SECOND DIVISION

[G.R. No. 72110. November 16, 1990.]

ROMAN CATHOLIC BISHOP OF MALOLOS, INC., petitioner, vs. INTERMEDIATE
APPELLATE COURT, and ROBES-FRANCISCO REALTY AND DEVELOPMENT
CORPORATION, respondents.
Rodrigo Law Office for petitioner.
Antonio P. Barredo and Napoleon M. Malinas for private respondent.
SYLLABUS
1.

CIVIL LAW; CONTRACTS; TENDER OF PAYMENT; CANNOT BE PRESUMED

BY MERE INFERENCE FROM SURROUNDING CIRCUMSTANCES. We
agree with the petitioner that a finding that the private respondent had sufficient
available funds on or before the grace period for the payment of its obligation
does not constitute proof of tender of payment by the latter for its obligation
within the said period. Tender of payment involves a positive and unconditional
act by the obligor of offering legal tender currency as payment to the obligee for
the formers obligation and demanding that the latter accept the same. Thus,
tender of payment cannot be presumed by a mere inference from surrounding
circumstances. At most, sufficiency of available funds is only affirmative of the
capacity or ability of the obligor to fulfill his part of the bargain. But whether or not
the obligor avails himself of such funds to settle his outstanding account remains
to be proven by independent and credible evidence. Tender of payment
presupposes not only that the obligor is able, ready, and willing, but more so, in
the act of performing his obligation. Ab posse ad actu non vale illatio. A proof
that an act could have been done is no proof that it was actually done. The
respondent court was therefore in error to have concluded from the sheer proof
of sufficient available funds on the part of the private respondent to meet more
than the total obligation within the grace period, the alleged truth of tender of
payment. The same is a classic case of non-sequitur.

2.

ID.; ID.; ID.; NOT VALIDLY CONSTITUTED BY PAYMENT OF A CERTIFIED

PERSONAL CHECK. With regard to the third issue, granting arguendo that we
would rule affirmatively on the two preceding issues, the case of the private
respondent still can not succeed in view of the fact that the latter used a certified
personal check which is not legal tender nor the currency stipulated, and
therefore, can not constitute valid tender of payment. The first paragraph of Art.
1249 of the Civil Code provides that the payment of debts in money shall be
made in the currency stipulated, and if it is not possible to deliver such currency,
then in the currency which is legal tender in the Philippines. The Court en banc in
the recent case of Philippine Airlines v. Court of Appeals, (Promulgated on
January 30, 1990) G.R. No. L-49188, stated thus: Since a negotiable instrument
is only a substitute for money and not money, the delivery of such an instrument
does not, by itself, operate as payment (citing Sec. 189, Act 2031 on Negs.

Insts.; Art. 1249, Civil Code; Bryan London Co. v. American Bank, 7 Phil. 255;
Tan Sunco v. Santos, 9 Phil. 44; 21 R.C.L. 60, 61). A check, whether a managers
check or ordinary check, is not legal tender, and an offer of a check in payment of
a debt is not a valid tender of payment and may be refused receipt by the obligee
or creditor. Hence, where the tender of payment by the private respondent was
not valid for failure to comply with the requisite payment in legal tender or
currency stipulated within the grace period and as such, was validly refused
receipt by the petitioner, the subsequent consignation did not operate to
discharge the former from its obligation to the latter.
3.

ID.; ID.; OBLIGATIONS ARISING THEREFROM HAVE THE FORCE OF LAW

BETWEEN THE CONTRACTING PARTIES. Art. 1159 of the Civil Code of the
Philippines provides that obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good faith. And
unless the stipulations in said contract are contrary to law, morals, good customs,
public order, or public policy, the same are binding as between the parties.
(Article 1409, Civil Code, par. 1). What the private respondent should have done
if it was indeed desirous of complying with its obligations would have been to pay
the petitioner within the grace period and obtain a receipt of such payment duly
issued by the latter. Thereafter, or, allowing a reasonable time, the private
respondent could have demanded from the petitioner the execution of the
necessary documents. In case the petitioner refused, the private respondent
could have had always resorted to judicial action for the legitimate enforcement
of its right. For the failure of the private respondent to undertake this more
judicious course of action, it alone shall suffer the consequences.

4.

REMEDIAL LAW; APPEAL; FACTUAL FINDINGS OF TRIAL COURT AS A

RULE, SHOULD BE ACCORDED FULL CONSIDERATION AND RESPECT.
On the contrary, the respondent court finds itself remiss in overlooking or taking
lightly the more important findings of fact made by the trial court which we have
earlier mentioned and which as a rule, are entitled to great weight on appeal and
should be accorded full consideration and respect and should not be disturbed
unless for strong and cogent reasons. (Natividad del Rosario Vda. de Alberto v.
Court of Appeals, G.R. 29759, May 18, 1989; Matabuena v. Court of Appeals,
G.R. 76542, May 5, 1989).

5.

ID.; SUPREME COURT; INSTANCES WHEN THE COURT HAS TO REVIEW

THE EVIDENCE. While the Court is not a trier of facts, yet, when the findings
of fact of the Court of Appeals are at variance with those of the trial court,
(Robleza v. Court of Appeals, G.R. 80364, June 28, 1989) or when the inference
of the Court of Appeals from its findings of fact is manifestly mistaken, (Reynolds
Philippine Corporation v. Court of Appeals, G.R. 38187, January 17, 1987) the
Court has to review the evidence in order to arrive at the correct findings based
on the record.

DECISION
SARMIENTO, J p:
This is a petition for review on certiorari which seeks the reversal and setting aside of
the decision 1 of the Court of Appeals, 2 the dispositive portion of which reads:
WHEREFORE, the decision appealed from is hereby reversed and set aside and
another one entered for the plaintiff ordering the defendant-appellee Roman Catholic
Bishop of Malolos, Inc. to accept the balance of P124,000.00 being paid by plaintiffappellant and thereafter to execute in favor of Robes-Francisco Realty Corporation a
registerable Deed of Absolute Sale over 20,655 square meters portion of that parcel of
land situated in San Jose del Monte, Bulacan described in OCT No. 575 (now Transfer
Certificates of Title Nos. T-169493, 169494,169495 and 169496) of the Register of
Deeds of Bulacan. In case of refusal of the defendant to execute the Deed of Final Sale,
the clerk of court is directed to execute the said document. Without pronouncement as
to damages and attorneys fees. Costs against the defendant-appellee.
The case at bar arose from a complaint filed by the private respondent, then plaintiff,
against the petitioner, then defendant, in the Court of First Instance (now Regional Trial
Court) of Bulacan, at Sta. Maria, Bulacan, 4 for specific performance with damages,
based on a contract 5 executed on July 7, 1971.
The property subject matter of the contract consists of a 20,655 sq.m.-portion, out of the
30,655 sq.m. total area, of a parcel of land covered by Original Certificate of Title No.
575 of the Province of Bulacan, issued and registered in the name of the petitioner
which it sold to the private respondent for and in consideration of P123,930.00. cdphil
The crux of the instant controversy lies in the compliance or non-compliance by the
private respondent with the provision for payment to the petitioner of the principal
balance of P100,000.00 and the accrued interest of P24,000.00 within the grace period.
A chronological narration of the antecedent facts is as follows:
On July 7, 1971, the subject contract over the land in question was executed between
the petitioner as vendor and the private respondent through its then president, Mr.
Carlos F. Robes, as vendee, stipulating for a downpayment of P23,930.00 and the
balance of P100,000.00 plus 12% interest per annum to be paid within four (4) years
from execution of the contract, that is, on or before July 7, 1975. The contract likewise
provides for cancellation, forfeiture of previous payments, and reconveyance of the land
in question in case the private respondent would fail to complete payment within the
said period.
On March 12, 1973, the private respondent, through its new president, Atty. Adalia
Francisco, addressed a letter 6 to Father Vasquez, parish priest of San Jose Del Monte,
Bulacan, requesting to be furnished with a copy of the subject contract and the
supporting documents.
On July 17, 1975, admittedly after the expiration of the stipulated period for payment,
the same Atty. Francisco wrote the petitioner a formal request 7 that her company be

allowed to pay the principal amount of P100,000.00 in three (3) equal installments of six
(6) months each with the first installment and the accrued interest of P24,000.00 to be
paid immediately upon approval of the said request.
On July 29, 1975, the petitioner, through its counsel, Atty. Carmelo Fernandez, formally
denied the said request of the private respondent, but granted the latter a grace period
of five (5) days from the receipt of the denial 8 to pay the total balance of P124,000.00,
otherwise, the provisions of the contract regarding cancellation, forfeiture, and
reconveyance would be implemented.
On August 4, 1975, the private respondent, through its president, Atty. Francisco, wrote
9 the counsel of the petitioner requesting an extension of 30 days from said date to fully
settle its account. The counsel for the petitioner, Atty. Fernandez, received the said letter
on the same day. Upon consultation with the petitioner in Malolos, Bulacan, Atty.
Fernandez, as instructed, wrote the private respondent a letter 10 dated August 7, 1975
informing the latter of the denial of the request for an extension of the grace period.
Consequently, Atty. Francisco, the private respondents president, wrote a letter 11
dated August 22, 1975, directly addressed to the petitioner, protesting the alleged
refusal of the latter to accept tender of payment purportedly made by the former on
August 5, 1975, the last day of the grace period. In the same letter of August 22, 1975,
received on the following day by the petitioner, the private respondent demanded the
execution of a deed of absolute sale over the land in question and after which it would
pay its account in full, otherwise, judicial action would be resorted to.
On August 27, 1975, the petitioners counsel, Atty. Fernandez, wrote a reply 12 to the
private respondent stating the refusal of his client to execute the deed of absolute sale
due to its (private respondents) failure to pay its full obligation. Moreover, the petitioner
denied that the private respondent had made any tender of payment whatsoever within
the grace period. In view of this alleged breach of contract, the petitioner cancelled the
contract and considered all previous payments forfeited and the land as ipso facto
reconveyed.
From a perusal of the foregoing facts, we find that both the contending parties have
conflicting versions on the main question of tender of payment.
The trial court, in its ratiocination, preferred not to give credence to the evidence
presented by the private respondent. According to the trial court:
. . . What made Atty. Francisco suddenly decide to pay plaintiffs obligation on August 5,
1975, go to defendants office at Malolos, and there tender her payment, when her
request of August 4, 1975 had not yet been acted upon until August 7, 1975? If Atty.
Francisco had decided to pay the obligation and had available funds for the purpose on
August 5, 1975, then there would have been no need for her to write defendant on
August 4, 1975 to request an extension of time. Indeed, Atty. Franciscos claim that she
made a tender of payment on August 5, 1975 such alleged act, considered in relation
to the circumstances both antecedent and subsequent thereto, being not in accord with
the normal pattern of human conduct is not worthy of credence.

The trial court likewise noted the inconsistency in the testimony of Atty. Francisco,
president of the private respondent, who earlier testified that a certain Mila Policarpio
accompanied her on August 5, 1975 to the office of the petitioner. Another person,
however, named Aurora Oracion, was presented to testify as the secretary-companion
of Atty. Francisco on that same occasion.
Furthermore, the trial court considered as fatal the failure of Atty. Francisco to present in
court the certified personal check allegedly tendered as payment or, at least, its xerox
copy, or even bank records thereof. Finally, the trial court found that the private
respondent had insufficient funds available to fulfill the entire obligation considering that
the latter, through its president, Atty. Francisco, only had a savings account deposit of
P64,840.00, and although the latter had a money-market placement of P300,000.00, the
same was to mature only after the expiration of the 5-day grace period.
Based on the above considerations, the trial court rendered a decision in favor of the
petitioner, the dispositive portion of which reads:
WHEREFORE, finding plaintiff to have failed to make out its case, the court hereby
declares the subject contract cancelled and plaintiffs downpayment of P23,930.00
forfeited in favor of defendant, and hereby dismisses the complaint; and on the
counterclaim, the Court orders plaintiff to pay defendant.
(1)
Attorneys fees of P10,000.00;
(2)
Litigation expenses of P2,000.00; and
(3)
Judicial costs.
SO ORDERED. 14
Not satisfied with the said decision, the private respondent appealed to the respondent
Intermediate Appellate Court (now Court of Appeals) assigning as reversible errors,
among others, the findings of the trial court that the available funds of the private
respondent were insufficient and that the latter did not effect a valid tender of payment
and consignation.
The respondent court, in reversing the decision of the trial court, essentially relies on the
following findings:
. . . We are convinced from the testimony of Atty. Adalia Francisco and her witnesses
that in behalf of the plaintiff-appellant they have a total available sum of P364,840.00 at
her and at the plaintiffs disposal on or before August 4, 1975 to answer for the
obligation of the plaintiff-appellant. It was not correct for the trial court to conclude that
the plaintiff-appellant had only about P64,840.00 in savings deposit on or before August
5, 1975, a sum not enough to pay the outstanding account of P124,000.00. The plaintiffappellant, through Atty. Francisco proved and the trial court even acknowledged that
Atty. Adalia Francisco had about P300,000.00 in money market placement. The error of
the trial court has in concluding that the money market placement of P300,000.00 was
out of reach of Atty. Francisco. But as testified to by Mr. Catalino Estrella, a
representative of the Insular Bank of Asia and America, Atty. Francisco could withdraw

anytime her money market placement and place it at her disposal, thus proving her
financial capability of meeting more than the whole of P124,000.00 then due per
contract. This situation, We believe, proves the truth that Atty. Francisco apprehensive
that her request for a 30-day grace period would be denied, she tendered payment on
August 4, 1975 which offer defendant through its representative and counsel refused to
receive. . .15 (Emphasis supplied)
In other words, the respondent court, finding that the private respondent had sufficient
available funds, ipso facto concluded that the latter had tendered payment. Is such
conclusion warranted by the facts proven? The petitioner submits that it is not. LexLib
Hence, this petition. 16
The petitioner presents the following issues for resolution:
xxx
xxx
xxx
A.
Is a finding that private respondent had sufficient available funds on or before the
grace period for the payment of its obligation proof that it (private respondent) did tender
of (sic) payment for its said obligation within said period?
xxx
xxx
xxx
B.
Is it the legal obligation of the petitioner (as vendor) to execute a deed of
absolute sale in favor of the private respondent (as vendee) before the latter has
actually paid the complete consideration of the sale where the contract between and
executed by the parties stipulates
That upon complete payment of the agreed consideration by the herein VENDEE, the
VENDOR shall cause the execution of a Deed of Absolute Sale in favor of the
VENDEE.
xxx
xxx
xxx.
C.
Is an offer of a check a valid tender of payment of an obligation under a contract
which stipulates that the consideration of the sale is in Philippine Currency? 17
We find the petition impressed with merit.
With respect to the first issue, we agree with the petitioner that a finding that the private
respondent had sufficient available funds on or before the grace period for the payment
of its obligation does not constitute proof of tender of payment by the latter for its
obligation within the said period. Tender of payment involves a positive and
unconditional act by the obligor of offering legal tender currency as payment to the
obligee for the formers obligation and demanding that the latter accept the same. Thus,
tender of payment cannot be presumed by a mere inference from surrounding
circumstances. At most, sufficiency of available funds is only affirmative of the capacity
or ability of the obligor to fulfill his part of the bargain. But whether or not the obligor
avails himself of such funds to settle his outstanding account remains to be proven by
independent and credible evidence. Tender of payment presupposes not only that the
obligor is able, ready, and willing, but more so, in the act of performing his obligation. Ab
posse ad actu non vale illatio. A proof that an act could have been done is no proof that
it was actually done.
The respondent court was therefore in error to have concluded from the sheer proof of
sufficient available funds on the part of the private respondent to meet more than the

total obligation within the grace period, the alleged truth of tender of payment. The same
is a classic case of non-sequitur.
On the contrary, the respondent court finds itself remiss in overlooking or taking lightly
the more important findings of fact made by the trial court which we have earlier
mentioned and which as a rule, are entitled to great weight on appeal and should be
accorded full consideration and respect and should not be disturbed unless for strong
and cogent reasons.
While the Court is not a trier of facts, yet, when the findings of fact of the Court of
Appeals are at variance with those of the trial court, 19 or when the inference of the
Court of Appeals from its findings of fact is manifestly mistaken, 20 the Court has to
review the evidence in order to arrive at the correct findings based on the record.
Apropos the second issue raised, although admittedly the documents for the deed of
absolute sale had not been prepared, the subject contract clearly provides that the full
payment by the private respondent is an a priori condition for the execution of the said
documents by the petitioner.
That upon complete payment of the agreed consideration by the herein VENDEE, the
VENDOR shall cause the execution of a Deed of Absolute Sale in favor of the VENDEE.
The private respondent is therefore in estoppel to claim otherwise as the latter did in the
testimony in cross-examination of its president, Atty. Francisco, which reads:
Q
Now, you mentioned, Atty. Francisco, that you wanted the defendant to execute
the final deed of sale before you would given (sic) the personal certified check in
payment of your balance, is that correct?
A
Yes, sir. 22
xxx
xxx
xxx
Art. 1159 of the Civil Code of the Philippines provides that obligations arising from
contracts have the force of law between the contracting parties and should be complied
with in good faith. And unless the stipulations in said contract are contrary to law,
morals, good customs, public order, or public policy, the same are binding as between
the parties.
What the private respondent should have done if it was indeed desirous of complying
with its obligations would have been to pay the petitioner within the grace period and
obtain a receipt of such payment duly issued by the latter. Thereafter, or, allowing a
reasonable time, the private respondent could have demanded from the petitioner the
execution of the necessary documents. In case the petitioner refused, the private
respondent could have had always resorted to judicial action for the legitimate
enforcement of its right. For the failure of the private respondent to undertake this more
judicious course of action, it alone shall suffer the consequences.
With regard to the third issue, granting arguendo that we would rule affirmatively on the
two preceding issues, the case of the private respondent still can not succeed in view of
the fact that the latter used a certified personal check which is not legal tender nor the
currency stipulated, and therefore, can not constitute valid tender of payment. The first

paragraph of Art. 1249 of the Civil Code provides that the payment of debts in money
shall be made in the currency stipulated, and if it is not possible to deliver such
currency, then in the currency which is legal tender in the Philippines.
The Court en banc in the recent case of Philippine Airlines v. Court of Appeals, 24 G.R.
No. L-49188, stated thus:
Since a negotiable instrument is only a substitute for money and not money, the delivery
of such an instrument does not, by itself, operate as payment (citing Sec. 189, Act 2031
on Negs. Insts.; Art. 1249, Civil Code; Bryan London Co. v. American Bank, 7 Phil. 255;
Tan Sunco v. Santos, 9 Phil. 44; 21 R.C.L. 60, 61). A check, whether a managers check
or ordinary check, is not legal tender, and an offer of a check in payment of a debt is not
a valid tender of payment and may be refused receipt by the obligee or creditor.
Hence, where the tender of payment by the private respondent was not valid for failure
to comply with the requisite payment in legal tender or currency stipulated within the
grace period and as such, was validly refused receipt by the petitioner, the subsequent
consignation did not operate to discharge the former from its obligation to the latter.
In view of the foregoing, the petitioner in the legitimate exercise of its rights pursuant to
the subject contract, did validly order therefore the cancellation of the said contract, the
forfeiture of the previous payment, and the reconveyance ipso facto of the land in
question.
WHEREFORE, the petition for review on certiorari is GRANTED and the DECISION of
the respondent court promulgated on April 25, 1985 is hereby SET ASIDE and
ANNULLED and the DECISION of the trial court dated May 25, 1981 is hereby
REINSTATED. Costs against the private respondent.
SO ORDERED.
Melencio-Herrera, Paras and Regalado, JJ ., concur.
Padilla, J ., took no part.

SECOND DIVISION
[G.R. No. L-48747. September 30, 1982.]
ANGEL JEREOS, petitioner, vs. HON. COURT OF APPEALS, SOLEDAD
RODRIGUEZ, FELICIA R. REYES, JOSE RODRIGUEZ, JESUS RODRIGUEZ, Jr.,
ROBERTO RODRIGUEZ, FRANCISCO RODRIGUEZ, TERESITA RODRIGUEZ,
MANUEL RODRIGUEZ, ANTONIO RODRIGUEZ, DOMINGO PARDORLA, Jr., and
NARCISO JARAVILLA, respondents.
Felix D. Bacabac for petitioner.
Lorenzo E. Coloso for respondent Pardorla, Jr.
Sixto P. Dimaisip for respondents Rodriguezes.

SYNOPSIS
A judge and his wife were hit by a passenger jeepney resulting in the death of the judge
and injuries to his wife. The driver of said jeepney was convicted for homicide thru
reckless imprudence. Thereafter, the judges widow filed an action for damages against
the driver, the operator (the registered owner) and the actual owner (petitioner herein),
of the jeepney. Petitioner denied ownership of the jeepney and presented a deed of sale
as evidence. The lower court held only the driver and the operator jointly and severally
liable for damages. On appeal, the Court of Appeals, finding that the sale relied on by
the petitioner was fictitious, held him, together with the driver and the operator, jointly
and severally liable. Hence this petition. Petitioner claims,that the Court of Appeals is
bound by the findings of fact of the lower court; and that it is the registered owner and
not the actual owner of the jeepney who is jointly and severally liable with the driver for
damages incurred by third persons as a consequence of death or injuries sustained in
the operation of said vehicle.
The Supreme Court denied the petition and held that since the trial court relied solely on
the deed of sale and ignored the testimonies of witnesses, the Court of Appeals had
reason to exercise its appellate jurisdiction over the lower court and modify the findings
of fact of said court; and that the actual owner of the vehicle is not exempted from
liability since the right of the registered owner tobe indemnified by the actual owner of
the amount he may be required to pay as damages for the injury caused is recognized.
SYLLABUS
1.

REMEDIAL LAW; APPEALS; FINDINGS OF FACT BY THE COURT OF

APPEALS IS GENERALLY BINDING ON THE SUPREME COURT; EXCEPTION.
The established rule in this jurisdiction is that findings of fact of the Court of
Appeals when supported by substantial evidence. is not reviewable on appeal by
certiorari. Said findings of the appellate court are final and cannot be disturbed by
the Supreme Court. However, where the findings of the Court of Appeals are
contrary to those of the trial court, a minute scrutiny by the Supreme Court is in
order and resort to duly proven evidence becomes necessary.

2.

ID.; ID.; FINDINGS OF FACT BY THE TRIAL COURT REVIEWABLE BY THE

COURT OF APPEALS. The Court of Appeals found that the trial court, in
exempting Angel Jereos from liability, relied solely on the deed of sale ignoring
altogether the testimony of Flora Jaravilla (wife of the driver) and of appellee
Domingo Pardorla, Jr. Hence, it had reason to exercise its appellate jurisdiction
over the lower court and notify the findings of fact of the trial court.

3.

CIVIL LAW; DAMAGES; PERSONS LIABLE THEREFOR FOR DEATH OR

INJURY RESULTING FROM VEHICULAR ACCIDENT. While the Supreme
Court in Vargas vs. Langcay (116 Phil. 478) ruled that the registered owner or

operator of a passenger vehicle is jointly and severally liable with the driver of the
said vehicle for damages incurred by passengers or third persons as a
consequence of injuries or death sustained in the operation of the said vehicle,
the Court did so to correct the erroneous findings of the Court of Appeals that the
liability of the registered owner or operator of a passenger vehicle is merely
subsidiary, as contemplated in Art. 103 of the Revised Penal Code. In no case
did the Court exempt the actual owner of the passenger vehicle from liability. On
the contrary, it adhered to the rule followed in the cases of Erezo vs. Jepte, (102
Phil. 103.), Tamayo vs. Aquino, (105 Phil. 949.) and De Peralta vs. Mangusang
(120 Phil. 582.), among others, that the registered owner or operator has the
right to be indemnified by the real or actual owner of the amount that he may be
required to pay as damage for the injury caused.
4.

ID; ID.; ID.; REMEDY OF REGISTERED OWNER AGAINST ACTUAL OWNER

OF VEHICLE. The right of the registered owner or operator to be indemnified
being recognized, his recovery may be made in any form either by a crossclaim, third party complaint, or an independent action. The result is the same.

DECISION
CONCEPCION, JR., J p:
Review on certiorari of the decision rendered by the respondent Court of Appeals in
case CA-G.R. No. 60232-R, entitled: Soledad Rodriguez, et al., plaintiffs-appellants,
versus Narciso Jaravilla, et al., defendants; Narciso Jaravilla and Domingo Pardorla, Jr.,
defendants-appellants; Angel Jereos, defendant-appellee.
Private respondent, Domingo Pardorla, Jr. is the holder of certificate of public
convenience for the operation of a jeepney line in Iloilo City. On February 23, 1971, one
of his jeepneys, driven by Narciso Jaravilla, hit Judge Jesus S. Rodriguez and his wife,
Soledad, while they were crossing Bonifacio Drive, Iloilo City, causing injuries to them,
which resulted in the death of Judge Rodriguez. Narciso Jaravilla was prosecuted and,
on his plea of guilty, was convicted of the crime of Homicide and Physical Injuries
through Reckless Imprudence and sentenced accordingly. Thereafter, Soledad
Rodriguez and her children filed with the Court of First Instance of Iloilo an action for
damages against Narciso Jaravilla, Domingo Pardorla, Jr., and Angel Jereos, the actual
owner of the jeepney.
Angel Jereos denied ownership of the jeepney in question and claimed that the plaintiffs
have no cause of action against him.
Domingo Pardorla, Jr., upon the other hand, claimed that he was only the franchise
owner and has nothing to do with the actual operation and supervision of the passenger
jeepney in question which is under the actual control, operation and supervision of
Angel Jereos who operates the same under the kabit system.

After appropriate proceedings, the Court of First Instance of Iloilo rendered judgment on
October 24, 1978, ordering Narciso Jaravilla and Domingo Pardorla, Jr. to pay, jointly
and severally, damages to the plaintiffs. Angel Jereos was exonerated for the reason
that the Court found no credible evidence to support plaintiffs as well as defendant
Pardorlas contention that defendant Jereos was the operator of the passenger jeepney
in question at the time of the accident which happened on February 3, 1971, defendant
Jereos sold on November 19, 1970 the said passenger jeepney to Flaviana Tanoy as
shown in the notarized deed of sale (Exh. 1-Jereos) who later transferred ownership
thereof to defendant Pardorla, Jr., whose registration certificate thereof is marked Exh.
3-B-Jereos was issued by the Land Transportation Commission on November 24,
1970.
Both plaintiffs and the defendants Narciso Jaravilla and Domingo Pardorla, Jr.,
appealed to the Court of Appeals. The plaintiffs contended that the trial court erred in
not finding the defendant Angel Jereos jointly and severally liable with the other
defendants for the damages incurred by them. The defendants Narciso Jaravilla and
Domingo Pardorla, Jr., however, did not file their brief.
On July 10, 1978, the Court of Appeals rendered a decision, modifying the decision of
the trial court, and holding that Angel Jereos is jointly and severally liable with the other
defendants for the damages awarded by the trial court to the plaintiffs, for the reason
that the rule stated in the case of Vargas vs. Langcay (6 SCRA 174) that it is the
registered owner of a passenger vehicle who is jointly and severally liable with the driver
for damages incurred by passengers or third persons as a consequence of injuries or
death sustained in the operation of said motor vehicle, which is invoked by Angel
Jereos, cannot be applied in this case since the sale of the jeepney by Angel Jereos to
his own sister-in-law, Flaviana Tanoy, and its registration in the name of Domingo
Pardorla, Jr., were simulated, fictitious transactions, parts and parcel of a strategem, to
place Angel Jereos beyond the reach of his creditors past or future.
Angel Jereos appeals from this decision. He contends that the respondent Court of
Appeals erred in holding that the sale of the jeep to Flaviana Tanoy was simulated and
fictitious and hence, it erred in finding him the actual or real owner of the ill-fated
jeepney.
The respondents claim, however, that the issue of whether or not the sale of the vehicle
in question to Flaviana Tanoy and thereafter, to Domingo Pardorla, Jr. is simulated or
fictitious, is one of fact and may not be reviewed by this Court on appeal.
But, the petitioner counters that the findings of fact of the respondent appellate court is
reviewable because the said findings are contrary to those of the trial court which were
based upon am evaluation of the credibility of witnesses and should not have been
disturbed by the appellate court, following the rule that trial courts are in a better
position to judge and evaluate the evidence presented in the course of the trial.
The established rule in this jurisdiction is that findings of fact of the Court of Appeals,
when supported by substantial evidence, is not reviewable on appeal by certiorari. Said

findings of the appellate court are final and cannot be disturbed by the Supreme Court.
However, where the findings of the Court of Appeals are contrary to those of the trial
court, a minute scrutiny by the Supreme Court is in order and resort to duly proven
evidence becomes necessary.
In the instant case, the Court of Appeals found that the trial court, in exempting Angel
Jereos from liability, relied solely on the deed of sale (Exh. 1-Jereos) ignoring
altogether the testimony of Flora Jaravilla (wife of the driver) and of appellee Domingo
Pardorla, Jr. Hence, it had reason to exercise its appellate jurisdiction over the lower
courts and modify the findings of fact of the trial court.
The respondent Domingo Pardorla, Jr., in whose line the jeepney in question was
registered under the kabit system declared that:
. . . this jeep was formerly attached to Imelda Mirasol then one of the units of Imelda
Mirasol met an accident which cost many lives. Now, Angel Jereos was afraid that later
on his jeep might be attached since there is a pending case against Mirasol. Now
according to Angel Jereos he went to see Imelda Mirasol and asked her to execute a
deed of sale in favor of Angel Jereos. Now, when Angel Jereos came to me and asked if
there is still vacancy in my line I told him there is. He told me that his jeep will be
transferred under my line. I told him yes, prepare the papers. Now, after he has
prepared the papers and he came back to me he told me he will just put it under the
name of Flaviana Tanoy, his sister-in-law but I asked him that cannot be, what is your
reason. According to him so that later on it can be hardly traced when something wrong
with the case of Imelda Mirasol comes, then I will just put it under the name of Flaviana
Tanoy, my sister-in-law but the jeep is still mine that is why I am the one who is paying
you.
His testimony is corroborated by Adriano Saladero, an employee of Pardorla, Jr., to
whom Angel Jereos pays the monthly dues for the registration of his jeepneys under the
certificate of public convenience issued to Pardorla, Jr., and by Flora Jaravilla, the wife
of the driver of the jeepney, who categorically stated that the jeepney driven by her
husband, Narciso Jaravilla, was owned by Angel Jereos to whom they pay a daily
boundary of P16.80; and that they park the said jeepney near the house of Angel
Jereos after returning it at night.
Finally, the petitioner, citing the case of Vargas vs. Langcay, 7 contends that it is the
registered owner of the vehicle, rather than the actual owner, who must be jointly and
severally liable with the driver of the passenger vehicle for damages incurred by third
persons as a consequence of injuries or death sustained in the operation of said
vehicle.
The contention is devoid of merit. While the Court therein ruled that the registered
owner or operator of a passenger vehicle is jointly and severally liable with the driver of
the said vehicle for damages incurred by passengers or third persons as a
consequence of injuries or death sustained in the operation of the said vehicle, the
Court did so to correct the erroneous findings of the Court of Appeals that the liability of
the registered owner or operator of a passenger vehicle is merely subsidiary, as

contemplated in Art. 103 of the Revised Penal Code. In no case did the Court exempt
the actual owner of the passenger vehicle from liability. On the contrary, it adhered to
the rule followed in the cases of Erezo vs. Jepte, 8 Tamayo vs. Aquino, 9 and De
Peralta vs Mangusang, 10 among others, that the registered owner or operator has the
right to be indemnified by the real or actual owner of the amount that he may be
required to pay as damage for the injury caused.
The right to be indemnified being recognized, recovery by the registered owner or
operator may be made in any form either by a cross-claim, third-party complaint, or
an independent action. The result is the same.
WHEREFORE, the petition should be, as it is hereby, DENIED. With costs against the
petitioner.
SO ORDERED.
Barredo, (Chairman), Aquino, Guerrero, Abad Santos, De Castro and Escolin, JJ.,
concur.