G.R.

No. L-48006 July 8, 1942 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
FAUSTO BARREDO, petitioner, action against Pedro Fontanilla, the person criminally liable, Barredo cannot be held
vs. responsible in the case. The petitioner's brief states on page 10:
SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.
... The Court of Appeals holds that the petitioner is being sued for his failure to exercise
Celedonio P. Gloria and Antonio Barredo for petitioner. all the diligence of a good father of a family in the selection and supervision of Pedro
Jose G. Advincula for respondents. 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
BOCOBO, J.: 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
This case comes up from the Court of Appeals which held the petitioner herein, Fausto II of Title 16 of Book IV of the Civil Code, in the precise words of article 1903 of the Civil
Barredo, liable in damages for the death of Faustino Garcia caused by the negligence of Code itself, is applicable only to "those (obligations) arising from wrongful or negligent
Pedro Fontanilla, a taxi driver employed by said Fausto Barredo. acts or commission not punishable by law.

At about half past one in the morning of May 3, 1936, on the road between Malabon and The gist of the decision of the Court of Appeals is expressed thus:
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 ... We cannot agree to the defendant's contention. The liability sought to be imposed
carretela was overturned, and one of its passengers, 16-year-old boy Faustino Garcia, upon him in this action is not a civil obligation arising from a felony or a misdemeanor
suffered injuries from which he died two days later. A criminal action was filed against (the crime of Pedro Fontanilla,), but an obligation imposed in article 1903 of the Civil Code
Fontanilla in the Court of First Instance of Rizal, and he was convicted and sentenced to by reason of his negligence in the selection or supervision of his servant or employee.
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 The pivotal question in this case is whether the plaintiffs may bring this separate civil
action be reserved. The Court of Appeals affirmed the sentence of the lower court in the action against Fausto Barredo, thus making him primarily and directly, responsible under
criminal case. Severino Garcia and Timotea Almario, parents of the deceased on March 7, article 1903 of the Civil Code as an employer of Pedro Fontanilla. The defendant maintains
1939, brought an action in the Court of First Instance of Manila against Fausto Barredo as that Fontanilla's negligence being punishable by the Penal Code, his (defendant's) liability
the sole proprietor of the Malate Taxicab and employer of Pedro Fontanilla. On July 8, as an employer is only subsidiary, according to said Penal code, but Fontanilla has not
1939, the Court of First Instance of Manila awarded damages in favor of the plaintiffs for been sued in a civil action and his property has not been exhausted. To decide the main
P2,000 plus legal interest from the date of the complaint. This decision was modified by issue, we must cut through the tangle that has, in the minds of many confused and
the Court of Appeals by reducing the damages to P1,000 with legal interest from the time jumbled together delitos and cuasi delitos, or crimes under the Penal Code and fault or
the action was instituted. It is undisputed that Fontanilla 's negligence was the cause of negligence under articles 1902-1910 of the Civil Code. This should be done, because
the mishap, as he was driving on the wrong side of the road, and at high speed. As to justice may be lost in a labyrinth, unless principles and remedies are distinctly envisaged.
Barredo's responsibility, the Court of Appeals found: 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
... It is admitted that defendant is Fontanilla's employer. There is proof that he exercised previous cases as well as by the solemn clarity of the consideration in several sentences
the diligence of a good father of a family to prevent damage. (See p. 22, appellant's brief.) of the Supreme Tribunal of Spain.
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 Authorities support the proposition that a quasi-delict or "culpa aquiliana " is a separate
appeared in the records of the Bureau of Public Works available to be public and to legal institution under the Civil Code with a substantivity all its own, and individuality that
himself. Therefore, he must indemnify plaintiffs under the provisions of article 1903 of is entirely apart and independent from delict or crime. Upon this principle and on the
the Civil Code. wording and spirit article 1903 of the Civil Code, the primary and direct responsibility of
employers may be safely anchored.
 Finally, teachers or directors of arts trades are liable for any damages caused by their
The pertinent provisions of the Civil Code and Revised Penal Code are as follows: pupils or apprentices while they are under their custody.

CIVIL CODE 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
ART. 1089 Obligations arise from law, from contracts and quasi-contracts, and damage.
from acts and omissions which are unlawful or in which any kind of fault or negligence
intervenes. ART. 1904. Any person who pays for damage caused by his employees may recover from
the latter what he may have paid.
x x x x x x x x x
REVISED PENAL CODE
ART. 1092. Civil obligations arising from felonies or misdemeanors shall be governed by
the provisions of the Penal Code. ART. 100. Civil liability of a person guilty of felony. Every person criminally liable for a
felony is also civilly liable.
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 ART. 101. Rules regarding civil liability in certain cases. The exemption from criminal
of this book. 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
x x x x x x x x x enforced to the following rules:

ART 1902. Any person who by an act or omission causes damage to another by his fault First. In cases of subdivision, 1, 2 and 3 of article 12 the civil liability for acts committed
or negligence shall be liable for the damage so done. 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
ART. 1903. The obligation imposed by the next preceding article is enforcible, not only for upon those having such person under their legal authority or control, unless it appears
personal acts and omissions, but also for those of persons for whom another is that there was no fault or negligence on their part.
responsible.
Should there be no person having such insane, imbecile or minor under his authority, legal
The father and in, case of his death or incapacity, the mother, are liable for any damages guardianship, or control, or if such person be insolvent, said insane, imbecile, or minor
caused by the minor children who live with them. shall respond with their own property, excepting property exempt from execution, in
accordance with the civil law.
Guardians are liable for damages done by minors or incapacitated persons subject to their
authority and living with them. 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
Owners or directors of an establishment or business are equally liable for any damages may have received.
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 courts shall determine, in their sound discretion, the proportionate amount for which
each one shall be liable.
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 When the respective shares can not be equitably determined, even approximately, or
of doing the act performed, in which case the provisions of the next preceding article shall when the liability also attaches to the Government, or to the majority of the inhabitants
be applicable. 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 It will thus be seen that while the terms of articles 1902 of the Civil Code seem to be broad
by special laws or regulations. 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
Third. In cases falling within subdivisions 5 and 6 of article 12, the persons using violence 365 of the Revised Penal Code punishes not only reckless but even simple imprudence or
or causing the fear shall be primarily liable and secondarily, or, if there be no such persons, negligence, the fault or negligence under article 1902 of the Civil Code has apparently
those doing the act shall be liable, saving always to the latter that part of their property been crowded out. It is this overlapping that makes the "confusion worse confounded."
exempt from execution. 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
ART. 102. Subsidiary civil liability of innkeepers, tavern keepers and proprietors of the responsibility for cuasi-delitos or culpa extra-contractual. The same negligent act
establishment. In default of persons criminally liable, innkeepers, tavern keepers, and causing damages may produce civil liability arising from a crime under article 100 of the
any other persons or corporation shall be civilly liable for crimes committed in their Revised Penal Code, or create an action for cuasi-delito or culpa extra-contractual under
establishments, in all cases where a violation of municipal ordinances or some general or articles 1902-1910 of the Civil Code.
special police regulation shall have been committed by them or their employees.
The individuality of cuasi-delito or culpa extra-contractual looms clear and unmistakable.
Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or This legal institution is of ancient lineage, one of its early ancestors being the Lex Aquilia
theft within their houses lodging therein, or the person, or for the payment of the value in the Roman Law. In fact, in Spanish legal terminology, this responsibility is often referred
thereof, provided that such guests shall have notified in advance the innkeeper himself, to as culpa aquiliana. The Partidas also contributed to the genealogy of the present fault
or the person representing him, of the deposit of such goods within the inn; and shall or negligence under the Civil Code; for instance, Law 6, Title 15, of Partida 7, says: "Tenudo
furthermore have followed the directions which such innkeeper or his representative may es de fazer emienda, porque, como quier que el non fizo a sabiendas en dao al otro, pero
have given them with respect to the care of and vigilance over such goods. No liability acaescio por su culpa."
shall attach in case of robbery with violence against or intimidation against or intimidation
of persons unless committed by the innkeeper's employees. 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-
ART. 103. Subsidiary civil liability of other persons. The subsidiary liability established contractual: "los actos . . . en que intervenga cualquier genero de culpa o negligencia."
in the next preceding article shall also apply to employers, teachers, persons, and Then article 1093 provides that this kind of obligation shall be governed by Chapter II of
corporations engaged in any kind of industry for felonies committed by their servants, Title XVI of Book IV, meaning articles 1902-0910. This portion of the Civil Code is
pupils, workmen, apprentices, or employees in the discharge of their duties. exclusively devoted to the legal institution of culpa aquiliana.

x x x x x x x x x Some of the differences between crimes under the Penal Code and the culpa aquiliana or
cuasi-delito under the Civil Code are:
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 1. That crimes affect the public interest, while cuasi-delitos are only of private concern.
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 2. That, consequently, the Penal Code punishes or corrects the criminal act, while the Civil
mayor in its minimum and medium periods shall be imposed. Code, by means of indemnification, merely repairs the damage.

Any person who, by simple imprudence or negligence, shall commit an act which would 3. That delicts are not as broad as quasi-delicts, because the former are punished only if
otherwise constitute a grave felony, shall suffer the penalty of arresto mayor in its there is a penal law clearly covering them, while the latter, cuasi-delitos, include all acts
medium and maximum periods; if it would have constituted a less serious felony, the in which "any king of fault or negligence intervenes." However, it should be noted that
penalty of arresto mayor in its minimum period shall be imposed." 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, Estas, para el caso actual (prescindiendo de culpas contractuales, que no vendrian a
p. 728.) cuento y que tiene otro regimen), dimanan, segun el articulo 1902 del Codigo Civil, de
toda accion u omision, causante de daos o perjuicios, en que intervenga culpa o
Let us now ascertain what some jurists say on the separate existence of quasi-delicts and negligencia. Es trivial que acciones semejantes son ejercitadas ante los Tribunales de lo
the employer's primary and direct liability under article 1903 of the Civil Code. 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
Dorado Montero in his essay on "Responsibilidad" in the "Enciclopedia Juridica Espaola" politicos del mismo, desenvuelven y ordenan la materia de responsabilidades civiles
(Vol. XXVII, p. 414) says: 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
El concepto juridico de la responsabilidad civil abarca diversos aspectos y comprende a intempestivo un paralelo entre aquellas ordenaciones, y la de la obligacion de indemnizar
diferentes personas. Asi, existe una responsabilidad civil propiamente dicha, que en a titulo de culpa civil; pero viene al caso y es necesaria una de las diferenciaciones que en
ningun casl lleva aparejada responsabilidad criminal alguna, y otra que es consecuencia el tal paralelo se notarian.
indeclinable de la penal que nace de todo delito o falta."
Los articulos 20 y 21 del Codigo Penal, despues de distribuir a su modo las
The juridical concept of civil responsibility has various aspects and comprises different responsabilidades civiles, entre los que sean por diversos conceptos culpables del delito
persons. Thus, there is a civil responsibility, properly speaking, which in no case carries o falta, las hacen extensivas a las empresas y los establecimientos al servicio de los cuales
with it any criminal responsibility, and another which is a necessary consequence of the estan los delincuentes; pero con caracter subsidiario, o sea, segun el texto literal, en
penal liability as a result of every felony or misdemeanor." 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
Maura, an outstanding authority, was consulted on the following case: There had been a por los actos y omisiones propios, sino por los de aquellas personas de quienes se debe
collision between two trains belonging respectively to the Ferrocarril Cantabrico and the responder; personas en la enumeracion de las cuales figuran los dependientes y
Ferrocarril del Norte. An employee of the latter had been prosecuted in a criminal case, empleados de los establecimientos o empresas, sea por actos del servicio, sea con ocasion
in which the company had been made a party as subsidiarily responsible in civil damages. de sus funciones. Por esto acontece, y se observa en la jurisprudencia, que las empresas,
The employee had been acquitted in the criminal case, and the employer, the Ferrocarril despues de intervenir en las causas criminales con el caracter subsidiario de su
del Norte, had also been exonerated. The question asked was whether the Ferrocarril responsabilidad civil por razon del delito, son demandadas y condenadas directa y
Cantabrico could still bring a civil action for damages against the Ferrocarril del Norte. aisladamente, cuando se trata de la obligacion, ante los tribunales civiles.
Maura's opinion was in the affirmative, stating in part (Maura, Dictamenes, Vol. 6, pp.
511-513): 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
Quedando las cosas asi, a proposito de la realidad pura y neta de los hechos, todavia suerte que tienen unos y otros normas de fondo en distintos cuerpos legales, y diferentes
menos parece sostenible que exista cosa juzgada acerca de la obligacion civil de modos de proceder, habiendose, por aadidura, abstenido de asistir al juicio criminal la
indemnizar los quebrantos y menoscabos inferidos por el choque de los trenes. El titulo Compaia del Ferrocarril Cantabrico, que se reservo ejercitar sus acciones, parece
en que se funda la accion para demandar el resarcimiento, no puede confundirse con las innegable que la de indemnizacion por los daos y perjuicios que le irrogo el choque, no
responsabilidades civiles nacidas de delito, siquiera exista en este, sea el cual sea, una estuvo sub judice ante el Tribunal del Jurado, ni fue sentenciada, sino que permanecio
culpa rodeada de notas agravatorias que motivan sanciones penales, mas o menos intacta, al pronunciarse el fallo de 21 de marzo. Aun cuando el veredicto no hubiese sido
severas. La lesion causada por delito o falta en los derechos civiles, requiere restituciones, de inculpabilidad, mostrose mas arriba, que tal accion quedaba legitimamente reservada
reparaciones o indemnizaciones, que cual la pena misma ataen al orden publico; por tal para despues del proceso; pero al declararse que no existio delito, ni responsabilidad
motivo vienen encomendadas, de ordinario, al Ministerio Fiscal; y claro es que si por esta dimanada de delito, materia unica sobre que tenian jurisdiccion aquellos juzgadores, se
via se enmiendan los quebrantos y menoscabos, el agraviado excusa procurar el ya redobla el motivo para la obligacion civil ex lege, y se patentiza mas y mas que la accion
conseguido desagravio; pero esta eventual coincidencia de los efectos, no borra la para pedir su cumplimiento permanece incolume, extraa a la cosa juzgada.
diversidad originaria de las acciones civiles para pedir indemnizacion.

As things are, apropos of the reality pure and simple of the facts, it seems less tenable Seeing that the title of this obligation is different, and the separation between punitive
that there should be res judicata with regard to the civil obligation for damages on justice and the civil courts being a true postulate of our judicial system, so that they have
account of the losses caused by the collision of the trains. The title upon which the action different fundamental norms in different codes, as well as different modes of procedure,
for reparation is based cannot be confused with the civil responsibilities born of a crime, and inasmuch as the Compaa del Ferrocarril Cantabrico has abstained from taking part
because there exists in the latter, whatever each nature, a culpa surrounded with in the criminal case and has reserved the right to exercise its actions, it seems undeniable
aggravating aspects which give rise to penal measures that are more or less severe. The that the action for indemnification for the losses and damages caused to it by the collision
injury caused by a felony or misdemeanor upon civil rights requires restitutions, was not sub judice before the Tribunal del Jurado, nor was it the subject of a sentence,
reparations, or indemnifications which, like the penalty itself, affect public order; for this but it remained intact when the decision of March 21 was rendered. Even if the verdict
reason, they are ordinarily entrusted to the office of the prosecuting attorney; and it is had not been that of acquittal, it has already been shown that such action had been
clear that if by this means the losses and damages are repaired, the injured party no legitimately reserved till after the criminal prosecution; but because of the declaration of
longer desires to seek another relief; but this coincidence of effects does not eliminate the non-existence of the felony and the non-existence of the responsibility arising from
the peculiar nature of civil actions to ask for indemnity. 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
Such civil actions in the present case (without referring to contractual faults which are not that the action for its enforcement remain intact and is not res judicata.
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 Laurent, a jurist who has written a monumental work on the French Civil Code, on which
intervenes. It is unimportant that such actions are every day filed before the civil courts the Spanish Civil Code is largely based and whose provisions on cuasi-delito or culpa extra-
without the criminal courts interfering therewith. Articles 18 to 21 and 121 to 128 of the contractual are similar to those of the Spanish Civil Code, says, referring to article 1384 of
Penal Code, bearing in mind the spirit and the social and political purposes of that Code, the French Civil Code which corresponds to article 1903, Spanish Civil 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 The action can be brought directly against the person responsible (for another), without
with legislative precedent of the Corpus Juris. It would be unwarranted to make a detailed including the author of the act. The action against the principal is accessory in the sense
comparison between the former provisions and that regarding the obligation to that it implies the existence of a prejudicial act committed by the employee, but it is not
indemnify on account of civil culpa; but it is pertinent and necessary to point out to one subsidiary in the sense that it can not be instituted till after the judgment against the
of such differences. 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
Articles 20 and 21 of the Penal Code, after distriburing in their own way the civil Civil Law, Spanish translation, Vol. 20, pp. 734-735.)
responsibilities among those who, for different reasons, are guilty of felony or
misdemeanor, make such civil responsibilities applicable to enterprises and Amandi, in his "Cuestionario del Codigo Civil Reformado" (Vol. 4, pp. 429, 430), declares
establishments for which the guilty parties render service, but with subsidiary character, that the responsibility of the employer is principal and not subsidiary. He writes:
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 Cuestion 1. La responsabilidad declarada en el articulo 1903 por las acciones u omisiones
1903 says: "The obligation imposed by the next preceding article is demandable, not only de aquellas personas por las que se debe responder, es subsidiaria? es principal? Para
for personal acts and omissions, but also for those of persons for whom another is contestar a esta pregunta es necesario saber, en primer lugar, en que se funda el precepto
responsible." Among the persons enumerated are the subordinates and employees of legal. Es que realmente se impone una responsabilidad por una falta ajena? Asi parece a
establishments or enterprises, either for acts during their service or on the occasion of primera vista; pero semejante afirmacion seria contraria a la justicia y a la maxima
their functions. It is for this reason that it happens, and it is so observed in judicial universal, segun la que las faltas son personales, y cada uno responde de aquellas que le
decisions, that the companies or enterprises, after taking part in the criminal cases son imputables. La responsabilidad de que tratamos se impone con ocasion de un delito
because of their subsidiary civil responsibility by reason of the crime, are sued and o culpa, pero no por causa de ellos, sino por causa del causi delito, esto es, de la
sentenced directly and separately with regard to the obligation, before the civil courts. imprudencia o de la negligencia del padre, del tutor, del dueo 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
dao, la ley presume que el padre, el tutor, el maestro, etc., han cometido una falta de (article 19), and for the latter, subsidiary (articles 20 and 21); but in the scheme of the
negligencia para prevenir o evitar el dao. Esta falta es la que la ley castiga. No hay, pues, civil law, in the case of article 1903, the responsibility should be understood as direct,
responsabilidad por un hecho ajeno, sino en la apariencia; en realidad la responsabilidad according to the tenor of that articles, for precisely it imposes responsibility "for the acts
se exige por un hecho propio. La idea de que esa responsabilidad sea subsidiaria es, por of those persons for whom one should be responsible."
lo tanto, completamente inadmisible.
Coming now to the sentences of the Supreme Tribunal of Spain, that court has upheld the
Question No. 1. Is the responsibility declared in article 1903 for the acts or omissions of principles above set forth: that a quasi-delict or culpa extra-contractual is a separate and
those persons for who one is responsible, subsidiary or principal? In order to answer this distinct legal institution, independent from the civil responsibility arising from criminal
question it is necessary to know, in the first place, on what the legal provision is based. Is liability, and that an employer is, under article 1903 of the Civil Code, primarily and
it true that there is a responsibility for the fault of another person? It seems so at first directly responsible for the negligent acts of his employee.
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 One of the most important of those Spanish decisions is that of October 21, 1910. In that
him. The responsibility in question is imposed on the occasion of a crime or fault, but not case, Ramon Lafuente died as the result of having been run over by a street car owned by
because of the same, but because of the cuasi-delito, that is to say, the imprudence or the "compaia Electric Madrilea de Traccion." The conductor was prosecuted in a
negligence of the father, guardian, proprietor or manager of the establishment, of the criminal case but he was acquitted. Thereupon, the widow filed a civil action against the
teacher, etc. Whenever anyone of the persons enumerated in the article referred to street car company, paying for damages in the amount of 15,000 pesetas. The lower court
(minors, incapacitated persons, employees, apprentices) causes any damage, the law awarded damages; so the company appealed to the Supreme Tribunal, alleging violation
presumes that the father, guardian, teacher, etc. have committed an act of negligence in of articles 1902 and 1903 of the Civil Code because by final judgment the non-existence
not preventing or avoiding the damage. It is this fault that is condemned by the law. It is, of fault or negligence had been declared. The Supreme Court of Spain dismissed the
therefore, only apparent that there is a responsibility for the act of another; in reality the appeal, saying:
responsibility exacted is for one's own act. The idea that such responsibility is subsidiary
is, therefore, completely inadmissible. Considerando que el primer motivo del recurso se funda en el equivocado supuesto de
que el Tribunal a quo, al condonar a la compaia Electrica Madrilea al pago del dao
Oyuelos, in his "Digesto: Principios, Doctrina y Jurisprudencia, Referentes al Codigo Civil causado con la muerte de Ramon La fuente Izquierdo, desconoce el valor y efectos
Espaol," says in Vol. VII, p. 743: 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
Es decir, no responde de hechos ajenos, porque se responde solo de su propia culpa, diferentes as pectos, y como la de lo criminal declrao dentro de los limites de su
doctrina del articulo 1902; mas por excepcion, se responde de la ajena respecto de competencia que el hecho de que se trata no era constitutivo de delito por no haber
aquellas personas con las que media algun nexo o vinculo, que motiva o razona la mediado descuido o negligencia graves, lo que no excluye, siendo este el unico
responsabilidad. Esta responsabilidad, es directa o es subsidiaria? En el orden penal, el fundamento del fallo absolutorio, el concurso de la culpa o negligencia no califacadas,
Codigo de esta clase distingue entre menores e incapacitados y los demas, declarando fuente de obligaciones civiles segun el articulo 1902 del Codigo, y que alcanzan, segun el
directa la primera (articulo 19) y subsidiaria la segunda (articulos 20 y 21); pero en el 1903, netre otras perosnas, a los Directores de establecimientos o empresas por los daos
orden civil, en el caso del articulo 1903, ha de entenderse directa, por el tenor del articulo causados por sus dependientes en determinadas condiciones, es manifesto que la de lo
que impone la responsabilidad precisamente "por los actos de aquellas personas de civil, al conocer del mismo hehco baho este ultimo aspecto y al condenar a la compaia
quienes se deba responder." recurrente a la indemnizacion del dao causado por uno de sus empleados, lejos de
infringer los mencionados textos, en relacion con el articulo 116 de la Ley de
That is to say, one is not responsible for the acts of others, because one is liable only for Enjuciamiento Criminal, se ha atenido estrictamente a ellos, sin invadir atribuciones
his own faults, this being the doctrine of article 1902; but, by exception, one is liable for ajenas a su jurisdiccion propia, ni contrariar en lo mas minimo el fallo recaido en la causa.
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 Considering that the first ground of the appeal is based on the mistaken supposition that
Penal Code distinguishes between minors and incapacitated persons on the one hand, the trial court, in sentencing the Compaia Madrilea to the payment of the damage
and other persons on the other, declaring that the responsibility for the former is direct 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 bar, be held liable for damages in a civil suit filed against him because his taxi driver had
the same act, when it is a fact that the two jurisdictions had taken cognizance of the same been convicted. The degree of negligence of the conductor in the Spanish case cited was
act in its different aspects, and as the criminal jurisdiction declared within the limits of its less than that of the taxi driver, Fontanilla, because the former was acquitted in the
authority that the act in question did not constitute a felony because there was no grave previous criminal case while the latter was found guilty of criminal negligence and was
carelessness or negligence, and this being the only basis of acquittal, it does no exclude sentenced to an indeterminate sentence of one year and one day to two years of prision
the co-existence of fault or negligence which is not qualified, and is a source of civil correccional.
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 (See also Sentence of February 19, 1902, which is similar to the one above quoted.)
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 In the Sentence of the Supreme Court of Spain, dated February 14, 1919, an action was
company, appellant herein, to pay an indemnity for the damage caused by one of its brought against a railroad company for damages because the station agent, employed by
employees, far from violating said legal provisions, in relation with article 116 of the Law the company, had unjustly and fraudulently, refused to deliver certain articles consigned
of Criminal Procedure, strictly followed the same, without invading attributes which are to the plaintiff. The Supreme Court of Spain held that this action was properly under
beyond its own jurisdiction, and without in any way contradicting the decision in that article 1902 of the Civil Code, the court saying:
cause. (Emphasis supplied.)
Considerando que la sentencia discutida reconoce, en virtud de los hechos que consigna
It will be noted, as to the case just cited: con relacion a las pruebas del pleito: 1., que las expediciones facturadas por la compaia
ferroviaria a la consignacion del actor de las vasijas vacias que en su demanda relacionan
First. That the conductor was not sued in a civil case, either separately or with the street tenian como fin el que este las devolviera a sus remitentes con vinos y alcoholes; 2., que
car company. This is precisely what happens in the present case: the driver, Fontanilla, llegadas a su destino tales mercanias no se quisieron entregar a dicho consignatario por
has not been sued in a civil action, either alone or with his employer. el jefe de la estacion sin motivo justificado y con intencion dolosa, y 3., que la falta de
entrega de estas expediciones al tiempo de reclamarlas el demandante le originaron
Second. That the conductor had been acquitted of grave criminal negligence, but the daos y perjuicios en cantidad de bastante importancia como expendedor al por mayor
Supreme Tribunal of Spain said that this did not exclude the co-existence of fault or que era de vinos y alcoholes por las ganancias que dejo de obtener al verse privado de
negligence, which is not qualified, on the part of the conductor, under article 1902 of the servir los pedidos que se le habian hecho por los remitentes en los envases:
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 Considerando que sobre esta base hay necesidad de estimar los cuatro motivos que
been held primarily liable for civil damages, and Barredo would have been held integran este recurso, porque la demanda inicial del pleito a que se contrae no contiene
subsidiarily liable for the same. But the plaintiffs are directly suing Barredo, on his primary accion que nazca del incumplimiento del contrato de transporte, toda vez que no se funda
responsibility because of his own presumed negligence which he did not overcome en el retraso de la llegada de las mercancias ni de ningun otro vinculo contractual entre
under article 1903. Thus, there were two liabilities of Barredo: first, the subsidiary one las partes contendientes, careciendo, por tanto, de aplicacion el articulo 371 del Codigo
because of the civil liability of the taxi driver arising from the latter's criminal negligence; de Comercio, en que principalmente descansa el fallo recurrido, sino que se limita a pedir
and, second, Barredo's primary liability as an employer under article 1903. The plaintiffs la reparaction de los daos y perjuicios producidos en el patrimonio del actor por la
were free to choose which course to take, and they preferred the second remedy. In so injustificada y dolosa negativa del porteador a la entrega de las mercancias a su nombre
doing, they were acting within their rights. It might be observed in passing, that the consignadas, segun lo reconoce la sentencia, y cuya responsabilidad esta claramente
plaintiff choose the more expeditious and effective method of relief, because Fontanilla sancionada en el articulo 1902 del Codigo Civil, que obliga por el siguiente a la Compaia
was either in prison, or had just been released, and besides, he was probably without demandada como ligada con el causante de aquellos por relaciones de caracter
property which might be seized in enforcing any judgment against him for damages. economico y de jurarquia administrativa.

Third. That inasmuch as in the above sentence of October 21, 1910, the employer was Considering that the sentence, in question recognizes, in virtue of the facts which it
held liable civilly, notwithstanding the acquittal of the employee (the conductor) in a declares, in relation to the evidence in the case: (1) that the invoice issued by the railroad
previous criminal case, with greater reason should Barredo, the employer in the case at 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 This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093
refused by the station agent without justification and with fraudulent intent, and (3) that of the Civil Code makes obligations arising from faults or negligence not punished by the
the lack of delivery of these goods when they were demanded by the plaintiff caused him law, subject to the provisions of Chapter II of Title XVI. Section 1902 of that chapter reads:
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 "A person who by an act or omission causes damage to another when there is fault or
to him by the consignors of the receptacles: negligence shall be obliged to repair the damage so done.

Considering that upon this basis there is need of upholding the four assignments of error, "SEC. 1903. The obligation imposed by the preceeding article is demandable, not only for
as the original complaint did not contain any cause of action arising from non-fulfillment personal acts and omissions, but also for those of the persons for whom they should be
of a contract of transportation, because the action was not based on the delay of the responsible.
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 "The father, and on his death or incapacity, the mother, is liable for the damages caused
applicable; but it limits to asking for reparation for losses and damages produced on the by the minors who live with them.
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 x x x x x x x x x
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 "Owners or directors of an establishment or enterprise are equally liable for the damages
the person who caused the damage by relations of economic character and by caused by their employees in the service of the branches in which the latter may be
administrative hierarchy. (Emphasis supplied.) employed or in the performance of their duties.

The above case is pertinent because it shows that the same act may come under both the x x x x x x x x x
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 "The liability referred to in this article shall cease when the persons mentioned therein
held to be also a proper subject of a civil action under article 1902 of the Civil Code. It is prove that they employed all the diligence of a good father of a family to avoid the
also to be noted that it was the employer and not the employee who was being sued. damage."

Let us now examine the cases previously decided by this Court. 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
In the leading case of Rakes vs. Atlantic Gulf and Pacific Co. (7 Phil., 359, 362-365 [year or maintain safe appliances for his workmen. His obligation therefore is one 'not punished
1907]), the trial court awarded damages to the plaintiff, a laborer of the defendant, by the laws' and falls under civil rather than criminal jurisprudence. But the answer may
because the latter had negligently failed to repair a tramway in consequence of which the be a broader one. We should be reluctant, under any conditions, to adopt a forced
rails slid off while iron was being transported, and caught the plaintiff whose leg was construction of these scientific codes, such as is proposed by the defendant, that would
broken. This Court held: 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
It is contended by the defendant, as its first defense to the action that the necessary prosecution of the proper criminal offender, and render recovery doubtful by reason of
conclusion from these collated laws is that the remedy for injuries through negligence lies the strict rules of proof prevailing in criminal actions. Even if these articles had always
only in a criminal action in which the official criminally responsible must be made stood alone, such a construction would be unnecessary, but clear light is thrown upon
primarily liable and his employer held only subsidiarily to him. According to this theory their meaning by the provisions of the Law of Criminal Procedure of Spain (Ley de
the plaintiff should have procured the arrest of the representative of the company Enjuiciamiento Criminal), which, though never in actual force in these Islands, was
accountable for not repairing the track, and on his prosecution a suitable fine should have formerly given a suppletory or explanatory effect. Under article 111 of this law, both
been imposed, payable primarily by him and secondarily by his employer. 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 of the contract for passage, while that to the injured bystander would originate in the
action once started, the civil remedy should be sought therewith, unless it had been negligent act itself.
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 In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the mother of the 8 of 9-year-old
enforced only on private complaint, the penal action thereunder should be extinguished. child Salvador Bona brought a civil action against Moreta to recover damages resulting
These provisions are in harmony with those of articles 23 and 133 of our Penal Code on from the death of the child, who had been run over by an automobile driven and managed
the same subject. 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:
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 If it were true that the defendant, in coming from the southern part of Solana Street, had
criminal nor even to be suspended thereby, except as expressly provided in the law. to stop his auto before crossing Real Street, because he had met vehicles which were
Where an individual is civilly liable for a negligent act or omission, it is not required that going along the latter street or were coming from the opposite direction along Solana
the injured party should seek out a third person criminally liable whose prosecution must Street, it is to be believed that, when he again started to run his auto across said Real
be a condition precedent to the enforcement of the civil right. 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
Under article 20 of the Penal Code the responsibility of an employer may be regarded as had completely reached a clear way on Solana Street. But, as the child was run over by
subsidiary in respect of criminal actions against his employees only while they are in the auto precisely at the entrance of Solana Street, this accident could not have occurred
process of prosecution, or in so far as they determine the existence of the criminal act if the auto had been running at a slow speed, aside from the fact that the defendant, at
from which liability arises, and his obligation under the civil law and its enforcement in the moment of crossing Real Street and entering Solana Street, in a northward direction,
the civil courts is not barred thereby unless by the election of the injured person. could have seen the child in the act of crossing the latter street from the sidewalk on the
Inasmuch as no criminal proceeding had been instituted, growing our of the accident in right to that on the left, and if the accident had occurred in such a way that after the
question, the provisions of the Penal Code can not affect this action. This construction automobile had run over the body of the child, and the child's body had already been
renders it unnecessary to finally determine here whether this subsidiary civil liability in stretched out on the ground, the automobile still moved along a distance of about 2
penal actions has survived the laws that fully regulated it or has been abrogated by the meters, this circumstance shows the fact that the automobile entered Solana Street from
American civil and criminal procedure now in force in the Philippines. 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
The difficulty in construing the articles of the code above cited in this case appears from death of the child would not have occurred.
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 It will be noticed that the defendant in the above case could have been prosecuted in a
offenses in articles 568 and 590 of the Penal Code. It has been shown that the liability of criminal case because his negligence causing the death of the child was punishable by the
an employer arising out of his relation to his employee who is the offender is not to be Penal Code. Here is therefore a clear instance of the same act of negligence being a proper
regarded as derived from negligence punished by the law, within the meaning of articles subject-matter either of a criminal action with its consequent civil liability arising from a
1902 and 1093. More than this, however, it cannot be said to fall within the class of acts crime or of an entirely separate and independent civil action for fault or negligence under
unpunished by the law, the consequence of which are regulated by articles 1902 and 1903 article 1902 of the Civil Code. Thus, in this jurisdiction, the separate individually of a cuasi-
of the Civil Code. The acts to which these articles are applicable are understood to be delito or culpa aquiliana under the Civil Code has been fully and clearly recognized, even
those not growing out of pre-existing duties of the parties to one another. But where with regard to a negligent act for which the wrongdoer could have been prosecuted and
relations already formed give rise to duties, whether springing from contract or quasi convicted in a criminal case and for which, after such a conviction, he could have been
contract, then breaches of those duties are subject to articles 1101, 1103, and 1104 of sued for this civil liability arising from his crime.
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 Years later (in 1930) this Court had another occasion to apply the same doctrine. In Bernal
his employee would arise out of the contract of employment, that to the passengers out 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. that he had shown that the exercised the care of a good father of a family, thus
On the evening of April 10, 1925, the Good Friday procession was held in Tacloban, Leyte. overcoming the presumption of negligence under article 1903. This Court said:
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 As to selection, the defendant has clearly shown that he exercised the care and diligence
two others were passing along Gran Capitan Street in front of the offices of the Tacloban of a good father of a family. He obtained the machine from a reputable garage and it was,
Electric & Ice Plant, Ltd., owned by defendants J. V. House, when an automobile appeared so far as appeared, in good condition. The workmen were likewise selected from a
from the opposite direction. The little girl, who was slightly ahead of the rest, was so standard garage, were duly licensed by the Government in their particular calling, and
frightened by the automobile that she turned to run, but unfortunately she fell into the apparently thoroughly competent. The machine had been used but a few hours when the
street gutter where hot water from the electric plant was flowing. The child died that accident occurred and it is clear from the evidence that the defendant had no notice,
same night from the burns. The trial courts dismissed the action because of the either actual or constructive, of the defective condition of the steering gear.
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 The legal aspect of the case was discussed by this Court thus:
who at the time of the tragic occurrence was the holder of the franchise for the electric
plant. This Court said in part: Article 1903 of the Civil Code not only establishes liability in cases of negligence, but also
provides when the liability shall cease. It says:
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 "The liability referred to in this article shall cease when the persons mentioned therein
plaintiffs. It is from this point that a majority of the court depart from the stand taken by prove that they employed all the diligence of a good father of a family to avoid the
the trial judge. The mother and her child had a perfect right to be on the principal street damage."
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. From this article two things are apparent: (1) That when an injury is caused by the
No one could foresee the coincidence of an automobile appearing and of a frightened negligence of a servant or employee there instantly arises a presumption of law that there
child running and falling into a ditch filled with hot water. The doctrine announced in the was negligence on the part of the matter or employer either in the selection of the servant
much debated case of Rakes vs. Atlantic Gulf and Pacific Co. ([1907]), 7 Phil., 359), still or employee, or in supervision over him after the selection, or both; and (2) that
rule. Article 1902 of the Civil Code must again be enforced. The contributory negligence presumption is juris tantum and not juris et de jure, and consequently, may be rebutted.
of the child and her mother, if any, does not operate as a bar to recovery, but in its It follows necessarily that if the employer shows to the satisfaction of the court that in
strictest sense could only result in reduction of the damages. 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.
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 This theory bases the responsibility of the master ultimately on his own negligence and
for reckless or simple negligence and not only punished but also made civilly liable not on that of his servant.
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. 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
In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915), the action was for damages for so negligently driven an automobile, which was operated by defendant as a public vehicle,
the death of the plaintiff's daughter alleged to have been caused by the negligence of the that said automobile struck and damaged the plaintiff's motorcycle. This Court, applying
servant in driving an automobile over the child. It appeared that the cause of the mishap article 1903 and following the rule in Bahia vs. Litonjua and Leynes, said in part (p. 41)
was a defect in the steering gear. The defendant Leynes had rented the automobile from that:
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 The master is liable for the negligent acts of his servant where he is the owner or director
to the plaintiff. On appeal this Court reversed the judgment as to Leynes on the ground of a business or enterprise and the negligent acts are committed while the servant is
engaged in his master's employment as such owner.
 liable. The main defense was that the defendant had exercised the diligence of a good
Another case which followed the decision in Bahia vs. Litonjua and Leynes was Cuison vs. father of a family to prevent the damage. The lower court rendered judgment in favor of
Norton & Harrison Co., 55 Phil., 18 (year 1930). The latter case was an action for damages the plaintiff. This Court held, in part, that this case was governed by the Penal Code,
brought by Cuison for the death of his seven-year-old son Moises. The little boy was on saying:
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 With this preliminary point out of the way, there is no escaping the conclusion that the
Francisco Bautista, who were working for Ora, an employee of defendant Norton & provisions of the Penal Code govern. The Penal Code in easily understandable language
Harrison Co., pleaded guilty to the crime of homicide through reckless negligence and authorizes the determination of subsidiary liability. The Civil Code negatives its
were sentenced accordingly. This Court, applying articles 1902 and 1903, held: 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
The basis of civil law liability is not respondent superior but the relationship of pater misdemeanor falling under article 604 of the Penal Code. The act of the motorman was
familias. This theory bases the liability of the master ultimately on his own negligence and not a wrongful or negligent act or omission not punishable by law. Accordingly, the civil
not on that of his servant. (Bahia vs. Litonjua and Leynes [1915], 30 Phil., 624; Cangco vs. obligation connected up with the Penal Code and not with article 1903 of the Civil Code.
Manila Railroad Co. [1918], 38 Phil., 768.) 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
In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517 (year 1930) the a case of civil negligence.
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): x x x x x x x x x

The evidence shows that Captain Lasa at the time the plaintiff's wharf collapsed was a Our deduction, therefore, is that the case relates to the Penal Code and not to the Civil
duly licensed captain, authorized to navigate and direct a vessel of any tonnage, and that Code. Indeed, as pointed out by the trial judge, any different ruling would permit the
the appellee contracted his services because of his reputation as a captain, according to master to escape scot-free by simply alleging and proving that the master had exercised
F. C. Cadwallader. This being so, we are of the opinion that the presumption of liability all diligence in the selection and training of its servants to prevent the damage. That
against the defendant has been overcome by the exercise of the care and diligence of a would be a good defense to a strictly civil action, but might or might not be to a civil action
good father of a family in selecting Captain Lasa, in accordance with the doctrines laid either as a part of or predicated on conviction for a crime or misdemeanor. (By way of
down by this court in the cases cited above, and the defendant is therefore absolved from parenthesis, it may be said further that the statements here made are offered to meet
all liability. 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, 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 It is not clear how the above case could support the defendant's proposition, because the
directly responsible in damages under article 1903, in relation to article 1902, of the Civil Court of Appeals based its decision in the present case on the defendant's primary
Code. 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
Let us now take up the Philippine decisions relied upon by the defendant. We study first, Electric Co., supra, is predicated on an entirely different theory, which is the subsidiary
City of Manila vs. Manila Electric Co., 52 Phil., 586 (year 1928). A collision between a truck liability of an employer arising from a criminal act of his employee, whereas the
of the City of Manila and a street car of the Manila Electric Co. took place on June 8, 1925. foundation of the decision of the Court of Appeals in the present case is the employer's
The truck was damaged in the amount of P1,788.27. Sixto Eustaquio, the motorman, was primary liability under article 1903 of the Civil Code. We have already seen that this is a
prosecuted for the crime of damage to property and slight injuries through reckless proper and independent remedy.
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 Arambulo vs. Manila Electric Co. (55 Phil., 75), is another case invoked by the defendant.
to collect the indemnity from Eustaquio, the City of Manila filed an action against the A motorman in the employ of the Manila Electric Company had been convicted o
Manila Electric Company to obtain payment, claiming that the defendant was subsidiarily 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 Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple
liability of the defendant as employer under the Penal Code. The defendant attempted to negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to
show that it had exercised the diligence of a good father of a family in selecting the fault or negligence not punished by law, according to the literal import of article 1093 of
motorman, and therefore claimed exemption from civil liability. But this Court held: 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
In view of the foregoing considerations, we are of opinion and so hold, (1) that the degree of negligence even the slightest would have to be indemnified only through
exemption from civil liability established in article 1903 of the Civil Code for all who have the principle of civil liability arising from a crime. In such a state of affairs, what sphere
acted with the diligence of a good father of a family, is not applicable to the subsidiary would remain for cuasi-delito or culpa aquiliana? We are loath to impute to the lawmaker
civil liability provided in article 20 of the Penal Code. 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
The above case is also extraneous to the theory of the defendant in the instant case, that giveth life. We will not use the literal meaning of the law to smother and render
because the action there had for its purpose the enforcement of the defendant's almost lifeless a principle of such ancient origin and such full-grown development as culpa
subsidiary liability under the Penal Code, while in the case at bar, the plaintiff's cause of aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910
action is based on the defendant's primary and direct responsibility under article 1903 of of the Spanish Civil Code.
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 Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable
1903 of the Civil Code is different in character from his subsidiary liability under the Penal doubt is required, while in a civil case, preponderance of evidence is sufficient to make
Code. 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
In trying to apply the two cases just referred to, counsel for the defendant has failed to evidence. In such cases, the defendant can and should be made responsible in a civil
recognize the distinction between civil liability arising from a crime, which is governed by action under articles 1902 to 1910 of the Civil Code. Otherwise, there would be many
the Penal Code, and the responsibility for cuasi-delito or culpa aquiliana under the Civil instances of unvindicated civil wrongs. Ubi jus ibi remedium.
Code, and has likewise failed to give the importance to the latter type of civil action.
Thirdly, to hold that there is only one way to make defendant's liability effective, and that
The defendant-petitioner also cites Francisco vs. Onrubia (46 Phil., 327). That case need is, to sue the driver and exhaust his (the latter's) property first, would be tantamount to
not be set forth. Suffice it to say that the question involved was also civil liability arising compelling the plaintiff to follow a devious and cumbersome method of obtaining relief.
from a crime. Hence, it is as inapplicable as the two cases above discussed. 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
The foregoing authorities clearly demonstrate the separate individuality of cuasi-delitos 1903 of the Civil Code. Our view of the law is more likely to facilitate remedy for civil
or culpa aquiliana under the Civil Code. Specifically they show that there is a distinction wrongs, because the procedure indicated by the defendant is wasteful and productive of
between civil liability arising from criminal negligence (governed by the Penal Code) and delay, it being a matter of common knowledge that professional drivers of taxis and
responsibility for fault or negligence under articles 1902 to 1910 of the Civil Code, and similar public conveyance usually do not have sufficient means with which to pay
that the same negligent act may produce either a civil liability arising from a crime under damages. Why, then, should the plaintiff be required in all cases to go through this
the Penal Code, or a separate responsibility for fault or negligence under articles 1902 to roundabout, unnecessary, and probably useless procedure? In construing the laws, courts
1910 of the Civil Code. Still more concretely, the authorities above cited render it have endeavored to shorten and facilitate the pathways of right and justice.
inescapable to conclude that the employer in this case the defendant-petitioner is
primarily and directly liable under article 1903 of the Civil Code. 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
The legal provisions, authors, and cases already invoked should ordinarily be sufficient to employees should be carefully chosen and supervised in order to avoid injury to the
dispose of this case. But inasmuch as we are announcing doctrines that have been little public. It is the masters or employers who principally reap the profits resulting from the
understood in the past, it might not be inappropriate to indicate their foundations. 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-32599 June 29, 1979 on the other hand, tried to show that, after overtaking the truck driven by Montoya, he
flashed a signal indicating his intention to turn left towards the poblacion of Marilao but
EDGARDO E. MENDOZA, petitioner was stopped at the intersection by a policeman who was directing traffic; that while he
vs. was at a stop position, his jeep was bumped at the rear by the truck driven by Montova
HON. ABUNDIO Z. ARRIETA, Presiding Judge of Branch VIII, Court of First Instance of causing him to be thrown out of the jeep, which then swerved to the left and hit
Manila, FELINO TIMBOL, and RODOLFO SALAZAR, respondents. petitioner's car, which was coming from the opposite direction.

David G. Nitafan for petitioner. On July 31, 1970, the Court of First Instance of Bulacan, Branch V, Sta. Maria, rendered
judgment, stating in its decretal portion:
Arsenio R. Reyes for respondent Timbol.
IN VIEW OF THE FOREGOING, this Court finds the accused Freddie Montoya GUILTY
Armando M. Pulgado for respondent Salazar. beyond reasonable doubt of the crime of damage to property thru reckless imprudence
in Crime. Case No. SM-227, and hereby sentences him to pay a fine of P972.50 and to
indemnify Rodolfo Salazar in the same amount of P972.50 as actual damages, with
MELENCIO-HERRERA, J: subsidiary imprisonment in case of insolvency, both as to fine and indemnity, with costs.

Petitioner, Edgardo Mendoza, seeks a review on certiorari of the Orders of respondent Accused Rodolfo Salazar is hereby ACQUITTED from the offense charged in Crime. Case
Judge in Civil Case No. 80803 dismissing his Complaint for Damages based on quasi-delict No. SM-228, with costs de oficio, and his bond is ordered canceled
against respondents Felino Timbol and Rodolfo Salazar.
SO ORDERED. 1
The facts which spawned the present controversy may be summarized as follows:
Thus, the trial Court absolved jeep-owner-driver Salazar of any liability, civil and criminal,
On October 22, 1969, at about 4:00 o'clock in the afternoon, a three- way vehicular in view of its findings that the collision between Salazar's jeep and petitioner's car was
accident occurred along Mac-Arthur Highway, Marilao, Bulacan, involving a Mercedes the result of the former having been bumped from behind by the truck driven by
Benz owned and driven by petitioner; a private jeep owned and driven by respondent Montoya. Neither was petitioner awarded damages as he was not a complainant against
Rodolfo Salazar; and a gravel and sand truck owned by respondent Felipino Timbol and truck-driver Montoya but only against jeep-owner-driver Salazar.
driven by Freddie Montoya. As a consequence of said mishap, two separate Informations
for Reckless Imprudence Causing Damage to Property were filed against Rodolfo Salazar On August 22, 1970, or after the termination of the criminal cases, petitioner filed Civil
and Freddie Montoya with the Court of First Instance of Bulacan. The race against truck- Case No. 80803 with the Court of First Instance of Manila against respondents jeep-
driver Montoya, docketed as Criminal Case No. SM-227, was for causing damage to the owner-driver Salazar and Felino Timbol, the latter being the owner of the gravel and sand
jeep owned by Salazar, in the amount of Pl,604.00, by hitting it at the right rear portion truck driven by Montoya, for indentification for the damages sustained by his car as a
thereby causing said jeep to hit and bump an oncoming car, which happened to be result of the collision involving their vehicles. Jeep-owner-driver Salazar and truck-owner
petitioner's Mercedes Benz. The case against jeep-owner-driver Salazar, docketed as Timbol were joined as defendants, either in the alternative or in solidum allegedly for the
Criminal Case No. SM 228, was for causing damage to the Mercedes Benz of petitioner in reason that petitioner was uncertain as to whether he was entitled to relief against both
the amount of P8,890.00 on only one of them.

At the joint trial of the above cases, petitioner testified that jeep-owner- driver Salazar On September 9, 1970, truck-owner Timbol filed a Motion to Dismiss Civil Case No. 80803
overtook the truck driven by Montoya, swerved to the left going towards the poblacion on the grounds that the Complaint is barred by a prior judgment in the criminal cases and
of Marilao, and hit his car which was bound for Manila. Petitioner further testified that that it fails to state a cause of action. An Opposition thereto was filed by petitioner.
before the impact, Salazar had jumped from the jeep and that he was not aware that
Salazar's jeep was bumped from behind by the truck driven by Montoya. Petitioner's In an Order dated September 12, 1970, respondent Judge dismissed the Complaint
version of the accident was adopted by truck driver Montoya. Jeep-owner-driver Salazar, against truck-owner Timbol for reasons stated in the afore- mentioned Motion to Dismiss
On September 30, 1970, petitioner sought before this Court the review of that dismissal, Montoya was not prosecuted for damage to petitioner's car but for damage to the jeep.
to which petition we gave due course. Neither was truck-owner Timbol a party in said case. In fact as the trial Court had put it
"the owner of the Mercedes Benz cannot recover any damages from the accused Freddie
On January 30, 1971, upon motion of jeep-owner-driver Salazar, respondent Judge also Montoya, he (Mendoza) being a complainant only against Rodolfo Salazar in Criminal Case
dismissed the case as against the former. Respondent Judge reasoned out that "while it No. SM-228. 4 And more importantly, in the criminal cases, the cause of action was the
is true that an independent civil action for liability under Article 2177 of the Civil Code enforcement of the civil liability arising from criminal negligence under Article l of the
could be prosecuted independently of the criminal action for the offense from which it Revised Penal Code, whereas Civil Case No. 80803 is based on quasi-delict under Article
arose, the New Rules of Court, which took effect on January 1, 1964, requires an express 2180, in relation to Article 2176 of the Civil Code As held in Barredo vs. Garcia, et al. 5
reservation of the civil action to be made in the criminal action; otherwise, the same
would be barred pursuant to Section 2, Rule 111 ... 2 Petitioner's Motion for The foregoing authorities clearly demonstrate the separate in. individuality of cuasi-
Reconsideration thereof was denied in the order dated February 23, 1971, with delitos or culpa aquiliana under the Civil Code. Specifically they show that there is a
respondent Judge suggesting that the issue be raised to a higher Court "for a more distinction between civil liability arising from criminal negligence (governed by the Penal
decisive interpretation of the rule. 3 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
On March 25, 1971, petitioner then filed a Supplemental Petition before us, also to review crime under the Penal Code, or a separate responsibility for fault or negligence under
the last two mentioned Orders, to which we required jeep-owner-driver Salazar to file an articles 1902 to 1910 of the Civil Code. Still more concretely, the authorities above cited
Answer. 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 Complaint against
That petitioner's cause of action against Timbol in the civil case is based on quasi-delict is
truck-owner Timbol evident from the recitals in the complaint to wit: that while petitioner was driving his car
along MacArthur Highway at Marilao, Bulacan, a jeep owned and driven by Salazar
We shall first discuss the validity of the Order, dated September 12, 1970, dismissing suddenly swerved to his (petitioner's) lane and collided with his car That the sudden
petitioner's Complaint against truck-owner Timbol. swerving of Salazar's jeep was caused either by the negligence and lack of skill of Freddie
Montoya, Timbol's employee, who was then driving a gravel and sand truck iii the same
In dismissing the Complaint against the truck-owner, respondent Judge sustained direction as Salazar's jeep; and that as a consequence of the collision, petitioner's car
Timbol's allegations that the civil suit is barred by the prior joint judgment in Criminal suffered extensive damage amounting to P12,248.20 and that he likewise incurred actual
Cases Nos. SM-227 and SM-228, wherein no reservation to file a separate civil case was and moral damages, litigation expenses and attorney's fees. Clearly, therefore, the two
made by petitioner and where the latter actively participated in the trial and tried to factors that a cause of action must consist of, namely: (1) plaintiff's primary right, i.e., that
prove damages against jeep-driver-Salazar only; and that the Complaint does not state a he is the owner of a Mercedes Benz, and (2) defendant's delict or wrongful act or omission
cause of action against truck-owner Timbol inasmuch as petitioner prosecuted jeep- which violated plaintiff's primary right, i.e., the negligence or lack of skill either of jeep-
owner-driver Salazar as the one solely responsible for the damage suffered by his car. owner Salazar or of Timbol's employee, Montoya, in driving the truck, causing Salazar's
jeep to swerve and collide with petitioner's car, were alleged in the Complaint. 6
Well-settled is the rule that for a prior judgment to constitute a bar to a subsequent case,
the following requisites must concur: (1) it must be a final judgment; (2) it must have been Consequently, petitioner's cause of action being based on quasi-delict, respondent Judge
rendered by a Court having jurisdiction over the subject matter and over the parties; (3) committed reversible error when he dismissed the civil suit against the truck-owner, as
it must be a judgment on the merits; and (4) there must be, between the first and second said case may proceed independently of the criminal proceedings and regardless of the
actions, Identity of parties, Identity of subject matter and Identity of cause of action. result of the latter.

It is conceded that the first three requisites of res judicata are present. However, we agree Art. 31. When the civil action is based on an obligation not arising from the act or
with petitioner that there is no Identity of cause of action between Criminal Case No. SM- omission complained of as a felony, such civil action may proceed independently of the
227 and Civil Case No. 80803. Obvious is the fact that in said criminal case truck-driver criminal proceedings and regardless of the result of the latter.
 The suit against
But it is truck-owner Timbol's submission (as well as that of jeep-owner-driver Salazar)
that petitioner's failure to make a reservation in the criminal action of his right to file an jeep-owner-driver Salazar
independent civil action bars the institution of such separate civil action, invoking section
2, Rule 111, Rules of Court, which says: The case as against jeep-owner-driver Salazar, who was acquitted in Criminal Case No.
SM-228, presents a different picture altogether.
Section 2. Independent civil action. In the cases provided for in Articles 31, 32, 33,
34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely At the outset it should be clarified that inasmuch as civil liability co-exists with criminal
separate and distinct from the criminal action may be brought by the injured party during responsibility in negligence cases, the offended party has the option between an action
the pendency of the criminal case, provided the right is reserved as required in the for enforcement of civil liability based on culpa criminal under Article 100 of the Revised
preceding section. Such civil action shau proceed independently of the criminal Penal Code, and an action for recovery of damages based on culpa aquiliana under Article
prosecution, and shall require only a preponderance of evidence. 2177 of the Civil Code. The action for enforcement of civil liability based on culpa criminal
under section 1 of Rule 111 of the Rules of Court is deemed simultaneously instituted
Interpreting the above provision, this Court, in Garcia vs. Florida 7 said: with the criminal action, unless expressly waived or reserved for separate application by
the offended party. 8
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- The circumstances attendant to the criminal case yields the conclusion that petitioner had
contractual. The former is a violation of the criminal law, while the latter is a distinct and opted to base his cause of action against jeep-owner-driver Salazar on culpa criminal and
independent negligence, having always had its own foundation and individuality. Some not on culpa aquiliana as evidenced by his active participation and intervention in the
legal writers are of the view that in accordance with Article 31, the civil action based upon prosecution of the criminal suit against said Salazar. The latter's civil liability continued to
quasi-delict may proceed independently of the criminal proceeding for criminal be involved in the criminal action until its termination. Such being the case, there was no
negligence and regardless of the result of the latter. Hence, 'the proviso in Section 2 of need for petitioner to have reserved his right to file a separate civil action as his action
Rule 111 with reference to ... Articles 32, 33 and 34 of the Civil Code is contrary to the for civil liability was deemed impliedly instituted in Criminal Case No. SM-228.
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. Neither would an independent civil action he. Noteworthy is the basis of the acquittal of
The proviso, which is procedural, may also be regarded as an unauthorized amendment jeep-owner-driver Salazar in the criminal case, expounded by the trial Court in this wise:
of substantive law, Articles 32, 33 and 34 of the Civil Code, which do not provide for the
reservation required in the proviso ... . In view of what has been proven and established during the trial, accused Freddie
Montoya would be held able for having bumped and hit the rear portion of the jeep driven
In his concurring opinion in the above case, Mr. Justice Antonio Barredo further observed by the accused Rodolfo Salazar,
that inasmuch as Articles 2176 and 2177 of the Civil Code create a civil liability distinct
and different from the civil action arising from the offense of negligence under the Considering that the collision between the jeep driven by Rodolfo Salazar and the car
Revised Penal Code, no reservation, therefore, need be made in the criminal case; that owned and driven by Edgardo Mendoza was the result of the hitting on the rear of the
Section 2 of Rule 111 is inoperative, "it being substantive in character and is not within jeep by the truck driven by Freddie Montoya, this Court behaves that accused Rodolfo
the power of the Supreme Court to promulgate; and even if it were not substantive but Salazar cannot be held able for the damages sustained by Edgardo Mendoza's car. 9
adjective, it cannot stand because of its inconsistency with Article 2177, an enactment of
the legislature superseding the Rules of 1940." Crystal clear is the trial Court's pronouncement that under the facts of the case, jeep-
owner-driver Salazar cannot be held liable for the damages sustained by petitioner's car.
We declare, therefore, that in so far as truck-owner Timbol is concerned, Civil Case No. In other words, "the fact from which the civil might arise did not exist. " Accordingly,
80803 is not barred by the fact that petitioner failed to reserve, in the criminal action, his inasmuch as petitioner's cause of action as against jeep-owner-driver Salazar is ex-
right to file an independent civil action based on quasi-delict. delictu, founded on Article 100 of the Revised Penal Code, the civil action must be held to

have been extinguished in consonance with Section 3(c), Rule 111 of the Rules of Court
10 which provides:

Sec. 3. Other civil actions arising from offenses. In all cases not included in the
preceding section the following rules shall be observed:

xxx xxx xxx

c) Extinction of the penal action does not carry with it extinction of the civil, unless
the extinction proceeds from a declaration in a final judgment that the fact from which
the civil night arise did not exist. ...

And even if petitioner's cause of action as against jeep-owner-driver Salazar were not ex-
delictu, the end result would be the same, it being clear from the judgment in the criminal
case that Salazar's acquittal was not based upon reasonable doubt, consequently, a civil
action for damages can no longer be instituted. This is explicitly provided for in Article 29
of the Civil Code quoted here under:

Art. 29. When the accused in a criminal prosecution is acquitted on the ground that his
guilt has not been proved beyond reasonable doubt, a civil action for damages for the
same act or omission may be instituted. Such action requires only a preponderance of
evidence ...

If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court
shall so declare. In the absence of any declaration to that effect, it may be inferred from
the text of the decision whether or not the acquittal is due to that ground.

In so far as the suit against jeep-owner-driver Salazar is concerned, therefore, we sustain
respondent Judge's Order dated January 30, 1971 dismissing the complaint, albeit on
different grounds.

WHEREFORE, 1) the Order dated September 12, 1970 dismissing Civil Case No. 80803
against private respondent Felino Timbol is set aside, and respondent Judge, or his
successor, hereby ordered to proceed with the hearing on the merits; 2) but the Orders
dated January 30, 1971 and February 23, 1971 dismissing the Complaint in Civil Case No.
80803 against respondent Rodolfo Salazar are hereby upheld.

No costs.

SO ORDERED.


G.R. No. 84698 February 4, 1992 reconsideration was similarly dealt with by an order dated 25 January 1988. Petitioners
then assailed the trial court's disposition before the respondent appellate court which, in
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D. LIM, BENJAMIN P. a decision * promulgated on 10 June 1988, affirmed the trial court's orders. On 22 August
PAULINO, ANTONIO M. MAGTALAS, COL. PEDRO SACRO and LT. M. SORIANO, petitioners, 1988, the respondent appellate court resolved to deny the petitioners' motion for
vs. reconsideration. Hence, this petition.
COURT OF APPEALS, HON. REGINA ORDOEZ-BENITEZ, in her capacity as Presiding Judge
of Branch 47, Regional Trial Court, Manila, SEGUNDA R. BAUTISTA and ARSENIA D. At the outset, it is to be observed that the respondent appellate court primarily anchored
BAUTISTA, respondents. its decision on the law of quasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil
Code. 1 Pertinent portions of the appellate court's now assailed ruling state:
Balgos and Perez for petitioners.
Article 2180 (formerly Article 1903) of the Civil Code is an adoption from the old Spanish
Collantes, Ramirez & Associates for private respondents. Civil Code. The comments of Manresa and learned authorities on its meaning should give
way to present day changes. The law is not fixed and flexible (sic); it must be dynamic. In
fact, the greatest value and significance of law as a rule of conduct in (sic) its flexibility to
PADILLA, J.: adopt to changing social conditions and its capacity to meet the new challenges of
progress.
A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while
on the second-floor premises of the Philippine School of Business Administration (PSBA) Construed in the light of modern day educational system, Article 2180 cannot be
prompted the parents of the deceased to file suit in the Regional Trial Court of Manila construed in its narrow concept as held in the old case of Exconde vs. Capuno 2 and
(Branch 47) presided over by Judge (now Court of Appeals justice) Regina Ordoez- Mercado vs. Court of Appeals; 3 hence, the ruling in the Palisoc 4 case that it should apply
Benitez, for damages against the said PSBA and its corporate officers. At the time of his to all kinds of educational institutions, academic or vocational.
death, Carlitos was enrolled in the third year commerce course at the PSBA. It was
established that his assailants were not members of the school's academic community At any rate, the law holds the teachers and heads of the school staff liable unless they
but were elements from outside the school. relieve themselves of such liability pursuant to the last paragraph of Article 2180 by
"proving that they observed all the diligence to prevent damage." This can only be done
Specifically, the suit impleaded the PSBA and the following school authorities: Juan D. Lim at a trial on the merits of the case. 5
(President), Benjamin P. Paulino (Vice-President), Antonio M. Magtalas
(Treasurer/Cashier), Col. Pedro Sacro (Chief of Security) and a Lt. M. Soriano (Assistant While we agree with the respondent appellate court that the motion to dismiss the
Chief of Security). Substantially, the plaintiffs (now private respondents) sought to complaint was correctly denied and the complaint should be tried on the merits, we do
adjudge them liable for the victim's untimely demise due to their alleged negligence, not however agree with the premises of the appellate court's ruling.
recklessness and lack of security precautions, means and methods before, during and
after the attack on the victim. During the proceedings a quo, Lt. M. Soriano terminated Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in
his relationship with the other petitioners by resigning from his position in the school. loco parentis. This Court discussed this doctrine in the afore-cited cases of Exconde,
Mendoza, Palisoc and, more recently, in Amadora vs. Court of Appeals. 6 In all such cases,
Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since it had been stressed that the law (Article 2180) plainly provides that the damage should
they are presumably sued under Article 2180 of the Civil Code, the complaint states no have been caused or inflicted by pupils or students of he educational institution sought
cause of action against them, as jurisprudence on the subject is to the effect that to be held liable for the acts of its pupils or students while in its custody. However, this
academic institutions, such as the PSBA, are beyond the ambit of the rule in the afore- material situation does not exist in the present case for, as earlier indicated, the assailants
stated article. of Carlitos were not students of the PSBA, for whose acts the school could be made liable.

The respondent trial court, however, overruled petitioners' contention and thru an order However, does the appellate court's failure to consider such material facts mean the
dated 8 December 1987, denied their motion to dismiss. A subsequent motion for exculpation of the petitioners from liability? It does not necessarily follow.

When an academic institution accepts students for enrollment, there is established a Immediately what comes to mind is the chapter of the Civil Code on Human Relations,
contract between them, resulting in bilateral obligations which both parties are bound to particularly Article 21, which provides:
comply with. 7 For its part, the school undertakes to provide the student with an
education that would presumably suffice to equip him with the necessary tools and skills Any person who wilfully causes loss or injury to another in a manner that is contrary to
to pursue higher education or a profession. On the other hand, the student covenants to morals, good custom or public policy shall compensate the latter for the damage.
abide by the school's academic requirements and observe its rules and regulations. (emphasis supplied).

Institutions of learning must also meet the implicit or "built-in" obligation of providing Air France penalized the racist policy of the airline which emboldened the petitioner's
their students with an atmosphere that promotes or assists in attaining its primary employee to forcibly oust the private respondent to cater to the comfort of a white man
undertaking of imparting knowledge. Certainly, no student can absorb the intricacies of who allegedly "had a better right to the seat." In Austro-American, supra, the public
physics or higher mathematics or explore the realm of the arts and other sciences when embarrassment caused to the passenger was the justification for the Circuit Court of
bullets are flying or grenades exploding in the air or where there looms around the school Appeals, (Second Circuit), to award damages to the latter. From the foregoing, it can be
premises a constant threat to life and limb. Necessarily, the school must ensure that concluded that should the act which breaches a contract be done in bad faith and be
adequate steps are taken to maintain peace and order within the campus premises and violative of Article 21, then there is a cause to view the act as constituting a quasi-delict.
to prevent the breakdown thereof.
In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that
Because the circumstances of the present case evince a contractual relation between the the contract between the school and Bautista had been breached thru the former's
PSBA and Carlitos Bautista, the rules on quasi-delict do not really govern. 8 A perusal of negligence in providing proper security measures. This would be for the trial court to
Article 2176 shows that obligations arising from quasi-delicts or tort, also known as extra- determine. And, even if there be a finding of negligence, the same could give rise
contractual obligations, arise only between parties not otherwise bound by contract, generally to a breach of contractual obligation only. Using the test of Cangco, supra, the
whether express or implied. However, this impression has not prevented this Court from negligence of the school would not be relevant absent a contract. In fact, that negligence
determining the existence of a tort even when there obtains a contract. In Air France vs. becomes material only because of the contractual relation between PSBA and Bautista.
Carrascoso (124 Phil. 722), the private respondent was awarded damages for his In other words, a contractual relation is a condition sine qua non to the school's liability.
unwarranted expulsion from a first-class seat aboard the petitioner airline. It is noted, The negligence of the school cannot exist independently of the contract, unless the
however, that the Court referred to the petitioner-airline's liability as one arising from negligence occurs under the circumstances set out in Article 21 of the Civil Code.
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 This Court is not unmindful of the attendant difficulties posed by the obligation of schools,
the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248 Fed. 231). above-mentioned, for conceptually a school, like a common carrier, cannot be an insurer
of its students against all risks. This is specially true in the populous student communities
This view was not all that revolutionary, for even as early as 1918, this Court was already of the so-called "university belt" in Manila where there have been reported several
of a similar mind. In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated incidents ranging from gang wars to other forms of hooliganism. It would not be equitable
thus: to expect of schools to anticipate all types of violent trespass upon their premises, for
notwithstanding the security measures installed, the same may still fail against an
The field of non-contractual obligation is much broader than that of contractual individual or group determined to carry out a nefarious deed inside school premises and
obligation, comprising, as it does, the whole extent of juridical human relations. These environs. Should this be the case, the school may still avoid liability by proving that the
two fields, figuratively speaking, concentric; that is to say, the mere fact that a person is breach of its contractual obligation to the students was not due to its negligence, here
bound to another by contract does not relieve him from extra-contractual liability to such statutorily defined to be the omission of that degree of diligence which is required by the
person. When such a contractual relation exists the obligor may break the contract under nature of the obligation and corresponding to the circumstances of persons, time and
such conditions that the same act which constitutes a breach of the contract would have place. 9
constituted the source of an extra-contractual obligation had no contract existed
between the parties.
As the proceedings a quo have yet to commence on the substance of the private
respondents' complaint, the record is bereft of all the material facts. Obviously, at this
stage, only the trial court can make such a determination from the evidence still to unfold.

WHEREFORE, the foregoing premises considered, the petition is DENIED. The court of
origin (RTC, Manila, Br. 47) is hereby ordered to continue proceedings consistent with this
ruling of the Court. Costs against the petitioners.

SO ORDERED.

































G.R. No. 183204 January 13, 2014 docketed as I.S. No. 03I-25014,18 against respondent Rosales.19 Petitioner accused
respondent Rosales and an unidentified woman as the ones responsible for the
THE METROPOLITAN BANK AND TRUST COMPANY, Petitioner, unauthorized and fraudulent withdrawal of US$75,000.00 from Liu Chiu Fangs dollar
vs. account with petitioners Escolta Branch.20 Petitioner alleged that on February 5, 2003,
ANA GRACE ROSALES AND YO YUK TO, Respondents. its branch in Escolta received from the PLRA a Withdrawal Clearance for the dollar
account of Liu Chiu Fang;21 that in the afternoon of the same day, respondent Rosales
D E C I S I O N went to petitioners Escolta Branch to inform its Branch Head, Celia A. Gutierrez
(Gutierrez), that Liu Chiu Fang was going to withdraw her dollar deposits in cash;22 that
DEL CASTILLO, J.: Gutierrez told respondent Rosales to come back the following day because the bank did
not have enough dollars;23 that on February 6, 2003, respondent Rosales accompanied
Bank deposits, which are in the nature of a simple loan or mutuum,1 must be paid upon an unidentified impostor of Liu Chiu Fang to the bank;24 that the impostor was able to
demand by the depositor.2 withdraw Liu Chiu Fangs dollar deposit in the amount of US$75,000.00;25 that on March
3, 2003, respondents opened a dollar account with petitioner; and that the bank later
This Petition for Review on Certiorari3 under Rule 45 of the Rules of Court assails the April discovered that the serial numbers of the dollar notes deposited by respondents in the
2, 2008 Decision4 and the May 30, 2008 Resolution5 of he Court of Appeals CA) in CA- amount of US$11,800.00 were the same as those withdrawn by the impostor.26
G.R. CV No. 89086.
Respondent Rosales, however, denied taking part in the fraudulent and unauthorized
Factual Antecedents withdrawal from the dollar account of Liu Chiu Fang.27 Respondent Rosales claimed that
she did not go to the bank on February 5, 2003.28 Neither did she inform Gutierrez that
Petitioner Metropolitan Bank and Trust Company is a domestic banking corporation duly Liu Chiu Fang was going to close her account.29 Respondent Rosales further claimed that
organized and existing under the laws of the Philippines.6 Respondent Ana Grace Rosales after Liu Chiu Fang opened an account with petitioner, she lost track of her.30
(Rosales) is the owner of China Golden Bridge Travel Services,7 a travel agency.8 Respondent Rosales version of the events that transpired thereafter is as follows:
Respondent Yo Yuk To is the mother of respondent Rosales.9
On February 6, 2003, she received a call from Gutierrez informing her that Liu Chiu Fang
In 2000, respondents opened a Joint Peso Account10 with petitioners Pritil-Tondo was at the bank to close her account.31 At noon of the same day, respondent Rosales
Branch.11 As of August 4, 2004, respondents Joint Peso Account showed a balance of went to the bank to make a transaction.32 While she was transacting with the teller, she
2,515,693.52.12 caught a glimpse of a woman seated at the desk of the Branch Operating Officer, Melinda
Perez (Perez).33 After completing her transaction, respondent Rosales approached Perez
In May 2002, respondent Rosales accompanied her client Liu Chiu Fang, a Taiwanese who informed her that Liu Chiu Fang had closed her account and had already left.34 Perez
National applying for a retirees visa from the Philippine Leisure and Retirement Authority then gave a copy of the Withdrawal Clearance issued by the PLRA to respondent
(PLRA), to petitioners branch in Escolta to open a savings account, as required by the Rosales.35 On June 16, 2003, respondent Rosales received a call from Liu Chiu Fang
PLRA.13 Since Liu Chiu Fang could speak only in Mandarin, respondent Rosales acted as inquiring about the extension of her PLRA Visa and her dollar account.36 It was only then
an interpreter for her.14 that Liu Chiu Fang found out that her account had been closed without her knowledge.37
Respondent Rosales then went to the bank to inform Gutierrez and Perez of the
On March 3, 2003, respondents opened with petitioners Pritil-Tondo Branch a Joint unauthorized withdrawal.38 On June 23, 2003, respondent Rosales and Liu Chiu Fang
Dollar Account15 with an initial deposit of US$14,000.00.16 went to the PLRA Office, where they were informed that the Withdrawal Clearance was
issued on the basis of a Special Power of Attorney (SPA) executed by Liu Chiu Fang in favor
On July 31, 2003, petitioner issued a "Hold Out" order against respondents accounts.17 of a certain Richard So.39 Liu Chiu Fang, however, denied executing the SPA.40 The
following day, respondent Rosales, Liu Chiu Fang, Gutierrez, and Perez met at the PLRA
On September 3, 2003, petitioner, through its Special Audit Department Head Antonio Office to discuss the unauthorized withdrawal.41 During the conference, the bank officers
Ivan Aguirre, filed before the Office of the Prosecutor of Manila a criminal case for Estafa assured Liu Chiu Fang that the money would be returned to her.42
through False Pretences, Misrepresentation, Deceit, and Use of Falsified Documents,
On December 15, 2003, the Office of the City Prosecutor of Manila issued a Resolution
dismissing the criminal case for lack of probable cause.43 Unfazed, petitioner moved for Ruling of the Court of Appeals
reconsideration.
Aggrieved, petitioner appealed to the CA.
On September 10, 2004, respondents filed before the Regional Trial Court (RTC) of Manila
a Complaint44 for Breach of Obligation and Contract with Damages, docketed as Civil Case On April 2, 2008, the CA affirmed the ruling of the RTC but deleted the award of actual
No. 04110895 and raffled to Branch 21, against petitioner. Respondents alleged that they damages because "the basis for [respondents] claim for such damages is the professional
attempted several times to withdraw their deposits but were unable to because fee that they paid to their legal counsel for [respondent] Rosales defense against the
petitioner had placed their accounts under "Hold Out" status.45 No explanation, criminal complaint of [petitioner] for estafa before the Office of the City Prosecutor of
however, was given by petitioner as to why it issued the "Hold Out" order.46 Thus, they Manila and not this case."60 Thus, the CA disposed of the case in this wise:
prayed that the "Hold Out" order be lifted and that they be allowed to withdraw their
deposits.47 They likewise prayed for actual, moral, and exemplary damages, as well as WHEREFORE, premises considered, the Decision dated January 15, 2007 of the RTC,
attorneys fees.48 Branch 21, Manila in Civil Case No. 04-110895 is AFFIRMED with MODIFICATION that the
award of actual damages to [respondents] Rosales and Yo Yuk To is hereby DELETED.
Petitioner alleged that respondents have no cause of action because it has a valid reason
for issuing the "Hold Out" order.49 It averred that due to the fraudulent scheme of SO ORDERED.61
respondent Rosales, it was compelled to reimburse Liu Chiu Fang the amount of
US$75,000.0050 and to file a criminal complaint for Estafa against respondent Rosales.51 Petitioner sought reconsideration but the same was denied by the CA in its May 30, 2008
Resolution.62
While the case for breach of contract was being tried, the City Prosecutor of Manila issued
a Resolution dated February 18, 2005, reversing the dismissal of the criminal complaint.52 Issues
An Information, docketed as Criminal Case No. 05-236103,53 was then filed charging
respondent Rosales with Estafa before Branch 14 of the RTC of Manila.54 Hence, this recourse by petitioner raising the following issues:

Ruling of the Regional Trial Court A. THE [CA] ERRED IN RULING THAT THE "HOLD-OUT" PROVISION IN THE APPLICATION
AND AGREEMENT FOR DEPOSIT ACCOUNT DOES NOT APPLY IN THIS CASE.
On January 15, 2007, the RTC rendered a Decision55 finding petitioner liable for damages
for breach of contract.56 The RTC ruled that it is the duty of petitioner to release the B. THE [CA] ERRED WHEN IT RULED THAT PETITIONERS EMPLOYEES WERE NEGLIGENT IN
deposit to respondents as the act of withdrawal of a bank deposit is an act of demand by RELEASING LIU CHIU FANGS FUNDS.
the creditor.57 The RTC also said that the recourse of petitioner is against its negligent
employees and not against respondents.58 The dispositive portion of the Decision reads: C. THE [CA] ERRED IN AFFIRMING THE AWARD OF MORAL DAMAGES, EXEMPLARY
DAMAGES, AND ATTORNEYS FEES.63
WHEREFORE, premises considered, judgment is hereby rendered ordering [petitioner]
METROPOLITAN BANK & TRUST COMPANY to allow [respondents] ANA GRACE ROSALES Petitioners Arguments
and YO YUK TO to withdraw their Savings and Time Deposits with the agreed interest,
actual damages of 50,000.00, moral damages of 50,000.00, exemplary damages of Petitioner contends that the CA erred in not applying the "Hold Out" clause stipulated in
30,000.00 and 10% of the amount due [respondents] as and for attorneys fees plus the the Application and Agreement for Deposit Account.64 It posits that the said clause
cost of suit. applies to any and all kinds of obligation as it does not distinguish between obligations
arising ex contractu or ex delictu.65 Petitioner also contends that the fraud committed by
The counterclaim of [petitioner] is hereby DISMISSED for lack of merit. respondent Rosales was clearly established by evidence;66 thus, it was justified in issuing
the "Hold-Out" order.67 Petitioner likewise denies that its employees were negligent in
SO ORDERED.59 releasing the dollars.68 It claims that it was the deception employed by respondent
Rosales that caused petitioners employees to release Liu Chiu Fangs funds to the Authority to Withhold, Sell and/or Set Off:
impostor.69
The Bank is hereby authorized to withhold as security for any and all obligations with the
Lastly, petitioner puts in issue the award of moral and exemplary damages and attorneys Bank, all monies, properties or securities of the Depositor now in or which may hereafter
fees. It insists that respondents failed to prove that it acted in bad faith or in a wanton, come into the possession or under the control of the Bank, whether left with the Bank for
fraudulent, oppressive or malevolent manner.70 safekeeping or otherwise, or coming into the hands of the Bank in any way, for so much
thereof as will be sufficient to pay any or all obligations incurred by Depositor under the
Respondents Arguments Account or by reason of any other transactions between the same parties now existing or
hereafter contracted, to sell in any public or private sale any of such properties or
Respondents, on the other hand, argue that there is no legal basis for petitioner to securities of Depositor, and to apply the proceeds to the payment of any Depositors
withhold their deposits because they have no monetary obligation to petitioner.71 They obligations heretofore mentioned.
insist that petitioner miserably failed to prove its accusations against respondent
Rosales.72 In fact, no documentary evidence was presented to show that respondent x x x x
Rosales participated in the unauthorized withdrawal.73 They also question the fact that
the list of the serial numbers of the dollar notes fraudulently withdrawn on February 6, JOINT ACCOUNT
2003, was not signed or acknowledged by the alleged impostor.74 Respondents likewise
maintain that what was established during the trial was the negligence of petitioners x x x x
employees as they allowed the withdrawal of the funds without properly verifying the
identity of the depositor.75 Furthermore, respondents contend that their deposits are in The Bank may, at any time in its discretion and with or without notice to all of the
the nature of a loan; thus, petitioner had the obligation to return the deposits to them Depositors, assert a lien on any balance of the Account and apply all or any part thereof
upon demand.76 Failing to do so makes petitioner liable to pay respondents moral and against any indebtedness, matured or unmatured, that may then be owing to the Bank
exemplary damages, as well as attorneys fees.77 by any or all of the Depositors. It is understood that if said indebtedness is only owing
from any of the Depositors, then this provision constitutes the consent by all of the
Our Ruling depositors to have the Account answer for the said indebtedness to the extent of the
equal share of the debtor in the amount credited to the Account.78
The Petition is bereft of merit.
Petitioners reliance on the "Hold Out" clause in the Application and Agreement for
At the outset, the relevant issues in this case are (1) whether petitioner breached its Deposit Account is misplaced.
contract with respondents, and (2) if so, whether it is liable for damages. The issue of
whether petitioners employees were negligent in allowing the withdrawal of Liu Chiu The "Hold Out" clause applies only if there is a valid and existing obligation arising from
Fangs dollar deposits has no bearing in the resolution of this case. Thus, we find no need any of the sources of obligation enumerated in Article 115779 of the Civil Code, to wit:
to discuss the same. law, contracts, quasi-contracts, delict, and quasi-delict. In this case, petitioner failed to
show that respondents have an obligation to it under any law, contract, quasi-contract,
The "Hold Out" clause does not apply delict, or quasi-delict. And although a criminal case was filed by petitioner against
respondent Rosales, this is not enough reason for petitioner to issue a "Hold Out" order
to the instant case. as the case is still pending and no final judgment of conviction has been rendered against
respondent Rosales. In fact, it is significant to note that at the time petitioner issued the
Petitioner claims that it did not breach its contract with respondents because it has a valid "Hold Out" order, the criminal complaint had not yet been filed. Thus, considering that
reason for issuing the "Hold Out" order. Petitioner anchors its right to withhold respondent Rosales is not liable under any of the five sources of obligation, there was no
respondents deposits on the Application and Agreement for Deposit Account, which legal basis for petitioner to issue the "Hold Out" order. Accordingly, we agree with the
reads: findings of the RTC and the CA that the "Hold Out" clause does not apply in the instant
case.
 within the bounds of the law and in accordance with due process, and not in bad faith or
In view of the foregoing, we find that petitioner is guilty of breach of contract when it in a wanton disregard of its contractual obligation to respondents.
unjustifiably refused to release respondents deposit despite demand. Having breached
its contract with respondents, petitioner is liable for damages. WHEREFORE, the Petition is hereby DENIED. The assailed April 2, 2008 Decision and the
May 30, 2008 Resolution of the Court of Appeals in CA-G.R. CV No. 89086 are hereby
Respondents are entitled to moral and AFFIRMED. SO ORDERED.
exemplary damages and attorneys fees.1wphi1

In cases of breach of contract, moral damages may be recovered only if the defendant
acted fraudulently or in bad faith,80 or is "guilty of gross negligence amounting to bad
faith, or in wanton disregard of his contractual obligations."81

In this case, a review of the circumstances surrounding the issuance of the "Hold Out"
order reveals that petitioner issued the "Hold Out" order in bad faith. First of all, the order
was issued without any legal basis. Second, petitioner did not inform respondents of the
reason for the "Hold Out."82 Third, the order was issued prior to the filing of the criminal
complaint. Records show that the "Hold Out" order was issued on July 31, 2003,83 while
the criminal complaint was filed only on September 3, 2003.84 All these taken together
lead us to conclude that petitioner acted in bad faith when it breached its contract with
respondents. As we see it then, respondents are entitled to moral damages.

As to the award of exemplary damages, Article 222985 of the Civil Code provides that
exemplary damages may be imposed "by way of example or correction for the public
good, in addition to the moral, temperate, liquidated or compensatory damages." They
are awarded only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner.86

In this case, we find that petitioner indeed acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner when it refused to release the deposits of respondents
without any legal basis. We need not belabor the fact that the banking industry is
impressed with public interest.87 As such, "the highest degree of diligence is expected,
and high standards of integrity and performance are even required of it."88 It must
therefore "treat the accounts of its depositors with meticulous care and always to have
in mind the fiduciary nature of its relationship with them."89 For failing to do this, an
award of exemplary damages is justified to set an example.

The award of attorney's fees is likewise proper pursuant to paragraph 1, Article 220890
of the Civil Code.

In closing, it must be stressed that while we recognize that petitioner has the right to
protect itself from fraud or suspicions of fraud, the exercise of his right should be done

G.R. No. 191431 March 13, 2013 Leonardo died during the pendency of the case and was substituted by his widow,
Esperanza. Meanwhile, Gruspe sold the wrecked car for 130,000.00.

RODOLFO G. CRUZ and ESPERANZA IBIAS, Petitioners, In a decision dated September 27, 2004, the RTC ruled in favor of Gruspe and ordered
vs. Cruz and Leonardo to pay 220,000.00,6 plus 15% per annum from November 15, 1999
ATTY. DELFIN GRUSPE, Respondent. until fully paid, and the cost of suit.

D E C I S I O N On appeal, the CA affirmed the RTC decision, but reduced the interest rate to 12% per
annum pursuant to the Joint Affidavit of Undertaking.7 It declared that despite its title,
BRION, J.: the Joint Affidavit of Undertaking is a contract, as it has all the essential elements of
consent, object certain, and consideration required under Article 1318 of the Civil
Before the Court is the petition for review on certiorari1 filed under Rule 45 of the Rules
of Court, assailing the decision2 dated July 30, 2009 and the resolution3 dated February Code. The CA further said that Cruz and Leonardo failed to present evidence to support
19, 2010 of the Court of Appeals (CA) in CA-G.R. CV No. 86083. The CA rulings affirmed their contention of vitiated consent. By signing the Joint Affidavit of Undertaking, they
with modification the decision dated September 27, 2004 of the Regional Trial Court (RTC) voluntarily assumed the obligation for the damage they caused to Gruspes car; Leonardo,
of Bacoor, Cavite, Branch 19, in Civil Case No. BCV-99-146 which granted respondent Atty. who was not a party to the incident, could have refused to sign the affidavit, but he did
Delfin Grupes claim for payment of sum of money against petitioners Rodolfo G. Cruz not.
and Esperanza Ibias.4
THE PETITION
THE FACTUAL BACKGROUND
In their appeal by certiorari with the Court, Cruz and Esperanza assail the CA ruling,
The claim arose from an accident that occurred on October 24, 1999, when the mini bus contending that the Joint Affidavit of Undertaking is not a contract that can be the basis
owned and operated by Cruz and driven by one Arturo Davin collided with the Toyota of an obligation to pay a sum of money in favor of Gruspe. They consider an affidavit as
Corolla car of Gruspe; Gruspes car was a total wreck. The next day, on October 25, 1999, different from a contract: an affidavits purpose is simply to attest to facts that are within
Cruz, along with Leonardo Q. Ibias went to Gruspes office, apologized for the incident, his knowledge, while a contract requires that there be a meeting of the minds between
and executed a Joint Affidavit of Undertaking promising jointly and severally to replace the two contracting parties.
the Gruspes damaged car in 20 days, or until November 15, 1999, of the same model and
of at least the same quality; or, alternatively, they would pay the cost of Gruspes car Even if the Joint Affidavit of Undertaking was considered as a contract, Cruz and
amounting to 350,000.00, with interest at Esperanza claim that it is invalid because Cruz and Leonardos consent thereto was
vitiated; the contract was prepared by Gruspe who is a lawyer, and its contents were
12% per month for any delayed payment after November 15, 1999, until fully paid.5 When never explained to them. Moreover, Cruz and Leonardo were simply forced to affix their
Cruz and Leonardo failed to comply with their undertaking, Gruspe filed a complaint for signatures, otherwise, the mini van would not be released.
collection of sum of money against them on November 19, 1999 before the RTC.
Also, they claim that prior to the filing of the complaint for sum of money, Gruspe did not
In their answer, Cruz and Leonardo denied Gruspes allegation, claiming that Gruspe, a make any demand upon them. Hence, pursuant to Article 1169 of the Civil Code, they
lawyer, prepared the Joint Affidavit of Undertaking and forced them to affix their could not be considered in default. Without this demand, Cruz and Esperanza contend
signatures thereon, without explaining and informing them of its contents; Cruz affixed that Gruspe could not yet take any action.
his signature so that his mini bus could be released as it was his only means of income;
Leonardo, a barangay official, accompanied Cruz to Gruspes office for the release of the THE COURTS RULING
mini bus, but was also deceived into signing the Joint Affidavit of Undertaking.
The Court finds the petition partly meritorious and accordingly modifies the judgment of
the CA.
 12%) was computed from November 15, 1999 the date stipulated in the Joint Affidavit
Contracts are obligatory no matter what their forms may be, whenever the essential of Undertaking for the payment of the value of Gruspes car. In the absence of a finding
requisites for their validity are present. In determining whether a document is an affidavit by the lower courts that Gruspe made a demand prior to the filing of the complaint, the
or a contract, the Court looks beyond the title of the document, since the denomination interest cannot be computed from November 15, 1999 because until a demand has been
or title given by the parties in their document is not conclusive of the nature of its made, Cruz and Leonardo could not be said to be in default.12 "In order that the debtor
contents.8 In the construction or interpretation of an instrument, the intention of the may be in default, it is necessary that the following requisites be present: (1) that the
parties is primordial and is to be pursued. If the terms of the document are clear and leave obligation be demandable and already liquidated; (2) that the debtor delays performance;
no doubt on the intention of the contracting parties, the literal meaning of its stipulations and (3) that the creditor requires the performance judicially and extrajudicially."13
shall control. If the words appear to be contrary to the parties evident intention, the Default generally begins from the moment the creditor demands the performance of the
latter shall prevail over the former.9 obligation. In this case, demand could be considered to have been made upon the filing
of the complaint on November 19, 1999, and it is only from this date that the interest
A simple reading of the terms of the Joint Affidavit of Undertaking readily discloses that should be computed.
it contains stipulations characteristic of a contract. As quoted in the CA decision,10 the
Joint Affidavit of Undertaking contained a stipulation where Cruz and Leonardo promised Although the CA upheld the Joint Affidavit of Undertaking, we note that it imposed
to replace the damaged car of Gruspe, 20 days from October 25, 1999 or up to November interest rate on a per annum basis, instead of the per month basis that was stated in the
15, 1999, of the same model and of at least the same quality. In the event that they cannot Joint Affidavit of Undertaking without explaining its reason for doing so.14 Neither party,
replace the car within the same period, they would pay the cost of Gruspes car in the however, questioned the change. Nonetheless, the Court affirms the change in the
total amount of 350,000.00, with interest at 12% per month for any delayed payment interest rate from 12% per month to 12% per annum, as we find the interest rate agreed
after November 15, 1999, until fully paid. These, as read by the CA, are very simple terms upon in the Joint Affidavit of Undertaking excessive.15
that both Cruz and Leonardo could easily understand.
WHEREFORE, we AFFIRM the decision dated July 30, 2009 and the resolution dated
There is also no merit to the argument of vitiated consent.1wphi1 An allegation of February 19, 2010 of the Court of Appeals in CA-G.R. CV No. 86083, subject to the
vitiated consent must be proven by preponderance of evidence; Cruz and Leonardo failed Modification that the twelve percent (12%) per annum interest imposed on the amount
to support their allegation. due shall accrue only from November 19, 1999, when judicial demand was made.

Although the undertaking in the affidavit appears to be onerous and lopsided, this does SO ORDERED.
not necessarily prove the alleged vitiation of consent. They, in fact, admitted the
genuineness and due execution of the Joint Affidavit and Undertaking when they said that
they signed the same to secure possession of their vehicle. If they truly believed that the
vehicle had been illegally impounded, they could have refused to sign the Joint Affidavit
of Undertaking and filed a complaint, but they did not. That the release of their mini bus
was conditioned on their signing the Joint Affidavit of Undertaking does not, by itself,
indicate that their consent was forced they may have given it grudgingly, but it is not
indicative of a vitiated consent that is a ground for the annulment of a contract.

Thus, on the issue of the validity and enforceability of the Joint Affidavit of Undertaking,
the CA did not commit any legal error that merits the reversal of the assailed decision.

Nevertheless, the CA glossed over the issue of demand which is material in the
computation of interest on the amount due. The RTC ordered Cruz and Leonardo to pay
Gruspe "350,000.00 as cost of the car xxx plus fifteen percent (15%) per annum from
November 15, 1999 until fully paid."11 The 15% interest (later modified by the CA to be
G.R. No. 200602 December 11, 2013 products to ACE Foods as reflected in Invoice No. 7733 11 (Invoice Receipt). The fine print
of the invoice states, inter alia, that "[t]itle to sold property is reserved in MICROPACIFIC
ACE FOODS, INC., Petitioner, TECHNOLOGIES CO., LTD. until full compliance of the terms and conditions of above and
vs. payment of the price"12 (title reservation stipulation). After delivery, the subject products
MICRO PACIFIC TECHNOLOGIES CO., LTD.1, Respondent. were then installed and configured in ACE Foodss premises. MTCLs demands against ACE
Foods to pay the purchase price, however, remained unheeded.13 Instead of paying the
D E C I S I O N purchase price, ACE Foods sent MTCL a Letter14 dated September 19, 2002, stating that
it "ha[s] been returning the [subject products] to [MTCL] thru [its] sales representative
PERLAS-BERNABE, J.: Mr. Mark Anteola who has agreed to pull out the said [products] but had failed to do so
up to now."
Assailed in this petition for review on certiorari2are the Decision3 dated October 21, 2011
and Resolution4 dated February 8, 2012 of the Court of Appeals (CA) in CA-G.R. CV No. Eventually, or on October 16, 2002, ACE Foods lodged a Complaint15 against MTCL before
89426 which reversed and set aside the Decision5 dated February 28, 2007 of the the RTC, praying that the latter pull out from its premises the subject products since MTCL
Regional Trial Court of Makati, Branch 148 (RTC) in Civil Case No. 02-1248, holding breached its "after delivery services" obligations to it, particularly, to: (a) install and
petitioner ACE Foods, Inc. (ACE Foods) liable to respondent Micro Pacific Technologies configure the subject products; (b) submit a cost benefit study to justify the purchase of
Co., Ltd. (MTCL) for the payment of Cisco Routers and Frame Relay Products (subject the subject products; and (c) train ACE Foodss technicians on how to use and maintain
products) amounting to 646,464.00 pursuant to a perfected contract of sale. the subject products. 16 ACE Foods likewise claimed that the subject products MTCL
delivered are defective and not working.17
The Facts
For its part, MTCL, in its Answer with Counterclaim,18 maintained that it had duly
ACE Foods is a domestic corporation engaged in the trading and distribution of consumer complied with its obligations to ACE Foods and that the subject products were in good
goods in wholesale and retail bases,6 while MTCL is one engaged in the supply of working condition when they were delivered, installed and configured in ACE Foodss
computer hardware and equipment.7 premises. Thereafter, MTCL even conducted a training course for ACE Foodss
representatives/employees; MTCL, however, alleged that there was actually no
On September 26, 2001, MTCL sent a letter-proposal8 for the delivery and sale of the agreement as to the purported "after delivery services." Further, MTCL posited that ACE
subject products to be installed at various offices of ACE Foods. Aside from the itemization Foods refused and failed to pay the purchase price for the subject products despite the
of the products offered for sale, the said proposal further provides for the following latters use of the same for a period of nine (9) months. As such, MTCL prayed that ACE
terms, viz.:9 Foods be compelled to pay the purchase price, as well as damages related to the
transaction.19
TERMS : Thirty (30) days upon delivery
The RTC Ruling
VALIDITY : Prices are based on current dollar rate and subject to changes without prior
notice. On February 28, 2007, the RTC rendered a Decision, 20 directing MTCL to remove the
subject products from ACE Foodss premises and pay actual damages and attorney fees
DELIVERY : Immediate delivery for items on stock, otherwise thirty (30) to forty-five days in the amounts of 200,000.00 and 100,000.00, respectively.21
upon receipt of [Purchase Order]
At the outset, it observed that the agreement between ACE Foods and MTCL is in the
WARRANTY : One (1) year on parts and services. Accessories not included in warranty. nature of a contract to sell. Its conclusion was based on the fine print of the Invoice
Receipt which expressly indicated that "title to sold property is reserved in MICROPACIFIC
On October 29, 2001, ACE Foods accepted MTCLs proposal and accordingly issued TECHNOLOGIES CO., LTD. until full compliance of the terms and conditions of above and
Purchase Order No. 10002310 (Purchase Order) for the subject products amounting to payment of the price," noting further that in a contract to sell, the prospective seller
646,464.00 (purchase price). Thereafter, or on March 4, 2002, MTCL delivered the said explicitly reserves the transfer of title to the prospective buyer, and said transfer is
conditioned upon the full payment of the purchase price.22 Thus, notwithstanding the The essential issue in this case is whether ACE Foods should pay MTCL the purchase price
execution of the Purchase Order and the delivery and installation of the subject products for the subject products.
at the offices of ACE Foods, by express stipulation stated in the Invoice Receipt issued by
MTCL and signed by ACE Foods, i.e., the title reservation stipulation, it is still the former The Courts Ruling
who holds title to the products until full payment of the purchase price therefor. In this
relation, it noted that the full payment of the price is a positive suspensive condition, the The petition lacks merit.
non-payment of which prevents the obligation to sell on the part of the seller/vendor
from materializing at all.23 Since title remained with MTCL, the RTC therefore directed it A contract is what the law defines it to be, taking into consideration its essential elements,
to withdraw the subject products from ACE Foodss premises. Also, in view of the and not what the contracting parties call it.33 The real nature of a contract may be
foregoing, the RTC found it unnecessary to delve into the allegations of breach since the determined from the express terms of the written agreement and from the
non-happening of the aforesaid suspensive condition ipso jure prevented the obligation contemporaneous and subsequent acts of the contracting parties. However, in the
to sell from arising.24 construction or interpretation of an instrument, the intention of the parties is primordial
and is to be pursued. The denomination or title given by the parties in their contract is
Dissatisfied, MTCL elevated the matter on appeal.25 not conclusive of the nature of its contents.34

The CA Ruling The very essence of a contract of sale is the transfer of ownership in exchange for a price
paid or promised. 35 This may be gleaned from Article 1458 of the Civil Code which
In a Decision26 dated October 21, 2011, the CA reversed and set aside the RTCs ruling, defines a contract of sale as follows:
ordering ACE Foods to pay MTCL the amount of 646,464.00, plus legal interest at the
rate of 6% per annum to be computed from April 4, 2002, and attorneys fees amounting Art. 1458. By the contract of sale one of the contracting parties obligates himself to
to 50,000.00.27 transfer the ownership and to deliver a determinate thing, and the other to pay therefor
a price certain in money or its equivalent.
It found that the agreement between the parties is in the nature of a contract of sale,
observing that the said contract had been perfected from the time ACE Foods sent the A contract of sale may be absolute or conditional. (Emphasis supplied)
Purchase Order to MTCL which, in turn, delivered the subject products covered by the
Invoice Receipt and subsequently installed and configured them in ACE Foodss Corollary thereto, a contract of sale is classified as a consensual contract, which means
premises.28 Thus, considering that MTCL had already complied with its obligation, ACE that the sale is perfected by mere consent. No particular form is required for its validity.
Foodss corresponding obligation arose and was then duty bound to pay the agreed Upon perfection of the contract, the parties may reciprocally demand performance, i.e.,
purchase price within thirty (30) days from March 5, 2002.29 In this light, the CA the vendee may compel transfer of ownership of the object of the sale, and the vendor
concluded that it was erroneous for ACE Foods not to pay the purchase price therefor, may require the vendee to pay the thing sold.36
despite its receipt of the subject products, because its refusal to pay disregards the very
essence of reciprocity in a contract of sale.30 The CA also dismissed ACE Foodss claim In contrast, a contract to sell is defined as a bilateral contract whereby the prospective
regarding MTCLs failure to perform its "after delivery services" obligations since the seller, while expressly reserving the ownership of the property despite delivery thereof
letter-proposal, Purchase Order and Invoice Receipt do not reflect any agreement to that to the prospective buyer, binds himself to sell the property exclusively to the prospective
effect.31 buyer upon fulfillment of the condition agreed upon, i.e., the full payment of the purchase
price. A contract to sell may not even be considered as a conditional contract of sale
Aggrieved, ACE Foods moved for reconsideration which was, however, denied in a where the seller may likewise reserve title to the property subject of the sale until the
Resolution 32 dated February 8, 2012, hence, this petition. fulfillment of a suspensive condition, because in a conditional contract of sale, the first
element of consent is present, although it is conditioned upon the happening of a
The Issue Before the Court contingent event which may or may not occur.37

In this case, the Court concurs with the CA that the parties have agreed to a contract of on the part of MTCL which has no effect on the nature of the parties original agreement
sale and not to a contract to sell as adjudged by the RTC. Bearing in mind its consensual as a contract of sale. Perforce, the obligations arising thereto, among others, ACE Foodss
nature, a contract of sale had been perfected at the precise moment ACE Foods, as obligation to pay the purchase price as well as to accept the delivery of the goods,40
evinced by its act of sending MTCL the Purchase Order, accepted the latters proposal to remain enforceable and subsisting.1wphi1
sell the subject products in consideration of the purchase price of 646,464.00. From that
point in time, the reciprocal obligations of the parties i.e., on the one hand, of MTCL to As a final point, it may not be amiss to state that the return of the subject products
deliver the said products to ACE Foods, and, on the other hand, of ACE Foods to pay the pursuant to a rescissory action41 is neither warranted by ACE Foodss claims of breach
purchase price therefor within thirty (30) days from delivery already arose and either with respect to MTCLs breach of its purported "after delivery services" obligations
consequently may be demanded. Article 1475 of the Civil Code makes this clear: or the defective condition of the products - since such claims were not adequately proven
in this case. The rule is clear: each party must prove his own affirmative allegation; one
Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds who asserts the affirmative of the issue has the burden of presenting at the trial such
upon the thing which is the object of the contract and upon the price. amount of evidence required by law to obtain a favorable judgment, which in civil cases,
is by preponderance of evidence. 42 This, however, ACE Foods failed to observe as regards
From that moment, the parties may reciprocally demand performance, subject to the its allegations of breach. Hence, the same cannot be sustained.
provisions of the law governing the form of contracts.
WHEREFORE, the petition is DENIED. Accordingly, the Decision dated October 21, 2011
At this juncture, the Court must dispel the notion that the stipulation anent MTCLs and Resolution dated February 8, 2012 of the Court of Appeals in CA-G.R. CV No. 89426
reservation of ownership of the subject products as reflected in the Invoice Receipt, i.e., are hereby AFFIRMED.
the title reservation stipulation, changed the complexion of the transaction from a
contract of sale into a contract to sell. Records are bereft of any showing that the said SO ORDERED.
stipulation novated the contract of sale between the parties which, to repeat, already
existed at the precise moment ACE Foods accepted MTCLs proposal. To be sure,
novation, in its broad concept, may either be extinctive or modificatory. It is extinctive
when an old obligation is terminated by the creation of a new obligation that takes the
place of the former; it is merely modificatory when the old obligation subsists to the
extent it remains compatible with the amendatory agreement. In either case, however,
novation is never presumed, and the animus novandi, whether totally or partially, must
appear by express agreement of the parties, or by their acts that are too clear and
unequivocal to be mistaken.38

In the present case, it has not been shown that the title reservation stipulation appearing
in the Invoice Receipt had been included or had subsequently modified or superseded the
original agreement of the parties. The fact that the Invoice Receipt was signed by a
representative of ACE Foods does not, by and of itself, prove animus novandi since: (a) it
was not shown that the signatory was authorized by ACE Foods (the actual party to the
transaction) to novate the original agreement; (b) the signature only proves that the
Invoice Receipt was received by a representative of ACE Foods to show the fact of
delivery; and (c) as matter of judicial notice, invoices are generally issued at the
consummation stage of the contract and not its perfection, and have been even treated
as documents which are not actionable per se, although they may prove sufficient
delivery. 39 Thus, absent any clear indication that the title reservation stipulation was
actually agreed upon, the Court must deem the same to be a mere unilateral imposition
G.R. No. 192105, December 09, 2013 Petitioner made personal and written follow-ups regarding his unpaid salaries,
ANTONIO LOCSIN II, Petitioners, v. MEKENI FOOD CORPORATION, Respondent. commissions, benefits, and offer to purchase his service vehicle. Mekeni replied that the
D E C I S I O N company car plan benefit applied only to employees who have been with the company
DEL CASTILLO, J.: for five years; for this reason, the balance that petitioner should pay on his service vehicle
stood at P116,380.00 if he opts to purchase the same.
In the absence of specific terms and conditions governing a car plan agreement between
the employer and employee, the former may not retain the installment payments made On May 3, 2007, petitioner filed against Mekeni and/or its President, Prudencio S. Garcia,
6
by the latter on the car plan and treat them as rents for the use of the service vehicle, in a Complaint for the recovery of monetary claims consisting of unpaid salaries,
the event that the employee ceases his employment and is unable to complete the commissions, sick/vacation leave benefits, and recovery of monthly salary deductions
installment payments on the vehicle. The underlying reason is that the service vehicle was which were earmarked for his cost-sharing in the car plan. The case was docketed in the
precisely used in the formers business; any personal benefit obtained by the employee National Labor Relations Commission (NLRC), National Capital Region (NCR), Quezon City
from its use is merely incidental. as NLRC NCR CASE NO. 00-05-04139-07.

1 2 7
This Petition for Review on Certiorari assails the January 27, 2010 Decision of the Court On October 30, 2007, Labor Arbiter Cresencio G. Ramos rendered a Decision, decreeing
3
of Appeals (CA) in CA-G.R. SP No. 109550, as well as its April 23, 2010 Resolution denying as follows:
4
petitioners Motion for Partial Reconsideration. ChanRoblesVirtualawlibrary WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered
directing respondents to turn-over to complainant x x x the subject vehicle upon the said
Factual Antecedents complainants payment to them of the sum of P100,435.84.

8
In February 2004, respondent Mekeni Food Corporation (Mekeni) a Philippine company SO ORDERED.
engaged in food manufacturing and meat processing offered petitioner Antonio Locsin Ruling of the National Labor Relations Commission
II the position of Regional Sales Manager to oversee Mekenis National Capital Region
9 10
Supermarket/Food Service and South Luzon operations. In addition to a compensation On appeal, the Labor Arbiters Decision was reversed in a February 27, 2009 Decision
and benefit package, Mekeni offered petitioner a car plan, under which one-half of the of the NLRC, thus:
cost of the vehicle is to be paid by the company and the other half to be deducted from WHEREFORE, premises considered, the appeal is hereby Granted. The assailed Decision
5
petitioners salary. Mekenis offer was contained in an Offer Sheet which was presented dated October 30, 2007 is hereby REVERSED and SET ASIDE and a new one entered
to petitioner. ordering respondent-appellee Mekeni Food Corporation to pay complainant-appellee the
following:
Petitioner began his stint as Mekeni Regional Sales Manager on March 17, 2004. To be
able to effectively cover his appointed sales territory, Mekeni furnished petitioner with a 1. Unpaid Salary in the amount of P12,511.45;
used Honda Civic car valued at P280,000.00, which used to be the service vehicle of
petitioners immediate supervisor. Petitioner paid for his 50% share through salary 2. Unpaid sick leave/vacation leave pay in the amount of P14,789.15;
deductions of P5,000.00 each month.
3. Unpaid commission in the amount of P9,780.00; and
Subsequently, Locsin resigned effective February 25, 2006. By then, a total of P112,500.00
had been deducted from his monthly salary and applied as part of the employees share 4. Reimbursement of complainants payment under the car plan agreement in the
in the car plan. Mekeni supposedly put in an equivalent amount as its share under the car amount of P112,500.00; and
plan. In his resignation letter, petitioner made an offer to purchase his service vehicle by
paying the outstanding balance thereon. The parties negotiated, but could not agree on 5. The equivalent share of the company as part of the complainants benefit under the
the terms of the proposed purchase. Petitioner thus returned the vehicle to Mekeni on car plan 50/50 sharing amounting to P112,500.00.
May 2, 2006.
Respondent-Appellee Mekeni Food Corporation is hereby authorized to deduct the sum
of P4,736.50 representing complainant-appellants cash advance from his total monetary ownership of the motor vehicle until it shall have been fully paid for. However, retention
award. of registration of the car in the companys name is only a form of a lien on the vehicle in
the event that the employee would abscond before he has fully paid for it. There are also
All other claims are dismissed for lack of merit. stipulations in car plan agreements to the effect that should the employment of the
employee concerned be terminated before all installments are fully paid, the vehicle will
11
SO ORDERED. be taken by the employer and all installments paid shall be considered rentals per
16
The NLRC held that petitioners amortization payments on his service vehicle amounting agreement.
to P112,500.00 should be reimbursed; if not, unjust enrichment would result, as the In the absence of evidence as to the stipulations of the car plan arrangement between
vehicle remained in the possession and ownership of Mekeni. In addition, the employers Mekeni and petitioner, the CA treated petitioners monthly contributions in the total
share in the monthly car plan payments should likewise be awarded to petitioner because amount of P112,500.00 as rentals for the use of his service vehicle for the duration of his
it forms part of the latters benefits under the car plan. It held further that Mekenis claim employment with Mekeni. The appellate court applied Articles 1484-1486 of the Civil
17
that the company car plan benefit applied only to employees who have been with the Code, and added that the installments paid by petitioner should not be returned to him
company for five years has not been substantiated by its evidence, in which case the car inasmuch as the amounts are not unconscionable. It made the following pronouncement:
plan agreement should be construed in petitioners favor. Having used the car in question for the duration of his employment, it is but fair that all
of Locsins payments be considered as rentals therefor which may be forfeited by Mekeni.
12
Mekeni moved to reconsider, but in an April 30, 2009 Resolution, the NLRC sustained its Therefore, Mekeni has no obligation to return these payments to Locsin. Conversely,
original findings. Mekeni has no right to demand the payment of the balance of the purchase price from
18
Locsin since the latter has already surrendered possession of the vehicle.
Ruling of the Court of Appeals Moreover, the CA held that petitioner cannot recover Mekenis corresponding share in
the purchase price of the service vehicle, as this would constitute unjust enrichment on
13
Mekeni filed a Petition for Certiorari with the CA assailing the NLRCs February 27, 2009 the part of petitioner at Mekenis expense.
Decision, saying that the NLRC committed grave abuse of discretion in holding it liable to
petitioner as it had no jurisdiction to resolve petitioners claims, which are civil in nature. The CA affirmed the NLRC judgment in all other respects. Petitioner filed his Motion for
19
Partial Reconsideration, but the CA denied the same in its April 23, 2010 Resolution.
On January 27, 2010, the CA issued the assailed Decision, decreeing as follows:
WHEREFORE, the petition for certiorari is GRANTED. The Decision of the National Labor Thus, petitioner filed the instant Petition; Mekeni, on the other hand, took no further
Relations Commission dated 27 February 2009, in NLRC NCR Case No. 00-05-04139-07, action.
and its Resolution dated 30 April 2009 denying reconsideration thereof, are MODIFIED in
that the reimbursement of Locsins payment under the car plan in the amount of Issue
P112,500.00, and the payment to him of Mekenis 50% share in the amount of
P112,500.00 are DELETED. The rest of the decision is AFFIRMED. Petitioner raises the following solitary issue:
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS ERRED IN NOT
14
SO ORDERED. CONSIDERING THE CAR PLAN PRIVILEGE AS PART OF THE COMPENSATION PACKAGE
In arriving at the above conclusion, the CA held that the NLRC possessed jurisdiction over OFFERED TO PETITIONER AT THE INCEPTION OF HIS EMPLOYMENT AND INSTEAD
petitioners claims, including the amounts he paid under the car plan, since his Complaint LIKENED IT TO A CAR LOAN ON INSTALLMENT, IN SPITE OF THE ABSENCE OF EVIDENCE
20
against Mekeni is one for the payment of salaries and employee benefits. With regard to ON RECORD.
the car plan arrangement, the CA applied the ruling in Elisco Tool Manufacturing Petitioners Arguments
15
Corporation v. Court of Appeals, where it was held that
21
First. Petitioner does not deny that private respondent Rolando Lantan acquired the In his Petition and Reply, petitioner mainly argues that the CA erred in treating his
vehicle in question under a car plan for executives of the Elizalde group of companies. monthly contributions to the car plan, totaling P112,500.00, as rentals for the use of his
Under a typical car plan, the company advances the purchase price of a car to be paid service vehicle during his employment; the car plan which he availed of was a benefit and
back by the employee through monthly deductions from his salary. The company retains it formed part of the package of economic benefits granted to him when he was hired as
Regional Sales Manager. Petitioner submits that this is shown by the Offer Sheet which the amounts applied to the cost of the service vehicle under the car plan.
was shown to him and which became the basis for his decision to accept the offer and
work for Mekeni. When the conclusions of the CA are grounded entirely on speculation, surmises and
conjectures, or when the inferences made by it are manifestly mistaken or absurd, its
24
Petitioner adds that the absence of documentary or other evidence showing the terms findings are subject to review by this Court.
and conditions of the Mekeni company car plan cannot justify a reliance on Mekenis self-
serving claims that the full terms thereof applied only to employees who have been with From the evidence on record, it is seen that the Mekeni car plan offered to petitioner was
the company for at least five years; in the absence of evidence, doubts should be resolved subject to no other term or condition than that Mekeni shall cover one-half of its value,
in his favor pursuant to the policy of the law that affords protection to labor, as well as and petitioner shall in turn pay the other half through deductions from his monthly salary.
the principle that all doubts should be construed to its benefit. Mekeni has not shown, by documentary evidence or otherwise, that there are other
terms and conditions governing its car plan agreement with petitioner. There is no
Finally, petitioner submits that the ruling in the Elisco Tool case cannot apply to his case evidence to suggest that if petitioner failed to completely cover one-half of the cost of
because the car plan subject of the said case involved a car loan, which his car plan benefit the vehicle, then all the deductions from his salary going to the cost of the vehicle will be
was not; it was part of his compensation package, and the vehicle was an important treated as rentals for his use thereof while working with Mekeni, and shall not be
component of his work which required constant and uninterrupted mobility. Petitioner refunded. Indeed, there is no such stipulation or arrangement between them. Thus, the
claims that the car plan was in fact more beneficial to Mekeni than to him; besides, he did CAs reliance on Elisco Tool is without basis, and its conclusions arrived at in the
not choose to avail of it, as it was simply imposed upon him. He concludes that it is only questioned decision are manifestly mistaken. To repeat what was said in Elisco Tool
just that his payments should be refunded and returned to him. First. Petitioner does not deny that private respondent Rolando Lantan acquired the
vehicle in question under a car plan for executives of the Elizalde group of companies.
Petitioner thus prays for the reversal of the assailed CA Decision and Resolution, and that Under a typical car plan, the company advances the purchase price of a car to be paid
the Court reinstate the NLRCs February 27, 2009 Decision. back by the employee through monthly deductions from his salary. The company retains
ownership of the motor vehicle until it shall have been fully paid for. However, retention
Respondents Arguments of registration of the car in the companys name is only a form of a lien on the vehicle in
the event that the employee would abscond before he has fully paid for it. There are also
22
In its Comment, Mekeni argues that the Petition does not raise questions of law, but stipulations in car plan agreements to the effect that should the employment of the
merely of fact, which thus requires the Court to review anew issues already passed upon employee concerned be terminated before all installments are fully paid, the vehicle
by the CA an unauthorized exercise given that the Supreme Court is not a trier of facts, will be taken by the employer and all installments paid shall be considered rentals per
23 25
nor is it its function to analyze or weigh the evidence of the parties all over again. It adds agreement. (Emphasis supplied)
that the issue regarding the car plan and the conclusions of the CA drawn from the It was made clear in the above pronouncement that installments made on the car plan
evidence on record are questions of fact. may be treated as rentals only when there is an express stipulation in the car plan
agreement to such effect. It was therefore patent error for the appellate court to assume
Mekeni asserts further that the service vehicle was merely a loan which had to be paid that, even in the absence of express stipulation, petitioners payments on the car plan
through the monthly salary deductions. If it is not allowed to recover on the loan, this may be considered as rentals which need not be returned.
would constitute unjust enrichment on the part of petitioner.
Indeed, the Court cannot allow that payments made on the car plan should be forfeited
Our Ruling by Mekeni and treated simply as rentals for petitioners use of the company service
vehicle. Nor may they be retained by it as purported loan payments, as it would have this
The Petition is partially granted. Court believe. In the first place, there is precisely no stipulation to such effect in their
agreement. Secondly, it may not be said that the car plan arrangement between the
To begin with, the Court notes that Mekeni did not file a similar petition questioning the parties was a benefit that the petitioner enjoyed; on the contrary, it was an absolute
CA Decision; thus, it is deemed to have accepted what was decreed. The only issue that necessity in Mekenis business operations, which benefited it to the fullest extent:
must be resolved in this Petition, then, is whether petitioner is entitled to a refund of all without the service vehicle, petitioner would have been unable to rapidly cover the vast
sales territory assigned to him, and sales or marketing of Mekenis products could not merely incidental.
have been booked or made fast enough to move Mekenis inventory. Poor sales, inability
to market Mekenis products, a high rate of product spoilage resulting from stagnant Conversely, petitioner cannot recover the monetary value of Mekenis counterpart
inventory, and poor monitoring of the sales territory are the necessary consequences of contribution to the cost of the vehicle; that is not property or money that belongs to him,
lack of mobility. Without a service vehicle, petitioner would have been placed at the nor was it intended to be given to him in lieu of the car plan. In other words, Mekenis
mercy of inefficient and unreliable public transportation; his official schedule would have share of the vehicles cost was not part of petitioners compensation package. To start
been dependent on the arrival and departure times of buses or jeeps, not to mention the with, the vehicle is an asset that belonged to Mekeni. Just as Mekeni is unjustly enriched
availability of seats in them. Clearly, without a service vehicle, Mekenis business could by failing to refund petitioners payments, so should petitioner not be awarded the value
only prosper at a snails pace, if not completely paralyzed. Its cost of doing business would of Mekenis counterpart contribution to the car plan, as this would unjustly enrich him at
be higher as well. The Court expressed just such a view in the past. Thus Mekenis expense.
In the case at bar, the disallowance of the subject car plan benefits would hamper the There is unjust enrichment when a person unjustly retains a benefit to the loss of
officials in the performance of their functions to promote and develop trade which another, or when a person retains money or property of another against the fundamental
requires mobility in the performance of official business. Indeed, the car plan benefits principles of justice, equity and good conscience. The principle of unjust enrichment
are supportive of the implementation of the objectives and mission of the agency requires two conditions: (1) that a person is benefited without a valid basis or justification,
26
relative to the nature of its operation and responsive to the exigencies of the service. and (2) that such benefit is derived at the expense of another.
(Emphasis supplied)
Any benefit or privilege enjoyed by petitioner from using the service vehicle was merely The main objective of the principle against unjust enrichment is to prevent one from
28
incidental and insignificant, because for the most part the vehicle was under Mekenis enriching himself at the expense of another without just cause or consideration. x x x
control and supervision. Free and complete disposal is given to the petitioner only after WHEREFORE, the Petition is GRANTED IN PART. The assailed January 27, 2010 Decision
the vehicles cost is covered or paid in full. Until then, the vehicle remains at the beck and and April 23, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 109550 are
call of Mekeni. Given the vast territory petitioner had to cover to be able to perform his MODIFIED, in that respondent Mekeni Food Corporation is hereby ordered to REFUND
work effectively and generate business for his employer, the service vehicle was an petitioner Antonio Locsin IIs payments under the car plan agreement in the total amount
absolute necessity, or else Mekenis business would suffer adversely. Thus, it is clear that of P112,500.00.
while petitioner was paying for half of the vehicles value, Mekeni was reaping the full
benefits from the use thereof. Thus, except for the counterpart or equivalent share of Mekeni Food Corporation in the
car plan agreement amounting to P112,500.00, which is DELETED, the February 27, 2009
In light of the foregoing, it is unfair to deny petitioner a refund of all his contributions to Decision of the National Labor Relations Commission is affirmed in all
the car plan. Under Article 22 of the Civil Code, [e]very person who through an act of respects.chanRoblesvirtualLawlibrary
performance by another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground, shall return the same SO ORDERED.
27
to him. Article 2142 of the same Code likewise clarifies that there are certain lawful,
voluntary and unilateral acts which give rise to the juridical relation of quasi-contract, to
the end that no one shall be unjustly enriched or benefited at the expense of another. In
the absence of specific terms and conditions governing the car plan arrangement
between the petitioner and Mekeni, a quasi-contractual relation was created between
them. Consequently, Mekeni may not enrich itself by charging petitioner for the use of its
vehicle which is otherwise absolutely necessary to the full and effective promotion of its
business. It may not, under the claim that petitioners payments constitute rents for the
use of the company vehicle, refuse to refund what petitioner had paid, for the reasons
that the car plan did not carry such a condition; the subject vehicle is an old car that is
substantially, if not fully, depreciated; the car plan arrangement benefited Mekeni for the
most part; and any personal benefit obtained by petitioner from using the vehicle was
G.R. No. 97995 January 21, 1993 On the basis of the cable message dated February 24, 1975 Cashier's Check No. 269522
in the amount of US$1,400 (P9,772.95) representing reimbursement from Star Kist, was
PHILIPPINE NATIONAL BANK, petitioner, issued by the Star Kist for the account of Mata on February 25, 1975 through the Insular
vs. Bank of Asia and America (IBAA).
COURT OF APPEALS AND B.P. MATA AND CO., INC., respondents.
However, fourteen days after or on March 11, 1975, PNB effected another payment
Roland A. Niedo for petitioner. through Cashier's Check No. 270271 in the amount of US$14,000 (P97,878.60) purporting
to be another transmittal of reimbursement from Star Kist, private respondent's foreign
Benjamin C. Santos Law Office for respondent. principal.

Six years later, or more specifically, on May 13, 1981, PNB requested Mata for refund of
ROMERO, J.: US$14,000 (P97,878.60) after it discovered its error in effecting the second payment.

Rarely is this Court confronted with a case calling for the delineation in broad strokes of On February 4, 1982, PNB filed a civil case for collection and refund of US$14,000 against
the distinctions between such closely allied concepts as the quasi-contract called "solutio Mata arguing that based on a constructive trust under Article 1456 of the Civil Code, it
indebiti" under the venerable Spanish Civil Code and the species of implied trust has a right to recover the said amount it erroneously credited to respondent Mata.1
denominated "constructive trusts," commonly regarded as of Anglo-American origin.
Such a case is the one presented to us now which has highlighted more of the affinity and After trial, the Regional Trial Court of Manila rendered judgment dismissing the complaint
less of the dissimilarity between the two concepts as to lead the legal scholar into the ruling that the instant case falls squarely under Article 2154 on solutio indebiti and not
error of interchanging the two. Presented below are the factual circumstances that under Article 1456 on constructive trust. The lower court ruled out constructive trust,
brought into juxtaposition the twin institutions of the Civil Law quasi-contract and the applying strictly the technical definition of a trust as "a right of property, real or personal,
Anglo-American trust. held by one party for the benefit of another; that there is a fiduciary relation between a
trustee and a cestui que trust as regards certain property, real, personal, money or choses
Private Respondent B.P. Mata & Co. Inc. (Mata), is a private corporation engaged in in action."2
providing goods and services to shipping companies. Since 1966, it has acted as a manning
or crewing agent for several foreign firms, one of which is Star Kist Foods, Inc., USA (Star In affirming the lower court, the appellate court added in its opinion that under Article
Kist). As part of their agreement, Mata makes advances for the crew's medical expenses, 2154 on solutio indebiti, the person who makes the payment is the one who commits the
National Seaman's Board fees, Seaman's Welfare fund, and standby fees and for the mistake vis-a-vis the recipient who is unaware of such a mistake.3 Consequently, recipient
crew's basic personal needs. Subsequently, Mata sends monthly billings to its foreign is duty bound to return the amount paid by mistake. But the appellate court concluded
principal Star Kist, which in turn reimburses Mata by sending a telegraphic transfer that petitioner's demand for the return of US$14,000 cannot prosper because its cause
through banks for credit to the latter's account. of action had already prescribed under Article 1145, paragraph 2 of the Civil Code which
states:
Against this background, on February 21, 1975, Security Pacific National Bank (SEPAC) of
Los Angeles which had an agency arrangement with Philippine National Bank (PNB), The following actions must be commenced within six years:
transmitted a cable message to the International Department of PNB to pay the amount
of US$14,000 to Mata by crediting the latter's account with the Insular Bank of Asia and xxx xxx xxx
America (IBAA), per order of Star Kist. Upon receipt of this cabled message on February
24, 1975, PNB's International Department noticed an error and sent a service message to (2) Upon a quasi-contract.
SEPAC Bank. The latter replied with instructions that the amount of US$14,000 should
only be for US$1,400. This is because petitioner's complaint was filed only on February 4, 1982, almost seven
years after March 11, 1975 when petitioner mistakenly made payment to private
respondent.
 construction of equity in order to satisfy the demands of justice. An example of a
Hence, the instant petition for certiorari proceeding seeking to annul the decision of the constructive trust is Article 1456 quoted above.11
appellate court on the basis that Mata's obligation to return US$14,000 is governed, in
the alternative, by either Article 1456 on constructive trust or Article 2154 of the Civil A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense 12 for
Code on quasi-contract.4 in a typical trust, confidence is reposed in one person who is named a trustee for the
benefit of another who is called the cestui que trust, respecting property which is held by
Article 1456 of the Civil Code provides: the trustee for the benefit of the cestui que trust.13 A constructive trust, unlike an express
trust, does not emanate from, or generate a fiduciary relation. While in an express trust,
If property is acquired through mistake or fraud, the person obtaining it is, by force of a beneficiary and a trustee are linked by confidential or fiduciary relations, in a
law, considered a trustee of an implied trust for the benefit of the person from whom the constructive trust, there is neither a promise nor any fiduciary relation to speak of and
property comes. the so-called trustee neither accepts any trust nor intends holding the property for the
beneficiary.14
On the other hand, Article 2154 states:
In the case at bar, Mata, in receiving the US$14,000 in its account through IBAA, had no
If something is received when there is no right to demand it, and it was unduly delivered intent of holding the same for a supposed beneficiary or cestui que trust, namely PNB.
through mistake, the obligation to return it arises. But under Article 1456, the law construes a trust, namely a constructive trust, for the
benefit of the person from whom the property comes, in this case PNB, for reasons of
Petitioner naturally opts for an interpretation under constructive trust as its action filed justice and equity.
on February 4, 1982 can still prosper, as it is well within the prescriptive period of ten (10)
years as provided by Article 1144, paragraph 2 of the Civil Code.5 At this juncture, a historical note on the codal provisions on trust and quasi-contracts is
in order.
If it is to be construed as a case of payment by mistake or solutio indebiti, then the
prescriptive period for quasi-contracts of six years applies, as provided by Article 1145. As Originally, under the Spanish Civil Code, there were only two kinds of quasi contracts:
pointed out by the appellate court, petitioner's cause of action thereunder shall have negotiorum gestio and solutio indebiti. But the Code Commission, mindful of the position
prescribed, having been brought almost seven years after the cause of action accrued. of the eminent Spanish jurist, Manresa, that "the number of quasi contracts may be
However, even assuming that the instant case constitutes a constructive trust and indefinite," added Section 3 entitled "Other Quasi-Contracts."15
prescription has not set in, the present action has already been barred by laches.
Moreover, even as Article 2142 of the Civil Code defines a quasi-contract, the succeeding
To recall, trusts are either express or implied. While express trusts are created by the article provides that: "The provisions for quasi-contracts in this Chapter do not exclude
intention of the trustor or of the parties, implied trusts come into being by operation of other quasi-contracts which may come within the purview of the preceding article."16
law.6 Implied trusts are those which, without being expressed, are deducible from the
nature of the transaction as matters of intent or which are superinduced on the Indubitably, the Civil Code does not confine itself exclusively to the quasi-contracts
transaction by operation of law as matters of equity, independently of the particular enumerated from Articles 2144 to 2175 but is open to the possibility that, absent a pre-
intention of the parties.7 existing relationship, there being neither crime nor quasi-delict, a quasi-contractual
relation may be forced upon the parties to avoid a case of unjust enrichment.17 There
In turn, implied trusts are subdivided into resulting and constructive trusts.8 A resulting being no express consent, in the sense of a meeting of minds between the parties, there
trust is a trust raised by implication of law and presumed always to have been is no contract to speak of. However, in view of the peculiar circumstances or factual
contemplated by the parties, the intention of which is found in the nature of the environment, consent is presumed to the end that a recipient of benefits or favors
transaction, but not expressed in the deed or instrument of conveyance.9 Examples of resulting from lawful, voluntary and unilateral acts of another may not be unjustly
resulting trusts are found in Articles 1448 to 1455 of the Civil Code.10 On the other hand, enriched at the expense of another.
a constructive trust is one not created by words either expressly or impliedly, but by
Undoubtedly, the instant case fulfills the indispensable requisites of solutio indebiti as Although we are not quite in accord with the opinion that "the trusts known to American
defined in Article 2154 that something (in this case money) has been received when there and English equity jurisprudence are derived from the fidei commissa of the Roman
was no right to demand it and (2) the same was unduly delivered through mistake. There Law,"24 it is safe to state that their roots are firmly grounded on such Civil Law principles
is a presumption that there was a mistake in the payment "if something which had never are expressed in the Latin maxim, "Nemo cum alterius detrimento locupletari potest," 25
been due or had already been paid was delivered; but he from whom the return is claimed particularly the concept of constructive trust.
may prove that the delivery was made out of liberality or for any other just cause."18
Returning to the instant case, while petitioner may indeed opt to avail of an action to
In the case at bar, a payment in the corrected amount of US$1,400 through Cashier's enforce a constructive trust or the quasi-contract of solutio indebiti, it has been deprived
Check No. 269522 had already been made by PNB for the account of Mata on February of a choice, for prescription has effectively blocked quasi-contract as an alternative,
25, 1975. Strangely, however, fourteen days later, PNB effected another payment leaving only constructive trust as the feasible option.
through Cashier's Check No. 270271 in the amount of US$14,000, this time purporting to
be another transmittal of reimbursement from Star Kist, private respondent's foreign Petitioner argues that the lower and appellate courts cannot indulge in semantics by
principal. holding that in Article 1456 the recipient commits the mistake while in Article 2154, the
recipient commits no mistake. 26 On the other hand, private respondent, invoking the
While the principle of undue enrichment or solutio indebiti, is not new, having been appellate court's reasoning, would impress upon us that under Article 1456, there can be
incorporated in the subject on quasi-contracts in Title XVI of Book IV of the Spanish Civil no mutual mistake. Consequently, private respondent contends that the case at bar is one
Code entitled "Obligations incurred without contract,"19 the chapter on Trusts is fairly of solutio indebiti and not a constructive trust.
recent, having been introduced by the Code Commission in 1949. Although the concept
of trusts is nowhere to be found in the Spanish Civil Code, the framers of our present Civil We agree with petitioner's stand that under Article 1456, the law does not make any
Code incorporated implied trusts, which includes constructive trusts, on top of quasi- distinction since mutual mistake is a possibility on either side on the side of either the
contracts, both of which embody the principle of equity above strict legalism.20 grantor or the grantee.27 Thus, it was error to conclude that in a constructive trust, only
the person obtaining the property commits a mistake. This is because it is also possible
In analyzing the law on trusts, it would be instructive to refer to Anglo-American that a grantor, like PNB in the case at hand, may commit the mistake.
jurisprudence on the subject. Under American Law, a court of equity does not consider a
constructive trustee for all purposes as though he were in reality a trustee; although it Proceeding now to the issue of whether or not petitioner may still claim the US$14,000 it
will force him to return the property, it will not impose upon him the numerous fiduciary erroneously paid private respondent under a constructive trust, we rule in the negative.
obligations ordinarily demanded from a trustee of an express trust.21 It must be borne in Although we are aware that only seven (7) years lapsed after petitioner erroneously
mind that in an express trust, the trustee has active duties of management while in a credited private respondent with the said amount and that under Article 1144, petitioner
constructive trust, the duty is merely to surrender the property. is well within the prescriptive period for the enforcement of a constructive or implied
trust, we rule that petitioner's claim cannot prosper since it is already barred by laches. It
Still applying American case law, quasi-contractual obligations give rise to a personal is a well-settled rule now that an action to enforce an implied trust, whether resulting or
liability ordinarily enforceable by an action at law, while constructive trusts are constructive, may be barred not only by prescription but also by laches.28
enforceable by a proceeding in equity to compel the defendant to surrender specific
property. To be sure, the distinction is more procedural than substantive.22 While prescription is concerned with the fact of delay, laches deals with the effect of
unreasonable delay.29 It is amazing that it took petitioner almost seven years before it
Further reflection on these concepts reveals that a constructive "trust" is as much a discovered that it had erroneously paid private respondent. Petitioner would attribute its
misnomer as a "quasi-contract," so far removed are they from trusts and contracts mistake to the heavy volume of international transactions handled by the Cable and
proper, respectively. In the case of a constructive trust, as in the case of quasi-contract, a Remittance Division of the International Department of PNB. Such specious reasoning is
relationship is "forced" by operation of law upon the parties, not because of any intention not persuasive. It is unbelievable for a bank, and a government bank at that, which
on their part but in order to prevent unjust enrichment, thus giving rise to certain regularly publishes its balanced financial statements annually or more frequently, by the
obligations not within the contemplation of the parties.23 quarter, to notice its error only seven years later. As a universal bank with worldwide
operations, PNB cannot afford to commit such costly mistakes. Moreover, as between
parties where negligence is imputable to one and not to the other, the former must
perforce bear the consequences of its neglect. Hence, petitioner should bear the cost of
its own negligence.

WHEREFORE, the decision of the Court of Appeals dismissing petitioner's claim against
private respondent is AFFIRMED.

Costs against petitioner.

SO ORDERED.
































G.R. No. 173227 January 20, 2009 petitioner for receipt for the payments but petitioner told her that it was not necessary
as there was mutual trust and confidence between them. According to her computation,
SEBASTIAN SIGA-AN, Petitioner, the total amount she paid to petitioner for the loan and interest accumulated to
vs. 1,200,000.00.7
ALICIA VILLANUEVA, Respondent.
Thereafter, respondent consulted a lawyer regarding the propriety of paying interest on
D E C I S I O N the loan despite absence of agreement to that effect. Her lawyer told her that petitioner
could not validly collect interest on the loan because there was no agreement between
CHICO-NAZARIO, J.: her and petitioner regarding payment of interest. Since she paid petitioner a total amount
of 1,200,000.00 for the 540,000.00 worth of loan, and upon being advised by her
Before Us is a Petition1 for Review on Certiorari under Rule 45 of the Rules of Court lawyer that she made overpayment to petitioner, she sent a demand letter to petitioner
seeking to set aside the Decision,2 dated 16 December 2005, and Resolution,3 dated 19 asking for the return of the excess amount of 660,000.00. Petitioner, despite receipt of
June 2006 of the Court of Appeals in CA-G.R. CV No. 71814, which affirmed in toto the the demand letter, ignored her claim for reimbursement.8
Decision,4 dated 26 January 2001, of the Las Pinas City Regional Trial Court, Branch 255,
in Civil Case No. LP-98-0068. Respondent prayed that the RTC render judgment ordering petitioner to pay respondent
(1) 660,000.00 plus legal interest from the time of demand; (2) 300,000.00 as moral
The facts gathered from the records are as follows: damages; (3) 50,000.00 as exemplary damages; and (4) an amount equivalent to 25% of
660,000.00 as attorneys fees.9
On 30 March 1998, respondent Alicia Villanueva filed a complaint5 for sum of money
against petitioner Sebastian Siga-an before the Las Pinas City Regional Trial Court (RTC), In his answer10 to the complaint, petitioner denied that he offered a loan to respondent.
Branch 255, docketed as Civil Case No. LP-98-0068. Respondent alleged that she was a He averred that in 1992, respondent approached and asked him if he could grant her a
businesswoman engaged in supplying office materials and equipments to the Philippine loan, as she needed money to finance her business venture with the PNO. At first, he was
Navy Office (PNO) located at Fort Bonifacio, Taguig City, while petitioner was a military reluctant to deal with respondent, because the latter had a spotty record as a supplier of
officer and comptroller of the PNO from 1991 to 1996. the PNO. However, since respondent was an acquaintance of his officemate, he agreed
to grant her a loan. Respondent paid the loan in full.11
Respondent claimed that sometime in 1992, petitioner approached her inside the PNO
and offered to loan her the amount of 540,000.00. Since she needed capital for her Subsequently, respondent again asked him to give her a loan. As respondent had been
business transactions with the PNO, she accepted petitioners proposal. The loan able to pay the previous loan in full, he agreed to grant her another loan. Later,
agreement was not reduced in writing. Also, there was no stipulation as to the payment respondent requested him to restructure the payment of the loan because she could not
of interest for the loan.6 give full payment on the due date. He acceded to her request. Thereafter, respondent
pleaded for another restructuring of the payment of the loan. This time he rejected her
On 31 August 1993, respondent issued a check worth 500,000.00 to petitioner as partial plea. Thus, respondent proposed to execute a promissory note wherein she would
payment of the loan. On 31 October 1993, she issued another check in the amount of acknowledge her obligation to him, inclusive of interest, and that she would issue several
200,000.00 to petitioner as payment of the remaining balance of the loan. Petitioner postdated checks to guarantee the payment of her obligation. Upon his approval of
told her that since she paid a total amount of 700,000.00 for the 540,000.00 worth of respondents request for restructuring of the loan, respondent executed a promissory
loan, the excess amount of 160,000.00 would be applied as interest for the loan. Not note dated 12 September 1994 wherein she admitted having borrowed an amount of
satisfied with the amount applied as interest, petitioner pestered her to pay additional 1,240,000.00, inclusive of interest, from petitioner and that she would pay said amount
interest. Petitioner threatened to block or disapprove her transactions with the PNO if in March 1995. Respondent also issued to him six postdated checks amounting to
she would not comply with his demand. As all her transactions with the PNO were subject 1,240,000.00 as guarantee of compliance with her obligation. Subsequently, he
to the approval of petitioner as comptroller of the PNO, and fearing that petitioner might presented the six checks for encashment but only one check was honored. He demanded
block or unduly influence the payment of her vouchers in the PNO, she conceded. Thus, that respondent settle her obligation, but the latter failed to do so. Hence, he filed
she paid additional amounts in cash and checks as interests for the loan. She asked criminal cases for Violation of the Bouncing Checks Law (Batas Pambansa Blg. 22) against
respondent. The cases were assigned to the Metropolitan Trial Court of Makati City, (5) Ordering defendant to pay the costs of suit.14
Branch 65 (MeTC).12
Petitioner appealed to the Court of Appeals. On 16 December 2005, the appellate court
Petitioner insisted that there was no overpayment because respondent admitted in the promulgated its Decision affirming in toto the RTC Decision, thus:
latters promissory note that her monetary obligation as of 12 September 1994 amounted
to 1,240,000.00 inclusive of interests. He argued that respondent was already estopped WHEREFORE, the foregoing considered, the instant appeal is hereby DENIED and the
from complaining that she should not have paid any interest, because she was given assailed decision [is] AFFIRMED in toto.15
several times to settle her obligation but failed to do so. He maintained that to rule in
favor of respondent is tantamount to concluding that the loan was given interest-free. Petitioner filed a motion for reconsideration of the appellate courts decision but this was
Based on the foregoing averments, he asked the RTC to dismiss respondents complaint. denied.16 Hence, petitioner lodged the instant petition before us assigning the following
errors:
After trial, the RTC rendered a Decision on 26 January 2001 holding that respondent made
an overpayment of her loan obligation to petitioner and that the latter should refund the I.
excess amount to the former. It ratiocinated that respondents obligation was only to pay
the loaned amount of 540,000.00, and that the alleged interests due should not be THE RTC AND THE COURT OF APPEALS ERRED IN RULING THAT NO INTEREST WAS DUE TO
included in the computation of respondents total monetary debt because there was no PETITIONER;
agreement between them regarding payment of interest. It concluded that since
respondent made an excess payment to petitioner in the amount of 660,000.00 through II.
mistake, petitioner should return the said amount to respondent pursuant to the principle
of solutio indebiti.13 THE RTC AND THE COURT OF APPEALS ERRED IN APPLYING THE PRINCIPLE OF SOLUTIO
INDEBITI.17
The RTC also ruled that petitioner should pay moral damages for the sleepless nights and
wounded feelings experienced by respondent. Further, petitioner should pay exemplary Interest is a compensation fixed by the parties for the use or forbearance of money. This
damages by way of example or correction for the public good, plus attorneys fees and is referred to as monetary interest. Interest may also be imposed by law or by courts as
costs of suit. penalty or indemnity for damages. This is called compensatory interest.18 The right to
interest arises only by virtue of a contract or by virtue of damages for delay or failure to
The dispositive portion of the RTC Decision reads: pay the principal loan on which interest is demanded.19

WHEREFORE, in view of the foregoing evidence and in the light of the provisions of law Article 1956 of the Civil Code, which refers to monetary interest,20 specifically mandates
and jurisprudence on the matter, judgment is hereby rendered in favor of the plaintiff that no interest shall be due unless it has been expressly stipulated in writing. As can be
and against the defendant as follows: gleaned from the foregoing provision, payment of monetary interest is allowed only if: (1)
there was an express stipulation for the payment of interest; and (2) the agreement for
(1) Ordering defendant to pay plaintiff the amount of 660,000.00 plus legal interest of the payment of interest was reduced in writing. The concurrence of the two conditions is
12% per annum computed from 3 March 1998 until the amount is paid in full; required for the payment of monetary interest. Thus, we have held that collection of
interest without any stipulation therefor in writing is prohibited by law.21
(2) Ordering defendant to pay plaintiff the amount of 300,000.00 as moral damages;
It appears that petitioner and respondent did not agree on the payment of interest for
(3) Ordering defendant to pay plaintiff the amount of 50,000.00 as exemplary damages; the loan. Neither was there convincing proof of written agreement between the two
regarding the payment of interest. Respondent testified that although she accepted
(4) Ordering defendant to pay plaintiff the amount equivalent to 25% of 660,000.00 as petitioners offer of loan amounting to 540,000.00, there was, nonetheless, no verbal or
attorneys fees; and written agreement for her to pay interest on the loan.22

Petitioner presented a handwritten promissory note dated 12 September 199423 Petitioners reliance on respondents alleged admission in the Batas Pambansa Blg. 22
wherein respondent purportedly admitted owing petitioner "capital and interest." cases that they had agreed on the payment of interest at the rate of 7% deserves scant
Respondent, however, explained that it was petitioner who made a promissory note and consideration. In the said case, respondent merely testified that after paying the total
she was told to copy it in her own handwriting; that all her transactions with the PNO amount of loan, petitioner ordered her to pay interest.28 Respondent did not
were subject to the approval of petitioner as comptroller of the PNO; that petitioner categorically declare in the same case that she and respondent made an express
threatened to disapprove her transactions with the PNO if she would not pay interest; stipulation in writing as regards payment of interest at the rate of 7%. As earlier discussed,
that being unaware of the law on interest and fearing that petitioner would make good monetary interest is due only if there was an express stipulation in writing for the
of his threats if she would not obey his instruction to copy the promissory note, she copied payment of interest.
the promissory note in her own handwriting; and that such was the same promissory note
presented by petitioner as alleged proof of their written agreement on interest.24 There are instances in which an interest may be imposed even in the absence of express
Petitioner did not rebut the foregoing testimony. It is evident that respondent did not stipulation, verbal or written, regarding payment of interest. Article 2209 of the Civil Code
really consent to the payment of interest for the loan and that she was merely tricked and states that if the obligation consists in the payment of a sum of money, and the debtor
coerced by petitioner to pay interest. Hence, it cannot be gainfully said that such incurs delay, a legal interest of 12% per annum may be imposed as indemnity for damages
promissory note pertains to an express stipulation of interest or written agreement of if no stipulation on the payment of interest was agreed upon. Likewise, Article 2212 of
interest on the loan between petitioner and respondent. the Civil Code provides that interest due shall earn legal interest from the time it is
judicially demanded, although the obligation may be silent on this point.
Petitioner, nevertheless, claims that both the RTC and the Court of Appeals found that he
and respondent agreed on the payment of 7% rate of interest on the loan; that the agreed All the same, the interest under these two instances may be imposed only as a penalty or
7% rate of interest was duly admitted by respondent in her testimony in the Batas damages for breach of contractual obligations. It cannot be charged as a compensation
Pambansa Blg. 22 cases he filed against respondent; that despite such judicial admission for the use or forbearance of money. In other words, the two instances apply only to
by respondent, the RTC and the Court of Appeals, citing Article 1956 of the Civil Code, still compensatory interest and not to monetary interest.29 The case at bar involves
held that no interest was due him since the agreement on interest was not reduced in petitioners claim for monetary interest.
writing; that the application of Article 1956 of the Civil Code should not be absolute, and
an exception to the application of such provision should be made when the borrower Further, said compensatory interest is not chargeable in the instant case because it was
admits that a specific rate of interest was agreed upon as in the present case; and that it not duly proven that respondent defaulted in paying the loan. Also, as earlier found, no
would be unfair to allow respondent to pay only the loan when the latter very well knew interest was due on the loan because there was no written agreement as regards
and even admitted in the Batas Pambansa Blg. 22 cases that there was an agreed 7% rate payment of interest.
of interest on the loan.25
Apropos the second assigned error, petitioner argues that the principle of solutio indebiti
We have carefully examined the RTC Decision and found that the RTC did not make a does not apply to the instant case. Thus, he cannot be compelled to return the alleged
ruling therein that petitioner and respondent agreed on the payment of interest at the excess amount paid by respondent as interest.30
rate of 7% for the loan. The RTC clearly stated that although petitioner and respondent
entered into a valid oral contract of loan amounting to 540,000.00, they, nonetheless, Under Article 1960 of the Civil Code, if the borrower of loan pays interest when there has
never intended the payment of interest thereon.26 While the Court of Appeals been no stipulation therefor, the provisions of the Civil Code concerning solutio indebiti
mentioned in its Decision that it concurred in the RTCs ruling that petitioner and shall be applied. Article 2154 of the Civil Code explains the principle of solutio indebiti.
respondent agreed on a certain rate of interest as regards the loan, we consider this as Said provision provides that if something is received when there is no right to demand it,
merely an inadvertence because, as earlier elucidated, both the RTC and the Court of and it was unduly delivered through mistake, the obligation to return it arises. In such a
Appeals ruled that petitioner is not entitled to the payment of interest on the loan. The case, a creditor-debtor relationship is created under a quasi-contract whereby the payor
rule is that factual findings of the trial court deserve great weight and respect especially becomes the creditor who then has the right to demand the return of payment made by
when affirmed by the appellate court.27 We found no compelling reason to disturb the mistake, and the person who has no right to receive such payment becomes obligated to
ruling of both courts. return the same. The quasi-contract of solutio indebiti harks back to the ancient principle
that no one shall enrich himself unjustly at the expense of another.31 The principle of
solutio indebiti applies where (1) a payment is made when there exists no binding relation that respondent made an overpayment of the loan by reason of the interest which the
between the payor, who has no duty to pay, and the person who received the payment; latter paid to petitioner.39
and (2) the payment is made through mistake, and not through liberality or some other
cause.32 We have held that the principle of solutio indebiti applies in case of erroneous Article 2217 of the Civil Code provides that moral damages may be recovered if the party
payment of undue interest.33 underwent physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation and similar injury.
It was duly established that respondent paid interest to petitioner. Respondent was under Respondent testified that she experienced sleepless nights and wounded feelings when
no duty to make such payment because there was no express stipulation in writing to that petitioner refused to return the amount paid as interest despite her repeated demands.
effect. There was no binding relation between petitioner and respondent as regards the Hence, the award of moral damages is justified. However, its corresponding amount of
payment of interest. The payment was clearly a mistake. Since petitioner received 300,000.00, as fixed by the RTC and the Court of Appeals, is exorbitant and should be
something when there was no right to demand it, he has an obligation to return it. equitably reduced. Article 2216 of the Civil Code instructs that assessment of damages is
left to the discretion of the court according to the circumstances of each case. This
We shall now determine the propriety of the monetary award and damages imposed by discretion is limited by the principle that the amount awarded should not be palpably
the RTC and the Court of Appeals. excessive as to indicate that it was the result of prejudice or corruption on the part of the
trial court.40 To our mind, the amount of 150,000.00 as moral damages is fair,
Records show that respondent received a loan amounting to 540,000.00 from reasonable, and proportionate to the injury suffered by respondent.
petitioner.34 Respondent issued two checks with a total worth of 700,000.00 in favor of
petitioner as payment of the loan.35 These checks were subsequently encashed by Article 2232 of the Civil Code states that in a quasi-contract, such as solutio indebiti,
petitioner.36 Obviously, there was an excess of 160,000.00 in the payment for the loan. exemplary damages may be imposed if the defendant acted in an oppressive manner.
Petitioner claims that the excess of 160,000.00 serves as interest on the loan to which Petitioner acted oppressively when he pestered respondent to pay interest and
he was entitled. Aside from issuing the said two checks, respondent also paid cash in the threatened to block her transactions with the PNO if she would not pay interest. This
total amount of 175,000.00 to petitioner as interest.37 Although no receipts reflecting forced respondent to pay interest despite lack of agreement thereto. Thus, the award of
the same were presented because petitioner refused to issue such to respondent, exemplary damages is appropriate. The amount of 50,000.00 imposed as exemplary
petitioner, nonetheless, admitted in his Reply-Affidavit38 in the Batas Pambansa Blg. 22 damages by the RTC and the Court is fitting so as to deter petitioner and other lenders
cases that respondent paid him a total amount of 175,000.00 cash in addition to the two from committing similar and other serious wrongdoings.41
checks. Section 26 Rule 130 of the Rules of Evidence provides that the declaration of a
party as to a relevant fact may be given in evidence against him. Aside from the amounts Jurisprudence instructs that in awarding attorneys fees, the trial court must state the
of 160,000.00 and 175,000.00 paid as interest, no other proof of additional payment factual, legal or equitable justification for awarding the same.42 In the case under
as interest was presented by respondent. Since we have previously found that petitioner consideration, the RTC stated in its Decision that the award of attorneys fees equivalent
is not entitled to payment of interest and that the principle of solutio indebiti applies to to 25% of the amount paid as interest by respondent to petitioner is reasonable and
the instant case, petitioner should return to respondent the excess amount of moderate considering the extent of work rendered by respondents lawyer in the instant
160,000.00 and 175,000.00 or the total amount of 335,000.00. Accordingly, the case and the fact that it dragged on for several years.43 Further, respondent testified that
reimbursable amount to respondent fixed by the RTC and the Court of Appeals should be she agreed to compensate her lawyer handling the instant case such amount.44 The
reduced from 660,000.00 to 335,000.00. award, therefore, of attorneys fees and its amount equivalent to 25% of the amount paid
as interest by respondent to petitioner is proper.
As earlier stated, petitioner filed five (5) criminal cases for violation of Batas Pambansa
Blg. 22 against respondent. In the said cases, the MeTC found respondent guilty of Finally, the RTC and the Court of Appeals imposed a 12% rate of legal interest on the
violating Batas Pambansa Blg. 22 for issuing five dishonored checks to petitioner. amount refundable to respondent computed from 3 March 1998 until its full payment.
Nonetheless, respondents conviction therein does not affect our ruling in the instant This is erroneous.
case. The two checks, subject matter of this case, totaling 700,000.00 which respondent
claimed as payment of the 540,000.00 worth of loan, were not among the five checks We held in Eastern Shipping Lines, Inc. v. Court of Appeals,45 that when an obligation,
found to be dishonored or bounced in the five criminal cases. Further, the MeTC found not constituting a loan or forbearance of money is breached, an interest on the amount
of damages awarded may be imposed at the rate of 6% per annum. We further declared
that when the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether it is a loan/forbearance of money or not,
shall be 12% per annum from such finality until its satisfaction, this interim period being
deemed equivalent to a forbearance of credit.

In the present case, petitioners obligation arose from a quasi-contract of solutio indebiti
and not from a loan or forbearance of money. Thus, an interest of 6% per annum should
be imposed on the amount to be refunded as well as on the damages awarded and on
the attorneys fees, to be computed from the time of the extra-judicial demand on 3
March 1998,46 up to the finality of this Decision. In addition, the interest shall become
12% per annum from the finality of this Decision up to its satisfaction.

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 71814, dated 16
December 2005, is hereby AFFIRMED with the following MODIFICATIONS: (1) the amount
of 660,000.00 as refundable amount of interest is reduced to THREE HUNDRED THIRTY
FIVE THOUSAND PESOS (335,000.00); (2) the amount of 300,000.00 imposed as moral
damages is reduced to ONE HUNDRED FIFTY THOUSAND PESOS (150,000.00); (3) an
interest of 6% per annum is imposed on the 335,000.00, on the damages awarded and
on the attorneys fees to be computed from the time of the extra-judicial demand on 3
March 1998 up to the finality of this Decision; and (4) an interest of 12% per annum is
also imposed from the finality of this Decision up to its satisfaction. Costs against
petitioner.

SO ORDERED.

















G.R. No. 172505 October 1, 2014 misrepresenting to Ferro Chemicals, Inc. that the shares subject of the contracts entered
into were free from all liens and encumbrances. The information reads:
ANTONIO M. GARCIA, Petitioner,
vs. The undersigned Assistant Prosecutor accuses Antonio M. Garcia of the felony of Estafa
FERRO CHEMICALS, INC., Respondent. as defined and penalized under Art. 318 of the Revised Penal Code as amended,
committed as follows:
D E C I S I O N
THAT on or about 15 July 1988, in Makati, Metro Manila, Philippines, a place within the
LEONEN, J.: jurisdiction of this Honorable Court, the above-named accused, with evident bad faith
and deceit, did, then and there, willfully, unlawfully and feloniously, misrepresent to
Before this court is a petition for review on certiorari1 assailing the decision2 of the Court FERRO CHEMICALS, INC. (FCI) represented by Ramon M. Garcia, that his share of
of Appeals dated August 11, 2005 and its resolution3 dated April 27, 2006, denying stock/proprietary share with Ayala Alabang Country Club, Inc. and Manila Polo Club, Inc.
petitioner Antonio Garcia's motion for reconsideration. collectively valued at about 10.00 Million Pesos, being part of other shares of stock
subject matter of a Deed of Absolute Sale and Purchase of Shares of Stock between the
Antonio Garcia, as seller, and Ferro Chemicals, Inc., through Ramon Garcia, as buyer, accused and FCI, were free from all liens, encumbrances and claims by third persons,
entered into a deed of absolute sale and purchase of shares of stock on July 15, 1988. when in truth and in fact, accused well knew that aforesaid share of stock/proprietary
The deed was for the sale and purchase of shares of stock from various corporations, share had already been garnished in July 1985 and subsequently sold at public auction in
including one class "A" share in Alabang Country Club, Inc. and one proprietary September 1989, and which misrepresentation and assurance FCI relied upon and paid
membership in the Manila Polo Club, Inc.4 These shares of stock were in the name of the consideration in accordance with the stipulated condition/manner of payment, all to
Antonio Garcia.5 The contract was allegedly entered into to prevent these shares of stock the damage and prejudice of FCI in the aforestated amount of 10.00 Million Pesos.
from being sold at public auction to pay the outstanding obligations of Antonio Garcia.6
Contrary to law.13
On March 3, 1989, a deed of right of repurchase over the same shares of stock subject of
the deed of absolute sale and purchase of shares of stock was entered into between In the decision dated December 12, 1996 of the Regional Trial Court, Antonio Garcia was
Antonio Garcia and Ferro Chemicals, Inc. Under the deed of right of repurchase, Antonio acquitted for insufficiency of evidence.14 The Regional Trial Court held:
Garcia can redeem the properties sold within 180 days from the signing of the
agreement.7 From the foregoing, it is very clear that private complainant was aware of the status of
the subject CLUB SHARES. Thus, the element of false pretense, fraudulent act or
Before the end of the 180-day period, Antonio Garcia exercised his right to repurchase fraudulent means which constitute the very cause or the only motive which induced the
the properties.8 However, Ferro Chemicals, Inc. did not agree to the repurchase ofthe private complainant to enter into the questioned deed of sale (Exh. "A") is wanting in the
shares of stock.9 Thus, Antonio Garcia filed an action for specific performance and case at bar.15 (Underscoring in the original)
annulment of transfer of shares.10
Ferro Chemicals, Inc. filed a motion for reconsideration, which was denied by the Regional
On September 6, 1989, the class "A" share in Alabang Country Club, Inc. and proprietary Trial Court in the order dated July 29, 1997.16
membership in the Manila Polo Club, Inc., which were included in the contracts entered
intobetween Antonio Garcia and Ferro Chemicals, Inc., were sold at public auction to On August 25, 1997, Ferro Chemicals, Inc. appealed to the Court of Appeals the July 29,
Philippine Investment System Organization.11 1997 order of the Regional Trial Court as to the civil aspect of the case.17 The notice of
appeal18 filed was entitled "Notice of Appeal Ex Gratia Abudantia Ad Cautelam (Of The
On September 3, 1990, the information based on the complaint of Ferro Chemicals, Inc. Civil Aspect of the Case)." It alleged:
was filed against Antonio Garcia before the Regional Trial Court.12 He was charged with
estafaunder Article 318 (Other Deceits) of the Revised Penal Code for allegedly 4. Herein private complainant hereby gives notice, out of extreme caution, that it is
appealing the Decision dated 12 December 1996 and the Order dated 29 July 1997 on the
civil aspect of the case to the Court of Appeals on the ground that it is notin accordance theycannot be given the same probative value in this civil aspect as only a preponderance
with the law and the facts of the case. of evidence is necessary to carry the day for the plaintiff, Ferro Chemicals.

5. This notice of appeal is without prejudice to the filing of an appropriate petition for While Antonio Garcia insists that no consideration was ever made over the club shares as
certiorari under Rule 65 of the Rules of Court on the criminal aspect, upon the giving of the same were merely given for safekeeping, the document denominated as Deed of
due course thereto, private complainant shall endeavor to seek the consolidation of this Absolute Sale states otherwise. It is a basic rule of evidence that between documentary
appeal with the said petition.19 evidence and oral evidence, the former carries more weight.

On October 15, 1997, the Makati City Prosecutors Office and Ferro Chemicals, Inc. also Also, We have observed that in Antonio Garcias letter of redemption addressed to Ferro
filed a petition for certiorari20 with this court, assailing the Regional Trial Courts Chemicals, he mentioned his interest in redeeming the company shares only. That he did
December 12, 1996 decision and July 29, 1997 order acquitting Antonio Garcia.21 not include the club shares only meant that said club shares no longer had any much
redeemable value as there was a lienover them. To redeem them would be pointless.
The petition for certiorari22 filed before this court sought to annul the decision of the trial
court acquitting Antonio Garcia. People of the Philippines and Ferro Chemicals, Inc. If they had no redeemable value to Antonio Garcia, to Ferro Chemical they were certainly
argued that the trial court "acted in grave abuse of discretion amounting to lack or excess marketable assets. The non-disclosure of the third lien in favor of PISO materially affected
of jurisdiction when it rendered the judgment of acquittal based on affidavits not at all Ferro Chemicals since it was not able to act on time to protect its interest when the
introduced in evidence by either of the parties thereby depriving the people of their auction sale over the club shares actually took place. As a result, Ferro Chemicals suffered
substantive right to due process of law."23 The verification/certification against forum losses due to the unfortunate public auction sale. It is but just and fair that Antonio Garcia
shopping, signed by Ramon Garcia as president of Ferro Chemicals, Inc., disclosed that be made to compensate the loss pursuant to Articles 21 and 2199 of the Civil Code.
the notice of appeal was filed "with respect to the civil aspect of the case."24
The actual loss suffered by Ferro Chemicals amounted to 1,000,000.00 which
In the resolution25 dated November 16, 1998, this court dismissed the petition for correspondents to the bid value of the club shares at the time of the auction as evidenced
certiorari filed, and entry of judgment was made on December 24, 1998.26 by the Sheriffs Certificate of Sale.31 (Citations omitted)

On the other hand, the Court of Appeals,27 in its decision28 dated August 11, 2005, Antonio Garcia filed a motion for reconsideration and Ferro Chemicals, Inc. filed a partial
granted the appeal and awarded Ferro Chemicals, Inc. the amount of 1,000,000.00 as motion for reconsideration of the decision of the Court of Appeals.32 These motions were
actual loss with legal interest and attorneys fees in the amount of 20,000.00.29 The denied in the resolution33 dated April 27, 2006. Thus, Antonio Garcia filed this petition
appellate court found that Antonio Garcia failed to disclose the Philippine Investment and for review on certiorari,34 assailing the decision and resolution of the Court of Appeals.
Savings Organizations lien over the club shares.30 Thus:
Antonio Garcia argues that the factual findings of the Court of Appeals were erroneous35
The issue in this case is whether or not Antonio Garcia disclosed to Ferro-Chemicals, and insists that "[Ferro Chemicals, Inc.] was fully aware that the shares covered by the
during the negotiation stage of the impending sale of the imputed club shares, the third Deed of Absolute Sale, including the Subject Club Shares, were not free from liens and
attachment lien in favor of Philippine Investment and Savings Organization (PISO) which, encumbrances and that the Deed [of] Sale was executed [to] warehouse [Antonio
ultimately, became the basis of the auction sale of said club shares. We have scrutinized Garcias] assets based on, among other evidence, the affidavits executed by Jaime
the records of the case but found no evidence that Antonio Garcia intimated to his Gonzales . . . and Rolando Navarro. . . ."36
brother the third attachment lien of PISO over the said club shares. While it is true that
Antonio Garcia divulged the two liens of Security Bank and Insular Bank of Asia and Antonio Garcia faults the Court of Appeals in disregarding the affidavits executed by Jaime
America, the lien of PISO was clearly not discussed. The affidavits executed by the two Gonzales and Rolando Navarro. Antonio Garcia argues that even thiscourt in G.R. No.
lawyers to the effect that the lien of PISO was considered but deliberately left out in the 130880 entitled People of the Philippines and Ferro Chemicals, Inc. v. Hon. Dennis Villa
deed cannot be given much weight as they were never placed on the witness stand and Ignacio and Antonio Garcia where the admissibility of the affidavits was put in issue held
cross-examined by Ferro-Chemicals. If their affidavits, although not offered, were that the trial court did not commit any grave abuse of discretion in the challenged
considered inthe criminal aspect and placed a cloud on the prosecutions thrust,
decision.37 He then reasoned that "pursuant to the law of the case, [the affidavits of Jurisdiction of a court over the subject matter is vested by law.46 In criminal cases, the
Gonzalez and Navarro] are admissible and should be given weight."38 imposable penalty of the crime charged in the information determines the court that has
jurisdiction over the case.47
Finally, Antonio Garcia claims thatboth he and and Ferro Chemicals, Inc. acted in bad faith
when they entered into the deed of absolute sale as a scheme to defraud Antonio Garcias The information charged Antonio Garcia with violation of Article 318 of the Revised Penal
creditors. Thus, they are in pari delicto and Ferro Chemicals, Inc. should not be allowed Code, which is punishable by arresto mayor, or imprisonment for a period of one (1)
to recover from Antonio Garcia.39 month and one (1) day to six (6) months. Article 318 states:

In its comment,40 Ferro Chemicals, Inc. points out that Antonio Garcia raised factual ART. 318: Other deceits. The penalty of arresto mayor and a fine of not less than the
issues not proper ina Rule 45 petition and reiterates the findings of the Court of amount of the damage caused and not more than twice such amount shall be imposed
Appeals.41 upon any person who shall defraud or damage another by any other deceit not mentioned
in the preceding articles of this chapter.
There are pertinent and important issues that the parties failed to raise before the trial
court, Court of Appeals, and this court. Nonetheless, we resolve to rule on these issues. Any person who, for profit or gain, shall interpret dreams, make forecasts, tell fortunes,
or take advantage of the credulity of the public in any other similar manner, shall suffer
As a general rule, this court through its appellate jurisdiction can only decide on matters the penalty of arresto mayoror a fine not exceeding 200 pesos.
or issues raised by the parties.42 However, the rule admits of exceptions.43 When the
unassigned error affects jurisdiction over the subject matter44 or when the consideration When the information was filed on September 3, 1990, the law in force was Batas
of the error is necessary for a complete resolution of the case,45 this court can still decide Pambansa Blg. 129 before it was amended by Republic Act No. 7691. Under Section 32 of
on these issues. Batas Pambansa Blg. 129, the Metropolitan Trial Court had jurisdiction over the case:

We cannot turn a blind eye on glaring misapplications of the law or patently erroneous SEC. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
decisions or resolutions simply because the parties failed to raise these errors before the Circuit Trial Courts in criminal cases.
court. Otherwise, we will be allowing injustice by reason of the mistakes of the parties
counsel and condoning reckless and negligent acts of lawyers to the prejudice of the . . . .
litigants. Failure to rule on these issues amounts to an abdication of our duty to dispense
justice to all parties. 2. Exclusive original jurisdiction over all offenses punishable with imprisonment of not
exceeding four years and two months, or a fine of not more than four thousand pesos, or
The issues are: both such fine and imprisonment, regardless of other imposable accessory or other
penalties, including the civil liability arising from such offenses or predicated thereon,
I. Whether the Regional Trial Court had jurisdiction over the case irrespective of kind, nature, value, or amount thereof: Provided, however, That in
offenses involving damage to property through criminal negligence they shall have
II. Whether the act of FerroChemicals, Inc. in filing the notice of appeal before the Court exclusive original jurisdiction where the imposable fine does not exceed twenty thousand
of Appeals and the petition for certiorari assailing the same trial court decision amounted pesos. (Emphasis supplied)
to forum shopping
The Regional Trial Court did not have jurisdiction to hear and decide the case. This lack of
III. Whether Ferro Chemicals, Inc. was entitled to the awards given as civil liability ex jurisdiction resulted in voiding all of the trial courts proceedings and the judgment
delicto rendered.48 Although the trial courts lack of jurisdiction was never raised as an issue in
any part of the proceedings and even until it reached this court, we proceed with resolving
The Regional Trial Court did not have jurisdiction the matter.

In Pangilinan v. Court of Appeals,49 this court held:

Thus, we apply the general rule thatjurisdiction is vested by law and cannot be conferred The test and requisites that must concur to establish when a litigant commits forum
or waived by the parties. Even on appeal and even if the reviewing parties did not raise shopping are the following:
the issue of jurisdiction, the reviewing court is not precluded fromruling that the lower
court had no jurisdiction over the case[.] The test for determining the existence of forum shopping is whether the elements of litis
pendentiaare present, or whether a final judgment in one case amounts to res judicatain
. . . . another. Thus, there is forum shopping when the following elements are present: (a)
identity of parties, or at least such parties asrepresent the same interests in both actions;
Having arrived at the conclusion that the Regional Trial Court did not have jurisdiction to (b) identity of rights asserted and relief prayed for, the relief being founded on the same
try the case against the appellant, it is no longer necessary to consider the other issues facts; and (c) the identity of the two preceding particulars, such that any judgment
raised as the decision of the Regional Trial Court is null and void.50 rendered in the other action will, regardless of which party is successful, amount to res
judicatain the action under consideration; said requisites are also constitutive of the
The trial courts lack of jurisdiction cannot be cured by the parties silence on the requisites for auter action pendant or lis pendens.56 (Citation omitted)
matter.51 The failure of the parties to raise the matter of jurisdiction also cannot be
construed as a waiver of the parties. Jurisdiction is conferred by law and cannot be waived There is no question that Ferro Chemicals, Inc. committed forum shopping when it filed
by the parties. an appeal before the Court of Appeals and a petition for certiorari before this court
assailing the same trial court decision. This is true even if Ferro Chemicals, Inc.s notice of
The assailed decision is void, considering that it originates from a void decision of the appeal to the Court of Appeals was entitled "Notice of Appeal Ex Gratia Abudantia Ad
Regional Trial Court for lack of jurisdiction over the subject matter. Cautelam (Of The Civil Aspect of the Case)."57 The "civil aspect of the case" referred to
by Ferro Chemicals, Inc. is for the recovery of civil liability ex delicto. However, it failed to
Ferro Chemicals, Inc. committed forum shopping make a reservation before the trial court to institute the civil action for the recovery of
civil liability ex delictoor institute a separate civil action prior to the filing of the criminal
Forum shopping is defined as "theact of a litigant who repetitively availed of several case.
judicial remedies in different courts, simultaneously or successively, all substantially
founded on the same transactions and the same essential facts and circumstances, and There is identity of parties. Petitioner, Antonio Garcia, and respondent, Ferro Chemicals,
all raising substantially the same issues either pending in, or already resolved adversely Inc., are both parties in the appeal filed before the Court of Appeals and the petition for
by some other court . . . to increase his chances of obtaining a favorable decision if not in certiorari before this court.
one court, then in another."52 Once clearly established that forum shopping was
committed willfully and deliberately by a party or his or her counsel, the case may be There is identity of the rights asserted and reliefs prayed for in both actions. At a glance,
summarily dismissed with prejudice, and the act shall constitute direct contempt and a it may appear that Ferro Chemicals, Inc. asserted different rights: The appeal before the
cause for administrative sanctions.53 Court of Appeals is purely on the civil aspect of the trial courts decision while the petition
for certiorari before this court is allegedly only onthe criminal aspect of the case.
Forum shopping is prohibited, and sanctions are imposed on those who commit forum However, the civil liability asserted by Ferro Chemicals, Inc. before the Court of Appeals
shopping as "it trifles with the courts, abuses their processes, degrades the administration arose from the criminal act. It is in the nature of civil liability ex delicto. Ferro Chemicals,
of justice and adds to the already congested court dockets."54 This court has said: Inc. did not reserve the right to institute the civil action for the recovery of civil liability ex
delictoor institute a separate civil action prior to the filing of the criminal case.58 Thus, it
What is critical is the vexation brought upon the courts and the litigants by a party who is an adjunct of the criminalaspect of the case.1wphi1 As held in Lim v. Kou Co Ping:59
asks different courts to rule on the same or related causes and grant the same or
substantially the same reliefs and in the process creates the possibility of conflicting The civil liability arising from the offense or ex delictois based on the acts or omissions
decisions being rendered by the different fora upon the same issues, regardless of that constitute the criminal offense; hence, its trial is inherently intertwined with the
whether the court in which one of the suits was brought has no jurisdiction over the criminal action.For this reason, the civil liability ex delictois impliedly instituted with the
action.55 (Citation omitted) criminal offense. If the action for the civil liability ex delictois instituted prior to or
subsequent to the filing of the criminal action, its proceedings are suspended until the cannot proceed independently of the criminal case. This includes subsequent proceedings
final outcome of the criminal action. The civil liability based on delict is extinguished when on the criminal action such as an appeal. In any case, Ferro Chemicals, Inc. joined the
the court hearing the criminal action declares that the act or omission from which the public prosecutor in filing the petition for certiorari before this court. Ramon Garcia,
civil liability may arise did not exist."60 (Emphasis supplied, citations omitted). President of Ferro Chemicals, Inc., signed the verification and certification of non-forum
shopping of the petition for certiorari.64
When the trial courts decision was appealed as to its criminal aspect in the petition for
certiorari before thiscourt, the civil aspect thereof is deemed included in the appeal. Thus, We must clarify, however, that private complainants in criminal cases are not precluded
the relief prayed for by Ferro Chemicals, Inc., that is, recovery of civil liability ex delicto, from filing a motion for reconsideration and subsequently an appeal on the civil aspect of
is asserted in both actions before this court and the Court of Appeals. a decision acquitting the accused. An exception to the rule that only the Solicitor General
can bring actions in criminal proceedings before the Court of Appeals or this court is
Even the allegations in the notice of appeal readily show that Ferro Chemicals, Inc. "when the private offended party questions the civil aspect of a decision of a lower
committedforum shopping, to wit: court."65 As discussed in Mobilia Products, Inc. v. Hajime Umezawa:66

5. This notice of appeal is without prejudice to the filing of an appropriate petition for In a criminal case in which the offended party is the State, the interest of the private
certiorari under Rule 65 of the Rules of Court on the criminal aspect, upon the giving of complainant or the offended party is limited to the civil liability arising there from. Hence,
due course thereto, private complainant shall endeavor to seek the consolidation of this if a criminal case is dismissed by the trial court or if there is an acquittal, a reconsideration
appeal with the said petition.61 of the order of dismissal or acquittal may be undertaken, whenever legally feasible,
insofar as the criminal aspect there of is concerned and may be made only by the public
As to the third requisite, on the assumption that the trial court had jurisdiction over the prosecutor; or in the case of an appeal, by the State only, through the OSG. The private
case, this courts decision in G.R. No. 130880 affirming the trial courts decision acquitting complainant or offended party may not undertake such motion for reconsideration or
the accused for lack of an essential element of the crime charged amounts to res appeal on the criminal aspect of the case.However, the offended party or private
judicatato assert the recovery of civil liability arising from the offense. This courts complainant may file a motion for reconsideration of such dismissal or acquittal or appeal
resolution dismissing the petition for certiorari filed by Ferro Chemicals, Inc. states: therefrom but only insofar as the civil aspect thereof is concerned. In so doing, the private
complainant or offended party need not secure the conformity of the public prosecutor.
In any event, petitioners failed to sufficiently show that any grave abuse of discretion was If the court denies his motion for reconsideration, the private complainant or offended
committed by the Regional Trial Court in rendering the challenged decision and order party may appeal or file a petition for certiorarior mandamus,if grave abuse amounting
which, on the contrary, appear to be in accord with the facts and the applicable law and to excess or lack of jurisdiction is shown and the aggrieved party has no right of appeal or
jurisprudence.62 given an adequate remedy in the ordinary course of law.67 (Citations omitted)

Litigants cannot avail themselves of two separate remedies for the same relief in the hope This is in consonance with the doctrine that:
that in one forum, the relief prayed for will be granted. This is the evil sought tobe averted
by the doctrine of non-forum shopping, and this is the problem that has happened in this [T]he extinction of the penal action does not necessarily carry with it the extinction ofthe
case. This court denied the petition for certiorari filed byFerro Chemicals, Inc. resulting in civil action, whether the latter is instituted with or separately from the criminal action.
finality of the trial courts decision.1awp++i1 The decision found Antonio Garcia not guilty The offended party may still claim civil liability ex delictoif there is a finding in the final
of the offense charged, and no civil liability was awarded to Ferro Chemicals, Inc. judgment in the criminal action that the act or omission from which the liability may arise
However, at present,there is a conflicting decision from the Court of Appeals awarding exists. Jurisprudence has enumerated three instances when, notwithstanding the
Ferro Chemicals, Inc. civil indemnity arising from the offense charged. accuseds acquittal, the offended party may still claim civil liability ex delicto: (a) if the
acquittal is based on reasonable doubt as only preponderance of evidence is required; (b)
When the civil action for the recovery of civil liability ex delicto is instituted with the if the court declared that the liability of the accused is only civil;and (c) if the civil liability
criminal action, whether by choice of private complainant (i.e., no reservation is made or of the accused does not arise from or is not based upon the crime of which the accused
no prior filing of a separate civil action) or as required by the law or rules, the case will be is acquitted.68
prosecuted under the direction and control of the public prosecutor.63 The civil action
However, if the state pursues an appeal on the criminal aspect of a decision of the trial
court acquitting the accused and private complainant/s failed to reserve the right to
institute a separate civil action,the civil liability ex delictothat is inherently attached to the
offense is likewise appealed. The appeal of the civil liability ex delictois impliedly
instituted with the petition for certiorari assailing the acquittal of the accused. Private
complainant cannot anymore pursue a separate appeal from that of the state without
violating the doctrine of non-forum shopping.

On the other hand, the conclusion isdifferent if private complainant reserved the right to
institute the civil action for the recovery of civil liability ex delicto before the Regional Trial
Court orinstitute a separate civil action prior to the filing of the criminal case in
accordance with Rule 111 of the Rules of Court. In these situations, the filing of an
appealas to the civil aspect of the case cannot be considered as forum shopping.1wphi1
This is not the situation here.

We see no more reason to discuss the issues presented by the parties in light of the
foregoing discussion.

Entry of judgment having been made on the resolution of the court in G.R. No. 130880
involving the same parties and issues and by virtue of the doctrine of finality of judgment,
we reiterate the resolution of this court.

WHEREFORE, the resolution in G.R. No. 130880 is reiterated. We grant the petition insofar
as it prays for the setting aside of the Court of Appeals' decision d~ted August 11, 2005
and resolution dated April 27, 2006 as a final decision over the assailed Regional Trial
Court decision that was rendered on November 16, 1998 in G.R. No. 130880.

SO ORDERED.














G.R. No. 207949 July 23, 2014 with plate number DEH 498 pulled up in front of his vehicle where four (4) men alighted.
Roderick saw one of the men take a mobile phone and upon uttering the word "alat," the
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, men returned to their car and drove away.6
vs.
ARMANDO DIONALDO y EBRON, RENATO DIONALDO y EBRON, MARIANO GARIGUEZ, JR. Meanwhile, a team had been organized to investigate the kidnapping of Edwin, headed
y RAMOS, and RODOLFO LARIDO y EBRON, Accused-Appellants. by SPO3 Romeo Caballero (SPO3 Caballero) and PO3 Nestor Acebuche (PO3 Acebuche) of
the Camp Crame Police Anti-Crime Emergency Response (PACER). During the course of
R E S O L U T I O N the investigation, Rodolfo, an employee at the Health Is Wealth Gym, confessed to PO3
Acebuche that he was part of the plan to kidnap Edwin, as in fact he was the one who
PERLAS-BERNABE, J.: tipped off Mariano, Renato, Armando and a certain Virgilio7 Varona8 (Virgilio) on the
condition that he will be given a share in the ransom money. Rodolfo gave information
Before the Court is an appeal assailing the Decision1 dated February 15, 2013 of the Court on the whereabouts of his cohorts, leading to their arrest on June 12, 2003. In the early
of Appeals (CA) in CA-G.R. CR-H.C. No. 02888 finding accused-appellants Armando morning of the following day or on June 13, 2003, the PACER team found the dead body
Dionaldo y Ebron (Armando), Renato Dionaldo y Ebron (Renato), Mariano Gariguez, Jr. y of Edwin at Sitio Pugpugan Laurel, Batangas, which Roderick identified.9
Ramos (Mariano), and Rodolfo Larido y Ebron (Rodolfo) guilty beyond reasonable doubt
of the crime of Kidnapping and Serious Illegal Detention. Thus, accused-appellants as well as Virgilio were charged in an Information10 which
reads:
The Facts
That on or about the 16th day of May, 2003 in Caloocan City, Metro Manila and within
At around 8 o'clock in the morning of May 16, 2003, Roderick Navarro (Roderick) dropped the jurisdiction of this Honorable Court, the above-named accused, conspiring together
his brother Edwin Navarro (Edwin) off at the Health Is Wealth Gym in Caloocan City. Thirty and mutually helping one another, being then private persons, did then and there by force
minutes later, he received a text message from another brother who told him that Edwin and intimidation willfully, unlawfully and feloniously with the use of motor vehicle and
had been kidnapped.2 Records show that three (3) men, later identified as Armando, superior strength take, carry and deprive EDWIN NAVARRO Y ONA, of his liberty against
Renato, and Mariano, forcibly dragged a bloodied Edwin down the stairway of the gym his will, for the purpose of extorting ransom as in fact a demand of 15,000,000.00 was
and pushed him inside a dark green Toyota car with plate number UKF 194.3 Upon made as a condition of the victims release and on the occasion thereof, the death of the
receiving the message, Roderick immediately reported the incident to the police. At victim resulted.
around 10 oclock in the morning of the same day, he received a phone call from Edwins
kidnappers who threatened to kill Edwin if he should report the matter to the police.4 Contrary to law.

The following day, Roderick received another call from the kidnappers, who demanded During arraignment, accused-appellants pleaded not guilty11 and interposed the
the payment of ransom money in the amount of 15,000,000.00. Roderick told them he defenses of denial and alibi. Except for Rodolfo, they individually claimed that on said date
had no such money, as he only had 50,000.00. On May 19, 2003, after negotiations over and time, they were in their respective houses when they were taken by men in police
the telephone, the kidnappers agreed to release Edwin in exchange for the amount of uniforms, then subsequently brought to Camp Crame, and there allegedly tortured and
110,000.00. Roderick was then instructed to bring the money to Batangas and wait for detained. On the other hand, Rodolfo, for himself, averred that at around 8 oclock in the
their next call.5 evening of June 12, 2003, while walking on his way home, he noticed that a van had been
following him. Suddenly, four (4) persons alighted from the vehicle, boarded him inside,
At around 7:30 in the evening of the same day, as Roderick was on his way to Batangas to blindfolded him, and eventually tortured him. He likewise claimed that he was made to
deliver the ransom money, the kidnappers called and instructed him to open all the sign an extrajudicial confession, purporting too that while a certain Atty. Nepomuceno
windows of the car he was driving and to turn on the hazard light when he reaches the had been summoned to assist him, the latter failed to do so.12
designated place. After a while, Roderick received another call directing him to exit in
Bicutan instead and proceed to C-5 until he arrives at the Centennial Village. He was told
to park beside the Libingan ng mga Bayani. After several hours, an orange Mitsubishi car
During trial, the death of the victim, Edwin, was established through a Certificate of
Death13 with Registry No. 2003-050 (subject certificate of death) showing that he died Separately, the CA found that accused-appellants claims of torture were never
on May 19, 2003 from a gunshot wound on the head. supported, and that Rodolfo voluntarily signed the extrajudicial confession and was
afforded competent and independent counsel in its execution.24
The RTC Ruling
Aggrieved by their conviction, accused-appellants filed the instant appeal.
In a Decision14 dated June 13, 2007, the Regional Trial Court of Caloocan City, Branch 129
(RTC), in Crim. Case No. C-68329, convicted accused-appellants of the crime of Kidnapping The Issue Before the Court
and Serious Illegal Detention, sentencing each of them to suffer the penalty of reclusion
perpetua. The sole issue to be resolved by the Court is whether or not accusedappellants are guilty
of the crime of Kidnapping and Serious Illegal Detention.
It gave credence to the positive and straightforward testimonies of the prosecution
witnesses which clearly established that it was the accusedappellants who forcibly The Courts Ruling
dragged a bloodied Edwin into a car and, consequently, deprived him of his liberty.15 In
light thereof, it rejected accused-appellants respective alibis and claims of torture, which The appeal is devoid of merit.
were not substantiated. It also held that the crime of Kidnapping had been committed for
the purpose of extorting ransom, which is punishable by death. However, in view of the Well-settled is the rule that the question of credibility of witnesses is primarily for the trial
suspended imposition of the death penalty pursuant to Republic Act No. (RA) 9346,16 court to determine. Its assessment of the credibility of a witness is entitled to great
only the penalty of reclusion perpetua was imposed.17 Further, the RTC found that weight, and it is conclusive and binding unless shown to be tainted with arbitrariness or
conspiracy attended the commission of the crime, as the accused-appellants individual unless, through oversight, some fact or circumstance of weight and influence has not
participation was geared toward a joint purpose and criminal design.18 been considered. Absent any showing that the trial judge overlooked, misunderstood, or
misapplied some facts or circumstances of weight which would affect the result of the
Notably, while the RTC found that the testimonies of the prosecution witnesses prove case, or that the judge acted arbitrarily, his assessment of the credibility of witnesses
that the victim Edwin was abducted, deprived of liberty, and eventually killed,19 a fact deserves high respect by the appellate court.25
which is supported by the subject certificate of death, it did not consider said death in its
judgment. The CA Ruling In this case, the RTC, as affirmed by the CA, gave weight and credence to the testimonies
of the prosecution witnesses, which they found to be straightforward and consistent.
In a Decision20 dated February 15, 2013, the CA affirmed in toto the RTCs conviction of Through these testimonies, it was clearly established that accused-appellants, who were
accused-appellants, finding that the prosecution was able to clearly establish all the all private individuals, took the victim Edwin and deprived him of his liberty, which acts
elements of the crime of Kidnapping and Serious Illegal Detention, namely: (a) the were illegal, and for the purpose of extorting ransom.26 Thus, seeing no semblance of
offender is a private individual; (b) he kidnaps or detains another, or in any manner arbitrariness or misapprehension on the part of the court a quo, the Court finds no
deprives the latter of his liberty; (c) the act of detention or kidnapping must be illegal; and compelling reason to disturb its factual findings on this score.1wphi1
(d) in the commission of the offense, any of the following circumstances is present: (1)
the kidnapping or detention lasts for more than three days; (2) it is committed simulating Anent the finding that conspiracy attended the commission of the crime, the Court
public authority; (3) any serious physical injuries are inflicted upon the person kidnapped likewise finds the conclusion of the RTC in this regard, as affirmed by the CA, to be well-
or detained or threats to kill him are made; or (4) the person kidnapped or detained is a taken. Conspiracy exists when two or more persons come to an agreement concerning
minor, except when the accused is any of the parents, female or a public officer.21 It the commission of a felony and decide to commit it, and when conspiracy is established,
likewise sustained the finding that the kidnapping was committed for the purpose of the responsibility of the conspirators is collective, not individual, rendering all of them
extorting ransom, as sufficiently proven by the testimony of the brother of the victim.22 equally liable regardless of the extent of their respective participations.27 In this relation,
Moreover, the CA affirmed that conspiracy attended the commission of the crime, as the direct proof is not essential to establish conspiracy, as it can be presumed from and
acts of accused-appellants emanated from the same purpose or common design, and they proven by the acts of the accused pointing to a joint purpose, design, concerted action,
were united in its execution.23 and community of interests.28 Hence, as the factual circumstances in this case clearly
show that accused-appellants acted in concert at the time of the commission of the crime
and that their acts emanated from the same purpose or common design, showing unity In People v. Ramos, the accused was found guilty of two separate heinous crimes of
in its execution,29 the CA, affirming the trial court, correctly ruled that there was kidnapping for ransom and murder committed on July 13, 1994 and sentenced to death.
conspiracy among them. On appeal, this Court modified the ruling and found the accused guilty of the "special
complex crime" of kidnapping for ransom with murder under the last paragraph of Article
The foregoing notwithstanding, the Court is, however, constrained to modify the ruling 267, as amended by Republic Act No. 7659. This Court said:
of the RTC and the CA, as the crime the accusedappellants have committed does not, as
the records obviously bear, merely constitute Kidnapping and Serious Illegal Detention, x x x This amendment introduced in our criminal statutes the concept of special complex
but that of the special complex crime of Kidnapping for Ransom with Homicide. This is in crime of kidnapping with murder or homicide. It effectively eliminated the distinction
view of the victims (i.e., Edwins) death, which was (a) specifically charged in the drawn by the courts between those cases where the killing of the kidnapped victim was
Information,30 and (b) clearly established during the trial of this case. Notably, while this purposely sought by the accused, and those where the killing of the victim was not
matter was not among the issues raised before the Court, the same should nonetheless deliberately resorted to but was merely an afterthought. Consequently, the rule now is:
be considered in accordance with the settled rule that in a criminal case, an appeal, as in Where the person kidnapped is killed in the course of the detention, regardless of
this case, throws open the entire case wide open for review, and the appellate court can whether the killing was purposely sought or was merely an afterthought, the kidnapping
correct errors, though unassigned, that may be found in the appealed judgment.31 and murder or homicide can no longer be complexed under Art. 48, nor be treated as
separate crimes, but shall be punished as a special complex crime under the last
After the amendment of the Revised Penal Code on December 31, 1993 by RA 7659, paragraph of Art. 267, as amended by RA No. 7659.33 (Emphases supplied; citations
Article 267 of the same Code now provides: omitted)

Art. 267. Kidnapping and serious illegal detention. Any private individual who shall Thus, further taking into account the fact that the kidnapping was committed for the
kidnap or detain another, or in any other manner deprive him of his liberty, shall suffer purpose of extorting ransom, accused-appellants conviction must be modified from
the penalty of reclusion perpetua to death: Kidnapping and Serious Illegal Detention to the special complex crime of Kidnapping for
Ransom with Homicide, which carries the penalty of death. As earlier intimated, the
1. If the kidnapping or detention shall have lasted more than three days. enactment of RA 9346 had suspended the imposition of the death penalty. This means
that the accused-appellants could, as the CA and trial court properly ruled, only be
2. If it shall have been committed simulating public authority. sentenced to the penalty of reclusion perpetua. To this, the Court adds that the accused-
appellants are not eligible for parole.34
3. If any serious physical injuries shall have been inflicted upon the person kidnapped or
detained; or if threats to kill him shall have been made. On a final note, the Court observes that the RTC and the CA failed to award civil indemnity
as well as damages to the family of the kidnap victim. In People v. Quiachon,35 the Court
4. If the person kidnapped or detained shall be a minor, except when the accused is any explained that even if the death penalty was not to be imposed on accused-appellants in
of the parents, female or a public officer; view of the prohibition in RA 9346, the award of civil indemnity was nonetheless proper,
not being dependent on the actual imposition of the death penalty but on the fact that
The penalty shall be death where the kidnapping or detention was committed for the qualifying circumstances warranting the imposition of the death penalty attended the
purpose of extorting ransom from the victim or any other person, even if none of the commission of the crime.36 In the present case, considering that both the qualifying
circumstances above-mentioned were present in the commission of the offense. circumstances of ransom and the death of the victim during captivity were duly alleged in
the information and proven during trial, civil indemnity in the amount of 100,000.00
When the victim is killed or dies as a consequence of the detention or is raped, or is must therefore be awarded to the family of the victim, to conform with prevailing
subjected to torture or dehumanizing acts, the maximum penalty shall be imposed. jurisprudence.37
(Emphases supplied)
Similarly, the Court finds that the award of moral damages is warranted in this case. Under
The Court further elucidated in People v. Mercado:32 Article 2217 of the Civil Code, moral damages include physical suffering, mental anguish,
fright, serious anxiety, wounded feelings, moral shock and similar injury, while Article
2219 of the same Code provides that moral damages may be recovered in cases of illegal
detention. It cannot be denied, in this case, that the kidnap victims family suffered
mental anguish, fright, and serious anxiety over the detention and eventually, the death
of Edwin. As such, and in accordance with prevailing jurisprudence,38 moral damages in
the amount of 100,000.00 must perforce be awarded to the family of the victim.

Finally, exemplary damages must be awarded in this case, in view of the confluence of
the aforesaid qualifying circumstances and in order to deter others from committing the
same atrocious acts. In accordance with prevailing jurisprudence,39 therefore, the Court
awards exemplary damages in the amount of 100,000.00 to the family of the kidnap
victim.

In addition, interest at the rate of six percent (6%) per annum shall be imposed on all
damages awarded from the date of finality of judgment until fully paid, pursuant to
prevailing jurisprudence.40

WHEREFORE, the appeal is DISMISSED. The Decision dated February 15, 2013 of the Court
of Appeals in CA-G.R. CR-H.C. No. 02888 is hereby AFFIRMED with the MODIFICATION that
all the accusedappellants herein are equally found GUILTY of the special complex crime
of Kidnapping for Ransom with Homicide, and are sentenced to each suffer the penalty
of reclusion perpetua, without eligibility for parole, and to pay, jointly and severally, the
family of the kidnap victim Edwin Navarro the following amounts: (1) 100,000.00 as civil
indemnity; (2) 100,000.00 as moral damages; and (3) 100,000.00 as exemplary
damages, all with interest at the rate of six percent (6%) per annum from the date of
finality of judgment until fully paid.

SO ORDERED.














G.R. No. 34840 September 23, 1931 he was driving at an excessive rate of speed, and that, on approaching the bridge and the
truck, he lost his head and so contributed by his negligence to the accident. The guaranty
NARCISO GUTIERREZ, plaintiff-appellee, given by the father at the time the son was granted a license to operate motor vehicles
vs. made the father responsible for the acts of his son. Based on these facts, pursuant to the
BONIFACIO GUTIERREZ, MARIA V. DE GUTIERREZ, MANUEL GUTIERREZ, ABELARDO provisions of article 1903 of the Civil Code, the father alone and not the minor or the
VELASCO, and SATURNINO CORTEZ, defendants-appellants. mother, would be liable for the damages caused by the minor.

L.D. Lockwood for appellants Velasco and Cortez. We are dealing with the civil law liability of parties for obligations which arise from fault
San Agustin and Roxas for other appellants. or negligence. At the same time, we believe that, as has been done in other cases, we can
Ramon Diokno for appellee. take cognizance of the common law rule on the same subject. In the United States, it is
uniformly held that the head of a house, the owner of an automobile, who maintains it
MALCOLM, J.: for the general use of his family is liable for its negligent operation by one of his children,
whom he designates or permits to run it, where the car is occupied and being used at the
This is an action brought by the plaintiff in the Court of First Instance of Manila against time of the injury for the pleasure of other members of the owner's family than the child
the five defendants, to recover damages in the amount of P10,000, for physical injuries driving it. The theory of the law is that the running of the machine by a child to carry other
suffered as a result of an automobile accident. On judgment being rendered as prayed for members of the family is within the scope of the owner's business, so that he is liable for
by the plaintiff, both sets of defendants appealed. the negligence of the child because of the relationship of master and servant. (Huddy On
Automobiles, 6th ed., sec. 660; Missell vs. Hayes [1914], 91 Atl., 322.) The liability of
On February 2, 1930, a passenger truck and an automobile of private ownership collided Saturnino Cortez, the owner of the truck, and of his chauffeur Abelardo Velasco rests on
while attempting to pass each other on the Talon bridge on the Manila South Road in the a different basis, namely, that of contract which, we think, has been sufficiently
municipality of Las Pias, Province of Rizal. The truck was driven by the chauffeur demonstrated by the allegations of the complaint, not controverted, and the evidence.
Abelardo Velasco, and was owned by Saturnino Cortez. The automobile was being The reason for this conclusion reaches to the findings of the trial court concerning the
operated by Bonifacio Gutierrez, a lad 18 years of age, and was owned by Bonifacio's position of the truck on the bridge, the speed in operating the machine, and the lack of
father and mother, Mr. and Mrs. Manuel Gutierrez. At the time of the collision, the father care employed by the chauffeur. While these facts are not as clearly evidenced as are
was not in the car, but the mother, together will several other members of the Gutierrez those which convict the other defendant, we nevertheless hesitate to disregard the points
family, seven in all, were accommodated therein. A passenger in the autobus, by the emphasized by the trial judge. In its broader aspects, the case is one of two drivers
name of Narciso Gutierrez, was en route from San Pablo, Laguna, to Manila. The collision approaching a narrow bridge from opposite directions, with neither being willing to slow
between the bus and the automobile resulted in Narciso Gutierrez suffering a fracture up and give the right of way to the other, with the inevitable result of a collision and an
right leg which required medical attendance for a considerable period of time, and which accident.
even at the date of the trial appears not to have healed properly.
The defendants Velasco and Cortez further contend that there existed contributory
It is conceded that the collision was caused by negligence pure and simple. The difference negligence on the part of the plaintiff, consisting principally of his keeping his foot outside
between the parties is that, while the plaintiff blames both sets of defendants, the owner the truck, which occasioned his injury. In this connection, it is sufficient to state that, aside
of the passenger truck blames the automobile, and the owner of the automobile, in turn, from the fact that the defense of contributory negligence was not pleaded, the evidence
blames the truck. We have given close attention to these highly debatable points, and bearing out this theory of the case is contradictory in the extreme and leads us far afield
having done so, a majority of the court are of the opinion that the findings of the trial into speculative matters.
judge on all controversial questions of fact find sufficient support in the record, and so
should be maintained. With this general statement set down, we turn to consider the The last subject for consideration relates to the amount of the award. The appellee
respective legal obligations of the defendants. suggests that the amount could justly be raised to P16,517, but naturally is not serious in
asking for this sum, since no appeal was taken by him from the judgment. The other
In amplification of so much of the above pronouncement as concerns the Gutierrez parties unite in challenging the award of P10,000, as excessive. All facts considered,
family, it may be explained that the youth Bonifacio was in incompetent chauffeur, that including actual expenditures and damages for the injury to the leg of the plaintiff, which
may cause him permanent lameness, in connection with other adjudications of this court,
lead us to conclude that a total sum for the plaintiff of P5,000 would be fair and
reasonable. The difficulty in approximating the damages by monetary compensation is
well elucidated by the divergence of opinion among the members of the court, three of
whom have inclined to the view that P3,000 would be amply sufficient, while a fourth
member has argued that P7,500 would be none too much.

In consonance with the foregoing rulings, the judgment appealed from will be modified,
and the plaintiff will have judgment in his favor against the defendants Manuel Gutierrez,
Abelardo Velasco, and Saturnino Cortez, jointly and severally, for the sum of P5,000, and
the costs of both instances.

Avancea, C.J., Johnson, Street, Villamor, Ostrand, Romualdez, and Imperial, JJ., concur.


VILLA-REAL, J.:


























G.R. No. 182356 December 4, 2013 Joel later revealed that his employer was respondent Rebecca Biong, doing business
under the name and style of "Pongkay Trading" and was engaged in a gravel and sand
DRA, LEILA A DELA LLANO, Petitioner, business.8
vs.
REBECCA BIONG, doing business under the name and style of Pongkay Trading, In the first week of May 2000, Dra. dela Llana began to feel mild to moderate pain on the
Respondent. left side of her neck and shoulder. The pain became more intense as days passed by. Her
injury became more severe. Her health deteriorated to the extent that she could no
D E C I S I O N longer move her left arm. On June 9, 2000, she consulted with Dr. Rosalinda Milla, a
rehabilitation medicine specialist, to examine her condition. Dr. Milla told her that she
BRION, J.: suffered from a whiplash injury, an injury caused by the compression of the nerve running
to her left arm and hand. Dr. Milla required her to undergo physical therapy to alleviate
Very case essentially turns on two basic questions: questions of fact and questions of law. her condition. Dra. dela Llanas condition did not improve despite three months of
Questions of fact are the parties and their counsel to respond to, based on what extensive physical therapy.9
supporting facts the legal questions require; the court can only draw conclusion from the
facts or evidence adduced. When the facts are lacking because of the deficiency of She then consulted other doctors, namely, Drs. Willie Lopez, Leonor Cabral-Lim and Eric
presented evidence, then the court can only draw one conclusion: that the cause must Flores, in search for a cure. Dr. Flores, a neuro-surgeon, finally suggested that she undergo
fail for lack of evidentiary support. a cervical spine surgery to release the compression of her nerve. On October 19, 2000,
Dr. Flores operated on her spine and neck, between the C5 and the C6 vertebrae.10
The present case is one such case as Dra. Leila A dela Llanas(petitioner) petition for
review on certorari1 challenging the February 11, 2008 Decision2 and the March 31, 2008 The operation released the impingement of the nerve, but incapacitated Dra. dela Llana
resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 89163. from the practice of her profession since June 2000 despite the surgery.11

The Factual Antecedents Dra. dela Llana, on October 16, 2000, demanded from Rebecca compensation for her
injuries, but Rebecca refused to pay.12
On March 30, 2000, at around 11:00 p.m., Juan dela Llana was driving a 1997 Toyota
Corolla car along North Avenue, Quezon City.4 Thus, on May 8, 2001, Dra. dela Llana sued Rebecca for damages before the Regional Trial
Court of Quezon City (RTC). She alleged that she lost the mobility of her arm as a result of
His sister, Dra. dela Llana, was seated at the front passenger seat while a certain Calimlim the vehicular accident and claimed 150,000.00 for her medical expenses (as of the filing
was at the backseat.5 of the complaint) and an average monthly income of 30,000.00 since June 2000. She
further prayed for actual, moral, and exemplary damages as well as attorneys fees.13
Juan stopped the car across the Veterans Memorial Hospital when the signal light turned
red. A few seconds after the car halted, a dump truck containing gravel and sand suddenly In defense, Rebecca maintained that Dra. dela Llana had no cause of action against her as
rammed the cars rear end, violently pushing the car forward. Due to the impact, the cars no reasonable relation existed between the vehicular accident and Dra. dela Llanas
rear end collapsed and its rear windshield was shattered. Glass splinters flew, puncturing injury. She pointed out that Dra. dela Llanas illness became manifest one month and one
Dra. dela Llana. Apart from these minor wounds, Dra. dela Llana did not appear to have week from the date of the vehicular accident. As a counterclaim, she demanded the
suffered from any other visible physical injuries.6 payment of attorneys fees and costs of the suit.14

The traffic investigation report dated March 30, 2000 identified the truck driver as Joel At the trial, Dra. dela Llana presented herself as an ordinary witness15 and Joel as a hostile
Primero. It stated that Joel was recklessly imprudent in driving the truck.7 witness.16

Dra. dela Llana reiterated that she lost the mobility of her arm because of the vehicular
accident. To prove her claim, she identified and authenticated a medical certificate dated
November 20, 2000 issued by Dr. Milla. The medical certificate stated that Dra. dela Llana
suffered from a whiplash injury. It also chronicled her clinical history and physical CA Ruling
examinations.17
In a decision dated February 11, 2008, the CA reversed the RTC ruling. It held that Dra.
Meanwhile, Joel testified that his truck hit the car because the trucks brakes got stuck.18 dela Llana failed to establish a reasonable connection between the vehicular accident and
her whiplash injury by preponderance of evidence. Citing Nutrimix Feeds Corp. v. Court
In defense, Rebecca testified that Dra. dela Llana was physically fit and strong when they of Appeals,23 it declared that courts will not hesitate to rule in favor of the other party if
met several days after the vehicular accident. She also asserted that she observed the there is no evidence or the evidence is too slight to warrant an inference establishing the
diligence of a good father of a family in the selection and supervision of Joel. She pointed fact in issue. It noted that the interval between the date of the collision and the date when
out that she required Joel to submit a certification of good moral character as well as Dra. dela Llana began to suffer the symptoms of her illness was lengthy. It concluded that
barangay, police, and NBI clearances prior to his employment. She also stressed that she this interval raised doubts on whether Joels reckless driving and the resulting collision in
only hired Primero after he successfully passed the driving skills test conducted by Alberto fact caused Dra. dela Llanas injury. It also declared that courts cannot take judicial notice
Marcelo, a licensed driver-mechanic.19 that vehicular accidents cause whiplash injuries. It observed that Dra. dela Llana did not
immediately visit a hospital to check if she sustained internal injuries after the accident.
Alberto also took the witness stand. He testified that he checked the truck in the morning Moreover, her failure to present expert witnesses was fatal to her claim. It also gave no
of March 30, 2000. He affirmed that the truck was in good condition prior to the vehicular weight to the medical certificate. The medical certificate did not explain how and why the
accident. He opined that the cause of the vehicular accident was a damaged compressor. vehicular accident caused the injury.24
According to him, the absence of air inside the tank damaged the compressor.20
The Petition
RTC Ruling
Dra. dela Llana points out in her petition before this Court that Nutrimix is inapplicable in
The RTC ruled in favor of Dra. dela Llana and held that the proximate cause of Dra. dela the present case. She stresses that Nutrimix involved the application of Article 1561 and
Llanas whiplash injury to be Joels reckless driving.21 1566 of the Civil Code, provisions governing hidden defects. Furthermore, there was
absolutely no evidence in Nutrimix that showed that poisonous animal feeds were sold
It found that a whiplash injury is an injury caused by the sudden jerking of the spine in the to the respondents in that case. As opposed to the respondents in Nutrimix, Dra. dela
neck area. It pointed out that the massive damage the car suffered only meant that the Llana asserts that she has established by preponderance of evidence that Joels egligent
truck was over-speeding. It maintained that Joel should have driven at a slower pace act was the proximate cause of her whiplash injury. First, pictures of her damaged car
because road visibility diminishes at night. He should have blown his horn and warned show that the collision was strong. She posits that it can be reasonably inferred from
the car that his brake was stuck and could have prevented the collision by swerving the these pictures that the massive impact resulted in her whiplash injury. Second, Dr. Milla
truck off the road. It also concluded that Joel was probably sleeping when the collision categorically stated in the medical certificate that Dra. dela Llana suffered from whiplash
occurred as Joel had been driving for fifteen hours on that fateful day. The RTC further injury. Third, her testimony that the vehicular accident caused the injury is credible
declared that Joels negligence gave rise to the presumption that Rebecca did not exercise because she was a surgeon.
the diligence of a good father of a family in Joel's selection and supervision of Joel.
Rebecca was vicariously liable because she was the employer and she personally chose Dra. dela Llana further asserts that the medical certificate has probative value. Citing
him to drive the truck. On the day of the collision, she ordered him to deliver gravel and several cases, she posits that an uncorroborated medical certificate is credible if
sand to Muoz Market, Quezon City. The Court concluded that the three elements uncontroverted.25
necessary to establish Rebeccas liability were present: (1) that the employee was chosen
by the employer, personally or through another; (2) that the services were to be rendered She points out that expert opinion is unnecessary if the opinion merely relates to matters
in accordance with orders which the employer had the authority to give at all times; and of common knowledge. She maintains that a judge is qualified as an expert to determine
(3) that the illicit act of the employee was on the occasion or by reason of the functions the causation between Joels reckless driving and her whiplash injury. Trial judges are
entrusted to him. The RTC thus awarded Dra. dela Llana the amounts of 570,000.00 as aware of the fact that whiplash injuries are common in vehicular collisions.
actual damages, 250,000.00 as moral damages, and the cost of the suit.22
The Respondents Position
These elements show that the source of obligation in a quasi-delict case is the breach or
In her Comment,26 Rebecca points out that Dra. dela Llana raises a factual issue which is omission of mutual duties that civilized society imposes upon its members, or which arise
beyond the scope of a petition for review on certiorari under Rule 45 of the Rules of Court. from non-contractual relations of certain members of society to others.29
She maintains that the CAs findings of fact are final and conclusive. Moreover, she
stresses that Dra. dela Llanas arguments are not substantial to merit this Courts Based on these requisites, Dra. dela Llana must first establish by preponderance of
consideration. evidence the three elements of quasi-delict before we determine Rebeccas liability as
Joels employer.
The Issue
She should show the chain of causation between Joels reckless driving and her whiplash
The sole issue for our consideration in this case is whether Joels reckless driving is the injury.
proximate cause of Dra. dela Llanas whiplash injury.
Only after she has laid this foundation can the presumption - that Rebecca did not
Our Ruling We find the petition unmeritorious. exercise the diligence of a good father of a family in the selection and supervision of Joel
- arise.30
The Supreme Court may review questions of fact in a petition for review on certiorari
when the findings of fact by the lower courts are conflicting Once negligence, the damages and the proximate causation are established, this Court
can then proceed with the application and the interpretation of the fifth paragraph of
The issue before us involves a question of fact and this Court is not a trier of facts. As a Article 2180 of the Civil Code.31
general rule, the CAs findings of fact are final and conclusive and this Court will not review
them on appeal. It is not the function of this Court to examine, review or evaluate the Under Article 2176 of the Civil Code, in relation with the fifth paragraph of Article 2180,
evidence in a petition for review on certiorari under Rule 45 of the Rules of Court. We can "an action predicated on an employees act or omission may be instituted against the
only review the presented evidence, by way of exception, when the conflict exists in employer who is held liable for the negligent act or omission committed by his
findings of the RTC and the CA.27 employee."32

We see this exceptional situation here and thus accordingly examine the relevant The rationale for these graduated levels of analyses is that it is essentially the wrongful or
evidence presented before the trial court. negligent act or omission itself which creates the vinculum juris in extra-contractual
obligations.33
Dra. dela Llana failed to establish her case by preponderance of evidence
In civil cases, a party who alleges a fact has the burden of proving it.
Article 2176 of the Civil Code provides that "[w]hoever by act or omission causes damage
to another, there being fault or negligence, is obliged to pay for the damage done. Such He who alleges has the burden of proving his allegation by preponderance of evidence or
fault or negligence, if there is no pre-existing contractual relation between the parties, is greater weight of credible evidence.34
a quasi-delict." Under this provision, the elements necessary to establish a quasi-delict
case are: The reason for this rule is that bare allegations, unsubstantiated by evidence, are not
equivalent to proof.
(1) damages to the plaintiff;
In short, mere allegations are not evidence.35
(2) negligence, by act or omission, of the defendant or by some person for whose acts the
defendant must respond, was guilty; and In the present case, the burden of proving the proximate causation between Joels
negligence and Dra. dela Llanas whiplash injury rests on Dra. dela Llana. She must
(3) the connection of cause and effect between such negligence and the damages.28 establish by preponderance of evidence that Joels negligence, in its natural and
continuous sequence, unbroken by any efficient intervening cause, produced her However, even if we consider the medical certificate in the disposition of this case, the
whiplash injury, and without which her whiplash injury would not have occurred.36 medical certificate has no probative value for being hearsay. It is a basic rule that
evidence, whether oral or documentary, is hearsay if its probative value is not based on
Notably, Dra. dela Llana anchors her claim mainly on three pieces of evidence: the personal knowledge of the witness but on the knowledge of another person who is
not on the witness stand.39
(1) the pictures of her damaged car,
Hearsay evidence, whether objected to or not, cannot be given credence40 except in very
(2) the medical certificate dated November 20, 2000, and unusual circumstance that is not found in the present case. Furthermore, admissibility of
evidence should not be equated with weight of evidence. The admissibility of evidence
(3) her testimonial evidence. However, none of these pieces of evidence show the causal depends on its relevance and competence, while the weight of evidence pertains to
relation between the vehicular accident and the whiplash injury. In other words, evidence already admitted and its tendency to convince and persuade. Thus, a particular
item of evidence may be admissible, but its evidentiary weight depends on judicial
Dra. dela Llana, during trial, did not adduce the factum probans or the evidentiary facts evaluation within the guidelines provided by the Rules of Court.41
by which the factum probandum or the ultimate fact can be established, as fully discussed
below.37 During trial, Dra. dela Llana testified:

A. "Q: Did your physician tell you, more or less, what was the reason why you were feeling
that pain in your left arm?
The pictures of the damaged
car only demonstrate the A: Well, I got a certificate from her and in that certificate, she stated that my condition
impact of the collision was due to a compression of the nerve, which supplied my left arm and my left hand.

Dra. dela Llana contends that the pictures of the damaged car show that the massive Court: By the way, what is the name of this physician, Dra.?
impact of the collision caused her whiplash injury. We are not persuaded by this bare
claim. Her insistence that these pictures show the causation grossly belies common logic. Witness: Her name is Dra. Rosalinda Milla. She is a Rehabilitation Medicine Specialist.
These pictures indeed demonstrate the impact of the collision. However, it is a far-fetched Atty. Yusingco: You mentioned that this Dra. Rosalinda Milla made or issued a medical
assumption that the whiplash injury can also be inferred from these pictures. certificate. What relation does this medical certificate, marked as Exhibit H have to do
with that certificate, you said was made by Dra. Milla?
B.
Witness: This is the medical certificate that Dra. Milla made out for me.
The medical certificate cannot be
considered because it was Atty. Yusingco: Your Honor, this has been marked as Exhibit H.
not admitted in evidence
Atty. Yusingco: What other medical services were done on you, Dra. dela Llana, as a result
Furthermore, the medical certificate, marked as Exhibit "H" during trial, should not be of that feeling, that pain that you felt in your left arm?
considered in resolving this case for the reason that it was not admitted in evidence by
the RTC in an order dated September 23, 2004.38 Witness: Well, aside from the medications and physical therapy, a re-evaluation of my
condition after three months indicated that I needed surgery.
Thus, the CA erred in even considering this documentary evidence in its resolution of the
case. It is a basic rule that evidence which has not been admitted cannot be validly Atty. Yusingco: Did you undergo this surgery?
considered by the courts in arriving at their judgments.
Witness: So, on October 19, I underwent surgery on my neck, on my spine.
 (c) the mental sanity of a person with whom he is sufficiently acquainted.1wphi1
Atty. Yusingco: And, what was the result of that surgical operation? Furthermore, the witness may also testify on his impressions of the emotion, behavior,
condition or appearance of a person.43
Witness: Well, the operation was to relieve the compression on my nerve, which did not
resolve by the extensive and prolonged physical therapy that I underwent for more than On the other hand, the opinion of an expert witness may be received in evidence on a
three months."42(emphasis ours) matter requiring special knowledge, skill, experience or training which he shown to
possess.44
Evidently, it was Dr. Milla who had personal knowledge of the contents of the medical
certificate.1wphi1 However, she was not presented to testify in court and was not even However, courts do not immediately accord probative value to an admitted expert
able to identify and affirm the contents of the medical certificate. Furthermore, Rebecca testimony, much less to an unobjected ordinary testimony respecting special knowledge.
was deprived of the opportunity to cross-examine Dr. Milla on the accuracy and veracity The reason is that the probative value of an expert testimony does not lie in a simple
of her findings. We also point out in this respect that the medical certificate nonetheless exposition of the expert's opinion. Rather, its weight lies in the assistance that the expert
did not explain the chain of causation in fact between Joels reckless driving and Dra. dela witness may afford the courts by demonstrating the facts which serve as a basis for his
Llanas whiplash injury. It did not categorically state that the whiplash injury was a result opinion and the reasons on which the logic of his conclusions is founded.45
of the vehicular accident. A perusal of the medical certificate shows that it only attested
to her medical condition, i.e., that she was suffering from whiplash injury. However, the In the present case, Dra. dela Llanas medical opinion cannot be given probative value for
medical certificate failed to substantially relate the vehicular accident to Dra. dela Llanas the reason that she was not presented as an expert witness. As an ordinary witness, she
whiplash injury. Rather, the medical certificate only chronicled her medical history and was not competent to testify on the nature, and the cause and effects of whiplash injury.
physical examinations. Furthermore, we emphasize that Dra. dela Llana, during trial, nonetheless did not provide
a medical explanation on the nature as well as the cause and effects of whiplash injury in
C. her testimony.

Dra. dela Llanas opinion that The Supreme Court cannot take
Joels negligence caused her judicial notice that vehicular
whiplash injury has no probative value accidents cause whiplash injuries.

Interestingly, the present case is peculiar in the sense that Dra. dela Llana, as the plaintiff Indeed, a perusal of the pieces of evidence presented by the parties before the trial court
in this quasi-delict case, was the lone physician-witness during trial. Significantly, she shows that Dra. Dela Llana did not present any testimonial or documentary evidence that
merely testified as an ordinary witness before the trial court. Dra. dela Llana essentially directly shows the causal relation between the vehicular accident and Dra. Dela Llanas
claimed in her testimony that Joels reckless driving caused her whiplash injury. Despite injury. Her claim that Joels negligence causes her whiplash injury was not established
the fact that Dra. dela Llana is a physician and even assuming that she is an expert in because of the deficiency of the presented evidence during trial. We point out in this
neurology, we cannot give weight to her opinion that Joels reckless driving caused her respect that courts cannot take judicial notice that vehicular ccidents cause whiplash
whiplash injury without violating the rules on evidence. Under the Rules of Court, there injuries. This proportion is not public knowledge, or is capable of unquestionable
is a substantial difference between an ordinary witness and an expert witness. The demonstration, or ought to be known to judges because of their judicial functions.46 We
opinion of an ordinary witness may be received in evidence regarding: have no expertise in the field of medicine. Justices and judges are only tasked to apply
and interpret the law on the basis of the parties pieces of evidence and their
(a) the identity of a person about whom he has adequate knowledge; corresponding legal arguments.

(b) a handwriting with which he has sufficient familiarity; and In sum, Dra. dela Llana miserably failed to establish her cause by preponderance of
evidence. While we commiserate with her, our solemn duty to independently and
impartially assess the merits of the case binds us to rule against Dra. dela Llanas favor.
Her claim, unsupported by prepondernace of evidence, is merely a bare assertion and has
no leg to stand on.

WHEREFORE, presmises considered, the assailed Decision dated February 11, 2008 and
Resolution dated March 31, 2008 of the Court of Appeals are hereby AFFIRMED and the
petition is hereby DENIED for lack of merit.
SO ORDERED.