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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 83748 May 12, 1989
FLAVIO K MACASAET & ASSOCIATES, INC., petitioner,
vs.
COMMISSION ON AUDIT and PHILIPPINE TOURISM
AUTHORITY, respondents.
F. Sumulong & Associates Law Offices for petitioner.

Under the Contract, PTA obligated itself to pay petitioner a


professional fee of seven (7%) of the actual construction
cost, as follows:
ARTICLE IV PROFESSIONAL FEE
In consideration for the professional services
to be performed by Designer under Article I of
this Agreement, the Authority shall pay seven
percent (7%) of the actual construction cost.
In addition, a Schedule of Payments was provided for while
the construction was in progress and up to its final
completion, thus:
ARTICLE V SCHEDULE OF PAYMENTS

MELENCIO-HERRERA, J.:
In this Petition for Certiorari, pursuant to Section 7, Article IX
of the 1987 Constitution, 1 petitioner, Flavio K. Macasaet &
Associates, Inc., prays that the ruling of public respondent
Commission on Audit (COA) denying its claim for completion
of payment of professional fees be overturned. The facts
follow. On 15 September 1977 respondent Philippine Tourism
Authority (PTA) entered into a Contract for "Project Design
and Management Services for the development of the
proposed Zamboanga Golf and Country Club, Calarian,
Zamboanga City" with petitioner company, but originally
with Flavio K Macasaet alone (hereinafter referred to simply
as the "Contract").

1. Upon the execution of the Agreement but


not more than fifteen (15) days, a minimum
payment equivalent to 10 percent of the
professional fee as provided in Art. IV
computed upon a reasonable estimated
construction cost of the project.
2. Upon the completion of the schematic
design services, but not more than 15 days
after the submission of the schematic design
to the Authority, a sum equivalent to 15% of
the professional fee as stated in Art. IV
computed upon the reasonable estimated
construction cost of the project.
3. Upon completion of the design
development services, but not more than 15

days after submission of the design


development to the authority, a sum
equivalent to 20% of the professional fee as
stated in Art. IV, computed upon
the reasonable estimated construction cost.

On 3 July 1985 PTA denied payment on the ground that "the


subject price escalation referred to increased cost of
construction materials and did not entail additional work on
the part of petitioner as to entitle it to additional
compensation under Article VI of the contract." 2

4. Upon completion of the contract document


services but not more than 15 days after
submission of the contract document to the
Authority, a sum equivalent to 25% of the
professional fee as stated in Art. IV, shall be
paid computed on the same basis as above.

Reconsiderations sought by the petitioner, up to respondent


COA, were to no avail. The latter expressed the opinion that
"to allow subject claim in the absence of a showing that
extra or additional services had been rendered by claimant
would certainly result in overpayment to him to the
prejudice of the Government" (1st Indorsement, July 10,
1987, p. 3, Rollo, p. 42).

5. Upon completion of the work and


acceptance thereof by the Authority, the
balance of the professional fee, computed on
the final actual project cost shall be paid.
(Emphasis supplied)
Pursuant to the foregoing Schedule, the PTA made periodic
payments of the stipulated professional fees to petitioner.
And, upon completion of the project, PTA paid petitioners
what it perceived to be the balance of the latter's
professional fees.
It turned out, however, that after the project was completed,
PTA paid Supra Construction Company, the main contractor,
the additional sum of P3,148,198.26 representing the
escalation cost of the contract price due to the increase in
the price of construction materials.
Upon learning of the price escalation, petitioner requested
payment of P219,302.47 additional professional fee
representing seven (7%) percent of P3,148,198.26.

Hence this Petition, to which we gave due course.


The basic issue for resolution is petitioner's entitlement to
additional professional fees, which, in turn, hinges on
whether or not the price escalation should be included in the
"final actual project cost."
Public respondents, through the Solicitor General, maintain
that petitioner had been paid its professional fee upon
completion of the project and that its claim for additional
payment is without any legal and factual basis for, after all,
no additional architectural services were rendered other
than the ones under the terms of the Contract. On the other
hand, petitioner anchors its claim to additional professional
fees, not on any change in services rendered, but on Article
IV, and paragraph 5 of Article V, of the Contract, supra.
The very terminologies used in the Contract call for
affirmative relief in petitioner's favor.

Under Article IV of said Contract, petitioner was to be


entitled to seven (7%) of the "actual construction cost."
Under paragraphs 1, 2, 3, and 4, Article V, periodic
payments were to be based on a "reasonable estimated
construction cost." ultimately, under paragraph 5, Article V,
the balance of the professional fee was to be computed on
the basis of "the final actual project cost."
The use of the terms "actual construction cost", gradating
into "final actual project cost" is not without significance.
The real intendment of the parties, as shown by paragraph
5, Article V, of their Contract was to base the ultimate
balance of petitioner's professional fees not on "actual
construction cost" alone but on the final actual project cost;
not on "construction cost" alone but on "project cost." By so
providing, the Contract allowed for flexibility based on
actuality and as a matter of equity for the contracting
parties. For evidently, the final actual project cost would not
necessarily tally with the actual construction cost initially
computed. The "final actual project cost" covers the totality
of all costs as actually and finally determined, and logically
includes the escalation cost of the contract price.
It matters not that the price escalation awarded to the
construction company did not entail additional work for
petitioner. As a matter of fact, neither did it for the main
contractor. The increased cost of materials was not the
doing of either contracting party.
That an escalation clause was not specifically provided for in
the Contract is of no moment either for it may be considered
as already "built-in" and understood from the very terms
"actual construction cost," and eventually "final actual
project cost."

Article VI of the Contract, supra, has no bearing on the


present controversy either. It speaks of any major change in
the planning and engineering aspects necessitating the
award and payment of additional compensation. Admittedly,
there was no additional work by petitioner, which required
additional compensation. Rather, petitioner's claim is for
payment of the balance of its professional fees based on the
"final actual project cost" and not for additional
compensation based on Article VI.
The terminologies in the contract being clear, leaving no
doubt as to the intention of the contracting parties, their
literal meaning control (Article 1370, Civil Code). The price
escalation cost must be deemed included in the final actual
project cost and petitioner held entitled to the payment of
its additional professional fees. Obligations arising from
contract have the force of law between the contracting
parties and should be complied with in good faith (Article 11
59, Civil Code).
WHEREFORE, the ruling of respondent Commission on Audit
is hereby SET ASIDE and respondent Philippines Tourism
Authority is hereby ordered to pay petitioner the additional
amount of P219,302.47 to complete the payment of its
professional fee under their Contract for Project Design and
Management Services.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino,
Medialdea and Regalado, JJ., concur.

Footnotes
1 Section 7. ... Unless otherwise provided by
this Constitution or by law, any decision,
order, or ruling of each Commission may be
brought to the Supreme Court on certiorari by
the aggrieved party within thirty days from
receipt of a copy thereof
2 Article VI CHANGE OF ORDERS
Should the Authority order any major change
on the planning and engineering aspects after
definite designs have been previously agreed
upon and the computation, designing, and
drafting works completed resulting in
additional work, additional compensation shall
be equitably paid for such additional work as
mutually agreed upon by both parties.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-30056 August 30, 1988
MARCELO AGCAOILI, plaintiff-appellee
vs.
GOVERNMENT SERVICE INSURANCE
SYSTEM, defendant-appellant.
Artemio L. Agcaoili for plaintiff-appellee.
Office of the Government Corporate Counsel for defendantappellant.

NARVASA, J.:
The appellant Government Service Insurance System, (GSIS,
for short) having approved the application of the appellee
Agcaoili for the purchase of a house and lot in the GSIS
Housing Project at Nangka Marikina, Rizal, subject to the
condition that the latter should forthwith occupy the house,
a condition that Agacoili tried to fulfill but could not for the
reason that the house was absolutely uninhabitable;
Agcaoili, after paying the first installment and other fees,
having thereafter refused to make further payment of other
stipulated installments until GSIS had made the house
habitable; and appellant having refused to do so, opting
instead to cancel the award and demand the vacation by
Agcaoili of the premises; and Agcaoili having sued the GSIS
in the Court of First Instance of Manila for specific
performance with damages and having obtained a favorable
judgment, the case was appealled to this Court by the GSIS.
Its appeal must fail.
The essential facts are not in dispute. Approval of Agcaoili's
aforementioned application for purchase 1 was contained in
a letter 2 addressed to Agcaoili and signed by GSIS Manager
Archimedes Villanueva in behalf of the Chairman-General
Manager, reading as follows:
Please be informed that your application to
purchase a house and lot in our GSIS Housing
Project at Nangka, Marikina, Rizal, has been
approved by this Office. Lot No. 26, Block No.
(48) 2, together with the housing unit
constructed thereon, has been allocated to
you.

You are, therefore, advised to occupy the said


house immediately.
If you fail to occupy the same within three (3)
days from receipt of this notice, your
application shall be considered automatically
disapproved and the said house and lot will be
awarded to another applicant.
Agcaoili lost no time in occupying the house. He could not
stay in it, however, and had to leave the very next day,
because the house was nothing more than a shell, in such a
state of incompleteness that civilized occupation was not
possible: ceiling, stairs, double walling, lighting facilities,
water connection, bathroom, toilet kitchen, drainage, were
inexistent. Agcaoili did however ask a homeless friend, a
certain Villanueva, to stay in the premises as some sort of
watchman, pending completion of the construction of the
house. Agcaoili thereafter complained to the GSIS, to no
avail.
The GSIS asked Agcaoili to pay the monthly amortizations
and other fees. Agcaoili paid the first monthly installment
and the incidental fees, 3 but refused to make further
payments until and unless the GSIS completed the housing
unit. What the GSIS did was to cancel the award and require
Agcaoili to vacate the premises. 4 Agcaoili reacted by
instituting suit in the Court of First Instance of Manila for
specific performance and damages. 5 Pending the action, a
written protest was lodged by other awardees of housing
units in the same subdivision, regarding the failure of the
System to complete construction of their own
houses. 6 Judgment was in due course rendered , 7 on the
basis of the evidence adduced by Agcaoili only, the GSIS
having opted to dispense with presentation of its own

proofs. The judgment was in Agcaoili's favor and contained


the following dispositions, 8 to wit:
1) Declaring the cancellation of the award (of
a house and lot) in favor of plaintiff (Mariano
Agcaoili) illegal and void;
2) Ordering the defendant (GSIS) to respect
and enforce the aforesaid award to the
plaintiff relative to Lot No. 26, Block No. (48) 2
of the Government Service Insurance System
(GSIS) low cost housing project at Nangka
Marikina, Rizal;
3) Ordering the defendant to complete the
house in question so as to make the same
habitable and authorizing it (defendant) to
collect the monthly amortization thereon only
after said house shall have been completed
under the terms and conditions mentioned in
Exhibit A ;and
4) Ordering the defendant to pay P100.00 as
damages and P300.00 as and for attorney's
fees, and costs.
Appellant GSIS would have this Court reverse this judgment
on the argument that
1) Agcaoili had no right to suspend payment of
amortizations on account of the incompleteness of his
housing unit, since said unit had been sold "in the condition
and state of completion then existing ... (and) he is deemed
to have accepted the same in the condition he found it when

he accepted the award;" and assuming indefiniteness of the


contract in this regard, such circumstance precludes a
judgment for specific performance. 9
2) Perfection of the contract of sale between it and Agcaoili
being conditioned upon the latter's immediate occupancy of
the house subject thereof, and the latter having failed to
comply with the condition, no contract ever came into
existence between them ; 10
3) Agcaoili's act of placing his homeless friend, Villanueva,
in possession, "without the prior or subsequent knowledge
or consent of the defendant (GSIS)" operated as a
repudiation by Agcaoili of the award and a deprivation of the
GSIS at the same time of the reasonable rental value of the
property. 11
Agcaoili's offer to buy from GSIS was contained in a printed
form drawn up by the latter, entitled "Application to
Purchase a House and/or Lot." Agcaoili filled up the form,
signed it, and submitted it. 12 The acceptance of the
application was also set out in a form (mimeographed) also
prepared by the GSIS. As already mentioned, this form sent
to Agcaoili, duly filled up, advised him of the approval of his
"application to purchase a house and lot in our GSIS Housing
Project at NANGKA, MARIKINA, RIZAL," and that "Lot No. 26,
Block No. (48) 2, together with the housing unit constructed
thereon, has been allocated to you." Neither the application
form nor the acceptance or approval form of the GSIS nor
the notice to commence payment of a monthly
amortizations, which again refers to "the house and lot
awarded" contained any hint that the house was
incomplete, and was being sold "as is," i.e., in whatever
state of completion it might be at the time. On the other
hand, the condition explicitly imposed on Agcaoili "to

occupy the said house immediately," or in any case within


three (3) days from notice, otherwise his "application shall
be considered automatically disapproved and the said house
and lot will be awarded to another applicant" would imply
that construction of the house was more or less complete,
and it was by reasonable standards, habitable, and that
indeed, the awardee should stay and live in it; it could not
be interpreted as meaning that the awardee would occupy it
in the sense of a pioneer or settler in a rude wilderness,
making do with whatever he found available in the
envirornment.
There was then a perfected contract of sale between the
parties; there had been a meeting of the minds upon the
purchase by Agcaoili of a determinate house and lot in the
GSIS Housing Project at Nangka Marikina, Rizal at a definite
price payable in amortizations at P31.56 per month, and
from that moment the parties acquired the right to
reciprocally demand performance. 13 It was, to be sure, the
duty of the GSIS, as seller, to deliver the thing sold in a
condition suitable for its enjoyment by the buyer for the
purpose contemplated , 14 in other words, to deliver the
house subject of the contract in a reasonably livable state.
This it failed to do.
It sold a house to Agcaoili, and required him to immediately
occupy it under pain of cancellation of the sale. Under the
circumstances there can hardly be any doubt that the house
contemplated was one that could be occupied for purposes
of residence in reasonable comfort and convenience. There
would be no sense to require the awardee to immediately
occupy and live in a shell of a house, a structure consisting
only of four walls with openings, and a roof, and to theorize,
as the GSIS does, that this was what was intended by the
parties, since the contract did not clearly impose upon it the

obligation to deliver a habitable house, is to advocate an


absurdity, the creation of an unfair situation. By any
objective interpretation of its terms, the contract can only
be understood as imposing on the GSIS an obligation to
deliver to Agcaoili a reasonably habitable dwelling in return
for his undertaking to pay the stipulated price. Since GSIS
did not fulfill that obligation, and was not willing to put the
house in habitable state, it cannot invoke Agcaoili's
suspension of payment of amortizations as cause to cancel
the contract between them. It is axiomatic that "(i)n
reciprocal obligations, neither party incurs in delay if the
other does not comply or is not ready to comply in a proper
manner with what is incumbent upon him." 15
Nor may the GSIS succeed in justifying its cancellation of the
award to Agcaoili by the claim that the latter had not
complied with the condition of occupying the house within
three (3) days. The record shows that Agcaoili did try to
fulfill the condition; he did try to occupy the house but found
it to be so uninhabitable that he had to leave it the following
day. He did however leave a friend in the structure, who
being homeless and hence willing to accept shelter even of
the most rudimentary sort, agreed to stay therein and look
after it. Thus the argument that Agcaoili breached the
agreement by failing to occupy the house, and by allowing
another person to stay in it without the consent of the GSIS,
must be rejected as devoid of merit.
Finally, the GSIS should not be heard to say that the
agreement between it and Agcaoili is silent, or imprecise as
to its exact prestation Blame for the imprecision cannot be
imputed to Agcaoili; it was after all the GSIS which caused
the contract to come into being by its written acceptance of
Agcaoili's offer to purchase, that offer being contained in a
printed form supplied by the GSIS. Said appellant having

caused the ambiguity of which it would now make capital,


the question of interpretation arising therefrom, should be
resolved against it.
It will not do, however, to dispose of the controversy by
simply declaring that the contract between the parties had
not been validly cancelled and was therefore still in force,
and that Agcaoili could not be compelled by the GSIS to pay
the stipulated price of the house and lot subject of the
contract until and unless it had first completed construction
of the house. This would leave the contract hanging or in
suspended animation, as it were, Agcaoili unwilling to pay
unless the house were first completed, and the GSIS averse
to completing construction, which is precisely what has been
the state of affairs between the parties for more than twenty
(20) years now. On the other hand, assuming it to be
feasible to still finish the construction of the house at this
time, to compel the GSIS to do so so that Agcaoili's
prestation to pay the price might in turn be demanded,
without modifying the price therefor, would not be quite fair.
The cost to the GSIS of completion of construction
at present prices would make the stipulated price
disproportionate, unrealistic.
The situation calls for the exercise by this Court of its equity
jurisdiction, to the end that it may render complete
justice to both parties.
As we . . reaffirmed in Air Manila, Inc. vs.
Court of Industrial Relations (83 SCRA 579,
589 [1978]). "(E)quity as the complement of
legal jurisdiction seeks to reach and do
complete justice where courts of law, through
the inflexibility of their rules and want of
power to adapt their judgments to the special

circumstances of cases, are incompetent so to


do. Equity regards the spirit of and not the
letter, the intent and not the form, the
substance rather than the circumstance, as it
is variously expressed by different courts...
" 16
In this case, the Court can not require specific performance
of the contract in question according to its literal terms, as
this would result in inequity. The prevailing rule is that in
decreeing specific performance equity requires17
... not only that the contract be just and
equitable in its provisions, but that the
consequences of specific performance
likewise be equitable and just. The general
rule is that this equitable relief will not be
granted if, under the circumstances of the
case, the result of the specific enforcement of
the contract would be harsh, inequitable,
oppressive, or result in an unconscionable
advantage to the plaintiff . .
In the exercise of its equity jurisdiction, the Court may
adjust the rights of parties in accordance with the
circumstances obtaining at the time of rendition of
judgment, when these are significantly different from those
existing at the time of generation of those rights.
The Court is not restricted to an adjustment of
the rights of the parties as they existed when
suit was brought, but will give relief
appropriate to events occuring ending the
suit. 18

While equitable jurisdiction is generally to be


determined with reference to the situation
existing at the time the suit is filed, the relief
to be accorded by the decree is governed by
the conditions which are shown to exist at the
time of making thereof, and not by the
circumstances attending the inception of the
litigation. In making up the final decree in an
equity suit the judge may rightly consider
matters arising after suit was brought.
Therefore, as a general rule, equity will
administer such relief as the nature, rights,
facts and exigencies of the case demand at
the close of the trial or at the time of the
making of the decree. 19
That adjustment is entirely consistent with the Civil Law
principle that in the exercise of rights a person must act with
justice, give everyone his due, and observe honesty and
good faith. 20 Adjustment of rights has been held to be
particularly applicable when there has been a depreciation
of currency.
Depreciation of the currency or other medium
of payment contracted for has frequently
been held to justify the court in withholding
specific performance or at least conditioning it
upon payment of the actual value of the
property contracted for. Thus, in an action for
the specific performance of a real estate
contract, it has been held that where the
currency in which the plaintiff had contracted
to pay had greatly depreciated before
enforcement was sought, the relief would be
denied unless the complaint would undertake

to pay the equitable value of the land. (Willard


& Tayloe [U.S.] 8 Wall 557,19 L. Ed 501;
Doughdrill v. Edwards, 59 Ala 424) 21
In determining the precise relief to give, the Court will
"balance the equities" or the respective interests of the
parties, and take account of the relative hardship that one
relief or another may occasion to them .22
The completion of the unfinished house so that it may be
put into habitable condition, as one form of relief to the
plaintiff Agcaoili, no longer appears to be a feasible option in
view of the not inconsiderable time that has already
elapsed. That would require an adjustment of the price of
the subject of the sale to conform to present prices of
construction materials and labor. It is more in keeping with
the realities of the situation, and with equitable norms, to
simply require payment for the land on which the house
stands, and for the house itself, in its unfinished state, as of
the time of the contract. In fact, this is an alternative relief
proposed by Agcaoili himself, i.e., "that judgment issue . .
(o)rdering the defendant (GSIS) to execute a deed of sale
that would embody and provide for a reasonable
amortization of payment on the basis of the present actual
unfinished and uncompleted condition, worth and value of
the said house. 23
WHEREFORE, the judgment of the Court a quo insofar as it
invalidates and sets aside the cancellation by respondent
GSIS of the award in favor of petitioner Agcaoili of Lot No.
26, Block No. (48) 2 of the GSIS low cost housing project at
Nangka, Marikina, Rizal, and orders the former to respect
the aforesaid award and to pay damages in the amounts
specified, is AFFIRMED as being in accord with the facts and
the law. Said judgments is however modified by deleting the

requirement for respondent GSIS "to complete the house in


question so as to make the same habitable," and instead it
is hereby ORDERED that the contract between the parties
relative to the property above described be modified by
adding to the cost of the land, as of the time of perfection of
the contract, the cost of the house in its unfinished state
also as of the time of perfection of the contract, and
correspondingly adjusting the amortizations to be paid by
petitioner Agcaoili, the modification to be effected after
determination by the Court a quo of the value of said house
on the basis of the agreement of the parties, or if this is not
possible by such commissioner or commissioners as the
Court may appoint. No pronouncement as to costs.

6 The letter was sent thru the awardees'


"Samahang Lakas ng Mahihirap," copy having
been marked at the trial as Exh. F; to the
letter was attached a resolution of said
Samahan adopted at its meeting of July 23,
1967 and to which, in turn, was appended a 3
page list of uncompleted houses with a
specification of items not completed.
7 By Hon. Manuel P. Barcelona, presiding over
Br. VIII of the CFI of Manila; Record on Appeal,
pp. 22-25, Rollo, p. 13.

SO ORDERED.

8 Parenthetical insertions Identifying the


parties, supplied.

Cruz, Gancayco, Aquino and Medialdea, JJ., concur.

9 Appellant's brief, pp. 11-14.


10 Id., pp. 7-8.

Footnotes

11 Appellant's brief, pp. 8-10.


1 Dated June 24, 1964.

12 Exh. E.

2 Dated October 5, 1965 (Exh. A ); Folder of


Exhibits,p.1.

I3 Art. 1475, Civil Code; Pacific Oxygen &


Acetylene Co. v. Central Bank, 37 SCRA 685.

3 O.R. No. 186558, Oct. 10, 1966.

14 Lim v. de los Santos, 8 SCRA 798.

4 Exh. D, Folder of Exhibits, p. 4.

I5 Art. 1169, last paragraph, Civil Code.

5 Docketed as Civil Case No. 69417.

16 Cristobal vs. Melchor, 101 SCRA 857, 865.


17 771 Am. Jur. 2d, 101.

18 30C.J.S. 929.
19 27 Am Jur. 2d. 818.
20 Art. 19, Civil Code: "Every person must, in
the exercise of his rights and in the
performance of his duties, act with justice,
give everyone his due, and observe and good
faith."
21 71 Am. Jur. 2d, 120.
22 Am. Jur. 2nd 628-629: "Their is a general
principle that a court of equity will balance
the equities' between the parties in
determining what, if any, relief to give. . .
Thus, for example, wherein the effect of the
only relief which can be granted to protect the
plaintiff will be destructive of the defendants'
business, which would be lawful but for the
harm it does to the plaintiff, relief may be
refused if, on a balancing of the respective
interests, that of the defendant is found to be
relatively important, and that of the plaintiff
relatively insignificant. . ."
23 Record on Appeal, p. 5; Rollo, p. 13.

Cruz and Associates law firm, entered into a retainer


agreement on February 26, 1987 whereby the former
obligated itself to pay the latter a monthly retainer fee of
P3,000.00 in consideration of the law firm's undertaking to
render the services enumerated in their
contract. 1 Parenthetically, said retainer agreement was
terminated by the union on April 4, 1990. 2

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 120592 March 14, 1997


TRADERS ROYAL BANK EMPLOYEES UNIONINDEPENDENT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
EMMANUEL NOEL A. CRUZ, respondents.

REGALADO, J.:
Petitioner Traders Royal Bank Employees Union and private
respondent Atty. Emmanuel Noel A. Cruz, head of the E.N.A.

During the existence of that agreement, petitioner union


referred to private respondent the claims of its members for
holiday, mid-year and year-end bonuses against their
employer, Traders Royal Bank (TRB). After the appropriate
complaint was filed by private respondent, the case was
certified by the Secretary of Labor to the National Labor
Relations Commission (NLRC) on March 24, 1987 and
docketed as NLRC-NCR Certified Case No. 0466. 3
On September 2, 1988, the NLRC rendered a decision in the
foregoing case in favor of the employees, awarding them
holiday pay differential, mid-year bonus differential, and
year-end bonus differential. 4 The NLRC, acting on a motion
for the issuance of a writ of execution filed by private
respondent as counsel for petitioner union, raffled the case
to Labor Arbiter Oswald Lorenzo. 5
However, pending the hearing of the application for the writ
of execution, TRB challenged the decision of the NLRC
before the Supreme Court. The Court, in its decision
promulgated on August 30, 1990, 6 modified the decision of
the NLRC by deleting the award of mid-year and year-end
bonus differentials while affirming the award of holiday pay
differential. 7

The bank voluntarily complied with such final judgment and


determined the holiday pay differential to be in the amount
of P175,794.32. Petitioner never contested the amount thus
found by TRB. 8 The latter duly paid its concerned
employees their respective entitlement in said sum through
their payroll. 9
After private respondent received the above decision of the
Supreme Court on September 18, 1990, 10 he notified the
petitioner union, the TRB management and the NLRC of his
right to exercise and enforce his attorney's lien over the
award of holiday pay differential through a letter dated
October 8, 1990. 11
Thereafter, on July 2, 1991, private respondent filed a
motion before Labor Arbiter Lorenzo for the determination of
his attorney's fees, praying that ten percent (10%) of the
total award for holiday pay differential computed by TRB at
P175,794.32, or the amount of P17,579.43, be declared as
his attorney's fees, and that petitioner union be ordered to
pay and remit said amount to him. 12
The TRB management manifested before the labor arbiter
that they did not wish to oppose or comment on private
respondent's motion as the claim was directed against the
union, 13 while petitioner union filed a comment and
opposition to said motion on July 15, 1991. 14 After
considering the position of the parties, the labor arbiter
issued an order 15 on November 26, 1991 granting the
motion of private respondent, as follows:
WHEREFORE, premises considered, it is
hereby ordered that the TRADERS ROYAL
BANK EMPLOYEES UNION with offices at

Kanlaon Towers, Roxas Boulevard is hereby


ordered (sic) to pay without delay the
attorney's fees due the movant law firm,
E.N.A. CRUZ and ASSOCIATES the amount of
P17,574.43 or ten (10%) per cent of the
P175,794.32 awarded by the Supreme Court
to the members of the former.
This constrained petitioner to file an appeal with the
NLRC on December 27, 1991, seeking a reversal of
that order. 16
On October 19, 1994, the First Division of the NLRC
promulgated a resolution affirming the order of the labor
arbiter. 17 The motion for reconsideration filed by petitioner
was denied by the NLRC in a resolution dated May 23,
1995, 18hence the petition at bar.
Petitioner maintains that the NLRC committed grave abuse
of discretion amounting to lack of jurisdiction in upholding
the award of attorney's fees in the amount of P17,574.43, or
ten percent (10%) of the P175,794.32 granted as holiday
pay differential to its members, in violation of the retainer
agreement; and that the challenged resolution of the NLRC
is null and void, 19 for the reasons hereunder stated.
Although petitioner union concedes that the NLRC has
jurisdiction to decide claims for attorney's fees, it contends
that the award for attorney's fees should have been
incorporated in the main case and not after the Supreme
Court had already reviewed and passed upon the decision of
the NLRC. Since the claim for attorney's fees by private
respondent was neither taken up nor approved by the

Supreme Court, no attorney's fees should have been


allowed by the NLRC.
Thus, petitioner posits that the NLRC acted without
jurisdiction in making the award of attorney's fees, as said
act constituted a modification of a final and executory
judgment of the Supreme Court which did not award
attorney's fees. It then cited decisions of the Court declaring
that a decision which has become final and executory can
no longer be altered or modified even by the court which
rendered the same.
On the other hand, private respondent maintains that his
motion to determine attorney's fees was just an incident of
the main case where petitioner was awarded its money
claims. The grant of attorney's fees was the consequence of
his exercise of his attorney's lien. Such lien resulted from
and corresponds to the services he rendered in the action
wherein the favorable judgment was obtained. To include
the award of the attorney's fees in the main case
presupposes that the fees will be paid by TRB to the adverse
party. All that the non-inclusion of attorney's fees in the
award means is that the Supreme Court did not order TRB to
pay the opposing party attorney's fees in the concept of
damages. He is not therefore precluded from filing his
motion to have his own professional fees adjudicated.
In view of the substance of the arguments submitted by
petitioner and private respondent on this score, it appears
necessary to explain and consequently clarify the nature of
the attorney's fees subject of this petition, in order to
dissipate the apparent confusion between and the
conflicting views of the parties.

There are two commonly accepted concepts of attorney's


fees, the so-called ordinary and extraordinary. 20 In its
ordinary concept, an attorney's fee is the reasonable
compensation paid to a lawyer by his client for the legal
services he has rendered to the latter. The basis of this
compensation is the fact of his employment by and his
agreement with the client.
In its extraordinary concept, an attorney's fee is an
indemnity for damages ordered by the court to be paid by
the losing party in a litigation. The basis of this is any of the
cases provided by law where such award can be made, such
as those authorized in Article 2208, Civil Code, and is
payable not to the lawyer but to the client, unless they have
agreed that the award shall pertain to the lawyer as
additional compensation or as part thereof.
It is the first type of attorney's fees which private
respondent demanded before the labor arbiter. Also, the
present controversy stems from petitioner's apparent
misperception that the NLRC has jurisdiction over claims for
attorney's fees only before its judgment is reviewed and
ruled upon by the Supreme Court, and that thereafter the
former may no longer entertain claims for attorney's fees.
It will be noted that no claim for attorney's fees was filed by
private respondent before the NLRC when it acted on the
money claims of petitioner, nor before the Supreme Court
when it reviewed the decision of the NLRC. It was only after
the High Tribunal modified the judgment of the NLRC
awarding the differentials that private respondent filed his
claim before the NLRC for a percentage thereof as attorney's
fees.

It would obviously have been impossible, if not improper, for


the NLRC in the first instance and for the Supreme Court
thereafter to make an award for attorney's fees when no
claim therefor was pending before them. Courts generally
rule only on issues and claims presented to them for
adjudication. Accordingly, when the labor arbiter ordered
the payment of attorney's fees, he did not in any way
modify the judgment of the Supreme Court.
As an adjunctive episode of the action for the recovery of
bonus differentials in NLRC-NCR Certified Case No. 0466,
private respondent's present claim for attorney's fees may
be filed before the NLRC even though or, better stated,
especially after its earlier decision had been reviewed and
partially affirmed. It is well settled that a claim for attorney's
fees may be asserted either in the very action in which the
services of a lawyer had been rendered or in a separate
action. 21
With respect to the first situation, the remedy for recovering
attorney's fees as an incident of the main action may be
availed of only when something is due to the
client. 22 Attorney's fees cannot be determined until after
the main litigation has been decided and the subject of the
recovery is at the disposition of the court. The issue over
attorney's fees only arises when something has been
recovered from which the fee is to be paid. 23
While a claim for attorney's fees may be filed before the
judgment is rendered, the determination as to the propriety
of the fees or as to the amount thereof will have to be held
in abeyance until the main case from which the lawyer's
claim for attorney's fees may arise has become final.
Otherwise, the determination to be made by the courts will
be premature. 24 Of course, a petition for attorney's fees

may be filed before the judgment in favor of the client is


satisfied or the proceeds thereof delivered to the client. 25
It is apparent from the foregoing discussion that a lawyer
has two options as to when to file his claim for professional
fees. Hence, private respondent was well within his rights
when he made his claim and waited for the finality of the
judgment for holiday pay differential, instead of filing it
ahead of the award's complete resolution. To declare that a
lawyer may file a claim for fees in the same action only
before the judgment is reviewed by a higher tribunal would
deprive him of his aforestated options and render ineffective
the foregoing pronouncements of this Court.
Assailing the rulings of the labor arbiter and the NLRC,
petitioner union insists that it is not guilty of unjust
enrichment because all attorney's fees due to private
respondent were covered by the retainer fee of P3,000.00
which it has been regularly paying to private respondent
under their retainer agreement. To be entitled to the
additional attorney's fees as provided in Part D (Special
Billings) of the agreement, it avers that there must be a
separate mutual agreement between the union and the law
firm prior to the performance of the additional services by
the latter. Since there was no agreement as to the payment
of the additional attorney's fees, then it is considered
waived.
En contra, private respondent contends that a retainer fee is
not the attorney's fees contemplated for and commensurate
to the services he rendered to petitioner. He asserts that
although there was no express agreement as to the amount
of his fees for services rendered in the case for recovery of
differential pay, Article 111 of the Labor Code supplants this

omission by providing for an award of ten percent (10%) of a


money judgment in a labor case as attorney's fees.
It is elementary that an attorney is entitled to have and
receive a just and reasonable compensation for services
performed at the special instance and request of his client.
As long as the lawyer was in good faith and honestly trying
to represent and serve the interests of the client, he should
have a reasonable compensation for such services. 26 It will
thus be appropriate, at this juncture, to determine if private
respondent is entitled to an additional remuneration under
the retainer agreement 27 entered into by him and
petitioner.

3. Proper documentation and notarization of


any or all transactions entered into by the
Union in its day-to-day course of business;
4. Review all contracts, deeds, agreements or
any other legal document to which the union
is a party signatory thereto but prepared or
caused to be prepared by any other third
party;
5. Represent the Union in any case wherein
the Union is a party litigant in any court of law
or quasi-judicial body subject to certain fees
as qualified hereinafter;

The parties subscribed therein to the following stipulations:


xxx xxx xxx
The Law Firm shall handle cases and extend legal services
under the parameters of the following terms and conditions:

6. Lia(i)se with and/or follow-up any pending


application or any papers with any
government agency and/or any private
institution which is directly related to any
legal matter referred to the Law Firm.

A. GENERAL SERVICES

B. SPECIAL LEGAL SERVICES

1. Assurance that an Associate of the Law


Firm shall be designated and be available on a
day-to-day basis depending on the Union's
needs;

1. Documentation of any contract and other


legal instrument/documents arising and/or
required by your Union which do not fall under
the category of its ordinary course of business
activity but requires a special, exhaustive or
detailed study and preparation;

2. Legal consultation, advice and render


opinion on any actual and/or anticipatory
situation confronting any matter within the
client's normal course of business;

2. Conduct or undertake researches and/or


studies on special projects of the Union;

3. Render active and actual participation or


assistance in conference table negotiations
with TRB management or any other third
person(s), juridical or natural, wherein the
presence of counsel is not for mere
consultation except CBA negotiations which
shall be subject to a specific agreement
(pursuant to PD 1391 and in relation to BP
130 & 227);
4. Preparation of Position Paper(s),
Memoranda or any other pleading for and in
behalf of the Union;
5. Prosecution or defense of any case
instituted by or against the Union; and,
6. Represent any member of the Union in any
proceeding provided that the particular
member must give his/her assent and that
prior consent be granted by the principal
officers. Further, the member must conform to
the rules and policies of the Law Firm.
C. FEE STRUCTURE
In consideration of our commitment to render
the services enumerated above when
required or necessary, your Union shall pay a
monthly retainer fee of THREE THOUSAND
PESOS (PHP 3,000.00), payable in advance on
or before the fifth day of every month.

An Appearance Fee which shall be negotiable


on a case-to-case basis.
Any and all Attorney's Fees collected from the
adverse party by virtue of a successful
litigation shall belong exclusively to the Law
Firm.
It is further understood that the foregoing
shall be without prejudice to our claim for
reimbursement of all out-of-pocket expenses
covering filing fees, transportation,
publication costs, expenses covering
reproduction or authentication of documents
related to any matter referred to the Law Firm
or that which redound to the benefit of the
Union.
D. SPECIAL BILLINGS
In the event that the Union avails of the
services duly enumerated in Title B, the Union
shall pay the Law Firm an amount mutually
agreed upon PRIOR to the performance of
such services. The sum agreed upon shall be
based on actual time and effort spent by the
counsel in relation to the importance and
magnitude of the matter referred to by the
Union. However, charges may beWAIVED by
the Law Firm if it finds that time and efforts
expended on the particular services are
inconsequential but such right of waiver is
duly reserved for the Law Firm.

xxx xxx xxx


The provisions of the above contract are clear and need no
further interpretation; all that is required to be done in the
instant controversy is its application. The P3,000.00 which
petitioner pays monthly to private respondent does not
cover the services the latter actually rendered before the
labor arbiter and the NLRC in behalf of the former. As
stipulated in Part C of the agreement, the monthly fee is
intended merely as a consideration for the law
firm'scommitment to render the services enumerated in Part
A (General Services) and Part B (Special Legal Services) of
the retainer agreement.
The difference between a compensation for a commitment
to render legal services and a remuneration for legal
services actually rendered can better be appreciated with a
discussion of the two kinds of retainer fees a client may pay
his lawyer. These are a general retainer, or a retaining fee,
and a special
retainer. 28
A general retainer, or retaining fee, is the fee paid to a
lawyer to secure his future services as general counsel for
any ordinary legal problem that may arise in the routinary
business of the client and referred to him for legal action.
The future services of the lawyer are secured and
committed to the retaining client. For this, the client pays
the lawyer a fixed retainer fee which could be monthly or
otherwise, depending upon their arrangement. The fees are
paid whether or not there are cases referred to the lawyer.
The reason for the remuneration is that the lawyer is
deprived of the opportunity of rendering services for a fee to
the opposing party or other parties. In fine, it is a
compensation for lost opportunities.

A special retainer is a fee for a specific case handled or


special service rendered by the lawyer for a client. A client
may have several cases demanding special or individual
attention. If for every case there is a separate and
independent contract for attorney's fees, each fee is
considered a special retainer.
As to the first kind of fee, the Court has had the occasion to
expound on its concept in Hilado vs. David 29 in this wise:
There is in legal practice what is called a
"retaining fee," the purpose of which stems
from the realization that the attorney is
disabled from acting as counsel for the other
side after he has given professional advice to
the opposite party, even if he should decline
to perform the contemplated services on
behalf of the latter. It is to prevent undue
hardship on the attorney resulting from the
rigid observance of the rule that a separate
and independent fee for consultation and
advice was conceived and authorized. "A
retaining fee is a preliminary fee given to an
attorney or counsel to insure and secure his
future services, and induce him to act for the
client. It is intended to remunerate counsel for
being deprived, by being retained by one
party, of the opportunity of rendering services
to the other and of receiving pay from him,
and the payment of such fee, in the absence
of an express understanding to the contrary,
is neither made nor received in payment of
the services contemplated; its payment has
no relation to the obligation of the client to
pay his attorney for the services for which he

has retained him to perform." (Emphasis


supplied).
Evidently, the P3,000.00 monthly fee provided in the
retainer agreement between the union and the law firm
refers to a general retainer, or a retaining fee, as said
monthly fee covers only the law firm's pledge, or as
expressly stated therein, its "commitment to render the
legal services enumerated." The fee is not payment for
private respondent's execution or performance of the
services listed in the contract, subject to some particular
qualifications or permutations stated there.
Generally speaking, where the employment of an attorney is
under an express valid contract fixing the compensation for
the attorney, such contract is conclusive as to the amount of
compensation. 30 We cannot, however, apply the foregoing
rule in the instant petition and treat the fixed fee of
P3,000.00 as full and sufficient consideration for private
respondent's services, as petitioner would have it.
We have already shown that the P3,000.00 is independent
and different from the compensation which private
respondent should receive in payment for his services. While
petitioner and private respondent were able to fix a fee for
the latter's promise to extend services, they were not able
to come into agreement as to the law firm's actual
performance of services in favor of the union. Hence, the
retainer agreement cannot control the measure of
remuneration for private respondent's services.
We, therefore, cannot favorably consider the suggestion of
petitioner that private respondent had already waived his

right to charge additional fees because of their failure to


come to an agreement as to its payment.
Firstly, there is no showing that private respondent
unequivocally opted to waive the additional charges in
consonance with Part D of the agreement. Secondly, the
prompt actions taken by private respondent, i.e., serving
notice of charging lien and filing of motion to determine
attorney's fees, belie any intention on his part to renounce
his right to compensation for prosecuting the labor case
instituted by the union. And, lastly, to adopt such theory of
petitioner may frustrate private respondent's right to
attorney's fees, as the former may simply and unreasonably
refuse to enter into any special agreement with the latter
and conveniently claim later that the law firm had
relinquished its right because of the absence of the same.
The fact that petitioner and private respondent failed to
reach a meeting of the minds with regard to the payment of
professional fees for special services will not absolve the
former of civil liability for the corresponding remuneration
therefor in favor of the latter.
Obligations do not emanate only from contracts. 31 One of
the sources of extra-contractual obligations found in our
Civil Code is the quasi-contract premised on the Roman
maxim that nemo cum alterius detrimento locupletari
protest. As embodied in our law, 32 certain lawful, voluntary
and unilateral acts give rise to the juridical relation of quasicontract to the end that no one shall be unjustly enriched or
benefited at the expense of another.
A quasi-contract between the parties in the case at bar
arose from private respondent's lawful, voluntary and

unilateral prosecution of petitioner's cause without awaiting


the latter's consent and approval. Petitioner cannot deny
that it did benefit from private respondent's efforts as the
law firm was able to obtain an award of holiday pay
differential in favor of the union. It cannot even hide behind
the cloak of the monthly retainer of P3,000.00 paid to
private respondent because, as demonstrated earlier,
private respondent's actual rendition of legal services is not
compensable merely by said amount.
Private respondent is entitled to an additional remuneration
for pursuing legal action in the interest of petitioner before
the labor arbiter and the NLRC, on top of the P3,000.00
retainer fee he received monthly from petitioner. The law
firm's services are decidedly worth more than such basic fee
in the retainer agreement. Thus, in Part C thereof on "Fee
Structure," it is even provided that all attorney's fees
collected from the adverse party by virtue of a successful
litigation shall belong exclusively to private respondent,
aside from petitioner's liability for appearance fees and
reimbursement of the items of costs and expenses
enumerated therein.
A quasi-contract is based on the presumed will or intent of
the obligor dictated by equity and by the principles of
absolute justice. Some of these principles are: (1) It is
presumed that a person agrees to that which will benefit
him; (2) Nobody wants to enrich himself unjustly at the
expense of another; and (3) We must do unto others what
we want them to do unto us under the same
circumstances. 33
As early as 1903, we allowed the payment of reasonable
professional fees to an interpreter, notwithstanding the lack
of understanding with his client as to his remuneration, on

the basis of quasi-contract. 34 Hence, it is not necessary that


the parties agree on a definite fee for the special services
rendered by private respondent in order that petitioner may
be obligated to pay compensation to the former. Equity and
fair play dictate that petitioner should pay the same after it
accepted, availed itself of, and benefited from private
respondent's services.
We are not unaware of the old ruling that a person who had
no knowledge of, nor consented to, or protested against the
lawyer's representation may not be held liable for attorney's
fees even though he benefited from the lawyer's
services. 35 But this doctrine may not be applied in the
present case as petitioner did not object to private
respondent's appearance before the NLRC in the case for
differentials.
Viewed from another aspect, since it is claimed that
petitioner obtained respondent's legal services and
assistance regarding its claims against the bank, only they
did not enter into a special contract regarding the
compensation therefor, there is at least the innominate
contract of facio ut des (I do that you may give). 36 This rule
of law, likewise founded on the principle against unjust
enrichment, would also warrant payment for the services of
private respondent which proved beneficial to petitioner's
members. In any case, whether there is an agreement or
not, the courts can fix a reasonable compensation which
lawyers should receive for their professional
services. 37 However, the value of private respondent's legal
services should not be established on the basis of Article
111 of the Labor Code alone. Said article provides:
Art. 111. Attorney's fees. (a) In cases of
unlawful withholding of wages the culpable

party may be assessed attorney's fees


equivalent to ten percent of the amount of the
wages recovered.
xxx xxx xxx
The implementing provision
further states:

38

of the foregoing article

Sec. 11. Attorney's fees. Attorney's fees in


any judicial or administrative proceedings for
the recovery of wages shall not exceed 10%
of the amount awarded. The fees may be
deducted from the total amount due the
winning party.
In the first place, the fees mentioned here are the
extraordinary attorney's fees recoverable as indemnity for
damages sustained by and payable to the prevailing part. In
the second place, the ten percent (10%) attorney's fees
provided for in Article 111 of the Labor Code and Section 11,
Rule VIII, Book III of the Implementing Rules is the maximum
of the award that may thus be granted. 39 Article 111 thus
fixes only the limit on the amount of attorney's fees the
victorious party may recover in any judicial or administrative
proceedings and it does not even prevent the NLRC from
fixing an amount lower than the ten percent (10%) ceiling
prescribed by the article when circumstances warrant it. 40
The measure of compensation for private respondent's
services as against his client should properly be addressed
by the rule of quantum meruit long adopted in this
jurisdiction. Quantum meruit, meaning "as much as he
deserves," is used as the basis for determining the lawyer's

professional fees in the absence of a contract,


recoverable by him from his client.

41

but

Where a lawyer is employed without a price for his services


being agreed upon, the courts shall fix the amount
onquantum meruit basis. In such a case, he would be
entitled to receive what he merits for his services. 42
It is essential for the proper operation of the principle that
there is an acceptance of the benefits by one sought to be
charged for the services rendered under circumstances as
reasonably to notify him that the lawyer performing the task
was expecting to be paid compensation therefor. The
doctrine of quantum meruit is a device to prevent undue
enrichment based on the equitable postulate that it is unjust
for a person to retain benefit without paying for it. 43
Over the years and through numerous decisions, this Court
has laid down guidelines in ascertaining the real worth of a
lawyer's services. These factors are now codified in Rule
20.01, Canon 20 of the Code of Professional Responsibility
and should be considered in fixing a reasonable
compensation for services rendered by a lawyer on the basis
of quantum meruit. These are: (a) the time spent and the
extent of services rendered or required; (b) the novelty and
difficulty of the questions involved; (c) the importance of the
subject matter; (d) the skill demanded; (e) the probability of
losing other employment as a result of acceptance of the
proffered case; (f) the customary charges for similar
services and the schedule of fees of the IBP chapter to
which the lawyer belongs; (g) the amount involved in the
controversy and the benefits resulting to the client from the
services; (h) the contingency or certainty of compensation;
(i) the character of the employment, whether occasional or
established; and (j) the professional standing of the lawyer.

Here, then, is the flaw we find in the award for attorney's


fees in favor of private respondent. Instead of adopting the
above guidelines, the labor arbiter forthwith but erroneously
set the amount of attorney's fees on the basis of Article 111
of the Labor Code. He completely relied on the operation of
Article 111 when he fixed the amount of attorney's fees at
P17,574.43. 44 Observe the conclusion stated in his order. 45
xxx xxx xxx
FIRST. Art. 111 of the Labor Code, as
amended, clearly declares movant's right to a
ten (10%) per cent of the award due its client.
In addition, this right to ten (10%) per cent
attorney's fees is supplemented by Sec. 111,
Rule VIII, Book III of the Omnibus Rules
Implementing the Labor Code, as amended.
xxx xxx xxx
As already stated, Article 111 of the Labor Code regulates
the amount recoverable as attorney's fees in the nature
of damages sustained by and awarded to the prevailing
party. It may not be used therefore, as the lone standard in
fixing the exact amount payable to the lawyer by his client
for the legal services he rendered. Also, while it limits the
maximum allowable amount of attorney's fees, it does not
direct the instantaneous and automatic award of attorney's
fees in such maximum limit.
It, therefore, behooves the adjudicator in questions and
circumstances similar to those in the case at bar, involving a
conflict between lawyer and client, to observe the above
guidelines in cases calling for the operation of the principles

of quasi-contract and quantum meruit, and to conduct a


hearing for the proper determination of attorney's fees. The
criteria found in the Code of Professional Responsibility are
to be considered, and not disregarded, in assessing the
proper amount. Here, the records do not reveal that the
parties were duly heard by the labor arbiter on the matter
and for the resolution of private respondent's fees.
It is axiomatic that the reasonableness of attorney's fees is a
question of fact. 46 Ordinarily, therefore, we would have
remanded this case for further reception of evidence as to
the extent and value of the services rendered by private
respondent to petitioner. However, so as not to needlessly
prolong the resolution of a comparatively simple
controversy, we deem it just and equitable to fix in the
present recourse a reasonable amount of attorney's fees in
favor of private respondent. For that purpose, we have duly
taken into account the accepted guidelines therefor and so
much of the pertinent data as are extant in the records of
this case which are assistive in that regard. On such
premises and in the exercise of our sound discretion, we
hold that the amount of P10,000.00 is a reasonable and fair
compensation for the legal services rendered by private
respondent to petitioner before the labor arbiter and the
NLRC.
WHEREFORE, the impugned resolution of respondent
National Labor Relations Commission affirming the order of
the labor arbiter is MODIFIED, and petitioner is hereby
ORDERED to pay the amount of TEN THOUSAND PESOS
(P10,000.00) as attorney's fees to private respondent for the
latter's legal services rendered to the former.
SO ORDERED.

Romero, Puno, Mendoza and Torres, Jr., JJ., concur.

16 Ibid., 7.

Footnotes

17 Ibid., 17-21.
1 Rollo, 26-30.

18 Ibid., 22-25.

2 Ibid., 45, 105.

19 Ibid., 7-8.

3 Ibid., 4.

20 Pineda E.L., Legal and Judicial Ethics, 1994


ed., 220.

4 Ibid., 5.
5 Ibid., 106.
6 Traders Royal Bank vs. NLRC and Traders
Royal Bank Employees Union, G.R. No. 88168.

21 Tolentino vs. Escalona, G.R. No. L-26556,


January 24, 1969, 26 SCRA 613.
22 Quirante, et al. vs. Intermediate Appellate
Court, et al., G.R. No. 73886, January 31,
1989, 169 SCRA 769.

7 Ibid., 31-38.
8 Ibid., 106.
9 Ibid., 17, 106.

23 Otto Gmur, Inc. vs. Revilla, et al., 55 Phil.


627 (1931).
24 See Quirante, et al. vs. Intermediate
Appellate Court, et al., supra, Fn. 22.

10 Ibid., 106.
25 Palanca vs. Pecson, 94 Phil. 419 (1954).
11 Ibid., 112-113.
12 Ibid., 39-43.

26 De Guzman vs. Visayan Rapid Transit Co.,


Inc., et al., 68 Phil. 643 (1939).

13 Ibid., 107.

27 Rollo, 26-30.

14 Ibid., 44-45.

28 Pineda, op. cit., 224-225, Fn. 20.

15 Ibid., 46-49.

29 84 Phil. 579 (1949), citing 7 C.J.S. 1019.

30 Francisco vs. Matias, G.R. No. L-16349,


January 31, 1965, 10 SCRA 89.

42 Lorenzo vs. Court of Appeals, et al., G.R.


No. 85383, August 30, 1990, 189 SCRA 260.

31 Article 1157, Civil Code.

43 Agpalo, R.E., The Code of Professional


Responsibility for Lawyers, 1991 ed., 257.

32 Article 2142, Civil Code.


44 The amount is short by P5.00 because 10%
of P175,794.32 is P17,579.43.

33 Tolentino, A.M., Commentaries and


Jurisprudence on the Civil Code, Vol. V, 1992
ed., 575.

45 Rollo, 48-49.

34 See Perez vs. Pomar, 2 Phil. 682 (1903).

46 Gonzales vs. National Housing Corporation,


G.R. No. 50092, December 18, 1979, 94 SCRA
786.

35 Orosco vs. Heirs of Hernandez, 1 Phil. 77


(1901).

Republic of the Philippines


SUPREME COURT
Manila

36 Corpuz vs. Court of Appeals, et al., G.R. No.


L-40424, June 30, 1980, 98 SCRA 424.

EN BANC

37 Panis vs. Yangco, 52 Phil. 499 (1928).


38 Sec. 11, Rule VIII, Book III of the Omnibus
Rules Implementing the Labor Code.
39 Sebuguero, et al. vs. NLRC, et al., G.R. No.
115394, September 27, 1995, 248 SCRA 532.
40 Taganas vs. NLRC, et al., G.R. No. 118746,
September 7, 1995, 248 SCRA 133.
41 Sesbreo vs. Court of Appeals, et al., G.R.
No. 117438, June 8, 1995, 245 SCRA 30.

G.R. No. L-48006

July 8, 1942

FAUSTO BARREDO, petitioner,


vs.
SEVERINO GARCIA and TIMOTEA
ALMARIO, respondents.
Celedonio P. Gloria and Antonio Barredo for petitioner.
Jose G. Advincula for respondents.
BOCOBO, J.:

This case comes up from the Court of Appeals which held


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

... It is admitted that defendant is Fontanilla's


employer. There is proof that he exercised the
diligence of a good father of a family to prevent
damage. (See p. 22, appellant's brief.) In fact it is
shown he was careless in employing Fontanilla who
had been caught several times for violation of the
Automobile Law and speeding (Exhibit A) violation
which appeared in the records of the Bureau of Public
Works available to be public and to himself.
Therefore, he must indemnify plaintiffs under the
provisions of article 1903 of the Civil Code.
The main theory of the defense is that the liability of Fausto
Barredo is governed by the Revised Penal Code; hence, his
liability is only subsidiary, and as there has been no civil
action against Pedro Fontanilla, the person criminally liable,
Barredo cannot be held responsible in the case. The
petitioner's brief states on page 10:
... The Court of Appeals holds that the petitioner is
being sued for his failure to exercise all the diligence
of a good father of a family in the selection and
supervision of Pedro Fontanilla to prevent damages
suffered by the respondents. In other words, The
Court of Appeals insists on applying in the case
article 1903 of the Civil Code. Article 1903 of the Civil
Code is found in Chapter II, Title 16, Book IV of the
Civil Code. This fact makes said article to a civil
liability arising from a crime as in the case at bar
simply because Chapter II of Title 16 of Book IV of the
Civil Code, in the precise words of article 1903 of the
Civil Code itself, is applicable only to "those
(obligations) arising from wrongful or negligent acts
or commission not punishable by law.

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


thus:
... We cannot agree to the defendant's contention.
The liability sought to be imposed upon him in this
action is not a civil obligation arising from a felony or
a misdemeanor (the crime of Pedro Fontanilla,), but
an obligation imposed in article 1903 of the Civil
Code by reason of his negligence in the selection or
supervision of his servant or employee.
The pivotal question in this case is whether the plaintiffs
may bring this separate civil action against Fausto Barredo,
thus making him primarily and directly, responsible under
article 1903 of the Civil Code as an employer of Pedro
Fontanilla. The defendant maintains that Fontanilla's
negligence being punishable by the Penal Code, his
(defendant's) liability as an employer is only subsidiary,
according to said Penal code, but Fontanilla has not been
sued in a civil action and his property has not been
exhausted. To decide the main issue, we must cut through
the tangle that has, in the minds of many confused and
jumbled together delitos and cuasi delitos, or crimes under
the Penal Code and fault or negligence under articles 19021910 of the Civil Code. This should be done, because justice
may be lost in a labyrinth, unless principles and remedies
are distinctly envisaged. Fortunately, we are aided in our
inquiry by the luminous presentation of the perplexing
subject by renown jurists and we are likewise guided by the
decisions of this Court in previous cases as well as by the
solemn clarity of the consideration in several sentences of
the Supreme Tribunal of Spain.
Authorities support the proposition that a quasi-delict or
"culpa aquiliana " is a separate legal institution under the

Civil Code with a substantivity all its own, and individuality


that is entirely apart and independent from delict or crime.
Upon this principle and on the wording and spirit article
1903 of the Civil Code, the primary and direct responsibility
of employers may be safely anchored.
The pertinent provisions of the Civil Code and Revised Penal
Code are as follows:
CIVIL CODE
ART. 1089 Obligations arise from law, from contracts
and quasi-contracts, and from acts and omissions
which are unlawful or in which any kind of fault or
negligence intervenes.
xxx

xxx

xxx

ART. 1092. Civil obligations arising from felonies or


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

xxx

xxx

ART 1902. Any person who by an act or omission


causes damage to another by his fault or negligence
shall be liable for the damage so done.

ART. 1903. The obligation imposed by the next


preceding article is enforcible, not only for personal
acts and omissions, but also for those of persons for
whom another is responsible.

ART. 1904. Any person who pays for damage caused


by his employees may recover from the latter what
he may have paid.
REVISED PENAL CODE

The father and in, case of his death or incapacity, the


mother, are liable for any damages caused by the
minor children who live with them.
Guardians are liable for damages done by minors or
incapacitated persons subject to their authority and
living with them.
Owners or directors of an establishment or business
are equally liable for any damages caused by their
employees while engaged in the branch of the
service in which employed, or on occasion of the
performance of their duties.
The State is subject to the same liability when it acts
through a special agent, but not if the damage shall
have been caused by the official upon whom properly
devolved the duty of doing the act performed, in
which case the provisions of the next preceding
article shall be applicable.
Finally, teachers or directors of arts trades are liable
for any damages caused by their pupils or
apprentices while they are under their custody.
The liability imposed by this article shall cease in
case the persons mentioned therein prove that they
are exercised all the diligence of a good father of a
family to prevent the damage.

ART. 100. Civil liability of a person guilty of felony.


Every person criminally liable for a felony is also
civilly liable.
ART. 101. Rules regarding civil liability in certain
cases. The exemption from criminal liability
established in subdivisions 1, 2, 3, 5, and 6 of article
12 and in subdivision 4 of article 11 of this Code does
not include exemption from civil liability, which shall
be enforced to the following rules:
First. In cases of subdivision, 1, 2 and 3 of article 12
the civil liability for acts committed by any imbecile
or insane person, and by a person under nine years
of age, or by one over nine but under fifteen years of
age, who has acted without discernment shall
devolve upon those having such person under their
legal authority or control, unless it appears that there
was no fault or negligence on their part.
Should there be no person having such insane,
imbecile or minor under his authority, legal
guardianship, or control, or if such person be
insolvent, said insane, imbecile, or minor shall
respond with their own property, excepting property
exempt from execution, in accordance with the civil
law.

Second. In cases falling within subdivision 4 of article


11, the person for whose benefit the harm has been
prevented shall be civilly liable in proportion to the
benefit which they may have received.
The courts shall determine, in their sound discretion, the
proportionate amount for which each one shall be liable.
When the respective shares can not be equitably
determined, even approximately, or when the liability also
attaches to the Government, or to the majority of the
inhabitants of the town, and, in all events, whenever the
damage has been caused with the consent of the authorities
or their agents, indemnification shall be made in the manner
prescribed by special laws or regulations.
Third. In cases falling within subdivisions 5 and 6 of article
12, the persons using violence or causing the fear shall be
primarily liable and secondarily, or, if there be no such
persons, those doing the act shall be liable, saving always to
the latter that part of their property exempt from execution.

their houses lodging therein, or the person, or for the


payment of the value thereof, provided that such
guests shall have notified in advance the innkeeper
himself, or the person representing him, of the
deposit of such goods within the inn; and shall
furthermore have followed the directions which such
innkeeper or his representative may have given them
with respect to the care of and vigilance over such
goods. No liability shall attach in case of robbery with
violence against or intimidation against or
intimidation of persons unless committed by the
innkeeper's employees.
ART. 103. Subsidiary civil liability of other persons.
The subsidiary liability established in the next
preceding article shall also apply to employers,
teachers, persons, and corporations engaged in any
kind of industry for felonies committed by their
servants, pupils, workmen, apprentices, or
employees in the discharge of their duties.
xxx

xxx

xxx

ART. 102. Subsidiary civil liability of innkeepers,


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

ART. 365. Imprudence and negligence. Any person


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

Innkeepers are also subsidiarily liable for the


restitution of goods taken by robbery or theft within

Any person who, by simple imprudence or


negligence, shall commit an act which would

otherwise constitute a grave felony, shall suffer the


penalty of arresto mayor in its medium and
maximum periods; if it would have constituted a less
serious felony, the penalty of arresto mayor in its
minimum period shall be imposed."
It will thus be seen that while the terms of articles 1902 of
the Civil Code seem to be broad enough to cover the
driver's negligence in the instant case, nevertheless article
1093 limits cuasi-delitos to acts or omissions "not
punishable by law." But inasmuch as article 365 of the
Revised Penal Code punishes not only reckless but even
simple imprudence or negligence, the fault or negligence
under article 1902 of the Civil Code has apparently been
crowded out. It is this overlapping that makes the "confusion
worse confounded." However, a closer study shows that
such a concurrence of scope in regard to negligent acts does
not destroy the distinction between the civil liability arising
from a crime and the responsibility for cuasi-delitos or culpa
extra-contractual. The same negligent act causing damages
may produce civil liability arising from a crime under article
100 of the Revised Penal Code, or create an action for cuasidelito or culpa extra-contractual under articles 1902-1910 of
the Civil Code.
The individuality of cuasi-delito or culpa extracontractual looms clear and unmistakable. This legal
institution is of ancient lineage, one of its early ancestors
being the Lex Aquilia in the Roman Law. In fact, in Spanish
legal terminology, this responsibility is often referred to as
culpa aquiliana. The Partidas also contributed to the
genealogy of the present fault or negligence under the Civil
Code; for instance, Law 6, Title 15, of Partida 7, says:
"Tenudo es de fazer emienda, porque, como quier que el

non fizo a sabiendas en dao al otro, pero acaescio por su


culpa."
The distinctive nature of cuasi-delitos survives in the Civil
Code. According to article 1089, one of the five sources of
obligations is this legal institution of cuasi-delito or culpa
extra-contractual: "los actos . . . en que intervenga cualquier
genero de culpa o negligencia." Then article 1093 provides
that this kind of obligation shall be governed by Chapter II of
Title XVI of Book IV, meaning articles 1902-0910. This
portion of the Civil Code is exclusively devoted to the legal
institution of culpa aquiliana.
Some of the differences between crimes under the Penal
Code and the culpa aquiliana or cuasi-delito under the Civil
Code are:
1. That crimes affect the public interest, while cuasidelitos are only of private concern.
2. That, consequently, the Penal Code punishes or corrects
the criminal act, while the Civil Code, by means of
indemnification, merely repairs the damage.
3. That delicts are not as broad as quasi-delicts, because the
former are punished only if there is a penal law clearly
covering them, while the latter, cuasi-delitos, include all acts
in which "any king of fault or negligence intervenes."
However, it should be noted that not all violations of the
penal law produce civil responsibility, such as begging in
contravention of ordinances, violation of the game laws,
infraction of the rules of traffic when nobody is hurt. (See
Colin and Capitant, "Curso Elemental de Derecho Civil," Vol.
3, p. 728.)

Let us now ascertain what some jurists say on the separate


existence of quasi-delicts and the employer's primary and
direct liability under article 1903 of the Civil Code.
Dorado Montero in his essay on "Responsibilidad" in the
"Enciclopedia Juridica Espaola" (Vol. XXVII, p. 414) says:
El concepto juridico de la responsabilidad civil abarca
diversos aspectos y comprende a diferentes
personas. Asi, existe una responsabilidad civil
propiamente dicha, que en ningun casl lleva
aparejada responsabilidad criminal alguna, y otra
que es consecuencia indeclinable de la penal que
nace de todo delito o falta."
The juridical concept of civil responsibility has
various aspects and comprises different persons.
Thus, there is a civil responsibility, properly speaking,
which in no case carries with it any criminal
responsibility, and another which is a necessary
consequence of the penal liability as a result of every
felony or misdemeanor."
Maura, an outstanding authority, was consulted on the
following case: There had been a collision between two
trains belonging respectively to the Ferrocarril Cantabrico
and the Ferrocarril del Norte. An employee of the latter had
been prosecuted in a criminal case, in which the company
had been made a party as subsidiarily responsible in civil
damages. The employee had been acquitted in the criminal
case, and the employer, the Ferrocarril del Norte, had also
been exonerated. The question asked was whether the
Ferrocarril Cantabrico could still bring a civil action for
damages against the Ferrocarril del Norte. Maura's opinion

was in the affirmative, stating in part (Maura, Dictamenes,


Vol. 6, pp. 511-513):
Quedando las cosas asi, a proposito de la realidad
pura y neta de los hechos, todavia menos parece
sostenible que exista cosa juzgada acerca de la
obligacion civil de indemnizar los quebrantos y
menoscabos inferidos por el choque de los trenes. El
titulo en que se funda la accion para demandar el
resarcimiento, no puede confundirse con las
responsabilidades civiles nacidas de delito, siquiera
exista en este, sea el cual sea, una culpa rodeada de
notas agravatorias que motivan sanciones penales,
mas o menos severas. La lesion causada por delito o
falta en los derechos civiles, requiere restituciones,
reparaciones o indemnizaciones, que cual la pena
misma ataen al orden publico; por tal motivo vienen
encomendadas, de ordinario, al Ministerio Fiscal; y
claro es que si por esta via se enmiendan los
quebrantos y menoscabos, el agraviado excusa
procurar el ya conseguido desagravio; pero esta
eventual coincidencia de los efectos, no borra la
diversidad originaria de las acciones civiles para
pedir indemnizacion.
Estas, para el caso actual (prescindiendo de
culpas contractuales, que no vendrian a cuento y que
tiene otro regimen), dimanan, segun el articulo 1902
del Codigo Civil, de toda accion u omision, causante
de daos o perjuicios, en que intervenga culpa o
negligencia. Es trivial que acciones semejantes son
ejercitadas ante los Tribunales de lo civil
cotidianamente, sin que la Justicia punitiva tenga que
mezclarse en los asuntos. Los articulos 18 al 21 y
121 al 128 del Codigo Penal, atentos al espiritu y a

los fines sociales y politicos del mismo, desenvuelven


y ordenan la materia de responsabilidades
civiles nacidas de delito, en terminos separados del
regimen por ley comun de la culpa que se denomina
aquiliana, por alusion a precedentes legislativos
del Corpus Juris. Seria intempestivo un paralelo entre
aquellas ordenaciones, y la de la obligacion de
indemnizar a titulo de culpa civil; pero viene al caso y
es necesaria una de las diferenciaciones que en el tal
paralelo se notarian.
Los articulos 20 y 21 del Codigo Penal, despues de
distribuir a su modo las responsabilidades civiles,
entre los que sean por diversos conceptos culpables
del delito o falta, las hacen extensivas a las
empresas y los establecimientos al servicio de los
cuales estan los delincuentes; pero con caracter
subsidiario, o sea, segun el texto literal, en defecto
de los que sean responsables criminalmente. No
coincide en ello el Codigo Civil, cuyo articulo 1903,
dice; La obligacion que impone el articulo anterior es
exigible, no solo por los actos y omisiones
propios, sino por los de aquellas personas de quienes
se debe responder; personas en la enumeracion de
las cuales figuran los dependientes y empleados de
los establecimientos o empresas, sea por actos del
servicio, sea con ocasion de sus funciones. Por esto
acontece, y se observa en la jurisprudencia, que las
empresas, despues de intervenir en las causas
criminales con el caracter subsidiario de su
responsabilidad civil por razon del delito, son
demandadas y condenadas directa y aisladamente,
cuando se trata de la obligacion, ante los tribunales
civiles.

Siendo como se ve, diverso el titulo de esta


obligacion, y formando verdadero postulado de
nuestro regimen judicial la separacion entre justicia
punitiva y tribunales de lo civil, de suerte que tienen
unos y otros normas de fondo en distintos cuerpos
legales, y diferentes modos de proceder, habiendose,
por aadidura, abstenido de asistir al juicio criminal
la Compaia del Ferrocarril Cantabrico, que se
reservo ejercitar sus acciones, parece innegable que
la de indemnizacion por los daos y perjuicios que le
irrogo el choque, no estuvo sub judice ante el
Tribunal del Jurado, ni fue sentenciada, sino que
permanecio intacta, al pronunciarse el fallo de 21 de
marzo. Aun cuando el veredicto no hubiese sido de
inculpabilidad, mostrose mas arriba, que tal accion
quedaba legitimamente reservada para despues del
proceso; pero al declararse que no existio delito, ni
responsabilidad dimanada de delito,
materia unica sobre que tenian jurisdiccion aquellos
juzgadores, se redobla el motivo para la obligacion
civil ex lege, y se patentiza mas y mas que la accion
para pedir su cumplimiento permanece incolume,
extraa a la cosa juzgada.
As things are, apropos of the reality pure and simple
of the facts, it seems less tenable that there should
beres judicata with regard to the civil obligation for
damages on account of the losses caused by the
collision of the trains. The title upon which the action
for reparation is based cannot be confused with the
civil responsibilities born of a crime, because there
exists in the latter, whatever each nature,
a culpasurrounded with aggravating aspects which
give rise to penal measures that are more or less
severe. The injury caused by a felony or

misdemeanor upon civil rights requires restitutions,


reparations, or indemnifications which, like the
penalty itself, affect public order; for this reason,
they are ordinarily entrusted to the office of the
prosecuting attorney; and it is clear that if by this
means the losses and damages are repaired, the
injured party no longer desires to seek another relief;
but this coincidence of effects does not eliminate the
peculiar nature of civil actions to ask for indemnity.
Such civil actions in the present case (without
referring to contractual faults which are not pertinent
and belong to another scope) are derived, according
to article 1902 of the Civil Code, from every act or
omission causing losses and damages in which culpa
or negligence intervenes. It is unimportant that such
actions are every day filed before the civil courts
without the criminal courts interfering therewith.
Articles 18 to 21 and 121 to 128 of the Penal Code,
bearing in mind the spirit and the social and political
purposes of that Code, develop and regulate the
matter of civil responsibilities arising from a crime,
separately from the regime under common law,
of culpa which is known as aquiliana, in accordance
with legislative precedent of the Corpus Juris. It
would be unwarranted to make a detailed
comparison between the former provisions and that
regarding the obligation to indemnify on account of
civil culpa; but it is pertinent and necessary to point
out to one of such differences.
Articles 20 and 21 of the Penal Code, after
distriburing in their own way the civil responsibilities
among those who, for different reasons, are guilty of
felony or misdemeanor, make such civil

responsibilities applicable to enterprises and


establishments for which the guilty parties render
service, but with subsidiary character, that is to say,
according to the wording of the Penal Code, in
default of those who are criminally responsible. In
this regard, the Civil Code does not coincide because
article 1903 says: "The obligation imposed by the
next preceding article is demandable, not only for
personal acts and omissions, but also for those of
persons for whom another is responsible." Among the
persons enumerated are the subordinates and
employees of establishments or enterprises, either
for acts during their service or on the occasion of
their functions. It is for this reason that it happens,
and it is so observed in judicial decisions, that the
companies or enterprises, after taking part in the
criminal cases because of their subsidiary civil
responsibility by reason of the crime, are sued and
sentenced directly and separately with regard to
theobligation, before the civil courts.
Seeing that the title of this obligation is different, and
the separation between punitive justice and the civil
courts being a true postulate of our judicial system,
so that they have different fundamental norms in
different codes, as well as different modes of
procedure, and inasmuch as the Compaa del
Ferrocarril Cantabrico has abstained from taking part
in the criminal case and has reserved the right to
exercise its actions, it seems undeniable that the
action for indemnification for the losses and damages
caused to it by the collision was not sub judice before
the Tribunal del Jurado, nor was it the subject of a
sentence, but it remained intact when the decision of
March 21 was rendered. Even if the verdict had not

been that of acquittal, it has already been shown that


such action had been legitimately reserved till after
the criminal prosecution; but because of the
declaration of the non-existence of the felony and
the non-existence of the responsibility arising from
the crime, which was the sole subject matter upon
which the Tribunal del Juradohad jurisdiction, there is
greater reason for the civil obligation ex lege, and it
becomes clearer that the action for its enforcement
remain intact and is not res judicata.
Laurent, a jurist who has written a monumental work on the
French Civil Code, on which the Spanish Civil Code is largely
based and whose provisions on cuasi-delito or culpa extracontractual are similar to those of the Spanish Civil Code,
says, referring to article 1384 of the French Civil Code which
corresponds to article 1903, Spanish Civil Code:
The action can be brought directly against the person
responsible (for another), without including the
author of the act. The action against the principal is
accessory in the sense that it implies the existence of
a prejudicial act committed by the employee, but it is
not subsidiary in the sense that it can not be
instituted till after the judgment against the author of
the act or at least, that it is subsidiary to the
principal action; the action for responsibility (of the
employer) is in itself a principal action. (Laurent,
Principles of French Civil Law, Spanish translation,
Vol. 20, pp. 734-735.)
Amandi, in his "Cuestionario del Codigo Civil Reformado"
(Vol. 4, pp. 429, 430), declares that the responsibility of the
employer is principal and not subsidiary. He writes:

Cuestion 1. La responsabilidad declarada en el


articulo 1903 por las acciones u omisiones de
aquellas personas por las que se debe responder, es
subsidiaria? es principal? Para contestar a esta
pregunta es necesario saber, en primer lugar, en que
se funda el precepto legal. Es que realmente se
impone una responsabilidad por una falta ajena? Asi
parece a primera vista; pero semejante afirmacion
seria contraria a la justicia y a la maxima universal,
segun la que las faltas son personales, y cada uno
responde de aquellas que le son imputables. La
responsabilidad de que tratamos se impone con
ocasion de un delito o culpa, pero no por causa de
ellos, sino por causa del causi delito, esto es, de la
imprudencia o de la negligencia del padre, del tutor,
del 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 negligencia
para prevenir o evitar el dao. Esta falta es la que la
ley castiga. No hay, pues, responsabilidad por un
hecho ajeno, sino en la apariencia; en realidad la
responsabilidad se exige por un hecho propio. La
idea de que esa responsabilidad sea subsidiaria es,
por lo tanto, completamente inadmisible.
Question No. 1. Is the responsibility declared in
article 1903 for the acts or omissions of those
persons for who one is responsible, subsidiary or
principal? In order to answer this question it is
necessary to know, in the first place, on what the
legal provision is based. Is it true that there is a
responsibility for the fault of another person? It

seems so at first sight; but such assertion would be


contrary to justice and to the universal maxim that
all faults are personal, and that everyone is liable for
those faults that can be imputed to him. The
responsibility in question is imposed on the occasion
of a crime or fault, but not because of the same, but
because of the cuasi-delito, that is to say, the
imprudence or negligence of the father, guardian,
proprietor or manager of the establishment, of the
teacher, etc. Whenever anyone of the persons
enumerated in the article referred to (minors,
incapacitated persons, employees, apprentices)
causes any damage, the law presumes that the
father, guardian, teacher, etc. have committed an
act of negligence in not preventing or avoiding the
damage. It is this fault that is condemned by the law.
It is, therefore, only apparent that there is a
responsibility for the act of another; in reality the
responsibility exacted is for one's own act. The idea
that such responsibility is subsidiary is, therefore,
completely inadmissible.
Oyuelos, in his "Digesto: Principios, Doctrina y
Jurisprudencia, Referentes al Codigo Civil Espaol," says in
Vol. VII, p. 743:
Es decir, no responde de hechos ajenos, porque se
responde solo de su propia culpa, doctrina del
articulo 1902; mas por excepcion, se responde de la
ajena respecto de aquellas personas con las que
media algun nexo o vinculo, que motiva o razona la
responsabilidad. Esta responsabilidad, es directa o es
subsidiaria? En el orden penal, el Codigo de esta
clase distingue entre menores e incapacitados y los
demas, declarando directa la primera (articulo 19) y

subsidiaria la segunda (articulos 20 y 21); pero en el


orden civil, en el caso del articulo 1903, ha de
entenderse directa, por el tenor del articulo que
impone la responsabilidad precisamente "por los
actos de aquellas personas de quienes se deba
responder."
That is to say, one is not responsible for the acts of
others, because one is liable only for his own faults,
this being the doctrine of article 1902; but, by
exception, one is liable for the acts of those persons
with whom there is a bond or tie which gives rise to
the responsibility. Is this responsibility direct or
subsidiary? In the order of the penal law, the Penal
Code distinguishes between minors and
incapacitated persons on the one hand, and other
persons on the other, declaring that the
responsibility for the former is direct (article 19), and
for the latter, subsidiary (articles 20 and 21); but in
the scheme of the civil law, in the case of article
1903, the responsibility should be understood as
direct, according to the tenor of that articles, for
precisely it imposes responsibility "for the acts of
those persons for whom one should be responsible."
Coming now to the sentences of the Supreme Tribunal of
Spain, that court has upheld the principles above set forth:
that a quasi-delict or culpa extra-contractual is a separate
and distinct legal institution, independent from the civil
responsibility arising from criminal liability, and that an
employer is, under article 1903 of the Civil Code, primarily
and directly responsible for the negligent acts of his
employee.

One of the most important of those Spanish decisions is that


of October 21, 1910. In that case, Ramon Lafuente died as
the result of having been run over by a street car owned by
the "compaia Electric Madrilea de Traccion." The
conductor was prosecuted in a criminal case but he was
acquitted. Thereupon, the widow filed a civil action against
the street car company, paying for damages in the amount
of 15,000 pesetas. The lower court awarded damages; so
the company appealed to the Supreme Tribunal, alleging
violation of articles 1902 and 1903 of the Civil Code because
by final judgment the non-existence of fault or negligence
had been declared. The Supreme Court of Spain dismissed
the appeal, saying:
Considerando que el primer motivo del recurso se
funda en el equivocado supuesto de que el Tribunal a
quo, al condonar a la compaia Electrica Madrilea al
pago del dao causado con la muerte de Ramon La
fuente Izquierdo, desconoce el valor y efectos
juridicos de la sentencia absolutoria deictada en la
causa criminal que se siguio por el mismo hecho,
cuando es lo cierto que de este han conocido las dos
jurisdicciones bajo diferentes as pectos, y como la de
lo criminal declrao dentro de los limites de su
competencia que el hecho de que se trata no era
constitutivo de delito por no haber mediado descuido
o negligencia graves, lo que no excluye, siendo este
el unico fundamento del fallo absolutorio, el concurso
de la culpa o negligencia no califacadas, fuente de
obligaciones civiles segun el articulo 1902 del
Codigo, y que alcanzan, segun el 1903, netre otras
perosnas, a los Directores de establecimientos o
empresas por los daos causados por sus
dependientes en determinadas condiciones, es
manifesto que la de lo civil, al conocer del mismo

hehco baho este ultimo aspecto y al condenar a la


compaia 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 Enjuciamiento Criminal, se ha
atenido estrictamente a ellos, sin invadir atribuciones
ajenas a su jurisdiccion propia, ni contrariar en lo
mas minimo el fallo recaido en la causa.
Considering that the first ground of the appeal is
based on the mistaken supposition that the trial
court, in sentencing the Compaia Madrilea to the
payment of the damage caused by the death of
Ramon Lafuente Izquierdo, disregards the value and
juridical effects of the sentence of acquittal rendered
in the criminal case instituted on account of the
same act, when it is a fact that the two jurisdictions
had taken cognizance of the same act in its different
aspects, and as the criminal jurisdiction declared
within the limits of its authority that the act in
question did not constitute a felony because there
was no grave carelessness or negligence, and this
being the only basis of acquittal, it does no exclude
the co-existence of fault or negligence which is not
qualified, and is a source of civil obligations
according to article 1902 of the Civil Code, affecting,
in accordance with article 1903, among other
persons, the managers of establishments or
enterprises by reason of the damages caused by
employees under certain conditions, it is manifest
that the civil jurisdiccion in taking cognizance of the
same act in this latter aspect and in ordering the
company, appellant herein, to pay an indemnity for
the damage caused by one of its employees, far from
violating said legal provisions, in relation with article

116 of the Law of Criminal Procedure, strictly


followed the same, without invading attributes which
are beyond its own jurisdiction, and without in any
way contradicting the decision in that cause.
(Emphasis supplied.)
It will be noted, as to the case just cited:
First. That the conductor was not sued in a civil case, either
separately or with the street car company. This is precisely
what happens in the present case: the driver, Fontanilla, has
not been sued in a civil action, either alone or with his
employer.
Second. That the conductor had been acquitted of grave
criminal negligence, but the Supreme Tribunal of Spain said
that this did not exclude the co-existence of fault or
negligence, which is not qualified, on the part of the
conductor, under article 1902 of the Civil Code. In the
present case, the taxi driver was found guilty of criminal
negligence, so that if he had even sued for his civil
responsibility arising from the crime, he would have been
held primarily liable for civil damages, and Barredo would
have been held subsidiarily liable for the same. But the
plaintiffs are directly suing Barredo, on his primary
responsibility because of his own presumed negligence
which he did not overcome under article 1903. Thus,
there were two liabilities of Barredo: first, the subsidiary one
because of the civil liability of the taxi driver arising from
the latter's criminal negligence; and, second, Barredo's
primary liability as an employer under article 1903. The
plaintiffs were free to choose which course to take, and they
preferred the second remedy. In so doing, they were acting
within their rights. It might be observed in passing, that the
plaintiff choose the more expeditious and effective method

of relief, because Fontanilla was either in prison, or had just


been released, and besides, he was probably without
property which might be seized in enforcing any judgment
against him for damages.
Third. That inasmuch as in the above sentence of October
21, 1910, the employer was held liable civilly,
notwithstanding the acquittal of the employee (the
conductor) in a previous criminal case, with greater reason
should Barredo, the employer in the case at bar, be held
liable for damages in a civil suit filed against him because
his taxi driver had been convicted. The degree of negligence
of the conductor in the Spanish case cited was less than that
of the taxi driver, Fontanilla, because the former was
acquitted in the previous criminal case while the latter was
found guilty of criminal negligence and was sentenced to an
indeterminate sentence of one year and one day to two
years of prision correccional.
(See also Sentence of February 19, 1902, which is similar to
the one above quoted.)
In the Sentence of the Supreme Court of Spain, dated
February 14, 1919, an action was brought against a railroad
company for damages because the station agent, employed
by the company, had unjustly andfraudulently, refused to
deliver certain articles consigned to the plaintiff. The
Supreme Court of Spain held that this action was properly
under article 1902 of the Civil Code, the court saying:
Considerando que la sentencia discutida reconoce,
en virtud de los hechos que consigna con relacion a
las pruebas del pleito: 1., que las expediciones
facturadas por la compaia ferroviaria a la

consignacion del actor de las vasijas vacias que en


su demanda relacionan tenian como fin el que este
las devolviera a sus remitentes con vinos y alcoholes;
2., que llegadas a su destino tales mercanias no se
quisieron entregar a dicho consignatario por el jefe
de la estacion sin motivo justificado y con intencion
dolosa, y 3., que la falta de entrega de estas
expediciones al tiempo de reclamarlas el
demandante le originaron daos y perjuicios en
cantidad de bastante importancia como expendedor
al por mayor que era de vinos y alcoholes por las
ganancias que dejo de obtener al verse privado de
servir los pedidos que se le habian hecho por los
remitentes en los envases:
Considerando que sobre esta base hay necesidad de
estimar los cuatro motivos que integran este recurso,
porque la demanda inicial del pleito a que se contrae
no contiene accion que nazca del incumplimiento del
contrato de transporte, toda vez que no se funda en
el retraso de la llegada de las mercancias ni de
ningun otro vinculo contractual entre las partes
contendientes, careciendo, por tanto, de aplicacion el
articulo 371 del Codigo de Comercio, en que
principalmente descansa el fallo recurrido, sino que
se limita a pedir la reparaction de los daos y
perjuicios producidos en el patrimonio del actor por
la injustificada y dolosa negativa del porteador a la
entrega de las mercancias a su nombre consignadas,
segun lo reconoce la sentencia, y cuya
responsabilidad esta claramente sancionada en el
articulo 1902 del Codigo Civil, que obliga por el
siguiente a la Compaia demandada como ligada con
el causante de aquellos por relaciones de caracter
economico y de jurarquia administrativa.

Considering that the sentence, in question


recognizes, in virtue of the facts which it declares, in
relation to the evidence in the case: (1) that the
invoice issued by the railroad company in favor of
the plaintiff contemplated that the empty receptacles
referred to in the complaint should be returned to the
consignors with wines and liquors; (2) that when the
said merchandise reached their destination, their
delivery to the consignee was refused by the station
agent without justification and with fraudulent intent,
and (3) that the lack of delivery of these goods when
they were demanded by the plaintiff caused him
losses and damages of considerable importance, as
he was a wholesale vendor of wines and liquors and
he failed to realize the profits when he was unable to
fill the orders sent to him by the consignors of the
receptacles:
Considering that upon this basis there is need of
upholding the four assignments of error, as the
original complaint did not contain any cause of action
arising from non-fulfillment of a contract of
transportation, because the action was not based on
the delay of the goods nor on any contractual
relation between the parties litigant and, therefore,
article 371 of the Code of Commerce, on which the
decision appealed from is based, is not applicable;
but it limits to asking for reparation for losses and
damages produced on the patrimony of the plaintiff
on account of the unjustified and fraudulent
refusal of the carrier to deliver the goods consigned
to the plaintiff as stated by the sentence, and the
carrier's responsibility is clearly laid down in article
1902 of the Civil Code which binds, in virtue of the
next article, the defendant company, because the

latter is connected with the person who caused the


damage by relations of economic character and by
administrative hierarchy. (Emphasis supplied.)
The above case is pertinent because it shows that the same
act may come under both the Penal Code and the Civil
Code. In that case, the action of the agent was unjustified
and fraudulent and therefore could have been the subject of
a criminal action. And yet, it was held to be also a proper
subject of a civil action under article 1902 of the Civil Code.
It is also to be noted that it was the employer and not the
employee who was being sued.
Let us now examine the cases previously decided by this
Court.
In the leading case of Rakes vs. Atlantic Gulf and Pacific Co.
(7 Phil., 359, 362-365 [year 1907]), the trial court awarded
damages to the plaintiff, a laborer of the defendant,
because the latter had negligently failed to repair a tramway
in consequence of which the rails slid off while iron was
being transported, and caught the plaintiff whose leg was
broken. This Court held:
It is contended by the defendant, as its first defense
to the action that the necessary conclusion from
these collated laws is that the remedy for injuries
through negligence lies only in a criminal action in
which the official criminally responsible must be
made primarily liable and his employer held only
subsidiarily to him. According to this theory the
plaintiff should have procured the arrest of the
representative of the company accountable for not
repairing the track, and on his prosecution a suitable

fine should have been imposed, payable primarily by


him and secondarily by his employer.
This reasoning misconceived the plan of the Spanish
codes upon this subject. Article 1093 of the Civil
Code makes obligations arising from faults or
negligence not punished by the law, subject to the
provisions of Chapter II of Title XVI. Section 1902 of
that chapter reads:
"A person who by an act or omission causes
damage to another when there is fault or
negligence shall be obliged to repair the
damage so done.
"SEC. 1903. The obligation imposed by the
preceeding article is demandable, not only for
personal acts and omissions, but also for
those of the persons for whom they should be
responsible.
"The father, and on his death or incapacity,
the mother, is liable for the damages caused
by the minors who live with them.
xxx

xxx

xxx

"Owners or directors of an establishment or


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

xxx

xxx

xxx

"The liability referred to in this article shall


cease when the persons mentioned therein
prove that they employed all the diligence of
a good father of a family to avoid the
damage."
As an answer to the argument urged in this particular
action it may be sufficient to point out that nowhere
in our general statutes is the employer penalized for
failure to provide or maintain safe appliances for his
workmen. His obligation therefore is one 'not
punished by the laws' and falls under civil rather than
criminal jurisprudence. But the answer may be a
broader one. We should be reluctant, under any
conditions, to adopt a forced construction of these
scientific codes, such as is proposed by the
defendant, that would rob some of these articles of
effect, would shut out litigants against their will from
the civil courts, would make the assertion of their
rights dependent upon the selection for prosecution
of the proper criminal offender, and render recovery
doubtful by reason of the strict rules of proof
prevailing in criminal actions. Even if these articles
had always stood alone, such a construction would
be unnecessary, but clear light is thrown upon their
meaning by the provisions of the Law of Criminal
Procedure of Spain (Ley de Enjuiciamiento Criminal),
which, though never in actual force in these Islands,
was formerly given a suppletory or explanatory
effect. Under article 111 of this law, both classes of
action, civil and criminal, might be prosecuted jointly
or separately, but while the penal action was pending
the civil was suspended. According to article 112, the

penal action once started, the civil remedy should be


sought therewith, unless it had been waived by the
party injured or been expressly reserved by him for
civil proceedings for the future. If the civil action
alone was prosecuted, arising out of a crime that
could be enforced only on private complaint, the
penal action thereunder should be extinguished.
These provisions are in harmony with those of
articles 23 and 133 of our Penal Code on the same
subject.
An examination of this topic might be carried much
further, but the citation of these articles suffices to
show that the civil liability was not intended to be
merged in the criminal nor even to be suspended
thereby, except as expressly provided in the law.
Where an individual is civilly liable for a negligent act
or omission, it is not required that the injured party
should seek out a third person criminally liable whose
prosecution must be a condition precedent to the
enforcement of the civil right.
Under article 20 of the Penal Code the responsibility
of an employer may be regarded as subsidiary in
respect of criminal actions against his employees
only while they are in process of prosecution, or in so
far as they determine the existence of the criminal
act from which liability arises, and his obligation
under the civil law and its enforcement in the civil
courts is not barred thereby unless by the election of
the injured person. Inasmuch as no criminal
proceeding had been instituted, growing our of the
accident in question, the provisions of the Penal Code
can not affect this action. This construction renders it
unnecessary to finally determine here whether this

subsidiary civil liability in penal actions has survived


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

In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the


mother of the 8 of 9-year-old child Salvador Bona brought a
civil action against Moreta to recover damages resulting
from the death of the child, who had been run over by an
automobile driven and managed by the defendant. The trial
court rendered judgment requiring the defendant to pay the
plaintiff the sum of P1,000 as indemnity: This Court in
affirming the judgment, said in part:
If it were true that the defendant, in coming from the
southern part of Solana Street, had to stop his auto
before crossing Real Street, because he had met
vehicles which were going along the latter street or
were coming from the opposite direction along
Solana Street, it is to be believed that, when he again
started to run his auto across said Real Street and to
continue its way along Solana Street northward, he
should have adjusted the speed of the auto which he
was operating until he had fully crossed Real Street
and had completely reached a clear way on Solana
Street. But, as the child was run over by the auto
precisely at the entrance of Solana Street, this
accident could not have occurred if the auto had
been running at a slow speed, aside from the fact
that the defendant, at the moment of crossing Real
Street and entering Solana Street, in a northward
direction, could have seen the child in the act of
crossing the latter street from the sidewalk on the
right to that on the left, and if the accident had
occurred in such a way that after the automobile had
run over the body of the child, and the child's body
had already been stretched out on the ground, the
automobile still moved along a distance of about 2
meters, this circumstance shows the fact that the
automobile entered Solana Street from Real Street,

at a high speed without the defendant having blown


the horn. If these precautions had been taken by the
defendant, the deplorable accident which caused the
death of the child would not have occurred.
It will be noticed that the defendant in the above case could
have been prosecuted in a criminal case because his
negligence causing the death of the child was punishable by
the Penal Code. Here is therefore a clear instance of the
same act of negligence being a proper subject-matter either
of a criminal action with its consequent civil liability arising
from a crime or of an entirely separate and independent civil
action for fault or negligence under article 1902 of the Civil
Code. Thus, in this jurisdiction, the separate individually of
a cuasi-delito or culpa aquilianaunder the Civil Code has
been fully and clearly recognized, even with regard to a
negligent act for which the wrongdoer could have been
prosecuted and convicted in a criminal case and for which,
after such a conviction, he could have been sued for this
civil liability arising from his crime.
Years later (in 1930) this Court had another occasion to
apply the same doctrine. In Bernal and Enverso vs. House
and Tacloban Electric & Ice Plant, Ltd., 54 Phil., 327, the
parents of the five-year-old child, Purificacion Bernal,
brought a civil action to recover damages for the child's
death as a result of burns caused by the fault and
negligence of the defendants. On the evening of April 10,
1925, the Good Friday procession was held in Tacloban,
Leyte. Fortunata Enverso with her daughter Purificacion
Bernal had come from another municipality to attend the
same. After the procession the mother and the daughter
with two others were passing along Gran Capitan Street in
front of the offices of the Tacloban Electric & Ice Plant, Ltd.,
owned by defendants J. V. House, when an automobile

appeared from the opposite direction. The little girl, who was
slightly ahead of the rest, was so frightened by the
automobile that she turned to run, but unfortunately she fell
into the street gutter where hot water from the electric plant
was flowing. The child died that same night from the burns.
The trial courts dismissed the action because of the
contributory negligence of the plaintiffs. But this Court held,
on appeal, that there was no contributory negligence, and
allowed the parents P1,000 in damages from J. V. House who
at the time of the tragic occurrence was the holder of the
franchise for the electric plant. This Court said in part:
Although the trial judge made the findings of fact
hereinbefore outlined, he nevertheless was led to
order the dismissal of the action because of the
contributory negligence of the plaintiffs. It is from
this point that a majority of the court depart from the
stand taken by the trial judge. The mother and her
child had a perfect right to be on the principal street
of Tacloban, Leyte, on the evening when the religious
procession was held. There was nothing abnormal in
allowing the child to run along a few paces in
advance of the mother. No one could foresee the
coincidence of an automobile appearing and of a
frightened child running and falling into a ditch filled
with hot water. The doctrine announced in the much
debated case of Rakes vs. Atlantic Gulf and Pacific
Co. ([1907]), 7 Phil., 359), still rule. Article 1902 of
the Civil Code must again be enforced. The
contributory negligence of the child and her mother,
if any, does not operate as a bar to recovery, but in
its strictest sense could only result in reduction of the
damages.

It is most significant that in the case just cited, this Court


specifically applied article 1902 of the Civil Code. It is thus
that although J. V. House could have been criminally
prosecuted for reckless or simple negligence and not only
punished but also made civilly liable because of his criminal
negligence, nevertheless this Court awarded damages in an
independent civil action for fault or negligence under article
1902 of the Civil Code.
In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915),
the action was for damages for the death of the plaintiff's
daughter alleged to have been caused by the negligence of
the servant in driving an automobile over the child. It
appeared that the cause of the mishap was a defect in the
steering gear. The defendant Leynes had rented the
automobile from the International Garage of Manila, to be
used by him in carrying passengers during the fiesta of Tuy,
Batangas. Leynes was ordered by the lower court to pay
P1,000 as damages to the plaintiff. On appeal this Court
reversed the judgment as to Leynes on the ground that he
had shown that the exercised the care of a good father of a
family, thus overcoming the presumption of negligence
under article 1903. This Court said:
As to selection, the defendant has clearly shown that
he exercised the care and diligence of a good father
of a family. He obtained the machine from a
reputable garage and it was, so far as appeared, in
good condition. The workmen were likewise selected
from a standard garage, were duly licensed by the
Government in their particular calling, and
apparently thoroughly competent. The machine had
been used but a few hours when the accident
occurred and it is clear from the evidence that the
defendant had no notice, either actual or

constructive, of the defective condition of the


steering gear.
The legal aspect of the case was discussed by this Court
thus:
Article 1903 of the Civil Code not only establishes
liability in cases of negligence, but also provides
when the liability shall cease. It says:
"The liability referred to in this article shall
cease when the persons mentioned therein
prove that they employed all the diligence of
a good father of a family to avoid the
damage."
From this article two things are apparent: (1) That
when an injury is caused by the negligence of a
servant or employee there instantly arises a
presumption of law that there was negligence on the
part of the matter or employer either in the selection
of the servant or employee, or in supervision over
him after the selection, or both; and (2) that
presumption is juris tantum and not juris et de jure,
and consequently, may be rebutted. It follows
necessarily that if the employer shows to the
satisfaction of the court that in selection and
supervision he has exercised the care and diligence
of a good father of a family, the presumption is
overcome and he is relieve from liability.
This theory bases the responsibility of the master
ultimately on his own negligence and not on that of
his servant.

The doctrine of the case just cited was followed by this


Court in Cerf vs. Medel (33 Phil., 37 [year 1915]). In the
latter case, the complaint alleged that the defendant's
servant had so negligently driven an automobile, which was
operated by defendant as a public vehicle, that said
automobile struck and damaged the plaintiff's motorcycle.
This Court, applying article 1903 and following the rule
in Bahia vs. Litonjua and Leynes, said in part (p. 41) that:
The master is liable for the negligent acts of his
servant where he is the owner or director of a
business or enterprise and the negligent acts are
committed while the servant is engaged in his
master's employment as such owner.
Another case which followed the decision in Bahia vs.
Litonjua and Leynes was Cuison vs. Norton & Harrison Co.,
55 Phil., 18 (year 1930). The latter case was an action for
damages brought by Cuison for the death of his seven-yearold son Moises. The little boy was on his way to school with
his sister Marciana. Some large pieces of lumber fell from a
truck and pinned the boy underneath, instantly killing him.
Two youths, Telesforo Binoya and Francisco Bautista, who
were working for Ora, an employee of defendant Norton &
Harrison Co., pleaded guilty to the crime of homicide
through reckless negligence and were sentenced
accordingly. This Court, applying articles 1902 and 1903,
held:
The basis of civil law liability is not respondent
superior but the relationship of pater familias. This
theory bases the liability of the master ultimately on
his own negligence and not on that of his servant.
(Bahia vs.Litonjua and Leynes [1915], 30 Phil., 624;
Cangco vs. Manila Railroad Co. [1918], 38 Phil., 768.)

In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co.,


55 Phil., 517 (year 1930) the plaintiff brought an action for
damages for the demolition of its wharf, which had been
struck by the steamer Helen C belonging to the defendant.
This Court held (p. 526):
The evidence shows that Captain Lasa at the time
the plaintiff's wharf collapsed was a duly licensed
captain, authorized to navigate and direct a vessel of
any tonnage, and that the appellee contracted his
services because of his reputation as a captain,
according to F. C. Cadwallader. This being so, we are
of the opinion that the presumption of liability
against the defendant has been overcome by the
exercise of the care and diligence of a good father of
a family in selecting Captain Lasa, in accordance with
the doctrines laid down by this court in the cases
cited above, and the defendant is therefore absolved
from all liability.
It is, therefore, seen that the defendant's theory about his
secondary liability is negatived by the six cases above set
forth. He is, on the authority of these cases, primarily and
directly responsible in damages under article 1903, in
relation to article 1902, of the Civil Code.
Let us now take up the Philippine decisions relied upon by
the defendant. We study first, City of Manila vs. Manila
Electric Co., 52 Phil., 586 (year 1928). A collision between a
truck of the City of Manila and a street car of the Manila
Electric Co. took place on June 8, 1925. The truck was
damaged in the amount of P1,788.27. Sixto Eustaquio, the
motorman, was prosecuted for the crime of damage to
property and slight injuries through reckless imprudence. He
was found guilty and sentenced to pay a fine of P900, to

indemnify the City of Manila for P1,788.27, with subsidiary


imprisonment in case of insolvency. Unable to collect the
indemnity from Eustaquio, the City of Manila filed an action
against the Manila Electric Company to obtain payment,
claiming that the defendant was subsidiarily liable. The main
defense was that the defendant had exercised the diligence
of a good father of a family to prevent the damage. The
lower court rendered judgment in favor of the plaintiff. This
Court held, in part, that this case was governed by the Penal
Code, saying:
With this preliminary point out of the way, there is no
escaping the conclusion that the provisions of the
Penal Code govern. The Penal Code in easily
understandable language authorizes the
determination of subsidiary liability. The Civil Code
negatives its application by providing that civil
obligations arising from crimes or misdemeanors
shall be governed by the provisions of the Penal
Code. The conviction of the motorman was a
misdemeanor falling under article 604 of the Penal
Code. The act of the motorman was not a wrongful or
negligent act or omission not punishable by law.
Accordingly, the civil obligation connected up with
the Penal Code and not with article 1903 of the Civil
Code. In other words, the Penal Code affirms its
jurisdiction while the Civil Code negatives its
jurisdiction. This is a case of criminal negligence out
of which civil liability arises and not a case of civil
negligence.
xxx

xxx

xxx

Our deduction, therefore, is that the case relates to


the Penal Code and not to the Civil Code. Indeed, as

pointed out by the trial judge, any different ruling


would permit the master to escape scot-free by
simply alleging and proving that the master had
exercised all diligence in the selection and training of
its servants to prevent the damage. That would be a
good defense to a strictly civil action, but might or
might not be to a civil action either as a part of or
predicated on conviction for a crime or misdemeanor.
(By way of parenthesis, it may be said further that
the statements here made are offered to meet the
argument advanced during our deliberations to the
effect that article 0902 of the Civil Code should be
disregarded and codal articles 1093 and 1903
applied.)
It is not clear how the above case could support the
defendant's proposition, because the Court of Appeals based
its decision in the present case on the defendant's primary
responsibility under article 1903 of the Civil Code and not on
his subsidiary liability arising from Fontanilla's criminal
negligence. In other words, the case of City of Manila vs.
Manila Electric Co., supra, is predicated on an entirely
different theory, which is the subsidiary liability of an
employer arising from a criminal act of his employee,
whereas the foundation of the decision of the Court of
Appeals in the present case is the employer's primary
liability under article 1903 of the Civil Code. We have
already seen that this is a proper and independent remedy.
Arambulo vs. Manila Electric Co. (55 Phil., 75), is another
case invoked by the defendant. A motorman in the employ
of the Manila Electric Company had been convicted o
homicide by simple negligence and sentenced, among other
things, to pay the heirs of the deceased the sum of P1,000.
An action was then brought to enforce the subsidiary liability

of the defendant as employer under the Penal Code. The


defendant attempted to show that it had exercised the
diligence of a good father of a family in selecting the
motorman, and therefore claimed exemption from civil
liability. But this Court held:
In view of the foregoing considerations, we are of
opinion and so hold, (1) that the exemption from civil
liability established in article 1903 of the Civil Code
for all who have acted with the diligence of a good
father of a family, is not applicable to the subsidiary
civil liability provided in article 20 of the Penal Code.
The above case is also extraneous to the theory of the
defendant in the instant case, because the action there had
for its purpose the enforcement of the defendant's
subsidiary liability under the Penal Code, while in the case at
bar, the plaintiff's cause of action is based on the
defendant's primary and direct responsibility under article
1903 of the Civil Code. In fact, the above case destroys the
defendant's contention because that decision illustrates the
principle that the employer's primary responsibility under
article 1903 of the Civil Code is different in character from
his subsidiary liability under the Penal Code.
In trying to apply the two cases just referred to, counsel for
the defendant has failed to recognize the distinction
between civil liability arising from a crime, which is
governed by the Penal Code, and the responsibility
for cuasi-delito or culpa aquiliana under the Civil Code, and
has likewise failed to give the importance to the latter type
of civil action.

The defendant-petitioner also cites Francisco vs.


Onrubia (46 Phil., 327). That case need not be set forth.
Suffice it to say that the question involved was also civil
liability arising from a crime. Hence, it is as inapplicable as
the two cases above discussed.
The foregoing authorities clearly demonstrate the separate
individuality of cuasi-delitos or culpa aquiliana under the
Civil Code. Specifically they show that there is a distinction
between civil liability arising from criminal negligence
(governed by the Penal Code) and responsibility for fault or
negligence under articles 1902 to 1910 of the Civil Code,
and that the same negligent act may produce either a civil
liability arising from a crime under the Penal Code, or a
separate responsibility for fault or negligence under articles
1902 to 1910 of the Civil Code. Still more concretely, the
authorities above cited render it inescapable to conclude
that the employer in this case the defendant-petitioner
is primarily and directly liable under article 1903 of the Civil
Code.
The legal provisions, authors, and cases already invoked
should ordinarily be sufficient to dispose of this case. But
inasmuch as we are announcing doctrines that have been
little understood in the past, it might not be inappropriate to
indicate their foundations.
Firstly, the Revised Penal Code in article 365 punishes not
only reckless but also simple negligence. If we were to hold
that articles 1902 to 1910 of the Civil Code refer only to
fault or negligence not punished by law, according to the
literal import of article 1093 of the Civil Code, the legal
institution of culpa aquiliana would have very little scope
and application in actual life. Death or injury to persons and
damage to property through any degree of negligence

even the slightest would have to be indemnified only


through the principle of civil liability arising from a crime. In
such a state of affairs, what sphere would remain for cuasidelito or culpa aquiliana? We are loath to impute to the
lawmaker any intention to bring about a situation so absurd
and anomalous. Nor are we, in the interpretation of the laws,
disposed to uphold the letter that killeth rather than the
spirit that giveth life. We will not use the literal meaning of
the law to smother and render almost lifeless a principle of
such ancient origin and such full-grown development
as culpa aquiliana or cuasi-delito, which is conserved and
made enduring in articles 1902 to 1910 of the Spanish Civil
Code.
Secondly, to find the accused guilty in a criminal case, proof
of guilt beyond reasonable doubt is required, while in a civil
case, preponderance of evidence is sufficient to make the
defendant pay in damages. There are numerous cases of
criminal negligence which can not be shown beyond
reasonable doubt, but can be proved by a preponderance of
evidence. In such cases, the defendant can and should be
made responsible in a civil action under articles 1902 to
1910 of the Civil Code. Otherwise, there would be many
instances of unvindicated civil wrongs. Ubi jus ibi remedium.
Thirdly, to hold that there is only one way to make
defendant's liability effective, and that is, to sue the driver
and exhaust his (the latter's) property first, would be
tantamount to compelling the plaintiff to follow a devious
and cumbersome method of obtaining relief. True, there is
such a remedy under our laws, but there is also a more
expeditious way, which is based on the primary and direct
responsibility of the defendant under article 1903 of the Civil
Code. Our view of the law is more likely to facilitate remedy
for civil wrongs, because the procedure indicated by the

defendant is wasteful and productive of delay, it being a


matter of common knowledge that professional drivers of
taxis and similar public conveyance usually do not have
sufficient means with which to pay damages. Why, then,
should the plaintiff be required in all cases to go through this
roundabout, unnecessary, and probably useless procedure?
In construing the laws, courts have endeavored to shorten
and facilitate the pathways of right and justice.
At this juncture, it should be said that the primary and direct
responsibility of employers and their presumed negligence
are principles calculated to protect society. Workmen and
employees should be carefully chosen and supervised in
order to avoid injury to the public. It is the masters or
employers who principally reap the profits resulting from the
services of these servants and employees. It is but right that
they should guarantee the latter's careful conduct for the
personnel and patrimonial safety of others. As Theilhard has
said, "they should reproach themselves, at least, some for
their weakness, others for their poor selection and all for
their negligence." And according to Manresa, "It is much
more equitable and just that such responsibility should fall
upon the principal or director who could have chosen a
careful and prudent employee, and not upon the injured
person who could not exercise such selection and who used
such employee because of his confidence in the principal or
director." (Vol. 12, p. 622, 2nd Ed.) Many jurists also base
this primary responsibility of the employer on the principle
of representation of the principal by the agent. Thus,
Oyuelos says in the work already cited (Vol. 7, p. 747) that
before third persons the employer and employee "vienen a
ser como una sola personalidad, por refundicion de la del
dependiente en la de quien le emplea y utiliza." ("become
as one personality by the merging of the person of the
employee in that of him who employs and utilizes him.") All

these observations acquire a peculiar force and significance


when it comes to motor accidents, and there is need of
stressing and accentuating the responsibility of owners of
motor vehicles.

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.

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 extracontractual. 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.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-24803 May 26, 1977
PEDRO ELCANO and PATRICIA ELCANO, in their
capacity as Ascendants of Agapito Elcano,
deceased,plaintiffs-appellants,
vs.
REGINALD HILL, minor, and MARVIN HILL, as father
and Natural Guardian of said minor, defendantsappellees.

upon motion to dismiss of defendants, the complaint of


plaintiffs for recovery of damages from defendant Reginald
Hill, a minor, married at the time of the occurrence, and his
father, the defendant Marvin Hill, with whom he was living
and getting subsistence, for the killing by Reginald of the
son of the plaintiffs, named Agapito Elcano, of which, when
criminally prosecuted, the said accused was acquitted on
the ground that his act was not criminal, because of "lack of
intent to kill, coupled with mistake."
Actually, the motion to dismiss based on the following
grounds:
1. The present action is not only against but a
violation of section 1, Rule 107, which is now
Rule III, of the Revised Rules of Court;
2. The action is barred by a prior judgment
which is now final and or in res-adjudicata;

Cruz & Avecilla for appellants.

3. The complaint had no cause of action


against defendant Marvin Hill, because he was
relieved as guardian of the other defendant
through emancipation by marriage.

Marvin R. Hill & Associates for appellees.

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

BARREDO, J.:
Appeal from the order of the Court of First Instance of
Quezon City dated January 29, 1965 in Civil Case No. Q8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing,

was first denied by the trial court. It was only upon motion
for reconsideration of the defendants of such denial,
reiterating the above grounds that the following order was
issued:
Considering the motion for reconsideration
filed by the defendants on January 14, 1965

and after thoroughly examining the


arguments therein contained, the Court finds
the same to be meritorious and well-founded.

THE ACTION IS BARRED BY A PRIOR


JUDGMENT WHICH IS NOW FINAL OR RESADJUDICTA;

WHEREFORE, the Order of this Court on


December 8, 1964 is hereby reconsidered by
ordering the dismissal of the above entitled
case.

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

SO ORDERED.
IV
Quezon City, Philippines, January 29, 1965. (p.
40, Record [p. 21, Record on Appeal.)
Hence, this appeal where plaintiffs-appellants, the spouses
Elcano, are presenting for Our resolution the following
assignment of errors:
THE LOWER COURT ERRED IN DISMISSING THE
CASE BY UPHOLDING THE CLAIM OF
DEFENDANTS THAT I
THE PRESENT ACTION IS NOT ONLY AGAINST
BUT ALSO A VIOLATION OF SECTION 1, RULE
107, NOW RULE 111, OF THE REVISED RULES
OF COURT, AND THAT SECTION 3(c) OF RULE
111, RULES OF COURT IS APPLICABLE;
II

THAT THE COMPLAINT STATES NO CAUSE OF


ACTION AGAINST DEFENDANT MARVIN HILL
BECAUSE HE WAS RELIEVED AS GUARDIAN OF
THE OTHER DEFENDANT THROUGH
EMANCIPATION BY MARRIAGE. (page 4,
Record.)
It appears that for the killing of the son, Agapito, of
plaintiffs-appellants, defendant- appellee Reginald Hill was
prosecuted criminally in Criminal Case No. 5102 of the Court
of First Instance of Quezon City. After due trial, he was
acquitted on the ground that his act was not criminal
because of "lack of intent to kill, coupled with mistake."
Parenthetically, none of the parties has favored Us with a
copy of the decision of acquittal, presumably because
appellants do not dispute that such indeed was the basis
stated in the court's decision. And so, when appellants filed
their complaint against appellees Reginald and his father,
Atty. Marvin Hill, on account of the death of their son, the
appellees filed the motion to dismiss above-referred to.

As We view the foregoing background of this case, the two


decisive issues presented for Our resolution are:
1. Is the present civil action for damages barred by the
acquittal of Reginald in the criminal case wherein the action
for civil liability, was not reversed?
2. May Article 2180 (2nd and last paragraphs) of the Civil
Code he applied against Atty. Hill, notwithstanding the
undisputed fact that at the time of the occurrence
complained of. Reginald, though a minor, living with and
getting subsistenee from his father, was already legally
married?
The first issue presents no more problem than the need for a
reiteration and further clarification of the dual character,
criminal and civil, of fault or negligence as a source of
obligation which was firmly established in this jurisdiction
in Barredo vs. Garcia, 73 Phil. 607. In that case, this Court
postulated, on the basis of a scholarly dissertation by Justice
Bocobo on the nature of culpa aquiliana in relation to culpa
criminal or delito and mereculpa or fault, with pertinent
citation of decisions of the Supreme Court of Spain, the
works of recognized civilians, and earlier jurisprudence of
our own, that the same given act can result in civil liability
not only under the Penal Code but also under the Civil Code.
Thus, the opinion holds:
The, above case is pertinent because it shows
that the same act machinist. come under both
the Penal Code and the Civil Code. In that
case, the action of the agent killeth unjustified
and fraudulent and therefore could have been
the subject of a criminal action. And yet, it

was held to be also a proper subject of a civil


action under article 1902 of the Civil Code. It
is also to be noted that it was the employer
and not the employee who was being sued.
(pp. 615-616, 73 Phil.). 1
It will be noticed that the defendant in the
above case could have been prosecuted in a
criminal case because his negligence causing
the death of the child was punishable by the
Penal Code. Here is therefore a clear instance
of the same act of negligence being a proper
subject matter either of a criminal action with
its consequent civil liability arising from a
crime or of an entirely separate and
independent civil action for fault or
negligence under article 1902 of the Civil
Code. Thus, in this jurisdiction, the separate
individuality of a cuasi-delito or culpa
aquiliana, under the Civil Code has been fully
and clearly recognized, even with regard to a
negligent act for which the wrongdoer could
have been prosecuted and convicted in a
criminal case and for which, after such a
conviction, he could have been sued for this
civil liability arising from his crime. (p. 617, 73
Phil.) 2
It is most significant that in the case just
cited, this Court specifically applied article
1902 of the Civil Code. It is thus that although
J. V. House could have been criminally
prosecuted for reckless or simple negligence
and not only punished but also made civilly
liable because of his criminal negligence,

nevertheless this Court awarded damages in


an independent civil action for fault or
negligence under article 1902 of the Civil
Code. (p. 618, 73 Phil.) 3
The legal provisions, authors, and cases
already invoked should ordinarily be sufficient
to dispose of this case. But inasmuch as we
are announcing doctrines that have been little
understood, in the past, it might not he
inappropriate to indicate their foundations.
Firstly, the Revised Penal Code in articles 365
punishes not only reckless but also simple
negligence. If we were to hold that articles
1902 to 1910 of the Civil Code refer only to
fault or negligence not punished by law,
accordingly to the literal import of article
1093 of the Civil Code, the legal institution
of culpa aquiliana would have very little scope
and application in actual life. Death or injury
to persons and damage to property- through
any degree of negligence - even the slightest
- would have to be Idemnified only through
the principle of civil liability arising from a
crime. In such a state of affairs, what sphere
would remain for cuasi-delito or culpa
aquiliana? We are loath to impute to the
lawmaker any intention to bring about a
situation so absurd and anomalous. Nor are
we, in the interpretation of the laws, disposed
to uphold the letter that killeth rather than the
spirit that giveth life. We will not use the
literal meaning of the law to smother and
render almost lifeless a principle of such

ancient origin and such full-grown


development as culpa aquiliana or cuasidelito, which is conserved and made enduring
in articles 1902 to 1910 of the Spanish Civil
Code.
Secondary, to find the accused guilty in a
criminal case, proof of guilt beyond
reasonable doubt is required, while in a civil
case, preponderance of evidence is sufficient
to make the defendant pay in damages. There
are numerous cases of criminal negligence
which can not be shown beyond reasonable
doubt, but can be proved by a preponderance
of evidence. In such cases, the defendant can
and should be made responsible in a civil
action under articles 1902 to 1910 of the Civil
Code. Otherwise. there would be many
instances of unvindicated civil wrongs. "Ubi
jus Idemnified remedium." (p. 620,73 Phil.)
Fourthly, because of the broad sweep of the
provisions of both the Penal Code and the Civil
Code on this subject, which has given rise to
the overlapping or concurrence of spheres
already discussed, and for lack of
understanding of the character and efficacy of
the action for culpa aquiliana, there has
grown up a common practice to seek
damages only by virtue of the civil
responsibility arising from a crime, forgetting
that there is another remedy, which is by
invoking articles 1902-1910 of the Civil Code.
Although this habitual method is allowed by,
our laws, it has nevertheless rendered

practically useless and nugatory the more


expeditious and effective remedy based
on culpa aquiliana or culpa extra-contractual.
In the present case, we are asked to help
perpetuate this usual course. But we believe it
is high time we pointed out to the harms done
by such practice and to restore the principle
of responsibility for fault or negligence under
articles 1902 et seq. of the Civil Code to its
full rigor. It is high time we caused the stream
of quasi-delict or culpa aquiliana to flow on its
own natural channel, so that its waters may
no longer be diverted into that of a crime
under the Penal Code. This will, it is believed,
make for the better safeguarding or private
rights because it realtor, an ancient and
additional remedy, and for the further reason
that an independent civil action, not
depending on the issues, limitations and
results of a criminal prosecution, and entirely
directed by the party wronged or his counsel,
is more likely to secure adequate and
efficacious redress. (p. 621, 73 Phil.)
Contrary to an immediate impression one might get upon a
reading of the foregoing excerpts from the opinion in Garcia
that the concurrence of the Penal Code and the Civil Code
therein referred to contemplate only acts of negligence and
not intentional voluntary acts - deeper reflection would
reveal that the thrust of the pronouncements therein is not
so limited, but that in fact it actually extends to fault
or culpa. This can be seen in the reference made therein to
the Sentence of the Supreme Court of Spain of February 14,
1919, supra, which involved a case of fraud or estafa, not a
negligent act. Indeed, Article 1093 of the Civil Code of

Spain, in force here at the time of Garcia, provided textually


that obligations "which are derived from acts or omissions in
which fault or negligence, not punishable by law, intervene
shall be the subject of Chapter II, Title XV of this book (which
refers to quasi-delicts.)" And it is precisely the underline
qualification, "not punishable by law", that Justice Bocobo
emphasized could lead to an ultimo construction or
interpretation of the letter of the law that "killeth, rather
than the spirit that giveth lift- hence, the ruling that "(W)e
will not use the literal meaning of the law to smother and
render almost lifeless a principle of such ancient origin and
such full-grown development as culpa aquiliana orquasidelito, which is conserved and made enduring in articles
1902 to 1910 of the Spanish Civil Code." And so, because
Justice Bacobo was Chairman of the Code Commission that
drafted the original text of the new Civil Code, it is to be
noted that the said Code, which was enacted after the
Garcia doctrine, no longer uses the term, 11 not punishable
by law," thereby making it clear that the concept of culpa
aquiliana includes acts which are criminal in character or in
violation of the penal law, whether voluntary or matter.
Thus, the corresponding provisions to said Article 1093 in
the new code, which is Article 1162, simply says,
"Obligations derived fromquasi-delicto shall be governed by
the provisions of Chapter 2, Title XVII of this Book, (on quasidelicts) and by special laws." More precisely, a new
provision, Article 2177 of the new code provides:
ART. 2177. Responsibility for fault or
negligence under the preceding article is
entirely separate and distinct from the civil
liability arising from negligence under the
Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission
of the defendant.

According to the Code Commission: "The foregoing provision


(Article 2177) through at first sight startling, is not so novel
or extraordinary when we consider the exact nature of
criminal and civil negligence. The former is a violation of the
criminal law, while the latter is a "culpa aquiliana" or quasidelict, of ancient origin, having always had its own
foundation and individuality, separate from criminal
negligence. Such distinction between criminal negligence
and "culpa extracontractual" or "cuasi-delito" has been
sustained by decision of the Supreme Court of Spain and
maintained as clear, sound and perfectly tenable by Maura,
an outstanding Spanish jurist. Therefore, under the proposed
Article 2177, acquittal from an accusation of criminal
negligence, whether on reasonable doubt or not, shall not
be a bar to a subsequent civil action, not for civil liability
arising from criminal negligence, but for damages due to a
quasi-delict or 'culpa aquiliana'. But said article forestalls a
double recovery.", (Report of the Code) Commission, p. 162.)
Although, again, this Article 2177 does seem to literally refer
to only acts of negligence, the same argument of Justice
Bacobo about construction that upholds "the spirit that
giveth lift- rather than that which is literal that killeth the
intent of the lawmaker should be observed in applying the
same. And considering that the preliminary chapter on
human relations of the new Civil Code definitely establishes
the separability and independence of liability in a civil action
for acts criminal in character (under Articles 29 to 32) from
the civil responsibility arising from crime fixed by Article 100
of the Revised Penal Code, and, in a sense, the Rules of
Court, under Sections 2 and 3 (c), Rule 111, contemplate
also the same separability, it is "more congruent with the
spirit of law, equity and justice, and more in harmony with
modern progress"- to borrow the felicitous relevant
language in Rakes vs. Atlantic. Gulf and Pacific Co., 7 Phil.

359, to hold, as We do hold, that Article 2176, where it


refers to "fault or negligencia covers not only acts "not
punishable by law" but also acts criminal in character,
whether intentional and voluntary or negligent.
Consequently, a separate civil action lies against the
offender in a criminal act, whether or not he is criminally
prosecuted and found guilty or acquitted, provided that the
offended party is not allowed, if he is actually charged also
criminally, to recover damages on both scores, and would
be entitled in such eventuality only to the bigger award of
the two, assuming the awards made in the two cases vary.
In other words, the extinction of civil liability referred to in
Par. (e) of Section 3, Rule 111, refers exclusively to civil
liability founded on Article 100 of the Revised Penal Code,
whereas the civil liability for the same act considered as
a quasi-delict only and not as a crime is not estinguished
even by a declaration in the criminal case that the criminal
act charged has not happened or has not been committed
by the accused. Briefly stated, We here hold, in reiteration of
Garcia, thatculpa aquiliana includes voluntary and negligent
acts which may be punishable by law.4
It results, therefore, that the acquittal of Reginal Hill in the
criminal case has not extinguished his liability for quasidelict, hence that acquittal is not a bar to the instant action
against him.
Coming now to the second issue about the effect of
Reginald's emancipation by marriage on the possible civil
liability of Atty. Hill, his father, it is also Our considered
opinion that the conclusion of appellees that Atty. Hill is
already free from responsibility cannot be upheld.
While it is true that parental authority is terminated upon
emancipation of the child (Article 327, Civil Code), and

under Article 397, emancipation takes place "by the


marriage of the minor (child)", it is, however, also clear that
pursuant to Article 399, emancipation by marriage of the
minor is not really full or absolute. Thus "(E)mancipation by
marriage or by voluntary concession shall terminate
parental authority over the child's person. It shall enable the
minor to administer his property as though he were of age,
but he cannot borrow money or alienate or encumber real
property without the consent of his father or mother, or
guardian. He can sue and be sued in court only with the
assistance of his father, mother or guardian."
Now under Article 2180, "(T)he obligation imposed by article
2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is
responsible. The father and, in case of his death or
incapacity, the mother, are responsible. The father and, in
case of his death or incapacity, the mother, are responsible
for the damages caused by the minor children who live in
their company." In the instant case, it is not controverted
that Reginald, although married, was living with his father
and getting subsistence from him at the time of the
occurrence in question. Factually, therefore, Reginald was
still subservient to and dependent on his father, a situation
which is not unusual.
It must be borne in mind that, according to Manresa, the
reason behind the joint and solidary liability of presuncion
with their offending child under Article 2180 is that is the
obligation of the parent to supervise their minor children in
order to prevent them from causing damage to third
persons. 5 On the other hand, the clear implication of Article
399, in providing that a minor emancipated by marriage
may not, nevertheless, sue or be sued without the
assistance of the parents, is that such emancipation does

not carry with it freedom to enter into transactions or do any


act that can give rise to judicial litigation. (See Manresa, Id.,
Vol. II, pp. 766-767, 776.) And surely, killing someone else
invites judicial action. Otherwise stated, the marriage of a
minor child does not relieve the parents of the duty to see to
it that the child, while still a minor, does not give
answerable for the borrowings of money and alienation or
encumbering of real property which cannot be done by their
minor married child without their consent. (Art. 399;
Manresa, supra.)
Accordingly, in Our considered view, Article 2180 applies to
Atty. Hill notwithstanding the emancipation by marriage of
Reginald. However, inasmuch as it is evident that Reginald
is now of age, as a matter of equity, the liability of Atty. Hill
has become milling, subsidiary to that of his son.
WHEREFORE, the order appealed from is reversed and the
trial court is ordered to proceed in accordance with the
foregoing opinion. Costs against appellees.
Fernando (Chairman), Antonio, and Martin, JJ., concur.
Concepcion Jr., J, is on leave.
Martin, J, was designated to sit in the Second Division.

Separate Opinions

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

Separate Opinions

Footnotes
1 Referring to Sentence of the Supreme Court
of Spain of February 14, 1919.
2 Referring to Manzanares vs. Moreta, 38 Phil.
821.
3 Referring to Bernal et al, vs. House et al., 54
Phil. 327.
4 Parenthetically, Manresa seemingly holds.
the contrary view thus:
"Sin embargo, para no ineurrir en error hay
que tener en cuenta que los lineage. del
precepts contenido en el presente articulo son
bastante mas reducidos, pues no se hallan
comprendidos en el todos los datios que pues
tener por causa la culpa o la negligencia.

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

"En efecto, examinando detenidamente la


terminos general de la culpa y de la
negligencia. se observe que, tanto en una
como en otra de dichas causas, hay tres
generoso o tres especies distintas, a saber:
1. La que represents una accion u omision
voluntaria por la que results incumplida una
obligacion anteriormente constituida.
2. La que sin existencia de una obligacion
anterior produce un dano o perjuicio que,

teniendo su origen en un hecho ilicito, no


reviste los caracteres de delito o falta; y
3. La que teniendo por origen un hecho que
constituya delito o falta produce una
responsabilidad civil como accesoria de la
responsabilidad criminal.
"La primera de estas tres especies de culpa o
negligencia es siempre accesoria de una
obligacion principal, cuyo incumplimiento da
origen a la terminos especial de la culpa en
materia de contratos, y el eatudio de esta
debe harms al examinar cada contrato, en
especial, como lo hicimos asi, analizando
entoces los peculiares efectos de dicha culpa
en cada uno de ellos.
"La tercera de las especies citadas es
accesoria tambien, pues no puede concebirse
su existencia sin la de un delicto o falts que la
produzca. Es decir, que solo al lado de la
responsabilidad criminal puede supuesto esa
responsabilidad civil y la obligacion
proveniente de la culpa, ineurrir como una
consecuencia de la responsabilidad criminal,
y, por consiguente, su examen y regulacion
perusal. al Derecho penal.
"Como consecuencia de ello, results que la
unica especie de culpa y omisiones o
negligencia que puede ser y es meanwhile.'
del presente capitulo, es la separability, o sea
la que sin la existencia de una obligacion

anterior, y sin ningun antecedents


contractual, produce un dano o perjuico que
tiene su origen en una accion u omision
culpable solo civilmente; as decir, que siendo
ilicita, no reviste sin embargo, los caracteres
de un delito o falta por no estar penada por la
ley. Y aun dentro de estos lineage hay que
restringir aun mas los terminos o la materia
propria de este articulo, el cual se refiere
unicamente a la culpa o negligencia
personates del obligado, pero no a las que
prudencia de actos o de omisiones de
persons., distintas de este." (pp. 642-643, Vol.
XII, Manresa, Codigo Civil Espanol.)
5 "Nuestro Codigo no ha seguido la escuela
italiana, sino que mas bien se ha
instantaneous, en el criterio de la doctrina
full-grown puesto que impone la obligacion de
reparar, el dano causado en virtud de una
presuncion juris tecum de culpa por parte del
que tiene bajo su autoridad o dependecia al
causante del daho, derivada del hicimos de no
haber puesto el cuidado y la vinculos debida
en los actos de sus subordinados para evitar
dicho resultado. Asi es que, segun el parrafo
ultimo del art. 1,903, cesa dicha
responsabilidad cuando se prueba que los
obligados por los actos ajenos emplearon toda
la diligencia de un buen padre de familia.
Luego no es la causa de la obligacion
impuesta la representacion, ni el interes, ni la
necesidad de que haya quienes responda del
dano causado por el que no tiene
personalidad in garantias de specialist. para

responsabilidad por siendo sino el


incumplimiento implicito o supuesto de los
deberes de precaucion y de prudencia que
impuesta los vinculos civiles que unicamente
al obligado con las persons., por quienes debe
representacion, el mal causado, Por ese
motivo coloca dicha obligacion entre las que
prudencia de la culpa of negligentj (pp.
670671, Manresa, Codigo Civil Espanol, Vol.
XII.)

Petitioner, Edgardo Mendoza, seeks a review on certiorari of


the Orders of respondent Judge in Civil Case No. 80803
dismissing his Complaint for Damages based on quasidelict against respondents Felino Timbol and Rodolfo
Salazar.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-32599 June 29, 1979
EDGARDO E. MENDOZA, petitioner
vs.
HON. ABUNDIO Z. ARRIETA, Presiding Judge of Branch
VIII, Court of First Instance of Manila, FELINO
TIMBOL, and RODOLFO SALAZAR, respondents.
David G. Nitafan for petitioner.
Arsenio R. Reyes for respondent Timbol.
Armando M. Pulgado for respondent Salazar.

MELENCIO-HERRERA, J:

The facts which spawned the present controversy may be


summarized as follows:
On October 22, 1969, at about 4:00 o'clock in the afternoon,
a three- way vehicular accident occurred along Mac-Arthur
Highway, Marilao, Bulacan, involving a Mercedes Benz
owned and driven by petitioner; a private jeep owned and
driven by respondent Rodolfo Salazar; and a gravel and
sand truck owned by respondent Felipino Timbol and 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 and
Freddie Montoya with the Court of First Instance of Bulacan.
The race against truck-driver Montoya, docketed as Criminal
Case No. SM-227, was for causing damage to the jeep
owned by Salazar, in the amount of Pl,604.00, by hitting it at
the right rear portion thereby causing said jeep to hit and
bump an oncoming car, which happened to be petitioner's
Mercedes Benz. The case against jeep-owner-driver Salazar,
docketed as Criminal Case No. SM 228, was for causing
damage to the Mercedes Benz of petitioner in the amount of
P8,890.00
At the joint trial of the above cases, petitioner testified that
jeep-owner- driver Salazar overtook the truck driven by
Montoya, swerved to the left going towards the poblacion of
Marilao, and hit his car which was bound for Manila.
Petitioner further testified that 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 version of the accident was
adopted by truck driver Montoya. Jeep-owner-driver Salazar,
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
was stopped at the intersection by a policeman who was
directing traffic; that while he was at a stop position, his
jeep was bumped at the rear by the truck driven by Montova
causing him to be thrown out of the jeep, which then
swerved to the left and hit petitioner's car, which was
coming from the opposite direction.
On July 31, 1970, the Court of First Instance of Bulacan,
Branch V, Sta. Maria, rendered judgment, stating in its
decretal portion:
IN VIEW OF THE FOREGOING, this Court finds
the accused Freddie Montoya GUILTY 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 subsidiary
imprisonment in case of insolvency, both as to
fine and indemnity, with costs.
Accused Rodolfo Salazar is hereby ACQUITTED
from the offense charged in Crime. Case No.
SM-228, with costs de oficio, and his bond is
ordered canceled
SO ORDERED.

Thus, the trial Court absolved jeep-owner-driver Salazar of


any liability, civil and criminal, in view of its findings that the
collision between Salazar's jeep and petitioner's car was the
result of the former having been bumped from behind by
the truck driven by Montoya. Neither was petitioner awarded
damages as he was not a complainant against truck-driver
Montoya but only against jeep-owner-driver Salazar.
On August 22, 1970, or after the termination of the criminal
cases, petitioner filed Civil Case No. 80803 with the Court of
First Instance of Manila against respondents jeep-ownerdriver Salazar and Felino Timbol, the latter being the owner
of the gravel and sand truck driven by Montoya, for
indentification for the damages sustained by his car as a
result of the collision involving their vehicles. Jeep-ownerdriver Salazar and truck-owner Timbol were joined as
defendants, either in the alternative or in solidum allegedly
for the reason that petitioner was uncertain as to whether
he was entitled to relief against both on only one of them.
On September 9, 1970, truck-owner Timbol filed a Motion to
Dismiss Civil Case No. 80803 on the grounds that the
Complaint is barred by a prior judgment in the criminal
cases and that it fails to state a cause of action. An
Opposition thereto was filed by petitioner.
In an Order dated September 12, 1970, respondent Judge
dismissed the Complaint 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, to which petition we gave due
course.

On January 30, 1971, upon motion of jeep-owner-driver


Salazar, respondent Judge also dismissed the case as
against the former. Respondent Judge reasoned out that
"while it is true that an independent civil action for liability
under Article 2177 of the Civil Code could be prosecuted
independently of the criminal action for the offense from
which it arose, the New Rules of Court, which took effect on
January 1, 1964, requires an express 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 Reconsideration thereof was
denied in the order dated February 23, 1971, with
respondent Judge suggesting that the issue be raised to a
higher Court "for a more decisive interpretation of the rule. 3

damages against jeep-driver-Salazar only; and that the


Complaint does not state a cause of action against truckowner Timbol inasmuch as petitioner prosecuted jeepowner-driver Salazar as the one solely responsible for the
damage suffered by his car.

On March 25, 1971, petitioner then filed a Supplemental


Petition before us, also to review the last two mentioned
Orders, to which we required jeep-owner-driver Salazar to
file an Answer.

It is conceded that the first three requisites of res


judicata are present. However, we agree with petitioner that
there is no Identity of cause of action between Criminal Case
No. SM-227 and Civil Case No. 80803. Obvious is the fact
that in said criminal case truck-driver Montoya was not
prosecuted for damage to petitioner's car but for damage to
the jeep. 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 Montoya, he (Mendoza) being a
complainant only against Rodolfo Salazar in Criminal Case
No. SM-228. 4 And more importantly, in the criminal cases,
the cause of action was the enforcement of the civil liability
arising from criminal negligence under Article l of the
Revised Penal Code, whereas Civil Case No. 80803 is based
on quasi-delict under Article 2180, in relation to Article 2176
of the Civil Code As held in Barredo vs. Garcia, et al. 5

The Complaint against


truck-owner Timbol
We shall first discuss the validity of the Order, dated
September 12, 1970, dismissing petitioner's Complaint
against truck-owner Timbol.
In dismissing the Complaint against the truck-owner,
respondent Judge sustained Timbol's allegations that the
civil suit is barred by the prior joint judgment in Criminal
Cases Nos. SM-227 and SM-228, wherein no reservation to
file a separate civil case was made by petitioner and where
the latter actively participated in the trial and tried to prove

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 rendered by a Court having jurisdiction over
the subject matter and over the parties; (3) it must be a
judgment on the merits; and (4) there must be, between the
first and second actions, Identity of parties, Identity of
subject matter and Identity of cause of action.

The foregoing authorities clearly demonstrate


the separate in. individuality of cuasi-

delitos or culpa aquiliana under the Civil


Code. Specifically they show that there is a
distinction between civil liability arising from
criminal negligence (governed by the Penal
Code) and responsibility for fault or
negligence under articles 1902 to 1910 of the
Civil Code, and that the same negligent act
may produce either a civil liability arising from
a crime under the Penal Code, or a separate
responsibility for fault or negligence under
articles 1902 to 1910 of the Civil Code. Still
more concretely, the authorities above cited
render it inescapable to conclude that the
employer in this case the defendantpetitioner is primarily and directly liable under
article 1903 of the Civil Code.
That petitioner's cause of action against Timbol in the civil
case is based on quasi-delict is 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 suddenly swerved to his (petitioner's)
lane and collided with his car That the sudden 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 direction as
Salazar's jeep; and that as a consequence of the collision,
petitioner's car suffered extensive damage amounting to
P12,248.20 and that he likewise incurred actual and moral
damages, litigation expenses and attorney's fees. Clearly,
therefore, the two factors that a cause of action must
consist of, namely: (1) plaintiff's primary right, i.e., that he is
the owner of a Mercedes Benz, and (2) defendant's delict or
wrongful act or omission which violated plaintiff's primary
right, i.e., the negligence or lack of skill either of jeep-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
Consequently, petitioner's cause of action being based
on quasi-delict, respondent Judge committed reversible error
when he dismissed the civil suit against the truck-owner, as
said case may proceed independently of the criminal
proceedings and regardless of the result of the latter.
Art. 31. When the civil action is based on an
obligation not arising from the act or omission
complained of as a felony, such civil action
may proceed independently of the criminal
proceedings and regardless of the result of
the latter.
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
independent civil action bars the institution of such separate
civil action, invoking section 2, Rule 111, Rules of Court,
which says:
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 separate and distinct from the
criminal action may be brought by the injured
party during the pendency of the criminal
case, provided the right is reserved as
required in the preceding section. Such civil
action shau proceed independently of the

criminal prosecution, and shall require only a


preponderance of evidence.
Interpreting the above provision, this Court, in Garcia vs.
Florida 7 said:
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 extracontractual. The former is a violation of the
criminal law, while the latter is a distinct and
independent negligence, having always had
its own foundation and individuality. Some
legal writers are of the view that in
accordance with Article 31, the civil action
based upon quasi-delict may proceed
independently of the criminal proceeding for
criminal negligence and regardless of the
result of the latter. Hence, 'the proviso in
Section 2 of Rule 111 with reference to ...
Articles 32, 33 and 34 of the Civil Code is
contrary to the letter and spirit of the said
articles, for these articles were drafted ... and
are intended to constitute as exceptions to
the general rule stated in what is now Section
1 of Rule 111. The proviso, which is
procedural, may also be regarded as an
unauthorized amendment of substantive law,
Articles 32, 33 and 34 of the Civil Code, which
do not provide for the reservation required in
the proviso ... .
In his concurring opinion in the above case, Mr. Justice
Antonio Barredo further observed 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 Revised Penal Code, no
reservation, therefore, need be made in the criminal case;
that Section 2 of Rule 111 is inoperative, "it being
substantive in character and is not within the power of the
Supreme Court to promulgate; and even if it were not
substantive but adjective, it cannot stand because of its
inconsistency with Article 2177, an enactment of the
legislature superseding the Rules of 1940."
We declare, therefore, that in so far as truck-owner Timbol is
concerned, Civil Case No. 80803 is not barred by the fact
that petitioner failed to reserve, in the criminal action, his
right to file an independent civil action based on quasidelict.
The suit against
jeep-owner-driver Salazar
The case as against jeep-owner-driver Salazar, who was
acquitted in Criminal Case No. SM-228, presents a different
picture altogether.
At the outset it should be clarified that inasmuch as civil
liability co-exists with criminal responsibility in negligence
cases, the offended party has the option between an action
for enforcement of civil liability based
on culpacriminal under Article 100 of the Revised Penal
Code, and an action for recovery of damages based
on culpa aquiliana under Article 2177 of the Civil Code. The
action for enforcement of civil liability based on culpa
criminalunder section 1 of Rule 111 of the Rules of Court is

deemed simultaneously instituted with the criminal action,


unless expressly waived or reserved for separate application
by the offended party. 8
The circumstances attendant to the criminal case yields the
conclusion that petitioner had opted to base his cause of
action against jeep-owner-driver Salazar on culpa
criminal and not on culpa aquiliana as evidenced by his
active participation and intervention in the prosecution of
the criminal suit against said Salazar. The latter's civil
liability continued to be involved in the criminal action until
its termination. Such being the case, there was no need for
petitioner to have reserved his right to file a separate civil
action as his action for civil liability was deemed impliedly
instituted in Criminal Case No. SM-228.
Neither would an independent civil action he. Noteworthy is
the basis of the acquittal of jeep-owner-driver Salazar in the
criminal case, expounded by the trial Court in this wise:
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 by the accused Rodolfo Salazar,
Considering that the collision between the
jeep driven by Rodolfo Salazar and the car
owned and driven by Edgardo Mendoza was
the result of the hitting on the rear of the jeep
by the truck driven by Freddie Montoya, this
Court behaves that accused Rodolfo Salazar
cannot be held able for the damages
sustained by Edgardo Mendoza's car. 9

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. In
other words, "the fact from which the civil might arise did
not exist. " Accordingly, inasmuch as petitioner's cause of
action as against jeep-owner-driver Salazar isex- 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 jeepowner-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.
Teehankee, (Chairman), Makasiar, Fernandez, Guerrero and
De Castro, JJ., concur.

#Footnotes
1 p. 26, Rollo
2 pp. 147-149, Ibid.
3 pp. 138-139, Ibid.
4 Decision P. 26, Ibid
5 73 PhiL 607, 620 (1942)
6 Racoma vs. Fortich, 39S CRA 521(1971)
7 52 SCRA 420 (1973)
8 Padua vs. Robles, 66 SCRA 485 (1975)
9 pp. 25-26, Rollo
10 Eleano Hill, 77 SCRA 98 (1977)

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-21438

September 28, 1966

AIR FRANCE, petitioner,


vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF
APPEALS, respondents.
Lichauco, Picazo and Agcaoili for petitioner.
Bengzon Villegas and Zarraga for respondent R. Carrascoso.

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

On appeal,2 the Court of Appeals slightly reduced the


amount of refund on Carrascoso's plane ticket from P393.20
to P383.10, and voted to affirm the appealed decision "in all
other respects", with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully
supported by the evidence of record", are:
Plaintiff, a civil engineer, was a member of a group of
48 Filipino pilgrims that left Manila for Lourdes on
March 30, 1958.
On March 28, 1958, the defendant, Air France,
through its authorized agent, Philippine Air Lines,
Inc., issued to plaintiff a "first class" round trip
airplane ticket from Manila to Rome. From Manila to
Bangkok, plaintiff travelled in "first class", but at
Bangkok, the Manager of the defendant airline forced
plaintiff to vacate the "first class" seat that he was
occupying because, in the words of the witness
Ernesto G. Cuento, there was a "white man", who,
the Manager alleged, had a "better right" to the seat.
When asked to vacate his "first class" seat, the
plaintiff, as was to be expected, refused, and told
defendant's Manager that his seat would be taken
over his dead body; a commotion ensued, and,
according to said Ernesto G. Cuento, "many of the
Filipino passengers got nervous in the tourist class;
when they found out that Mr. Carrascoso was having
a hot discussion with the white man [manager], they
came all across to Mr. Carrascoso and pacified Mr.
Carrascoso to give his seat to the white man"
(Transcript, p. 12, Hearing of May 26, 1959); and
plaintiff reluctantly gave his "first class" seat in the
plane.3

1. The trust of the relief petitioner now seeks is that we


review "all the findings" 4 of respondent Court of Appeals.
Petitioner charges that respondent court failed to make
complete findings of fact on all the issues properly laid
before it. We are asked to consider facts favorable to
petitioner, and then, to overturn the appellate court's
decision.
Coming into focus is the constitutional mandate that "No
decision shall be rendered by any court of record without
expressing therein clearly and distinctly the facts and the
law on which it is based". 5 This is echoed in the statutory
demand that a judgment determining the merits of the case
shall state "clearly and distinctly the facts and the law on
which it is based"; 6 and that "Every decision of the Court of
Appeals shall contain complete findings of fact on all issues
properly raised before it". 7
A decision with absolutely nothing to support it is a nullity. It
is open to direct attack. 8 The law, however, solely insists
that a decision state the "essential ultimate facts" upon
which the court's conclusion is drawn. 9 A court of justice is
not hidebound to write in its decision every bit and piece of
evidence 10 presented by one party and the other upon the
issues raised. Neither is it to be burdened with the obligation
"to specify in the sentence the facts"which a party
"considered as proved". 11 This is but a part of the mental
process from which the Court draws the essential ultimate
facts. A decision is not to be so clogged with details such
that prolixity, if not confusion, may result. So long as the
decision of the Court of Appeals contains the necessary
facts to warrant its conclusions, it is no error for said court
to withhold therefrom "any specific finding of facts with
respect to the evidence for the defense". Because as this
Court well observed, "There is no law that so
requires". 12 Indeed, "the mere failure to specify (in the
decision) the contentions of the appellant and the reasons
for refusing to believe them is not sufficient to hold the
same contrary to the requirements of the provisions of law

and the Constitution". It is in this setting that in Manigque, it


was held that the mere fact that the findings "were based
entirely on the evidence for the prosecution without taking
into consideration or even mentioning the appellant's side in
the controversy as shown by his own testimony", would not
vitiate the judgment. 13 If the court did not recite in the
decision the testimony of each witness for, or each item of
evidence presented by, the defeated party, it does not mean
that the court has overlooked such testimony or such item
of evidence. 14 At any rate, the legal presumptions are that
official duty has been regularly performed, and that all the
matters within an issue in a case were laid before the court
and passed upon by it. 15
Findings of fact, which the Court of Appeals is required to
make, maybe defined as "the written statement of the
ultimate facts as found by the court ... and essential to
support the decision and judgment rendered
thereon". 16They consist of the
court's "conclusions" with respect to the determinative facts
in issue". 17 A question of law, upon the other hand, has
been declared as "one which does not call for an
examination of the probative value of the evidence
presented by the parties." 18
2. By statute, "only questions of law may be raised" in an
appeal by certiorari from a judgment of the Court of
Appeals. 19 That judgment is conclusive as to the facts. It is
not appropriately the business of this Court to alter the facts
or to review the questions of fact. 20
With these guideposts, we now face the problem of whether
the findings of fact of the Court of Appeals support its
judgment.
3. Was Carrascoso entitled to the first class seat he claims?
It is conceded in all quarters that on March 28, 1958 he paid
to and received from petitioner a first class ticket. But

petitioner asserts that said ticket did not represent the true
and complete intent and agreement of the parties; that said
respondent knew that he did not have confirmed
reservations for first class on any specific flight, although he
had tourist class protection; that, accordingly, the issuance
of a first class ticket was no guarantee that he would have a
first class ride, but that such would depend upon the
availability of first class seats.
These are matters which petitioner has thoroughly
presented and discussed in its brief before the Court of
Appeals under its third assignment of error, which reads:
"The trial court erred in finding that plaintiff had confirmed
reservations for, and a right to, first class seats on the
"definite" segments of his journey, particularly that from
Saigon to Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that
the issuance of a first-class ticket was no guarantee
that the passenger to whom the same had been
issued, would be accommodated in the first-class
compartment, for as in the case of plaintiff he had
yet to make arrangements upon arrival at every
station for the necessary first-class reservation. We
are not impressed by such a reasoning. We cannot
understand how a reputable firm like defendant
airplane company could have the indiscretion to give
out tickets it never meant to honor at all. It received
the corresponding amount in payment of first-class
tickets and yet it allowed the passenger to be at the
mercy of its employees. It is more in keeping with the
ordinary course of business that the company should
know whether or riot the tickets it issues are to be
honored or not.22
Not that the Court of Appeals is alone. The trial court
similarly disposed of petitioner's contention, thus:

On the fact that plaintiff paid for, and was issued a "First
class" ticket, there can be no question. Apart from his
testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B2", "C" and "C-1", and defendant's own witness, Rafael
Altonaga, confirmed plaintiff's testimony and testified as
follows:
Q. In these tickets there are marks "O.K." From what
you know, what does this OK mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx

xxx

xxx

Defendant tried to prove by the testimony of its witnesses


Luis Zaldariaga and Rafael Altonaga that although plaintiff
paid for, and was issued a "first class" airplane ticket, the
ticket was subject to confirmation in Hongkong. The court
cannot give credit to the testimony of said witnesses. Oral
evidence cannot prevail over written evidence, and
plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie
the testimony of said witnesses, and clearly show that the
plaintiff was issued, and paid for, a first class ticket without
any reservation whatever.
Furthermore, as hereinabove shown, defendant's own
witness Rafael Altonaga testified that the reservation for a
"first class" accommodation for the plaintiff was confirmed.
The court cannot believe that after such confirmation
defendant had a verbal understanding with plaintiff that the
"first class" ticket issued to him by defendant would be
subject to confirmation in Hongkong. 23

We have heretofore adverted to the fact that except for a


slight difference of a few pesos in the amount refunded on
Carrascoso's ticket, the decision of the Court of First
Instance was affirmed by the Court of Appeals in all other
respects. We hold the view that such a judgment of
affirmance has merged the judgment of the lower
court. 24Implicit in that affirmance is a determination by the
Court of Appeals that the proceeding in the Court of First
Instance was free from prejudicial error and "all questions
raised by the assignments of error and all questions that
might have been raised are to be regarded as finally
adjudicated against the appellant". So also, the judgment
affirmed "must be regarded as free from all error". 25 We
reached this policy construction because nothing in the
decision of the Court of Appeals on this point would suggest
that its findings of fact are in any way at war with those of
the trial court. Nor was said affirmance by the Court of
Appeals upon a ground or grounds different from those
which were made the basis of the conclusions of the trial
court. 26
If, as petitioner underscores, a first-class-ticket holder is not
entitled to a first class seat, notwithstanding the fact that
seat availability in specific flights is therein confirmed, then
an air passenger is placed in the hollow of the hands of an
airline. What security then can a passenger have? It will
always be an easy matter for an airline aided by its
employees, to strike out the very stipulations in the ticket,
and say that there was a verbal agreement to the contrary.
What if the passenger had a schedule to fulfill? We have
long learned that, as a rule, a written document speaks a
uniform language; that spoken word could be notoriously
unreliable. If only to achieve stability in the relations
between passenger and air carrier, adherence to the ticket
so issued is desirable. Such is the case here. The lower
courts refused to believe the oral evidence intended to
defeat the covenants in the ticket.

The foregoing are the considerations which point to the


conclusion that there are facts upon which the Court of
Appeals predicated the finding that respondent Carrascoso
had a first class ticket and was entitled to a first class seat
at Bangkok, which is a stopover in the Saigon to Beirut leg
of the flight. 27 We perceive no "welter of distortions by the
Court of Appeals of petitioner's statement of its position", as
charged by petitioner. 28 Nor do we subscribe to petitioner's
accusation that respondent Carrascoso "surreptitiously took
a first class seat to provoke an issue". 29 And this because,
as petitioner states, Carrascoso went to see the Manager at
his office in Bangkok "to confirm my seat and because from
Saigon I was told again to see the Manager". 30 Why, then,
was he allowed to take a first class seat in the plane at
Bangkok, if he had no seat? Or, if another had a better right
to the seat?
4. Petitioner assails respondent court's award of moral
damages. Petitioner's trenchant claim is that Carrascoso's
action is planted upon breach of contract; that to authorize
an award for moral damages there must be an averment of
fraud or bad faith;31 and that the decision of the Court of
Appeals fails to make a finding of bad faith. The pivotal
allegations in the complaint bearing on this issue are:
3. That ... plaintiff entered into a contract of air
carriage with the Philippine Air Lines for a valuable
consideration, the latter acting as general agents for
and in behalf of the defendant, under which said
contract, plaintiff was entitled to, as defendant
agreed to furnish plaintiff, First Class passage on
defendant's plane during the entire duration of
plaintiff's tour of Europe with Hongkong as starting
point up to and until plaintiff's return trip to
Manila, ... .
4. That, during the first two legs of the trip from
Hongkong to Saigon and from Saigon to Bangkok,
defendant furnished to the plaintiff First Class

accommodation but only after protestations,


arguments and/or insistence were made by the
plaintiff with defendant's employees.
5. That finally, defendant failed to provide First Class
passage, but instead furnished plaintiff
only TouristClass accommodations from Bangkok to
Teheran and/or Casablanca, ... the plaintiff has
been compelledby defendant's employees to leave
the First Class accommodation berths at
Bangkok after he was already seated.
6. That consequently, the plaintiff, desiring no
repetition of the inconvenience and embarrassments
brought by defendant's breach of contract was forced
to take a Pan American World Airways plane on his
return trip from Madrid to Manila.32
xxx

xxx

xxx

2. That likewise, as a result of defendant's failure to furnish


First Class accommodations aforesaid, plaintiff suffered
inconveniences, embarrassments, and humiliations, thereby
causing plaintiff mental anguish, serious anxiety, wounded
feelings, social humiliation, and the like injury, resulting in
moral damages in the amount of P30,000.00. 33
xxx

xxx

xxx

The foregoing, in our opinion, substantially aver: First, That


there was a contract to furnish plaintiff a first class passage
covering, amongst others, the Bangkok-Teheran leg; Second,
That said contract was breached when petitioner failed to
furnish first class transportation at Bangkok; and Third, that
there was bad faith when petitioner's employee compelled
Carrascoso to leave his first class accommodation
berth "after he was already, seated" and to take a seat in
the tourist class, by reason of which he suffered

inconvenience, embarrassments and humiliations, thereby


causing him mental anguish, serious anxiety, wounded
feelings and social humiliation, resulting in moral damages.
It is true that there is no specific mention of the term bad
faith in the complaint. But, the inference of bad faith is
there, it may be drawn from the facts and circumstances set
forth therein. 34 The contract was averred to establish the
relation between the parties. But the stress of the action is
put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of
the trial, respondent's counsel placed petitioner on guard on
what Carrascoso intended to prove: That while sitting in the
plane in Bangkok, Carrascoso was oustedby petitioner's
manager who gave his seat to a white man; 35 and (b)
evidence of bad faith in the fulfillment of the contract was
presented without objection on the part of the petitioner. It
is, therefore, unnecessary to inquire as to whether or not
there is sufficient averment in the complaint to justify an
award for moral damages. Deficiency in the complaint, if
any, was cured by the evidence. An amendment thereof to
conform to the evidence is not even required. 36 On the
question of bad faith, the Court of Appeals declared:
That the plaintiff was forced out of his seat in the first
class compartment of the plane belonging to the
defendant Air France while at Bangkok, and was
transferred to the tourist class not only without his
consent but against his will, has been sufficiently
established by plaintiff in his testimony before the
court, corroborated by the corresponding entry made
by the purser of the plane in his notebook which
notation reads as follows:
"First-class passenger was forced to go to the
tourist class against his will, and that the
captain refused to intervene",

and by the testimony of an eye-witness, Ernesto G.


Cuento, who was a co-passenger. The captain of the
plane who was asked by the manager of defendant
company at Bangkok to intervene even refused to do
so. It is noteworthy that no one on behalf of
defendant ever contradicted or denied this evidence
for the plaintiff. It could have been easy for
defendant to present its manager at Bangkok to
testify at the trial of the case, or yet to secure his
disposition; but defendant did neither. 37
The Court of appeals further stated
Neither is there evidence as to whether or not a prior
reservation was made by the white man. Hence, if
the employees of the defendant at Bangkok sold a
first-class ticket to him when all the seats had
already been taken, surely the plaintiff should not
have been picked out as the one to suffer the
consequences and to be subjected to the humiliation
and indignity of being ejected from his seat in the
presence of others. Instead of explaining to the white
man the improvidence committed by defendant's
employees, the manager adopted the more drastic
step of ousting the plaintiff who was then safely
ensconsced in his rightful seat. We are strengthened
in our belief that this probably was what happened
there, by the testimony of defendant's witness Rafael
Altonaga who, when asked to explain the meaning of
the letters "O.K." appearing on the tickets of plaintiff,
said "that the space is confirmed for first class.
Likewise, Zenaida Faustino, another witness for
defendant, who was the chief of the Reservation
Office of defendant, testified as follows:
"Q How does the person in the ticket-issuing
office know what reservation the passenger
has arranged with you?

A They call us up by phone and ask for the


confirmation." (t.s.n., p. 247, June 19, 1959)
In this connection, we quote with approval what the
trial Judge has said on this point:
Why did the, using the words of witness
Ernesto G. Cuento, "white man" have a
"better right" to the seat occupied by Mr.
Carrascoso? The record is silent. The
defendant airline did not prove "any better",
nay, any right on the part of the "white man"
to the "First class" seat that the plaintiff was
occupying and for which he paid and was
issued a corresponding "first class" ticket.
If there was a justified reason for the action of
the defendant's Manager in Bangkok, the
defendant could have easily proven it by
having taken the testimony of the said
Manager by deposition, but defendant did not
do so; the presumption is that evidence
willfully suppressed would be adverse if
produced [Sec. 69, par (e), Rules of Court];
and, under the circumstances, the Court is
constrained to find, as it does find, that the
Manager of the defendant airline in Bangkok
not merely asked but threatened the plaintiff
to throw him out of the plane if he did not
give up his "first class" seat because the said
Manager wanted to accommodate, using the
words of the witness Ernesto G. Cuento, the
"white man".38
It is really correct to say that the Court of Appeals in
the quoted portion first transcribed did not use the
term "bad faith". But can it be doubted that the
recital of facts therein points to bad faith? The
manager not only prevented Carrascoso from

enjoying his right to a first class seat; worse, he


imposed his arbitrary will; he forcibly ejected him
from his seat, made him suffer the humiliation of
having to go to the tourist class compartment - just
to give way to another passenger whose right thereto
has not been established. Certainly, this is bad faith.
Unless, of course, bad faith has assumed a meaning
different from what is understood in law. For, "bad
faith" contemplates a "state of mind affirmatively
operating with furtive design or with some motive of
self-interest or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is
the express finding of bad faith in the judgment of
the Court of First Instance, thus:
The evidence shows that the defendant
violated its contract of transportation with
plaintiff in bad faith, with the aggravating
circumstances that defendant's Manager in
Bangkok went to the extent of threatening the
plaintiff in the presence of many passengers
to have him thrown out of the airplane to give
the "first class" seat that he was occupying to,
again using the words of the witness Ernesto
G. Cuento, a "white man" whom he
(defendant's Manager) wished to
accommodate, and the defendant has not
proven that this "white man" had any "better
right" to occupy the "first class" seat that the
plaintiff was occupying, duly paid for, and for
which the corresponding "first class" ticket
was issued by the defendant to him.40
5. The responsibility of an employer for the tortious act of its
employees need not be essayed. It is well settled in
law. 41 For the willful malevolent act of petitioner's manager,
petitioner, his employer, must answer. Article 21 of the Civil
Code says:

ART. 21. Any person who willfully causes loss or injury


to another in a manner that is contrary to morals,
good customs or public policy shall compensate the
latter for the damage.
In parallel circumstances, we applied the foregoing legal
precept; and, we held that upon the provisions of Article
2219 (10), Civil Code, moral damages are recoverable. 42
6. A contract to transport passengers is quite different in
kind and degree from any other contractual relation. 43And
this, because of the relation which an air-carrier sustains
with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and
advantages it offers. The contract of air carriage, therefore,
generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees, naturally, could
give ground for an action for damages.
Passengers do not contract merely for transportation. They
have a right to be treated by the carrier's employees with
kindness, respect, courtesy and due consideration. They are
entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such
employees. So it is, that any rule or discourteous conduct on
the part of employees towards a passenger gives the latter
an action for damages against the carrier. 44
Thus, "Where a steamship company 45 had accepted a
passenger's check, it was a breach of contract and a tort,
giving a right of action for its agent in the presence of third
persons to falsely notify her that the check was worthless
and demand payment under threat of ejection, though the
language used was not insulting and she was not
ejected." 46 And this, because, although the relation of
passenger and carrier is "contractual both in origin and
nature" nevertheless "the act that breaks the contract may
be also a tort". 47 And in another case, "Where a passenger
on a railroad train, when the conductor came to collect his

fare tendered him the cash fare to a point where the train
was scheduled not to stop, and told him that as soon as the
train reached such point he would pay the cash fare from
that point to destination, there was nothing in the conduct
of the passenger which justified the conductor in using
insulting language to him, as by calling him a lunatic," 48 and
the Supreme Court of South Carolina there held the carrier
liable for the mental suffering of said passenger.1awphl.nt
Petitioner's contract with Carrascoso is one attended with
public duty. The stress of Carrascoso's action as we have
said, is placed upon his wrongful expulsion. This is a
violation of public duty by the petitioner air carrier a case
of quasi-delict. Damages are proper.
7. Petitioner draws our attention to respondent Carrascoso's
testimony, thus
Q You mentioned about an attendant. Who is that
attendant and purser?
A When we left already that was already in the trip
I could not help it. So one of the flight attendants
approached me and requested from me my ticket
and I said, What for? and she said, "We will note that
you transferred to the tourist class". I said, "Nothing
of that kind. That is tantamount to accepting my
transfer." And I also said, "You are not going to note
anything there because I am protesting to this
transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?

A Well, the seats there are so close that you feel


uncomfortable and you don't have enough leg room,
I stood up and I went to the pantry that was next to
me and the purser was there. He told me, "I have
recorded the incident in my notebook." He read it
and translated it to me because it was recorded in
French "First class passenger was forced to go to
the tourist class against his will, and that the captain
refused to intervene."
Mr. VALTE
I move to strike out the last part of the testimony of
the witness because the best evidence would be the
notes. Your Honor.
COURT
I will allow that as part of his testimony.

49

Petitioner charges that the finding of the Court of Appeals


that the purser made an entry in his notebook reading "First
class passenger was forced to go to the tourist class against
his will, and that the captain refused to intervene" is
predicated upon evidence [Carrascoso's testimony above]
which is incompetent. We do not think so. The subject of
inquiry is not the entry, but the ouster incident. Testimony
on the entry does not come within the proscription of the
best evidence rule. Such testimony is admissible. 49a
Besides, from a reading of the transcript just quoted, when
the dialogue happened, the impact of the startling
occurrence was still fresh and continued to be felt. The
excitement had not as yet died down. Statements then, in
this environment, are admissible as part of the res
gestae. 50 For, they grow "out of the nervous excitement and
mental and physical condition of the declarant". 51 The
utterance of the purser regarding his entry in the notebook

was spontaneous, and related to the circumstances of the


ouster incident. Its trustworthiness has been
guaranteed. 52 It thus escapes the operation of the hearsay
rule. It forms part of the res gestae.
At all events, the entry was made outside the Philippines.
And, by an employee of petitioner. It would have been an
easy matter for petitioner to have contradicted Carrascoso's
testimony. If it were really true that no such entry was
made, the deposition of the purser could have cleared up
the matter.
We, therefore, hold that the transcribed testimony of
Carrascoso is admissible in evidence.
8. Exemplary damages are well awarded. The Civil Code
gives the court ample power to grant exemplary damages
in contracts and quasi- contracts. The only condition is that
defendant should have "acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner." 53 The manner
of ejectment of respondent Carrascoso from his first class
seat fits into this legal precept. And this, in addition to moral
damages.54
9. The right to attorney's fees is fully established. The grant
of exemplary damages justifies a similar judgment for
attorneys' fees. The least that can be said is that the courts
below felt that it is but just and equitable that attorneys'
fees be given. 55 We do not intend to break faith with the
tradition that discretion well exercised as it was here
should not be disturbed.
10. Questioned as excessive are the amounts decreed by
both the trial court and the Court of Appeals, thus:
P25,000.00 as moral damages; P10,000.00, by way of
exemplary damages, and P3,000.00 as attorneys' fees. The
task of fixing these amounts is primarily with the trial
court. 56 The Court of Appeals did not interfere with the
same. The dictates of good sense suggest that we give our

imprimatur thereto. Because, the facts and circumstances


point to the reasonableness thereof.57

Braga vs. Millora, 3 Phil. 458, 465.

10

On balance, we say that the judgment of the Court of


Appeals does not suffer from reversible error. We
accordingly vote to affirm the same. Costs against
petitioner. So ordered.

11

Aringo vs. Arena 14 Phil. 263, 266; emphasis


supplied.
12

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala,


Makalintal, Zaldivar and Castro, JJ., concur.
Bengzon, J.P., J., took no part.
Footnotes
1

Civil Case No. 38810, "Rafael Carrascoso, plaintiff,


vs. Air France, defendant," R.A., pp. 79-80.

Appendix A, petitioner's brief, pp 146-147. See also


R.A., pp. 66-67.

Reyes vs. People. 71 Phil. 598, 600.

13

People vs. Manigque 35 O.G., No. 94, pp. 1682,


1683, citing Section 133 of the Code of Civil
Procedure and Section 12, Art. VIII,
Constitution, supra.
14

Badger et al. vs. Boyd, 65 S.W. (2d), pp. 601, 610.

15

Section 5, (m) and (o), Rule 131, Rules of Court.

16

In re Good's Estate, 266 P. (2d), pp. 719, 729.

17

Badger et al. vs. Boyd, supra.

C.A.-G.R. No. 26522-R, "Rafael Carrascoso, plaintiffappellee, vs. Air France, defendant-appellant."

Id.

18
4

Petitioner's brief, p. 142.

Goduco vs. Court of Appeals, et al., L-17647,


February 28, 1964.

Section 12, Article VIII, Constitution.

19

Section 1, Rule 36, Rules of Court. See also Section


2, Rule 120, in reference to judgments in criminal
cases.
7

Sec. 4. Rule 51; Sec. 33(2), Judiciary Act of 1948, as


amended.
8

Edwards vs. McCoy, 22 Phil. 598, 601; Yangco vs.


Court of First Instance of Manila, et al., 29 Phil. 183,
191.

Section 2, Rule 45, Rules of Court, formerly Section


2, Rule 46 of the Rules of Court.
20

Medel, et al. vs. Calasanz, et al. L-14835, August


31, 1960; Astraquillo, et al. vs. Javier, et al., L-20034,
January 30, 1965.
21

22

Petitioner's brief in the Court of Appeals, pp. 82-98.

Decision of the Court of Appeals, Appendix A,


petitioner's brief, pp. 148-149.

23

R.A., pp. 67, 73.

34

24

5 B C.J.S., p. 295; 3 Am. Jur. p. 678.

25

3 Am. Jur., pp. 677-678.

Copeland vs. Dunehoo et al., 138 S.E., 267, 270.


See also 25 C.J.S., pp. 758-759; 15 Am. Jur., pp. 766767.
35

Statement of Attorney Villegas for respondent


Carrascoso in open court. Respondent's brief, p. 33.

26

See Garcia Valdez vs. Seterana Tuason, 40 Phil, 943,


951.
27

Carrascoso's ticket, according to petitioner (brief,


pp. 7-8), shows:
Segment or leg
1. Manila to
Hongkong
2. Hongkong to
Saigon
3. Saigon to Beirut
28

Carrier

Flight
No.

Date of
Departure

PAL

300A

March 30

VN(Air
693
Vietnam)
AF(Air France) 245

March 31
March 31

Petitioner's brief, p. 50; see also id., pp. 37 and 46.

29

Id., p. 103.

30

Ibid., p. 102.

36

Section 5, Rule 10, Rules of Court, in part reads:


"SEC. 5. Amendment to conform to or authorize
presentation of evidence.When issues not raised by
the pleadings are tried by express or implied consent
of the parties, they shall be treated in all respects, as
if they had been raised in the pleadings. Such
amendment of the pleadings as may be necessary to
cause them to conform to the evidence and to raise
these issues may be made upon motion of any party
at any time, even after judgment; but failure so to
amend does not affect the result of the trial of these
issues ..."; Co Tiamco vs. Diaz, etc., et al., 75 Phil.
672, 679; J.M. Tuason & Co., Inc., etc. vs. Bolanos, 95
Phil. 106, 110.
37

Decision, Court of Appeals, Appendix A of


petitioner's brief, pp. 147-148.
38

Decision of the Court of Appeals, Appendix A of


petitioner's brief, pp. 147-151.

31

Article 2220, Civil Code reads: "Willful injury to


property may be a legal ground for awarding moral
damages if the court should find that, under the
circumstances, such damages are justly due. The
same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith."

39

Words & Phrases, Perm. Ed., Vol. 5, p. 13, citing


Warfield Natural Gas Co. vs. Allen, 59 S.W. (2d) 534,
538.
40

R.A., p.74; emphasis supplied.


Article 2180, Civil Code.

32

R.A., p. 2-4; emphasis supplied.

41

33

R.A., P. 5; second cause of action.

42

Philippine Refining Co. vs. Garcia, et al., L-21871


and L-21962, September 27, 1966.

43

See Section 4, Chapter 3, Title VIII, Civil Code.

44

4 R.C.L., pp. 1174-1175.

51

IV Martin, Rules of Court in the Philippines, 1963


ed., p. 324.
52

Ibid.

53

Article 2232, Civil Code.

54

Article 2229, Civil Code.


Article 2208, (1) and (11), Civil Code.

45

An air carrier is a common carrier; and air


transportation is similar or analogous to land and
water transportation. Mendoza vs. Philippine Air
Lines, Inc., 90 Phil. 836, 841-842.
46

Austro-American S.S. Co. vs. Thomas, 248 F. 231.

55

47

Id., p. 233.

56

48

Lipman vs. Atlantic Coast Line R. Co., 93 S.E. 714,


716.

Coleongco vs. Claparols, L-18616, March 31, 1964;


Corpus vs. Cuaderno, et al., L-23721, March 31,
1965.
57

49

Petitioner's brief, pp, 104-105.

49a

V Moran, Comments on the Rules of Court, 1963


ed., p. 76.
50

Section 36, Rule 130, Rules of Court.

Cf. Yutuk vs. Manila Electric Company, L-13016,


May 31, 1961; Lopez et al. vs. Pan American World
Airways, L-22415, March 30, 1966.