and internal hemorrhage and multiple fractures
(pp. 15 and 16, record).

For the funeral expenses of Francisco Dy, Jr. her widow spent P651,360.00 (Exh. I-3). At the time of his death
he was 45 years old. He was the President and Chairman of the Board of the Dynamic Wood Products and
Development Corporation (DWPC), a wood processing establishment, from which he was receiving an income
of P10,000.00 a month. (Exh. D). In the Articles of Incorporation of the DWPC, the spouses Francisco Dy, Jr.
and Rosario Perez Dy appear to be stockholders of 10,000 shares each with par value of P100.00 per share
out of its outstanding and subscribed capital stock of 60,000 shares valued at P6,000,000.00 (Exhs. K-1 & 10-
B). Under its 1988 Income Tax Returns (Exh. J) the DWPC had a taxable net income of P78,499.30 (Exh. J).
Francisco Dy, Jr. was a La Salle University graduate in Business Administration, past president of the Pasay
Jaycees, National Treasurer and President of the Philippine Jaycees in 1971 and 1976, respectively, and
World Vice-President of Jaycees International in 1979. He was also the recipient of numerous awards as a
civic leader (Exh. C). His children were all studying in prestigious schools and spent about P180,000.00 for
their education in 1988 alone (Exh. H-4).

As stated earlier, the plaintiffs' procurement of a writ of attachment of the properties of the Corporation was
declared illegal by the Court of Appeals. It was shown that on December 26, 1989, Deputy Sheriff Edgardo
Zabat of the RTC at San Fernando, Pampanga, attached six units of Truck Tractors and trailers of the
Corporation at its garage at San Fernando, Pampanga. These vehicles were kept under PC guard by the
plaintiffs in said garage thus preventing the Corporation to operate them. However, on December 28, 1989,
the Court of Appeals dissolved the writ (p. 30, record) and on December 29, 1989, said Sheriff reported to this
Court that the attached vehicles were taken by the defendant's representative, Melita Manapil (Exh. O, p. 31,
record). The defendant's general Manager declared that it lost P21,000.00 per day for the non-operation of
the six units during their attachment (p. 31, t.s.n., Natividad C. Babaran, proceedings on December 10, 1990).8

On June 6, 1992, the trial court rendered a joint decision, the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing considerations judgment is hereby rendered:

 1. Finding the accused Romeo Dunca y de Tumol guilty beyond reasonable doubt of the crime of Double
Homicide through Reckless Imprudence with violation of the Motor Vehicle Law (Rep. Act No. 4136), and
appreciating in his favor the mitigating circumstance of voluntary surrender without any aggravating
circumstance to offset the same, the Court hereby sentences him to suffer two (2) indeterminate penalties of
four months and one day of arresto mayor as minimum to three years, six months and twenty days as
maximum; to indemnify the Heirs of Francisco Dy. Jr. in the amount of P3,000,000.00 as compensatory
damages, P1,000,000.00 as moral damages, and P1,030,000.00 as funeral expenses;

2. Ordering the plaintiff in Civil Case No. Br. 19-424 to pay the defendant therein actual damages in the amount
of P84,000.00; and

3. Ordering the dismissal of the complaint in Civil Case No. Br. 19-424.

No pronouncement as to costs.

SO ORDERED.

Cauayan, Isabela, June 6, 1992.

(Sgd.) ARTEMIO R. ALIVIA

Regional Trial Judge9

On September 3, 1992, petitioner and the accused filed a notice of appeal from the joint decision. 10

On the other hand, private respondents moved for amendment of the dispositive portion of the joint decision so as to
hold petitioner subsidiarily liable for the damages awarded to the private respondents in the event of insolvency of the
accused. 11

On October 26, 1992, the trial court rendered a supplemental decision amending the dispositive portion by inserting
an additional paragraph reading as follows:

2:A — Ordering the defendant Reyes Trucking Corporation subsidiarily liable for all the damages awarded to
the heirs of Francisco Dy, Jr., in the event of insolvency of the accused but deducting therefrom the damages
of P84,000.00 awarded to said defendant in the next preceding paragraph; and . . . 12

On November 12, 1992, petitioner filed with the trial court a supplemental notice of appeal from the supplemental
decision. 13

During the pendency of the appeal, the accused jumped bail and fled to a foreign country. By resolution dated
December 29, 1994, the Court of Appeals dismissed the appeal of the accused in the criminal case. 14

On January 6, 1997, the Court of Appeals rendered an amended decision affirming that of the trial court, as set out in
the opening paragraph of this decision. 15

On January 31, 1997, petitioner filed a motion for reconsideration of the amended decision. 16

On April 21, 1997, the Court of Appeals denied petitioner's motion for reconsideration for lack of merit 17

Hence, this petition for review. 18

On July 21, 1997, the Court required respondents to comment on the petition within ten (10) days from notice. 19

On January 27, 1998, the Solicitor General filed his comment. 20 On April 13, 1998, the Court granted leave to petitioner
to file a reply and noted the reply it filed on March 11, 1998. 21

We now resolve to give due course to the petition and decide the case.
Petitioner raises three (3) grounds for allowance of the petition, which, however, boil down to two (2) basic issues,
namely:

1. May petitioner as owner of the truck involved in the accident be held subsidiarily liable for the damages
awarded to the offended parties in the criminal action against the truck driver despite the filing of a separate
civil action by the offended parties against the employer of the truck driver?

2. May the Court award damages to the offended parties in the criminal case despite the filing of a civil action
against the employer of the truck driver; and in amounts exceeding that alleged in the information for reckless
imprudence resulting in homicide and damage to property? 22

We grant the petition, resolving under the circumstances pro hac vice to remand the cases to the trial court for
determination of the civil liability of petitioner as employer of the accused driver in the civil action quasi ex delicto re-
opened for the purpose.

In negligence cases, the aggrieved party has the choice between (1) an action to enforce civil liability arising from
crime under Article 100 of the Revised Penal Code; and (2) a separate action for quasi delict under Article 2176 of
the Civil Code of the Philippines. Once the choice is made, the injured party can not avail himself of any other remedy
because he may not recover damages twice for the same negligent act or omission of the accused. 23 This is the rule
against double recovery. 1âwphi1.nêt

In other words, "the same act or omission can create two kinds of liability on the part of the offender, that is, civil
liability ex delicto, and civil liability quasi delicto" either of which "may be enforced against the culprit, subject to the
caveat under Article 2177 of the Civil Code that the offended party can not recover damages under both types of
liability." 24

In the instant case, the offended parties elected to file a separate civil action for damages against petitioner as
employer of the accused, based on quasi delict, under Article 2176 of the Civil Code of the Philippines. Private
respondents sued petitioner Rafael Reyes Trucking Corporation, as the employer of the accused, to be vicariously
liable for the fault or negligence of the latter. Under the law, this vicarious liability of the employer is founded on at
least two specific provisions of law.

The first is expressed in Article 2176 in relation to Article 2180 of the Civil Code, which would allow an action predicated
on quasi-delict to be instituted by the injured party against the employer for an act or omission of the employee and
would necessitate only a preponderance of evidence to prevail. Here, the liability of the employer for the negligent
conduct of the subordinate is direct and primary, subject to the defense of due diligence in the selection and
supervision of the employee. The enforcement of the judgment against the employer in an action based on Article
2176 does not require the employee to be insolvent since the nature of the liability of the employer with that of the
employee, the two being statutorily considered joint tortfeasors, is solidary. 25 The second, predicated on Article 103 of
the Revised Penal Code, provides that an employer may be held subsidiarily civilly liable for a felony committed by
his employee in the discharge of his duty. This liability attaches when the employee is convicted of a crime done in
the performance of his work and is found to be insolvent that renders him unable to properly respond to the civil liability
adjudged. 26

As regards the first issue, the answer is in the negative. Rafael Reyes Trucking Corporation, as employer of the
accused who has been adjudged guilty in the criminal case for reckless imprudence, can not be held subsidiarily liable
because of the filing of the separate civil action based on quasi delict against it. In view of the reservation to file, and
the subsequent filing of the civil action for recovery of civil liability, the same was not instituted with the criminal action.
Such separate civil action was for recovery of damages under Article 2176 of the Civil Code, arising from the same
act or omission of the accused. 27

Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules of Criminal Procedure, when private
respondents, as complainants in the criminal action, reserved the right to file the separate civil action, they waived
other available civil actions predicated on the same act or omission of the accused-driver. Such civil action includes
the recovery of indemnity under the Revised Penal Code, and damages under Articles 32, 33, and 34 of the Civil
Code of the Philippines arising from the same act or omission of the accused. 28
The intention of private respondents to proceed primarily and directly against petitioner as employer of accused truck
driver became clearer when they did not ask for the dismissal of the civil action against the latter based on quasi delict.

Consequently, the Court of Appeals and the trial court erred in holding the accused civilly liable, and petitioner-
employer of the accused subsidiarily liable for damages arising from crime (ex delicto) in the criminal action as the
offended parties in fact filed a separate civil action against the employer based on quasi delict resulting in the waiver
of the civil action ex delicto.

It might be argued that private respondents as complainants in the criminal case withdrew the reservation to file a civil
action against the driver (accused) and manifested that they would pursue the civil liability of the driver in the criminal
action. However, the withdrawal is ineffective to reverse the effect of the reservation earlier made because private
respondents did not withdraw the civil action against petitioner based on quasi delict. In such a case, the provision of
Rule 111, Section 1, paragraph 3 of the 1985 Rules on Criminal Procedure is clear that the reservation to file or the
filing of a separate civil action results in a waiver of other available civil actions arising from the same act or omission
of the accused. Rule 111, Section 1, paragraph 2 enumerated what are the civil actions deemed waived upon such
reservation or filing, and one of which is the civil indemnity under the Revised Penal Code. Rule 111, Section 1,
paragraph 3 of the 1985 Rules on Criminal Procedure specifically provides:

A waiver of any of the civil actions extinguishes the others. The institution of, or the reservation of the right to
file, any of said civil actions separately waives the others.

The rationale behind this rule is the avoidance of multiple suits between the same litigants arising out of the same act
or omission of the offender. The restrictive phraseology of the section under consideration is meant to cover all kinds
of civil actions, regardless of their source in law, provided that the action has for its basis the same act or omission of
the offender. 29

However, petitioner as defendant in the separate civil action for damages filed against it, based on quasi delict, may
be held liable thereon. Thus, the trial court grievously erred in dismissing plaintiff's civil complaint. And the Court of
Appeals erred in affirming the trial court's decision. Unfortunately private respondents did not appeal from such
dismissal and could not be granted affirmative relief. 30

The Court, however, in exceptional cases has relaxed the rules "in order to promote their objectives and assist the
parties in obtaining just, speedy, and inexpensive determination of every action or proceeding" 31 or exempted "a
particular case from the operation of the rules." 32

Invoking this principle, we rule that the trial court erred in awarding civil damages in the criminal case and in dismissing
the civil action. Apparently satisfied with such award, private respondent did not appeal from the dismissal of the civil
case. However, petitioner did appeal. Hence, this case should be remanded to the trial court so that it may render
decision in the civil case awarding damages as may be warranted by the evidence. 33

With regard to the second issue, the award of damages in the criminal case was improper because the civil action for
the recovery of civil liability was waived in the criminal action by the filing of a separate civil action against the employer.
As enunciated in Ramos vs. Gonong, 34 "civil indemnity is not part of the penalty for the crime committed." The only
issue brought before the trial court in the criminal action is whether accused Romeo Dunca y de Tumol is guilty of
reckless imprudence resulting in homicide and damage to property. The action for recovery of civil liability is not
included therein, but is covered by the separate civil action filed against the petitioner as employer of the accused
truck-driver.

In this case, accused-driver jumped bail pending his appeal from his conviction. Thus, the judgment convicting the
accused became final and executory, but only insofar as the penalty in the criminal action is concerned. The damages
awarded in the criminal action was invalid because of its effective waiver. The pronouncement was void because the
action for recovery of the civil liability arising from the crime has been waived in said criminal action.

With respect to the issue that the award of damages in the criminal action exceeded the amount of damages alleged
in the amended information, the issue is de minimis. At any rate, the trial court erred in awarding damages in the
criminal case because by virtue of the reservation of the right to bring a separate civil action or the filing thereof, "there
would be no possibility that the employer would be held liable because in such a case there would be no
pronouncement as to the civil liability of the accused. 35
As a final note, we reiterate that "the policy against double recovery requires that only one action be maintained for
the same act or omission whether the action is brought against the employee or against his employer. 36 The injured
party must choose which of the available causes of action for damages he will bring. 37

Parenthetically, the trial court found the accused "guilty beyond reasonable doubt of the crime of Double Homicide
Through Reckless Imprudence with violation of the Motor Vehicle Law (Rep. Act No. 4136)". There is no such
nomenclature of an offense under the Revised Penal Code. Thus, the trial court was misled to sentence the accused
"to suffer two (2) indeterminate penalties of four (4) months and one (1) day of arresto mayor, as minimum, to three
(3) years, six (6) months and twenty (20) days of prision correccional, as maximum." This is erroneous because in
reckless imprudence cases, the actual penalty for criminal negligence bears no relation to the individual willfull crime
or crimes committed, but is set in relation to a whole class, or series of crimes. 38

Unfortunately, we can no longer correct this judgment even if erroneous, as it is, because it has become final and
executory.

Under Article 365 of the Revised Penal Code, criminal negligence "is treated as a mere quasi offense, and dealt with
separately from willful offenses. It is not a question of classification or terminology. In intentional crimes, the act itself
is punished; in negligence or imprudence, what is principally penalized is the mental attitude or condition behind the
act, the dangerous recklessness, lack of care or foresight, the imprudencia punible. Much of the confusion has arisen
from the common use of such descriptive phrase as "homicide through reckless imprudence", and the like; when the
strict technical sense is, more accurately, "reckless imprudence resulting in homicide"; or "simple imprudence causing
damages to property"." 39

There is need, therefore, to rectify the designation of the offense without disturbing the imposed penalty for the
guidance of bench and bar in strict adherence to precedent.

WHEREFORE, the Court GRANTS the petition and SETS ASIDE the amended decision and resolution of the Court
of Appeals in CA-G.R. CR No. 14448, promulgated on January 6, 1997, and the joint decision of the Regional Trial
Court, Isabela, Branch 19, Cauayan, in Criminal Case No. Br. 19-311 and Civil Case No. Br. 19-424, dated June 6,
1992.

IN LIEU THEREOF, the Court renders judgment as follows:

(1) In Criminal Case No. Br. 19-311, the Court declares the accused Romeo Dunca y de Tumol guilty beyond
reasonable doubt of reckless imprudence resulting in homicide and damage to property, defined and penalized
under Article 365, paragraph 2 of the Revised Penal Code, with violation of the automobile law (R.A. No. 4136,
as amended), and sentences him to suffer two (2) indeterminate penalties of four (4) months and one (1) day
of arresto mayor, as minimum, to three (3) years, six (6) months and twenty (20) days of prision correccional,
as maximum, 40 without indemnity, and to pay the costs, and

(2) In Civil Case No. Br. 19-424, the Court orders the case re-opened to determine the liability of the defendant
Rafael Reyes Trucking Corporation to plaintiffs and that of plaintiffs on defendant's counterclaim.

No costs in this instance.

SO ORDERED.
G.R. No. 175773 June 17, 2013

MITSUBISHI MOTORS PHILIPPINES SALARIED EMPLOYEES UNION (MMPSEU), Petitioner,

vs.
MITSUBISHI MOTORS PHILIPPINES CORPORATION, Respondent.

DECISION

DEL CASTILLO, J.:

The Collective Bargaining Agreement (CBA) of the parties in this case provides that the company shoulder the
hospitalization expenses of the dependents of covered employees subject to certain limitations and restrictions.
Accordingly, covered employees pay part of the hospitalization insurance premium through monthly salary deduction
while the company, upon hospitalization of the covered employees' dependents, shall pay the hospitalization
expenses incurred for the same. The conflict arose when a portion of the hospitalization expenses of the covered
employees' dependents were paid/shouldered by the dependent's own health insurance. While the company refused
to pay the portion of the hospital expenses already shouldered by the dependents' own health insurance, the union
insists that the covered employees are entitled to the whole and undiminished amount of said hospital expenses.

By this Petition for Review on Certiorari,1 petitioner Mitsubishi Motors Philippines Salaried Employees Union
(MMPSEU) assails the March 31, 2006 Decision2 and December 5, 2006 Resolution3 of the Court of Appeals (CA) in
CA-G.R. SP No. 75630, which reversed and set aside the Voluntary Arbitrator’s December 3, 2002 Decision4 and
declared respondent Mitsubishi Motors Philippines Corporation (MMPC) to be under no legal obligation to pay its
covered employees’ dependents’ hospitalization expenses which were already shouldered by other health insurance
companies.

Factual Antecedents

The parties’ CBA5 covering the period August 1, 1996 to July 31, 1999 provides for the hospitalization insurance
benefits for the covered dependents, thus:

SECTION 4. DEPENDENTS’ GROUP HOSPITALIZATION INSURANCE – The COMPANY shall obtain group
hospitalization insurance coverage or assume under a self-insurance basis hospitalization for the dependents of
regular employees up to a maximum amount of forty thousand pesos (₱40,000.00) per confinement subject to the
following:

a. The room and board must not exceed three hundred pesos (₱300.00) per day up to a maximum of thirty-
one (31) days. Similarly, Doctor’s Call fees must not exceed three hundred pesos (₱300.00) per day for a
maximum of thirty-one (31) days. Any excess of this amount shall be borne by the employee.

b. Confinement must be in a hospital designated by the COMPANY. For this purpose, the COMPANY shall
designate hospitals in different convenient places to be availed of by the dependents of employees. In cases
of emergency where the dependent is confined without the recommendation of the company doctor or in a
hospital not designated by the COMPANY, the COMPANY shall look into the circumstances of such
confinement and arrange for the payment of the amount to the extent of the hospitalization benefit.

c. The limitations and restrictions listed in Annex "B" must be observed.

d. Payment shall be direct to the hospital and doctor and must be covered by actual billings.

Each employee shall pay one hundred pesos (₱100.00) per month through salary deduction as his share in the
payment of the insurance premium for the above coverage with the balance of the premium to be paid by the
COMPANY. If the COMPANY is self-insured the one hundred pesos (₱100.00) per employee monthly contribution
shall be given to the COMPANY which shall shoulder the expenses subject to the above level of benefits and subject
to the same limitations and restrictions provided for in Annex "B" hereof.
The hospitalization expenses must be covered by actual hospital and doctor’s bills and any amount in excess of the
above mentioned level of benefits will be for the account of the employee.

For purposes of this provision, eligible dependents are the covered employees’ natural parents, legal spouse and
legitimate or legally adopted or step children who are unmarried, unemployed who have not attained twenty-one (21)
years of age and wholly dependent upon the employee for support.

This provision applies only in cases of actual confinement in the hospital for at least six (6) hours.

Maternity cases are not covered by this section but will be under the next succeeding section on maternity benefits.6

When the CBA expired on July 31, 1999, the parties executed another CBA7 effective August 1, 1999 to July 31, 2002
incorporating the same provisions on dependents’ hospitalization insurance benefits but in the increased amount of
₱50,000.00. The room and board expenses, as well as the doctor’s call fees, were also increased to ₱375.00.

On separate occasions, three members of MMPSEU, namely, Ernesto Calida (Calida), Hermie Juan Oabel (Oabel)
and Jocelyn Martin (Martin), filed claims for reimbursement of hospitalization expenses of their dependents.

MMPC paid only a portion of their hospitalization insurance claims, not the full amount. In the case of Calida, his wife,
Lanie, was confined at Sto. Tomas University Hospital from September 4 to 9, 1998 due to Thyroidectomy. The
medical expenses incurred totalled ₱29,967.10. Of this amount, ₱9,000.00 representing professional fees was paid
by MEDICard Philippines, Inc. (MEDICard) which provides health maintenance to Lanie.8 MMPC only paid
₱12,148.63.9 It did not pay the ₱9,000.00 already paid by MEDICard and the ₱6,278.47 not covered by official
receipts. It refused to give to Calida the difference between the amount of medical expenses of ₱27,427.1010 which
he claimed to be entitled to under the CBA and the ₱12,148.63 which MMPC directly paid to the hospital.

In the case of Martin, his father, Jose, was admitted at The Medical City from March 26 to 27, 2000 due to Acid Peptic
Disease and incurred medical expenses amounting to ₱9,101.30.14 MEDICard paid ₱8,496.00.15 Consequently,
MMPC only paid ₱288.40,16 after deducting from the total medical expenses the amount paid by MEDICard and the
₱316.90 discount given by the hospital.

Claiming that under the CBA, they are entitled to hospital benefits amounting to ₱27,427.10, ₱6,769.35 and
₱8,123.80, respectively, which should not be reduced by the amounts paid by MEDICard and by Prosper, Calida,
Oabel and Martin asked for reimbursement from MMPC. However, MMPC denied the claims contending that double
insurance would result if the said employees would receive from the company the full amount of hospitalization
expenses despite having already received payment of portions thereof from other health insurance providers.

This prompted the MMPSEU President to write the MMPC President17 demanding full payment of the hospitalization
benefits. Alleging discrimination against MMPSEU union members, she pointed out that full reimbursement was given
in a similar claim filed by Luisito Cruz (Cruz), a member of the Hourly Union. In a letter-reply,18 MMPC, through its
Vice-President for Industrial Relations Division, clarified that the claims of the said MMPSEU members have already
been paid on the basis of official receipts submitted. It also denied the charge of discrimination and explained that the
case of Cruz involved an entirely different matter since it concerned the admissibility of certified true copies of
documents for reimbursement purposes, which case had been settled through voluntary arbitration.

On August 28, 2000, MMPSEU referred the dispute to the National Conciliation and Mediation Board and requested
for preventive mediation.19

Proceedings before the Voluntary Arbitrator

On October 3, 2000, the case was referred to Voluntary Arbitrator Rolando Capocyan for resolution of the issue
involving the interpretation of the subject CBA provision.20

MMPSEU alleged that there is nothing in the CBA which prohibits an employee from obtaining other insurance or
declares that medical expenses can be reimbursed only upon presentation of original official receipts. It stressed that
the hospitalization benefits should be computed based on the formula indicated in the CBA without deducting the
benefits derived from other insurance providers. Besides, if reduction is permitted, MMPC would be unjustly benefited
from the monthly premium contributed by the employees through salary deduction. MMPSEU added that its members
had legitimate claims under the CBA and that any doubt as to any of its provisions should be resolved in favor of its
members. Moreover, any ambiguity should be resolved in favor of labor.21

On the other hand, MMPC argued that the reimbursement of the entire amounts being claimed by the covered
employees, including those already paid by other insurance companies, would constitute double indemnity or double
insurance, which is circumscribed under the Insurance Code. Moreover, a contract of insurance is a contract of
indemnity and the employees cannot be allowed to profit from their dependents’ loss.22

Meanwhile, the parties separately sought for a legal opinion from the Insurance Commission relative to the issue at
hand. In its letter23 to the Insurance Commission, MMPC requested for confirmation of its position that the covered
employees cannot claim insurance benefits for a loss that had already been covered or paid by another insurance
company. However, the Office of the Insurance Commission opted not to render an opinion on the matter as the same
may become the subject of a formal complaint before it.24 On the other hand, when queried by MMPSEU,25 the
Insurance Commission, through Atty. Richard David C. Funk II (Atty. Funk) of the Claims Adjudication Division,
rendered an opinion contained in a letter,26 viz:

Ms. Cecilia L. ParasPresident

Mitsubishi Motors Phils.

[Salaried] Employees Union

Ortigas Avenue Extension,
Cainta, Rizal

Madam:

We acknowledge receipt of your letter which, to our impression, basically poses the question of whether or not
recovery of medical expenses from a Health Maintenance Organization bars recovery of the same reimbursable
amount of medical expenses under a contract of health or medical insurance.

We wish to opine that in cases of claims for reimbursement of medical expenses where there are two contracts
providing benefits to that effect, recovery may be had on both simultaneously. In the absence of an Other Insurance
provision in these coverages, the courts have uniformly held that an insured is entitled to receive the insurance benefits
without regard to the amount of total benefits provided by other insurance. (INSURANCE LAW, A Guide to
Fundamental Principles, Legal Doctrines, and Commercial Practices; Robert E. Keeton, Alau I. Widiss, p. 261). The
result is consistent with the public policy underlying the collateral source rule – that is, x x x the courts have usually
concluded that the liability of a health or accident insurer is not reduced by other possible sources of indemnification
or compensation. (ibid).

Very truly yours,

RICHARD DAVID C. FUNK II

Officer-in-Charge
Claims Adjudication Division

(SGD.)
Attorney IV

On December 3, 2002, the Voluntary Arbitrator rendered a Decision27 finding MMPC liable to pay or reimburse the
amount of hospitalization expenses already paid by other health insurance companies. The Voluntary Arbitrator held
that the employees may demand simultaneous payment from both the CBA and their dependents’ separate health
insurance without resulting to double insurance, since separate premiums were paid for each contract. He also noted
that the CBA does not prohibit reimbursement in case there are other health insurers.

Proceedings before the Court of Appeals

MMPC filed a Petition for Review with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction28 before the CA. It claimed that the Voluntary Arbitrator committed grave abuse of discretion in
not finding that recovery under both insurance policies constitutes double insurance as both had the same subject
matter, interest insured and risk or peril insured against; in relying solely on the unauthorized legal opinion of Atty.
Funk; and in not finding that the employees will be benefited twice for the same loss. In its Comment,29 MMPSEU
countered that MMPC will unjustly enrich itself and profit from the monthly premiums paid if full reimbursement is not
made.

On March 31, 2006, the CA found merit in MMPC’s Petition. It ruled that despite the lack of a provision which bars
recovery in case of payment by other insurers, the wordings of the subject provision of the CBA showed that the
parties intended to make MMPC liable only for expenses actually incurred by an employee’s qualified dependent. In
particular, the provision stipulates that payment should be made directly to the hospital and that the claim should be
supported by actual hospital and doctor’s bills. These mean that the employees shall only be paid amounts not covered
by other health insurance and is more in keeping with the principle of indemnity in insurance contracts. Besides, a
contrary interpretation would "allow unscrupulous employees to unduly profit from the x x x benefits" and shall "open
the floodgates to questionable claims x x x."30

The dispositive portion of the CA Decision31 reads:

WHEREFORE, the instant petition is GRANTED. The decision of the voluntary arbitrator dated December 3, 2002 is
REVERSED and SET ASIDE and judgment is rendered declaring that under Art. XI, Sec. 4 of the Collective Bargaining
Agreement between petitioner and respondent effective August 1, 1999 to July 31, 2002, the former’s obligation to
reimburse the Union members for the hospitalization expenses incurred by their dependents is exclusive of those paid
by the Union members to the hospital.

SO ORDERED.32

In its Motion for Reconsideration,33 MMPSEU pointed out that the alleged oppression that may be committed by
abusive employees is a mere possibility whereas the resulting losses to the employees are real. MMPSEU cited
Samsel v. Allstate Insurance Co.,34 wherein the Arizona Supreme Court explicitly ruled that an insured may recover
from separate health insurance providers, regardless of whether one of them has already paid the medical expenses
incurred. On the other hand, MMPC argued in its Comment35 that the cited foreign case involves a different set of
facts.

The CA, in its Resolution36 dated December 5, 2006, denied MMPSEU’s motion.

Hence, this Petition.

Issues

MMPSEU presented the following grounds in support of its Petition:

A.

THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT REVERSED THE DECISION DATED 03 [DECEMBER]
2002 OF THE VOLUNTARY ARBITRATOR BELOW WHEN THE SAME WAS SUPPORTED BY SUBSTANTIAL
EVIDENCE, INCLUDING THE OPINION OF THE INSURANCE COMMISSION THAT RECOVERY FROM BOTH THE
CBA AND SEPARATE HEALTH CARDS IS NOT PROHIBITED IN THE ABSENCE OF ANY SPECIFIC PROVISION
IN THE CBA.

B.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN OVERTURNING THE DECISION OF THE
VOLUNTARY ARBITRATOR WITHOUT EVEN GIVING ANY LEGAL OR JUSTIFIABLE BASIS FOR SUCH
REVERSAL.

C.
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN REFUSING TO CONSIDER OR EVEN MENTION
ANYTHING ABOUT THE AMERICAN AUTHORITIES CITED IN THE RECORDS THAT DO NOT PROHIBIT, BUT IN
FACT ALLOW, RECOVERY FROM TWO SEPARATE HEALTH PLANS.

D.

THE COURT OF APPEALS GRAVELY ERRED IN GIVING MORE IMPORTANCE TO A POSSIBLE, HENCE
MERELY SPECULATIVE, ABUSE BY EMPLOYEES OF THE BENEFITS IF DOUBLE RECOVERY WERE
ALLOWED INSTEAD OF THE REAL INJURY TO THE EMPLOYEES WHO ARE PAYING FOR THE CBA
HOSPITALIZATION BENEFITS THROUGH MONTHLY SALARY DEDUCTIONS BUT WHO MAY NOT BE ABLE TO
AVAIL OF THE SAME IF THEY OR THEIR DEPENDENTS HAVE OTHER HEALTH INSURANCE.37

MMPSEU avers that the Decision of the Voluntary Arbitrator deserves utmost respect and finality because it is
supported by substantial evidence and is in accordance with the opinion rendered by the Insurance Commission, an
agency equipped with vast knowledge concerning insurance contracts. It maintains that under the CBA, member-
employees are entitled to full reimbursement of medical expenses incurred by their dependents regardless of any
amounts paid by the latter’s health insurance provider. Otherwise, non-recovery will constitute unjust enrichment on
the part of MMPC. It avers that recovery from both the CBA and other insurance companies is allowed under their
CBA and not prohibited by law nor by jurisprudence.

Our Ruling

The Petition has no merit.

Atty. Funk erred in applying the

collateral source rule.

The Voluntary Arbitrator based his ruling on the opinion of Atty. Funk that the employees may recover benefits from
different insurance providers without regard to the amount of benefits paid by each. According to him, this view is
consistent with the theory of the collateral source rule.

As part of American personal injury law, the collateral source rule was originally applied to tort cases wherein the
defendant is prevented from benefiting from the plaintiff’s receipt of money from other sources.38 Under this rule, if an
injured person receives compensation for his injuries from a source wholly independent of the tortfeasor, the payment
should not be deducted from the damages which he would otherwise collect from the tortfeasor.39 In a recent
Decision40 by the Illinois Supreme Court, the rule has been described as "an established exception to the general rule
that damages in negligence actions must be compensatory." The Court went on to explain that although the rule
appears to allow a double recovery, the collateral source will have a lien or subrogation right to prevent such a double
recovery.41 In Mitchell v. Haldar,42 the collateral source rule was rationalized by the Supreme Court of Delaware:

The collateral source rule is ‘predicated on the theory that a tortfeasor has no interest in, and therefore no right to
benefit from monies received by the injured person from sources unconnected with the defendant’. According to the
collateral source rule, ‘a tortfeasor has no right to any mitigation of damages because of payments or compensation
received by the injured person from an independent source.’ The rationale for the collateral source rule is based upon
the quasi-punitive nature of tort law liability. It has been explained as follows:

The collateral source rule is designed to strike a balance between two competing principles of tort law: (1) a plaintiff
is entitled to compensation sufficient to make him whole, but no more; and (2) a defendant is liable for all damages
that proximately result from his wrong. A plaintiff who receives a double recovery for a single tort enjoys a windfall; a
defendant who escapes, in whole or in part, liability for his wrong enjoys a windfall. Because the law must sanction
one windfall and deny the other, it favors the victim of the wrong rather than the wrongdoer.

Thus, the tortfeasor is required to bear the cost for the full value of his or her negligent conduct even if it results in a
windfall for the innocent plaintiff. (Citations omitted)

As seen, the collateral source rule applies in order to place the responsibility for losses on the party causing them.43 Its
application is justified so that "'the wrongdoer should not benefit from the expenditures made by the injured party or
take advantage of contracts or other relations that may exist between the injured party and third persons."44 Thus, it
finds no application to cases involving no-fault insurances under which the insured is indemnified for losses by
insurance companies, regardless of who was at fault in the incident generating the losses.45 Here, it is clear that
MMPC is a no-fault insurer. Hence, it cannot be obliged to pay the hospitalization expenses of the dependents of its
employees which had already been paid by separate health insurance providers of said dependents.

The Voluntary Arbitrator therefore erred in adopting Atty. Funk’s view that the covered employees are entitled to full
payment of the hospital expenses incurred by their dependents, including the amounts already paid by other health
insurance companies based on the theory of collateral source rule.

The conditions set forth in the CBA provision indicate an intention to limit MMPC’s liability only to actual expenses
incurred by the employees’ dependents, that is, excluding the amounts paid by dependents’ other health insurance
providers.

The Voluntary Arbitrator ruled that the CBA has no express provision barring claims for hospitalization expenses
already paid by other insurers. Hence, the covered employees can recover from both. The CA did not agree, saying
that the conditions set forth in the CBA implied an intention of the parties to limit MMPC’s liability only to the extent of
the expenses actually incurred by their dependents which excludes the amounts shouldered by other health insurance
companies.

We agree with the CA. The condition that payment should be direct to the hospital and doctor implies that MMPC is
only liable to pay medical expenses actually shouldered by the employees’ dependents. It follows that MMPC’s liability
is limited, that is, it does not include the amounts paid by other health insurance providers. This condition is obviously
intended to thwart not only fraudulent claims but also double claims for the same loss of the dependents of covered
employees.

It is well to note at this point that the CBA constitutes a contract between the parties and as such, it should be strictly
construed for the purpose of limiting the amount of the employer’s liability.46 The terms of the subject provision are
clear and provide no room for any other interpretation. As there is no ambiguity, the terms must be taken in their plain,
ordinary and popular sense.47 Consequently, MMPSEU cannot rely on the rule that a contract of insurance is to be
liberally construed in favor of the insured. Neither can it rely on the theory that any doubt must be resolved in favor of
labor.

Samsel v. Allstate Insurance Co. is not

on all fours with the case at bar.

MMPSEU cannot rely on Samsel v. Allstate Insurance Co. where the Supreme Court of Arizona allowed the insured
to enjoy medical benefits under an automobile policy insurance despite being able to also recover from a separate
health insurer. In that case, the Allstate automobile policy does not contain any clause restricting medical payment
coverage to expenses actually paid by the insured nor does it specifically provide for reduction of medical payments
benefits by a coordination of benefits.48 However, in the case before us, the dependents’ group hospitalization
insurance provision in the CBA specifically contains a condition which limits MMPC’s liability only up to the extent of
the expenses that should be paid by the covered employee’s dependent to the hospital and doctor. This is evident
from the portion which states that "payment by MMPC shall be direct to the hospital and doctor."49 In contrast, the
Allstate automobile policy expressly gives Allstate the authority to pay directly to the insured person or on the latter’s
behalf all reasonable expenses actually incurred. Therefore, reliance on Samsel is unavailing because the facts
therein are different and not decisive of the issues in the present case.

To allow reimbursement of amounts paid

under other insurance policies shall
constitute double recovery which is not
sanctioned by law.

MMPSEU insists that MMPC is also liable for the amounts covered under other insurance policies; otherwise, MMPC
will unjustly profit from the premiums the employees contribute through monthly salary deductions.

This contention is unmeritorious.

To constitute unjust enrichment, it must be shown that a party was unjustly enriched in the sense that the term unjustly
could mean illegally or unlawfully.50 A claim for unjust enrichment fails when the person who will benefit has a valid
claim to such benefit.51

The CBA has provided for MMPC’s limited liability which extends only up to the amount to be paid to the hospital and
doctor by the employees’ dependents, excluding those paid by other insurers. Consequently, the covered employees
will not receive more than what is due them; neither is MMPC under any obligation to give more than what is due
under the CBA.

Moreover, since the subject CBA provision is an insurance contract, the rights and obligations of the parties must be
determined in accordance with the general principles of insurance law.52 Being in the nature of a non-life insurance
contract and essentially a contract of indemnity, the CBA provision obligates MMPC to indemnify the covered
employees’ medical expenses incurred by their dependents but only up to the extent of the expenses actually
incurred.53 This is consistent with the principle of indemnity which proscribes the insured from recovering greater than
the loss.54 Indeed, to profit from a loss will lead to unjust enrichment and therefore should not be countenanced. As
aptly ruled by the CA, to grant the claims of MMPSEU will permit possible abuse by employees.

WHEREFORE, the Petition is DENIED. The Decision dated March 31, 2006 and Resolution dated December 5, 2006
of the Court of Appeals in CA-G.R. SP No. 75630, are AFFIRMED.

SO ORDERED.