Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 74761 November 6, 1990
NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (First Civil Cases Division) and
MISSIONARIES OF OUR LADY OF LA SALETTE, INC., respondents.
Lope E. Adriano for petitioners.
Padilla Law Office for private respondent.

FERNAN, C.J.:
The pivotal issue in this petition for certiorari, prohibition and mandamus is whether a
corporation, which has built through its agents, waterpaths, water conductors and contrivances
within its land, thereby causing inundation and damage to an adjacent land, can be held civilly
liable for damages under Articles 2176 and 2177 of the Civil Code on quasi-delicts such that the
resulting civil case can proceed independently of the criminal case.
The antecedent facts are as follows:
Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated
in Biga (Biluso) Silang, Cavite which is adjacent to that of private respondent, Missionaries of
Our Lady of La Salette, Inc., a religious corporation.
Within the land of respondent corporation, waterpaths and contrivances, including an artificial
lake, were constructed, which allegedly inundated and eroded petitioners' land, caused a young
man to drown, damaged petitioners' crops and plants, washed away costly fences, endangered the
lives of petitioners and their laborers during rainy and stormy seasons, and exposed plants and
other improvements to destruction.
In July 1982, petitioners instituted a criminal action, docketed as Criminal Case No. TG-907-82,
before the Regional Trial Court of Cavite, Branch 4 (Tagaytay City), against Efren Musngi,

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Orlando Sapuay and Rutillo Mallillin, officers and directors of herein respondent corporation, for
destruction by means of inundation under Article 324 of the Revised Penal Code.
Subsequently, on February 22, 1983, petitioners filed another action against respondent
corporation, this time a civil case, docketed as Civil Case No. TG-748, for damages with prayer
for the issuance of a writ of preliminary injunction before the same court. 1
On March 11, 1983, respondent corporation filed its answer to the complaint and opposition to
the issuance of a writ of preliminary injunction. Hearings were conducted including ocular
inspections on the land. However, on April 26, 1984, the trial court, acting on respondent
corporation's motion to dismiss or suspend the civil action, issued an order suspending further
hearings in Civil Case No, TG-748 until after judgment in the related Criminal Case No. TG907-82.
Resolving respondent corporation's motion to dismiss filed on June 22, 1984, the trial court
issued on August 27, 1984 the disputed order dismissing Civil Case No. TG-748 for lack of
jurisdiction, as the criminal case which was instituted ahead of the civil case was still unresolved.
Said order was anchored on the provision of Section 3 (a), Rule III of the Rules of Court which
provides that "criminal and civil actions arising from the same offense may be instituted
separately, but after the criminal action has been commenced the civil action cannot be instituted
until final judgment has been rendered in the criminal action." 2
Petitioners appealed from that order to the Intermediate Appellate Court. 3
On February 17, 1986, respondent Appellate Court, First Civil Cases Division, promulgated a
decision 4 affirming the questioned order of the trial court. 5 A motion for reconsideration filed by
petitioners was denied by the Appellate Court in its resolution dated May 19, 1986. 6
Directly at issue is the propriety of the dismissal of Civil Case No. TG-748 in accordance with
Section 3 (a) of Rule 111 of the Rules of Court. Petitioners contend that the trial court and the
Appellate Court erred in dismissing Civil Case No. TG-748 since it is predicated on a quasidelict. Petitioners have raised a valid point.
It is axiomatic that the nature of an action filed in court is determined by the facts alleged in the
complaint as constituting the cause of action. 7 The purpose of an action or suit and the law to
govern it, including the period of prescription, is to be determined not by the claim of the party
filing the action, made in his argument or brief, but rather by the complaint itself, its allegations
and prayer for relief. 8 The nature of an action is not necessarily determined or controlled by its
title or heading but the body of the pleading or complaint itself. To avoid possible denial of
substantial justice due to legal technicalities, pleadings as well as remedial laws should be

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liberally construed so that the litigants may have ample opportunity to prove their respective
claims. 9
Quoted hereunder are the pertinent portions of petitioners' complaint in Civil Case No. TG-748:
4) That within defendant's land, likewise located at Biga (Biluso), Silang, Cavite,
adjacent on the right side of the aforesaid land of plaintiffs, defendant constructed
waterpaths starting from the middle-right portion thereof leading to a big hole or
opening, also constructed by defendant, thru the lower portion of its concrete
hollow-blocks fence situated on the right side of its cemented gate fronting the
provincial highway, and connected by defendant to a man height inter-connected
cement culverts which were also constructed and lain by defendant cross-wise
beneath the tip of the said cemented gate, the left-end of the said inter-connected
culverts again connected by defendant to a big hole or opening thru the lower
portion of the same concrete hollowblocks fence on the left side of the said
cemented gate, which hole or opening is likewise connected by defendant to the
cemented mouth of a big canal, also constructed by defendant, which runs
northward towards a big hole or opening which was also built by defendant thru
the lower portion of its concrete hollow-blocks fence which separates the land of
plaintiffs from that of defendant (and which serves as the exit-point of the
floodwater coming from the land of defendant, and at the same time, the entrancepoint of the same floodwater to the land of plaintiffs, year after year, during rainy
or stormy seasons.
5) That moreover, on the middle-left portion of its land just beside the land of
plaintiffs, defendant also constructed an artificial lake, the base of which is soil,
which utilizes the water being channeled thereto from its water system thru interconnected galvanized iron pipes (No. 2) and complimented by rain water during
rainy or stormy seasons, so much so that the water below it seeps into, and the
excess water above it inundates, portions of the adjoining land of plaintiffs.
6) That as a result of the inundation brought about by defendant's aforementioned
water conductors, contrivances and manipulators, a young man was drowned to
death, while herein plaintiffs suffered and will continue to suffer, as follows:
a) Portions of the land of plaintiffs were eroded and converted to
deep, wide and long canals, such that the same can no longer be
planted to any crop or plant.
b) Costly fences constructed by plaintiffs were, on several
occasions, washed away.
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c) During rainy and stormy seasons the lives of plaintiffs and their
laborers are always in danger.
d) Plants and other improvements on other portions of the land of
plaintiffs are exposed to destruction. ... 10
A careful examination of the aforequoted complaint shows that the civil action is one under
Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are
present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or
some other person for whose acts he must respond; and (c) the connection of cause and effect
between the fault or negligence of the defendant and the damages incurred by the plaintiff. 11
Clearly, from petitioner's complaint, the waterpaths and contrivances built by respondent
corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion
of a causal connection between the act of building these waterpaths and the damage sustained by
petitioners. Such action if proven constitutes fault or negligence which may be the basis for the
recovery of damages.
In the case of Samson vs. Dionisio, 12 the Court applied Article 1902, now Article 2176 of the
Civil Code and held that "any person who without due authority constructs a bank or dike,
stopping the flow or communication between a creek or a lake and a river, thereby causing loss
and damages to a third party who, like the rest of the residents, is entitled to the use and
enjoyment of the stream or lake, shall be liable to the payment of an indemnity for loss and
damages to the injured party.
While the property involved in the cited case belonged to the public domain and the property
subject of the instant case is privately owned, the fact remains that petitioners' complaint
sufficiently alleges that petitioners have sustained and will continue to sustain damage due to the
waterpaths and contrivances built by respondent corporation. Indeed, the recitals of the
complaint, the alleged presence of damage to the petitioners, the act or omission of respondent
corporation supposedly constituting fault or negligence, and the causal connection between the
act and the damage, with no pre-existing contractual obligation between the parties make a clear
case of a quasi delict or culpa aquiliana.
It must be stressed that the use of one's property is not without limitations. Article 431 of the
Civil Code provides that "the owner of a thing cannot make use thereof in such a manner as to
injure the rights of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS.
Moreover, adjoining landowners have mutual and reciprocal duties which require that each must
use his own land in a reasonable manner so as not to infringe upon the rights and interests of
others. Although we recognize the right of an owner to build structures on his land, such
structures must be so constructed and maintained using all reasonable care so that they cannot be
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dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If
the structures cause injury or damage to an adjoining landowner or a third person, the latter can
claim indemnification for the injury or damage suffered.
Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act
or omission constituting fault or negligence, thus:
Article 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this chapter.
Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by
law" but also acts criminal in character, whether intentional and voluntary or negligent.
Consequently, a separate civil action lies against the offender in a criminal act, whether or not he
is criminally prosecuted and found guilty or acquitted, provided that the offended party is not
allowed, (if the tortfeasor is actually charged also criminally), to recover damages on both scores,
and would be entitled in such eventuality only to the bigger award of the two, assuming the
awards made in the two cases vary. 13
The distinctness of quasi-delicta is shown in Article 2177 of the Civil Code, which states:
Article 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence under
the Penal Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant.
According to the Report of the Code Commission "the foregoing provision though at first sight
startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil
negligence. The former is a violation of the criminal law, while the latter is a distinct and
independent negligence, which is a "culpa aquiliana" or quasi-delict, of ancient origin, having
always had its own foundation and individuality, separate from criminal negligence. Such
distinction between criminal negligence and "culpa extra-contractual" or "cuasi-delito" has been
sustained by decisions of the Supreme Court of Spain ... 14
In the case of Castillo vs. Court of Appeals, 15 this Court held that a quasi-delict or culpa
aquiliana is a separate legal institution under the Civil Code with a substantivity all its own, and
individuality that is entirely apart and independent from a delict or crime a distinction exists
between the civil liability arising from a crime and the responsibility for quasi-delicts or culpa
extra-contractual. The same negligence causing damages may produce civil liability arising from
a crime under the Penal Code, or create an action for quasi-delicts or culpa extra-contractual
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under the Civil Code. Therefore, the acquittal or conviction in the criminal case is entirely
irrelevant in the civil case, unless, of course, in the event of an acquittal where the court has
declared that the fact from which the civil action arose did not exist, in which case the extinction
of the criminal liability would carry with it the extinction of the civil liability.
In Azucena vs. Potenciano, 16 the Court declared that in quasi-delicts, "(t)he civil action is
entirely independent of the criminal case according to Articles 33 and 2177 of the Civil Code.
There can be no logical conclusion than this, for to subordinate the civil action contemplated in
the said articles to the result of the criminal prosecution whether it be conviction or acquittal
would render meaningless the independent character of the civil action and the clear
injunction in Article 31, that his action may proceed independently of the criminal proceedings
and regardless of the result of the latter."
WHEREFORE, the assailed decision dated February 17, 1986 of the then Intermediate Appellate
Court affirming the order of dismissal of the Regional Trial Court of Cavite, Branch 18
(Tagaytay City) dated August 17, 1984 is hereby REVERSED and SET ASIDE. The trial court is
ordered to reinstate Civil Case No. TG-748 entitled "Natividad V. Andamo and Emmanuel R.
Andamo vs. Missionaries of Our Lady of La Salette Inc." and to proceed with the hearing of the
case with dispatch. This decision is immediately executory. Costs against respondent
corporation.
SO ORDERED.
Gutierrez, Jr. and Bidin, JJ., concur.
Feliciano, J., is on leave.

DIGEST
Doctrine:
It must be stressed that the use of ones property is not without limitations. Article 431 of the
Civil Code provides that the owner of a thing cannot make use thereof in such a manner as to
injure the rights of a third person. SIC UTERE TUO UT ALIENUM NON LAEDAS.

Facts:

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Petitioner spouses Andamo owned a parcel of land situated in Biga Silang, Cavite which is
adjacent to that of private respondent corporation, Missionaries of Our lady of La Salette, Inc.
Within the land of the latter, waterpaths and contrivances, including an artificial lake, were
constructed, which allegedly inundated and eroded petitioners land, caused a young man to
drown, damagaed petitioners crops and plants, washed away costly fences, endangered the
livesofthepetitioners and their laborers and some other destructions.
This prompted petitioner spouses to file a criminal action for destruction by means of inundation
under Article 324 of the RPC and a civil action for damages.

Issue:
Whether petitioner spouses Andamo can claim damages for destruction caused by respondents
waterpaths and contrivances on the basis of Articles 2176 and 2177 of the Civil Code on quasidelicts.

Held:
Yes. A careful examination of the aforequoted complaint shows that the civil action is one under
Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are
present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or
some other person for whose acts he must respond; and (c) the connection of cause and effect
between the fault or negligence of the defendant and the damages incurred by the plaintiff. 11
Clearly, from petitioners complaint, the waterpaths and contrivances built by respondent
corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion
of a causal connection between the act of building these waterpaths and the damage sustained by
petitioners. Such action if proven constitutes fault or negligence which may be the basis for the
recovery of damages.
It must be stressed that the use of ones property is not without limitations. Article 431 of the
Civil Code provides that the owner of a thing cannot make use thereof in such a manner as to
injure the rights of a third person. SIC UTERE TUO UT ALIENUM NON LAEDAS.
Moreover, adjoining landowners have mutual and reciprocal duties which require that each must
use his own land in a reasonable manner so as not to infringe upon the rights and interests of
others. Although we recognize the right of an owner to build structures on his land, such
structures must be so constructed and maintained using all reasonable care so that they cannot be
dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If
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the structures cause injury or damage to an adjoining landowner or a third person, the latter can
claim indemnification for the injury or damage suffered.

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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
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
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brief.) In fact it is shown he was careless in employing Fontanilla who had been caught
several times for violation of the Automobile Law and speeding (Exhibit A) violation
which appeared in the records of the Bureau of Public Works available to be public and to
himself. Therefore, he must indemnify plaintiffs under the provisions of article 1903 of
the Civil Code.
The main theory of the defense is that the liability of Fausto Barredo is governed by the Revised
Penal Code; hence, his liability is only subsidiary, and as there has been no civil action against
Pedro Fontanilla, the person criminally liable, Barredo cannot be held responsible in the case.
The petitioner's brief states on page 10:
... The Court of Appeals holds that the petitioner is being sued for his failure to exercise
all the diligence of a good father of a family in the selection and supervision of Pedro
Fontanilla to prevent damages suffered by the respondents. In other words, The Court of
Appeals insists on applying in the case article 1903 of the Civil Code. Article 1903 of the
Civil Code is found in Chapter II, Title 16, Book IV of the Civil Code. This fact makes
said article to a civil liability arising from a crime as in the case at bar simply because
Chapter II of Title 16 of Book IV of the Civil Code, in the precise words of article 1903
of the Civil Code itself, is applicable only to "those (obligations) arising from wrongful
or negligent acts or commission not punishable by law.
The gist of the decision of the Court of Appeals is expressed thus:
... We cannot agree to the defendant's contention. The liability sought to be imposed upon
him in this action is not a civil obligation arising from a felony or a misdemeanor (the
crime of Pedro Fontanilla,), but an obligation imposed in article 1903 of the Civil Code
by reason of his negligence in the selection or supervision of his servant or employee.
The pivotal question in this case is whether the plaintiffs may bring this separate civil action
against Fausto Barredo, thus making him primarily and directly, responsible under article 1903
of the Civil Code as an employer of Pedro Fontanilla. The defendant maintains that Fontanilla's
negligence being punishable by the Penal Code, his (defendant's) liability as an employer is only
subsidiary, according to said Penal code, but Fontanilla has not been sued in a civil action and his
property has not been exhausted. To decide the main issue, we must cut through the tangle that
has, in the minds of many confused and jumbled together delitos and cuasi delitos, or crimes
under the Penal Code and fault or negligence under articles 1902-1910 of the Civil Code. This
should be done, because justice may be lost in a labyrinth, unless principles and remedies are
distinctly envisaged. Fortunately, we are aided in our inquiry by the luminous presentation of the
perplexing subject by renown jurists and we are likewise guided by the decisions of this Court in
previous cases as well as by the solemn clarity of the consideration in several sentences of the
Supreme Tribunal of Spain.
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Authorities support the proposition that a quasi-delict or "culpa aquiliana " is a separate legal
institution under the Civil Code with a substantivity all its own, and individuality that is entirely
apart and independent from delict or crime. Upon this principle and on the wording and spirit
article 1903 of the Civil Code, the primary and direct responsibility of employers may be safely
anchored.
The pertinent provisions of the Civil Code and Revised Penal Code are as follows:
CIVIL CODE
ART. 1089 Obligations arise from law, from contracts and quasi-contracts, and from acts
and omissions which are unlawful or in which any kind of fault or negligence intervenes.
xxx

xxx

xxx

ART. 1092. Civil obligations arising from felonies or misdemeanors shall be governed by
the provisions of the Penal Code.
ART. 1093. Those which are derived from acts or omissions in which fault or negligence,
not punishable by law, intervenes shall be subject to the provisions of Chapter II, Title
XVI of this book.
xxx

xxx

xxx

ART 1902. Any person who by an act or omission causes damage to another by his fault
or negligence shall be liable for the damage so done.
ART. 1903. The obligation imposed by the next preceding article is enforcible, not only
for personal acts and omissions, but also for those of persons for whom another is
responsible.
The father and in, case of his death or incapacity, the mother, are liable for any damages
caused by the minor children who live with them.
Guardians are liable for damages done by minors or incapacitated persons subject to their
authority and living with them.
Owners or directors of an establishment or business are equally liable for any damages
caused by their employees while engaged in the branch of the service in which employed,
or on occasion of the performance of their duties.

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The State is subject to the same liability when it acts through a special agent, but not if
the damage shall have been caused by the official upon whom properly devolved the duty
of doing the act performed, in which case the provisions of the next preceding article
shall be applicable.
Finally, teachers or directors of arts trades are liable for any damages caused by their
pupils or apprentices while they are under their custody.
The liability imposed by this article shall cease in case the persons mentioned therein
prove that they are exercised all the diligence of a good father of a family to prevent the
damage.
ART. 1904. Any person who pays for damage caused by his employees may recover from
the latter what he may have paid.
REVISED PENAL CODE
ART. 100. Civil liability of a person guilty of felony. Every person criminally liable for
a felony is also civilly liable.
ART. 101. Rules regarding civil liability in certain cases. The exemption from
criminal liability established in subdivisions 1, 2, 3, 5, and 6 of article 12 and in
subdivision 4 of article 11 of this Code does not include exemption from civil liability,
which shall be enforced to the following rules:
First. In cases of subdivision, 1, 2 and 3 of article 12 the civil liability for acts committed
by any imbecile or insane person, and by a person under nine years of age, or by one over
nine but under fifteen years of age, who has acted without discernment shall devolve
upon those having such person under their legal authority or control, unless it appears
that there was no fault or negligence on their part.
Should there be no person having such insane, imbecile or minor under his authority,
legal guardianship, or control, or if such person be insolvent, said insane, imbecile, or
minor shall respond with their own property, excepting property exempt from execution,
in accordance with the civil law.
Second. In cases falling within subdivision 4 of article 11, the person for whose benefit
the harm has been prevented shall be civilly liable in proportion to the benefit which they
may have received.
The courts shall determine, in their sound discretion, the proportionate amount for which each
one shall be liable.
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When the respective shares can not be equitably determined, even approximately, or when the
liability also attaches to the Government, or to the majority of the inhabitants of the town, and, in
all events, whenever the damage has been caused with the consent of the authorities or their
agents, indemnification shall be made in the manner prescribed by special laws or regulations.
Third. In cases falling within subdivisions 5 and 6 of article 12, the persons using violence or
causing the fear shall be primarily liable and secondarily, or, if there be no such persons, those
doing the act shall be liable, saving always to the latter that part of their property exempt from
execution.
ART. 102. Subsidiary civil liability of innkeepers, tavern keepers and proprietors of
establishment. In default of persons criminally liable, innkeepers, tavern keepers, and
any other persons or corporation shall be civilly liable for crimes committed in their
establishments, in all cases where a violation of municipal ordinances or some general or
special police regulation shall have been committed by them or their employees.
Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or
theft within their houses lodging therein, or the person, or for the payment of the value
thereof, provided that such guests shall have notified in advance the innkeeper himself, or
the person representing him, of the deposit of such goods within the inn; and shall
furthermore have followed the directions which such innkeeper or his representative may
have given them with respect to the care of and vigilance over such goods. No liability
shall attach in case of robbery with violence against or intimidation against or
intimidation of persons unless committed by the innkeeper's employees.
ART. 103. Subsidiary civil liability of other persons. The subsidiary liability
established in the next preceding article shall also apply to employers, teachers, persons,
and corporations engaged in any kind of industry for felonies committed by their
servants, pupils, workmen, apprentices, or employees in the discharge of their duties.
xxx

xxx

xxx

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

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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 cuasidelitos 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 extracontractual. The same negligent act causing damages may produce civil liability arising from a
crime under article 100 of the Revised Penal Code, or create an action for cuasi-delito or culpa
extra-contractual under articles 1902-1910 of the Civil Code.
The individuality of cuasi-delito or culpa extra-contractual looms clear and unmistakable. This
legal institution is of ancient lineage, one of its early ancestors being the Lex Aquilia in the
Roman Law. In fact, in Spanish legal terminology, this responsibility is often referred to as culpa
aquiliana. The Partidas also contributed to the genealogy of the present fault or negligence under
the Civil Code; for instance, Law 6, Title 15, of Partida 7, says: "Tenudo es de fazer emienda,
porque, como quier que el non fizo a sabiendas en 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 extracontractual: "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 cuasidelito under the Civil Code are:
1. That crimes affect the public interest, while cuasi-delitos are only of private concern.
2. That, consequently, the Penal Code punishes or corrects the criminal act, while the Civil Code,
by means of indemnification, merely repairs the damage.
3. That delicts are not as broad as quasi-delicts, because the former are punished only if there is a
penal law clearly covering them, while the latter, cuasi-delitos, include all acts in which "any
king of fault or negligence intervenes." However, it should be noted that not all violations of the
penal law produce civil responsibility, such as begging in contravention of ordinances, violation
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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.

15 | P a g e

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.

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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.

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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
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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
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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.

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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.

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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.

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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
23 | P a g e

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
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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
25 | P a g e

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.
26 | P a g e

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 fiveyear-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
27 | P a g e

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:

28 | P a g e

The master is liable for the negligent acts of his servant where he is the owner or director
of a business or enterprise and the negligent acts are committed while the servant is
engaged in his master's employment as such owner.
Another case which followed the decision in Bahia vs. Litonjua and Leynes was Cuison vs.
Norton & Harrison Co., 55 Phil., 18 (year 1930). The latter case was an action for damages
brought by Cuison for the death of his seven-year-old son Moises. The little boy was on his way
to school with his sister Marciana. Some large pieces of lumber fell from a truck and pinned the
boy underneath, instantly killing him. Two youths, Telesforo Binoya and Francisco Bautista, who
were working for Ora, an employee of defendant Norton & Harrison Co., pleaded guilty to the
crime of homicide through reckless negligence and were sentenced accordingly. This Court,
applying articles 1902 and 1903, held:
The basis of civil law liability is not respondent superior but the relationship of pater
familias. This theory bases the liability of the master ultimately on his own negligence
and not on that of his servant. (Bahia vs.Litonjua and Leynes [1915], 30 Phil., 624;
Cangco vs. Manila Railroad Co. [1918], 38 Phil., 768.)
In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517 (year 1930) the
plaintiff brought an action for damages for the demolition of its wharf, which had been struck by
the steamer Helen C belonging to the defendant. This Court held (p. 526):
The evidence shows that Captain Lasa at the time the plaintiff's wharf collapsed was a
duly licensed captain, authorized to navigate and direct a vessel of any tonnage, and that
the appellee contracted his services because of his reputation as a captain, according to F.
C. Cadwallader. This being so, we are of the opinion that the presumption of liability
against the defendant has been overcome by the exercise of the care and diligence of a
good father of a family in selecting Captain Lasa, in accordance with the doctrines laid
down by this court in the cases cited above, and the defendant is therefore absolved from
all liability.
It is, therefore, seen that the defendant's theory about his secondary liability is negatived by the
six cases above set forth. He is, on the authority of these cases, primarily and directly responsible
in damages under article 1903, in relation to article 1902, of the Civil Code.
Let us now take up the Philippine decisions relied upon by the defendant. We study first, City of
Manila vs. Manila Electric Co., 52 Phil., 586 (year 1928). A collision between a truck of the City
of Manila and a street car of the Manila Electric Co. took place on June 8, 1925. The truck was
damaged in the amount of P1,788.27. Sixto Eustaquio, the motorman, was prosecuted for the
crime of damage to property and slight injuries through reckless imprudence. He was found
guilty and sentenced to pay a fine of P900, to indemnify the City of Manila for P1,788.27, with
29 | P a g e

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.

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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.

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The legal provisions, authors, and cases already invoked should ordinarily be sufficient to
dispose of this case. But inasmuch as we are announcing doctrines that have been little
understood in the past, it might not be inappropriate to indicate their foundations.
Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple
negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or
negligence not punished by law, according to the literal import of article 1093 of the Civil Code,
the legal institution of culpa aquiliana would have very little scope and application in actual life.
Death or injury to persons and damage to property through any degree of negligence even the
slightest would have to be indemnified only through the principle of civil liability arising
from a crime. In such a state of affairs, what sphere would remain for cuasi-delito or culpa
aquiliana? We are loath to impute to the lawmaker any intention to bring about a situation so
absurd and anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the letter
that killeth rather than the spirit that giveth life. We will not use the literal meaning of the law to
smother and render almost lifeless a principle of such ancient origin and such full-grown
development as culpa aquiliana or cuasi-delito, which is conserved and made enduring in
articles 1902 to 1910 of the Spanish Civil Code.
Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt is
required, while in a civil case, preponderance of evidence is sufficient to make the defendant pay
in damages. There are numerous cases of criminal negligence which can not be shown beyond
reasonable doubt, but can be proved by a preponderance of evidence. In such cases, the
defendant can and should be made responsible in a civil action under articles 1902 to 1910 of the
Civil Code. Otherwise, there would be many instances of unvindicated civil wrongs. Ubi jus ibi
remedium.
Thirdly, to hold that there is only one way to make defendant's liability effective, and that is, to
sue the driver and exhaust his (the latter's) property first, would be tantamount to compelling the
plaintiff to follow a devious and cumbersome method of obtaining relief. True, there is such a
remedy under our laws, but there is also a more expeditious way, which is based on the primary
and direct responsibility of the defendant under article 1903 of the Civil Code. Our view of the
law is more likely to facilitate remedy for civil wrongs, because the procedure indicated by the
defendant is wasteful and productive of delay, it being a matter of common knowledge that
professional drivers of taxis and similar public conveyance usually do not have sufficient means
with which to pay damages. Why, then, should the plaintiff be required in all cases to go through
this roundabout, unnecessary, and probably useless procedure? In construing the laws, courts
have endeavored to shorten and facilitate the pathways of right and justice.
At this juncture, it should be said that the primary and direct responsibility of employers and
their presumed negligence are principles calculated to protect society. Workmen and employees
should be carefully chosen and supervised in order to avoid injury to the public. It is the masters
32 | P a g e

or employers who principally reap the profits resulting from the services of these servants and
employees. It is but right that they should guarantee the latter's careful conduct for the personnel
and patrimonial safety of others. As Theilhard has said, "they should reproach themselves, at
least, some for their weakness, others for their poor selection and all for their negligence." And
according to Manresa, "It is much more equitable and just that such responsibility should fall
upon the principal or director who could have chosen a careful and prudent employee, and not
upon the injured person who could not exercise such selection and who used such employee
because of his confidence in the principal or director." (Vol. 12, p. 622, 2nd Ed.) Many jurists
also base this primary responsibility of the employer on the principle of representation of the
principal by the agent. Thus, Oyuelos says in the work already cited (Vol. 7, p. 747) that before
third persons the employer and employee "vienen a ser como una sola personalidad, por
refundicion de la del dependiente en la de quien le emplea y utiliza." ("become as one personality
by the merging of the person of the employee in that of him who employs and utilizes him.") All
these observations acquire a peculiar force and significance when it comes to motor accidents,
and there is need of stressing and accentuating the responsibility of owners of motor vehicles.
Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil
Code on this subject, which has given rise to the overlapping or concurrence of spheres already
discussed, and for lack of understanding of the character and efficacy of the action for culpa
aquiliana, there has grown up a common practice to seek damages only by virtue of the civil
responsibility arising from a crime, forgetting that there is another remedy, which is by invoking
articles 1902-1910 of the Civil Code. Although this habitual method is allowed by our laws, it
has nevertheless rendered practically useless and nugatory the more expeditious and effective
remedy based on culpa aquiliana or culpa extra-contractual. In the present case, we are asked to
help perpetuate this usual course. But we believe it is high time we pointed out to the harm done
by such practice and to restore the principle of responsibility for fault or negligence under
articles 1902 et seq. of the Civil Code to its full rigor. It is high time we caused the stream of
quasi-delict or culpa aquiliana to flow on its own natural channel, so that its waters may no
longer be diverted into that of a crime under the Penal Code. This will, it is believed, make for
the better safeguarding of private rights because it re-establishes an ancient and additional
remedy, and for the further reason that an independent civil action, not depending on the issues,
limitations and results of a criminal prosecution, and entirely directed by the party wronged or
his counsel, is more likely to secure adequate and efficacious redress.
In view of the foregoing, the judgment of the Court of Appeals should be and is hereby affirmed,
with costs against the defendant-petitioner.
Yulo, C.J., Moran, Ozaeta and Paras, JJ., concur.

33 | P a g e

DIGEST

FACTS:
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.
DECISION OF LOWER COURTS (CRIMINAL CASE):
1. CFI- Rizal Fontanilla was convicted and sentenced to an indeterminate sentence of one year
and one day to two years ofprision correccional. The court in the criminal case granted the
petition that the right to bring a separate civil action be reserved.
2. CA: 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.
DECISION OF LOWER COURTS (CIVIL CASE):
1. CFI Manila: Fausto Barredo is liable in damages for the death of Faustino Garcia caused by
negligence of Pedro Fontanilla, a taxi driver employed by Barredo in the amount of 2,000.
2. CA: reduced the damages to 1,000.
ISSUE:
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 thus making him primarily and directly, responsible under article 1903 of the Civil Code
as an employer of Pedro Fontanilla
RULING:
Yes.
The responsibility in question is imposed on the occasion of a crime or fault, but not because of
the same, but because of thecuasi- 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.
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.

34 | P a g e

Crimes under penal code

1. affect public interest
2. Penal Code punishes or corrects the criminal act
3. not as broad as quasi-delicts because crimes are punished only if there is a penal law clearly
covering them
4. proof beyond reasonable doubt is required

Culpa aquiliana / Cuasi-delito

1. Only of private concern
2. Civil Code, by means of indemnification, merely repairs the damage (includes both reckless
and simple negligence)
3. include all acts in which any kind of fault or negligence intervenes
when there is exercise of the care and diligence of a good father of a family, the presumption is
overcome and he is relieved from liability.
4. only preponderance of evidence is required
Note: not all violations of the penal law produce civil responsibility.
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) The basis of civil law liability is not respondent
superior but the relationship ofpater familias. This theory bases the liability of the master
ultimately on his own negligence and not on that of his servant.A quasi-delict or culpa extracontractual 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.
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.
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
35 | P a g e

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."
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 acuasi-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.

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, defendants-appellees.
Cruz & Avecilla for appellants.
36 | P a g e

Marvin R. Hill & Associates for appellees.

BARREDO, J.:
Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in
Civil Case No. Q-8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to
dismiss of defendants, the complaint of plaintiffs for recovery of damages from defendant
Reginald Hill, a minor, married at the time of the occurrence, and his father, the defendant
Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald of the
son of the plaintiffs, named Agapito Elcano, of which, when criminally prosecuted, the said
accused was acquitted on the ground that his act was not criminal, because of "lack of intent to
kill, coupled with mistake."
Actually, the motion to dismiss based on the following grounds:
1. The present action is not only against but a violation of section 1, Rule 107,
which is now Rule III, of the Revised Rules of Court;
2. The action is barred by a prior judgment which is now final and or in resadjudicata;
3. The complaint had no cause of action against defendant Marvin Hill, because
he was relieved as guardian of the other defendant through emancipation by
marriage.
(P. 23, Record [p. 4, Record on Appeal.])
was first denied by the trial court. It was only upon motion for reconsideration of the defendants
of such denial, reiterating the above grounds that the following order was issued:
Considering the motion for reconsideration filed by the defendants on January 14,
1965 and after thoroughly examining the arguments therein contained, the Court
finds the same to be meritorious and well-founded.
WHEREFORE, the Order of this Court on December 8, 1964 is hereby
reconsidered by ordering the dismissal of the above entitled case.
SO ORDERED.

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Quezon City, Philippines, January 29, 1965. (p. 40, Record [p. 21, Record on
Appeal.)
Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our
resolution the following assignment of errors:
THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING
THE CLAIM OF DEFENDANTS THAT I
THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION
OF SECTION 1, RULE 107, NOW RULE 111, OF THE REVISED RULES OF
COURT, AND THAT SECTION 3(c) OF RULE 111, RULES OF COURT IS
APPLICABLE;
II
THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW
FINAL OR RES-ADJUDICTA;
III
THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE
CIVIL CODE, ARE INAPPLICABLE IN THE INSTANT CASE; and
IV
THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST
DEFENDANT MARVIN HILL BECAUSE HE WAS RELIEVED AS
GUARDIAN OF THE OTHER DEFENDANT THROUGH EMANCIPATION
BY MARRIAGE. (page 4, Record.)
It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant- appellee
Reginald Hill was prosecuted criminally in Criminal Case No. 5102 of the Court of First Instance
of Quezon City. After due trial, he was acquitted on the ground that his act was not criminal
because of "lack of intent to kill, coupled with mistake." Parenthetically, none of the parties has
favored Us with a copy of the decision of acquittal, presumably because appellants do not
dispute that such indeed was the basis stated in the court's decision. And so, when appellants
filed their complaint against appellees Reginald and his father, Atty. Marvin Hill, on account of
the death of their son, the appellees filed the motion to dismiss above-referred to.

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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 cuasidelito 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
39 | P a g e

criminally prosecuted for reckless or simple negligence and not only punished but
also made civilly liable because of his criminal negligence, nevertheless this
Court awarded damages in an independent civil action for fault or negligence
under article 1902 of the Civil Code. (p. 618, 73 Phil.) 3
The legal provisions, authors, and cases already invoked should ordinarily be
sufficient to dispose of this case. But inasmuch as we are announcing doctrines
that have been little understood, in the past, it might not he inappropriate to
indicate their foundations.
Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also
simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code
refer only to fault or negligence not punished by law, accordingly to the literal
import of article 1093 of the Civil Code, the legal institution of culpa
aquiliana would have very little scope and application in actual life. Death or
injury to persons and damage to property- through any degree of negligence even the slightest - would have to be Idemnified only through the principle of
civil liability arising from a crime. In such a state of affairs, what sphere would
remain for cuasi-delito or culpa aquiliana? We are loath to impute to the
lawmaker any intention to bring about a situation so absurd and anomalous. Nor
are we, in the interpretation of the laws, disposed to uphold the letter that killeth
rather than the spirit that giveth life. We will not use the literal meaning of the law
to smother and render almost lifeless a principle of such ancient origin and such
full-grown development as culpa aquiliana or cuasi-delito, which is conserved
and made enduring in articles 1902 to 1910 of the Spanish Civil Code.
Secondary, to find the accused guilty in a criminal case, proof of guilt beyond
reasonable doubt is required, while in a civil case, preponderance of evidence is
sufficient to make the defendant pay in damages. There are numerous cases of
criminal negligence which can not be shown beyond reasonable doubt, but can be
proved by a preponderance of evidence. In such cases, the defendant can and
should be made responsible in a civil action under articles 1902 to 1910 of the
Civil Code. Otherwise. there would be many instances of unvindicated civil
wrongs. "Ubi jus Idemnified remedium." (p. 620,73 Phil.)
Fourthly, because of the broad sweep of the provisions of both the Penal Code and
the Civil Code on this subject, which has given rise to the overlapping or
concurrence of spheres already discussed, and for lack of understanding of the
character and efficacy of the action for culpa aquiliana, there has grown up a
common practice to seek damages only by virtue of the civil responsibility arising
from a crime, forgetting that there is another remedy, which is by invoking articles
40 | P a g e

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 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 orquasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the
Spanish Civil Code." And so, because Justice Bacobo was Chairman of the Code Commission
that drafted the original text of the new Civil Code, it is to be noted that the said Code, which
was enacted after the Garcia doctrine, no longer uses the term, 11 not punishable by law,"
thereby making it clear that the concept of culpa aquiliana includes acts which are criminal in
character or in violation of the penal law, whether voluntary or matter. Thus, the corresponding
provisions to said Article 1093 in the new code, which is Article 1162, simply says, "Obligations
derived fromquasi-delicto shall be governed by the provisions of Chapter 2, Title XVII of this
Book, (on quasi-delicts) and by special laws." More precisely, a new provision, Article 2177 of
the new code provides:

41 | P a g e

ART. 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence under
the Penal Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant.
According to the Code Commission: "The foregoing provision (Article 2177) through at first
sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and
civil negligence. The former is a violation of the criminal law, while the latter is a "culpa
aquiliana" or quasi-delict, of ancient origin, having always had its own foundation and
individuality, separate from criminal negligence. Such distinction between criminal negligence
and "culpa extracontractual" or "cuasi-delito" has been sustained by decision of the Supreme
Court of Spain and maintained as clear, sound and perfectly tenable by Maura, an outstanding
Spanish jurist. Therefore, under the proposed Article 2177, acquittal from an accusation of
criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil
action, not for civil liability arising from criminal negligence, but for damages due to a quasidelict 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 liftrather 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
42 | P a g e

It results, therefore, that the acquittal of Reginal Hill in the criminal case has not extinguished his
liability for quasi-delict, hence that acquittal is not a bar to the instant action against him.
Coming now to the second issue about the effect of Reginald's emancipation by marriage on the
possible civil liability of Atty. Hill, his father, it is also Our considered opinion that the
conclusion of appellees that Atty. Hill is already free from responsibility cannot be upheld.
While it is true that parental authority is terminated upon emancipation of the child (Article 327,
Civil Code), and under Article 397, emancipation takes place "by the marriage of the minor
(child)", it is, however, also clear that pursuant to Article 399, emancipation by marriage of the
minor is not really full or absolute. Thus "(E)mancipation by marriage or by voluntary
concession shall terminate parental authority over the child's person. It shall enable the minor to
administer his property as though he were of age, but he cannot borrow money or alienate or
encumber real property without the consent of his father or mother, or guardian. He can sue and
be sued in court only with the assistance of his father, mother or guardian."
Now under Article 2180, "(T)he obligation imposed by article 2176 is demandable not only for
one's own acts or omissions, but also for those of persons for whom one is responsible. The
father and, in case of his death or incapacity, the mother, are responsible. The father and, in case
of his death or incapacity, the mother, are responsible for the damages caused by the minor
children who live in their company." In the instant case, it is not controverted that Reginald,
although married, was living with his father and getting subsistence from him at the time of the
occurrence in question. Factually, therefore, Reginald was still subservient to and dependent on
his father, a situation which is not unusual.
It must be borne in mind that, according to Manresa, the reason behind the joint and solidary
liability of presuncion with their offending child under Article 2180 is that is the obligation of the
parent to supervise their minor children in order to prevent them from causing damage to third
persons. 5 On the other hand, the clear implication of Article 399, in providing that a minor
emancipated by marriage may not, nevertheless, sue or be sued without the assistance of the
parents, is that such emancipation does not carry with it freedom to enter into transactions or do
any act that can give rise to judicial litigation. (See Manresa, Id., Vol. II, pp. 766-767, 776.) And
surely, killing someone else invites judicial action. Otherwise stated, the marriage of a minor
child does not relieve the parents of the duty to see to it that the child, while still a minor, does
not give answerable for the borrowings of money and alienation or encumbering of real property
which cannot be done by their minor married child without their consent. (Art. 399;
Manresa, supra.)
Accordingly, in Our considered view, Article 2180 applies to Atty. Hill notwithstanding the
emancipation by marriage of Reginald. However, inasmuch as it is evident that Reginald is now

43 | P a g e

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
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).

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DIGEST
Reginald Hill, a minor, caused the death of Agapito (son of Elcano). Elcano filed a criminal case
against Reginald but Reginald was acquitted for lack of intent coupled with mistake. Elcano
then filed a civil action against Reginald and his dad (Marvin Hill) for damages based on Article
2180 of the Civil Code. Hill argued that the civil action is barred by his sons acquittal in the
criminal case; and that if ever, his civil liability as a parent has been extinguished by the fact that
his son is already an emancipated minor by reason of his marriage.
ISSUE:
Whether or not Marvin Hill may be held civilly liable under Article 2180.
HELD:
Yes. The acquittal of Reginald in the criminal case does not bar the filing of a separate civil
action. 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 accused 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 extinguished even by a declaration in the criminal case that the criminal act
charged has not happened or has not been committed by the accused. Briefly stated, culpa
aquiliana includes voluntary and negligent acts which may be punishable by law.
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 Emancipation by marriage or by voluntary concession
shall terminate parental authority over the childs 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. Therefore, Article 2180 is applicable
to Marvin Hill the SC however ruled since at the time of the decision, Reginald is already of
age, Marvins liability should be subsidiary only as a matter of equity.

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Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 158995

September 26, 2006

L.G. FOODS CORPORATION and VICTORINO GABOR, Vice-President and General

Manager, petitioners,
vs.
HON. PHILADELFA B. PAGAPONG-AGRAVIADOR, in her capacity as Presiding Judge
of Regional Trial Court, Branch 43, Bacolod City, and SPS. FLORENTINO and
THERESA VALLEJERA, respondents.
DECISION
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GARCIA, J.:
Assailed and sought to be set aside in this petition for review on certiorari is the Decision1 dated
April 25, 2003 of the Court of Appeals (CA), as reiterated in its Resolution of July 10,
2003,2 in CA-G.R. SP No. 67600, affirming an earlier Order of the Regional Trial Court (RTC) of
Bacolod City, Branch 43, which denied the petitioners' motion to dismiss in Civil Case No. 9910845, an action for damages arising from a vehicular accident thereat instituted by the herein
private respondents - the spouses Florentino Vallejera and Theresa Vallejera - against the
petitioners.
The antecedent facts may be briefly stated as follows:
On February 26, 1996, Charles Vallereja, a 7-year old son of the spouses Florentino Vallejera and
Theresa Vallejera, was hit by a Ford Fiera van owned by the petitioners and driven at the time by
their employee, Vincent Norman Yeneza y Ferrer. Charles died as a result of the accident.
In time, an Information for Reckless Imprudence Resulting to Homicide was filed against the
driver before the Municipal Trial Court in Cities (MTCC), Bacolod City, docketed as Criminal
Case No. 67787, entitled People of the Philippines v. Vincent Norman Yeneza.
Unfortunately, before the trial could be concluded, the accused driver committed suicide,
evidently bothered by conscience and remorse. On account thereof, the MTCC, in its order of
September 30, 1998, dismissed the criminal case.
On June 23, 1999, in the RTC of Bacolod City, the spouses Vallejera filed a complaint3 for
damages against the petitioners as employers of the deceased driver, basically alleging that as
such employers, they failed to exercise due diligence in the selection and supervision of their
employees. Thereat docketed as Civil Case No. 99-10845, the complaint was raffled to Branch
43 of the court.
In their Answer with Compulsory Counterclaim,4 the petitioners as defendants denied liability for
the death of the Vallejeras' 7-year old son, claiming that they had exercised the required due
diligence in the selection and supervision of their employees, including the deceased driver. They
thus prayed in their Answer for the dismissal of the complaint for lack of cause of action on the
part of the Vallejera couple.
During pre-trial, the defendant petitioners insisted that their dismissal prayer be resolved. Hence,
the trial court required them to file within ten days a memorandum of authorities supportive of
their position.
Instead, however, of the required memorandum of authorities, the defendant petitioners filed
a Motion to Dismiss, principally arguing that the complaint is basically a "claim for subsidiary
47 | P a g e

liability against an employer" under the provision of Article 1035 of the Revised Penal Code.
Prescinding therefrom, they contend that there must first be a judgment of conviction against
their driver as a condition sine qua non to hold them liable. Ergo, since the driver died during the
pendency of the criminal action, the sine qua non condition for their subsidiary liability was not
fulfilled, hence the of lack of cause of action on the part of the plaintiffs. They further argue that
since the plaintiffs did not make a reservation to institute a separate action for damages when the
criminal case was filed, the damage suit in question is thereby deemed instituted with the
criminal action. which was already dismissed.
In an Order dated September 4, 2001,6 the trial court denied the motion to dismiss for lack of
merit and set the case for pre-trial. With their motion for reconsideration having been denied by
the same court in its subsequent order7 of September 26, 2001, the petitioners then went
on certiorari to the CA in CA-G.R. SP No. 67600, imputing grave abuse of discretion on the part
of the trial judge in refusing to dismiss the basic complaint for damages in Civil Case No. 9910845.
In the herein assailed decision8 dated April 25, 2003, the CA denied the petition and upheld the
trial court. Partly says the CA in its challenged issuance:
xxx

xxx

xxx

It is clear that the complaint neither represents nor implies that the responsibility charged
was the petitioner's subsidiary liability under Art. 103, Revised Penal Code. As pointed
out [by the trial court] in the Order of September 4, 2001, the complaint does not even
allege the basic elements for such a liability, like the conviction of the accused employee
and his insolvency. Truly enough, a civil action to enforce subsidiary liability separate
and distinct from the criminal action is even unnecessary.
xxx

xxx

xxx

Specifically, Civil Case No. 99-10845 exacts responsibility for fault or negligence under
Art. 2176, Civil Code, which is entirely separate and distinct from the civil liability
arising from negligence under the Revised Penal Code. Verily, therefore, the liability
under Art. 2180, Civil Code, is direct and immediate, and not conditioned upon prior
recourse against the negligent employee or prior showing of the latter's insolvency.
(Underscoring in the original.)
In time, the petitioners moved for a reconsideration but their motion was denied by the CA in its
resolution9 of July 10, 2003. Hence, the petitioners' present recourse on their submission that the
appellate court committed reversible error in upholding the trial court's denial of their motion to
dismiss.
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We DENY.
As the Court sees it, the sole issue for resolution is whether the spouses Vallejeras' cause of
action in Civil Case No. 99-10845 is founded on Article 103 of the Revised Penal Code, as
maintained by the petitioners, or derived from Article 218010 of the Civil Code, as ruled by the
two courts below.
It thus behooves us to examine the allegations of the complaint for damages in Civil Case No.
99-10845. That complaint alleged, inter alia, as follows:
xxx

xxx

xxx

3. That defendant [LG Food Corporation] is the registered owner of a Ford Fiera Van
with Plate No. NMS 881 and employer sometime February of 1996 of one Vincent
Norman Yeneza y Ferrer, a salesman of said corporation;
4. That sometime February 26, 1996 at around 2:00 P.M. at Rosario St., Bacolod City, the
minor son of said plaintiffs [now respondents], Charles Vallejera, 7 years old, was hit and
bumped by above-described vehicle then driven by said employee, Vincent Norman
Yeneza y Ferrer;
5. That the mishap was due to the gross fault and negligence of defendant's employee,
who drove said vehicle, recklessly, negligently and at a high speed without regard to
traffic condition and safety of other road users and likewise to the fault and negligence of
the owner employer, herein defendants LG Food Corporation who failed to exercise due
diligence in the selection and supervision of his employee, Vincent Norman Yeneza y
Ferrer;
6. That as a result of said incident, plaintiffs' son suffered multiple body injuries which
led to his untimely demise on that very day;
7. That a criminal case was filed against the defendant's employee, docketed as Criminal
Case No. 67787, (earlier filed as Crim. Case No. 96-17570 before RTC) before MTCBranch III, entitled "People v. Yeneza" for "Reckless Imprudence resulting to Homicide,"
but the same was dismissed because pending litigation, then remorse-stricken [accused]
committed suicide;
xxx xxx xxx
8. That the injuries and complications as well as the resultant death suffered by the late
minor Charles Vallejera were due to the negligence and imprudence of defendant's
employee;
49 | P a g e

9. That defendant LG Foods Corporation is civilly liable for the

negligence/imprudence of its employee since it failed to exercise the necessary
diligence required of a good father of the family in the selection and supervision of
his employee, Vincent Norman Yeneza y Ferrer which diligence if exercised, would
have prevented said incident. (Bracketed words and emphasis ours.)
Nothing in the foregoing allegations suggests, even remotely, that the herein petitioners are being
made to account for their subsidiary liability under Article 103 of the Revised Penal Code. As
correctly pointed out by the trial court in its order of September 4, 2001 denying the
petitioners' Motion to Dismiss, the complaint did not even aver the basic elements for the
subsidiary liability of an employer under Article 103 of the Revised Penal Code, such as the prior
conviction of the driver in the criminal case filed against him nor his insolvency.
Admittedly, the complaint did not explicitly state that plaintiff Vallejeras were suing the
defendant petitioners for damages based on quasi-delict. Clear it is, however, from the
allegations of the complaint that quasi-delict was their choice of remedy against the petitioners.
To stress, the plaintiff spouses alleged in their complaint gross fault and negligence on the part of
the driver and the failure of the petitioners, as employers, to exercise due diligence in the
selection and supervision of their employees. The spouses further alleged that the petitioners are
civilly liable for the negligence/imprudence of their driver since they failed to exercise the
necessary diligence required of a good father of the family in the selection and supervision of
their employees, which diligence, if exercised, could have prevented the vehicular accident that
resulted to the death of their 7-year old son.
Section 2, Rule 2, of the 1997 Rules of Civil Procedure defines cause of action as the "act or
omission by which a party violates the right of another." Such act or omission gives rise to an
obligation which may come from law, contracts, quasi contracts, delicts or quasi-delicts.11
Corollarily, an act or omission causing damage to another may give rise to two separate civil
liabilities on the part of the offender, i.e., 1) civil liability ex delicto;12 and 2) independent civil
liabilities, such as those (a) not arising from an act or omission complained of as felony (e.g.,
culpa contractual or obligations arising from law;13 the intentional torts;14 and culpa aquiliana15);
or (b) where the injured party is granted a right to file an action independent and distinct from the
criminal action.16 Either of these two possible liabilities may be enforced against the offender.17
Stated otherwise, victims of negligence or their heirs have a choice between an action to enforce
the civil liability arising from culpa criminal under Article 100 of the Revised Penal Code, and
an action for quasi-delict (culpa aquiliana) under Articles 2176 to 2194 of the Civil Code. If, as
here, the action chosen is for quasi-delict, the plaintiff may hold the employer liable for the
negligent act of its employee, subject to the employer's defense of exercise of the diligence of a
good father of the family. On the other hand, if the action chosen is for culpa criminal, the
50 | P a g e

plaintiff can hold the employer subsidiarily liable only upon proof of prior conviction of its
employee.18
Article 116119 of the Civil Code provides that civil obligation arising from criminal offenses shall
be governed by penal laws subject to the provision of Article 217720 and of the pertinent
provision of Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of this Book,
regulating damages. Plainly, Article 2177 provides for the alternative remedies the plaintiff may
choose from in case the obligation has the possibility of arising indirectly from the delict/crime
or directly from quasi-delict/tort. The choice is with the plaintiff who makes known his cause of
action in his initiatory pleading or complaint,21 and not with the defendant who can not ask for
the dismissal of the plaintiff's cause of action or lack of it based on the defendant's perception
that the plaintiff should have opted to file a claim under Article 103 of the Revised Penal Code.
Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is
not conditioned upon prior recourse against the negligent employee and a prior showing of
insolvency of such employee.22
Here, the complaint sufficiently alleged that the death of the couple's minor son was caused by
the negligent act of the petitioners' driver; and that the petitioners themselves were civilly liable
for the negligence of their driver for failing "to exercise the necessary diligence required of a
good father of the family in the selection and supervision of [their] employee, the driver, which
diligence, if exercised, would have prevented said accident."
Had the respondent spouses elected to sue the petitioners based on Article 103 of the Revised
Penal Code, they would have alleged that the guilt of the driver had been proven beyond
reasonable doubt; that such accused driver is insolvent; that it is the subsidiary liability of the
defendant petitioners as employers to pay for the damage done by their employee (driver) based
on the principle that every person criminally liable is also civilly liable.23Since there was no
conviction in the criminal case against the driver, precisely because death intervened prior to the
termination of the criminal proceedings, the spouses' recourse was, therefore, to sue the
petitioners for their direct and primary liability based on quasi-delict.
Besides, it is worthy to note that the petitioners, in their Answer with Compulsory CounterClaim,24 repeatedly made mention of Article 2180 of the Civil Code and anchored their defense
on their allegation that "they had exercised due diligence in the selection and supervision of
[their] employees." The Court views this defense as an admission that indeed the petitioners
acknowledged the private respondents' cause of action as one for quasi-delict under Article 2180
of the Civil Code.
All told, Civil Case No. 99-10845 is a negligence suit brought under Article 2176 - Civil Code to
recover damages primarily from the petitioners as employers responsible for their negligent
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driver pursuant to Article 2180 of the Civil Code. The obligation imposed by Article 2176 is
demandable not only for one's own acts or omissions, but also for those of persons for whom one
is responsible. Thus, the employer is liable for damages caused by his employees and household
helpers acting within the scope of their assigned tasks, even though the former is not engaged in
any business or industry.
Citing Maniago v. CA,25 petitioner would argue that Civil Case No. 99-10845 should have been
dismissed for failure of the respondent spouses to make a reservation to institute a separate civil
action for damages when the criminal case against the driver was filed.
The argument is specious.
To start with, the petitioners' reliance on Maniago is obviously misplaced. There, the civil case
was filed while the criminal case against the employee was still pending. Here, the criminal case
against the employee driver was prematurely terminated due to his death. Precisely, Civil Case
No. 99-10845 was filed by the respondent spouses because no remedy can be obtained by them
against the petitioners with the dismissal of the criminal case against their driver during the
pendency thereof.
The circumstance that no reservation to institute a separate civil action for damages was made
when the criminal case was filed is of no moment for the simple reason that the criminal case
was dismissed without any pronouncement having been made therein. In reality, therefor, it is as
if there was no criminal case to speak of in the first place. And for the petitioners to insist for the
conviction of their driver as a condition sine qua non to hold them liable for damages is to ask
for the impossible.
IN VIEW WHEREOF, the instant petition is DENIED for lack of merit.
Costs against the petitioners.
SO ORDERED.
Puno, Chairperson, Sandoval-Gutierrez, Corona, Azcuna, J.J., concur.

NO CASE DIGEST

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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-12191

October 14, 1918

JOSE CANGCO, plaintiff-appellant,

vs.
MANILA RAILROAD CO., defendant-appellee.
Ramon Sotelo for appellant.
Kincaid & Hartigan for appellee.

FISHER, J.:
At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in
the employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of
P25. He lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line
of the defendant railroad company; and in coming daily by train to the company's office in the
city of Manila where he worked, he used a pass, supplied by the company, which entitled him to
ride upon the company's trains free of charge. Upon the occasion in question, January 20, 1915,
the plaintiff arose from his seat in the second class-car where he was riding and, making, his exit
through the door, took his position upon the steps of the coach, seizing the upright guardrail with
his right hand for support.
On the side of the train where passengers alight at the San Mateo station there is a cement
platform which begins to rise with a moderate gradient some distance away from the company's
office and extends along in front of said office for a distance sufficient to cover the length of
several coaches. As the train slowed down another passenger, named Emilio Zuiga, also an
employee of the railroad company, got off the same car, alighting safely at the point where the
platform begins to rise from the level of the ground. When the train had proceeded a little farther
the plaintiff Jose Cangco stepped off also, but one or both of his feet came in contact with a sack
of watermelons with the result that his feet slipped from under him and he fell violently on the
platform. His body at once rolled from the platform and was drawn under the moving car, where
his right arm was badly crushed and lacerated. It appears that after the plaintiff alighted from the
train the car moved forward possibly six meters before it came to a full stop.
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The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was
lighted dimly by a single light located some distance away, objects on the platform where the
accident occurred were difficult to discern especially to a person emerging from a lighted car.
The explanation of the presence of a sack of melons on the platform where the plaintiff alighted
is found in the fact that it was the customary season for harvesting these melons and a large lot
had been brought to the station for the shipment to the market. They were contained in numerous
sacks which has been piled on the platform in a row one upon another. The testimony shows that
this row of sacks was so placed of melons and the edge of platform; and it is clear that the fall of
the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment he
stepped upon the platform. His statement that he failed to see these objects in the darkness is
readily to be credited.
The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the
injuries which he had received were very serious. He was therefore brought at once to a certain
hospital in the city of Manila where an examination was made and his arm was amputated. The
result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital
where a second operation was performed and the member was again amputated higher up near
the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of
medical and surgical fees and for other expenses in connection with the process of his curation.
Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of
Manila to recover damages of the defendant company, founding his action upon the negligence
of the servants and employees of the defendant in placing the sacks of melons upon the platform
and leaving them so placed as to be a menace to the security of passenger alighting from the
company's trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found
the facts substantially as above stated, and drew therefrom his conclusion to the effect that,
although negligence was attributable to the defendant by reason of the fact that the sacks of
melons were so placed as to obstruct passengers passing to and from the cars, nevertheless, the
plaintiff himself had failed to use due caution in alighting from the coach and was therefore
precluded form recovering. Judgment was accordingly entered in favor of the defendant
company, and the plaintiff appealed.
It can not be doubted that the employees of the railroad company were guilty of negligence in
piling these sacks on the platform in the manner above stated; that their presence caused the
plaintiff to fall as he alighted from the train; and that they therefore constituted an effective legal
cause of the injuries sustained by the plaintiff. It necessarily follows that the defendant company
is liable for the damage thereby occasioned unless recovery is barred by the plaintiff's own
contributory negligence. In resolving this problem it is necessary that each of these conceptions
of liability, to-wit, the primary responsibility of the defendant company and the contributory
negligence of the plaintiff should be separately examined.
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It is important to note that the foundation of the legal liability of the defendant is the contract of
carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if
at all, from the breach of that contract by reason of the failure of defendant to exercise due care
in its performance. That is to say, its liability is direct and immediate, differing essentially, in
legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed
by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in
their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations
arising ex contractu, but only to extra-contractual obligations or to use the technical form of
expression, that article relates only to culpa aquiliana and not to culpa contractual.
Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code,
clearly points out this distinction, which was also recognized by this Court in its decision in the
case of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article
1093 Manresa clearly points out the difference between "culpa, substantive and independent,
which of itself constitutes the source of an obligation between persons not formerly connected by
any legal tie" and culpa considered as an accident in the performance of an obligation already
existing . . . ."
In the Rakes case (supra) the decision of this court was made to rest squarely upon the
proposition that article 1903 of the Civil Code is not applicable to acts of negligence which
constitute the breach of a contract.
Upon this point the Court said:
The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are
understood to be those not growing out of pre-existing duties of the parties to one
another. But where relations already formed give rise to duties, whether springing from
contract or quasi-contract, then breaches of those duties are subject to article 1101, 1103,
and 1104 of the same code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at
365.)
This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in
certain cases imposed upon employers with respect to damages occasioned by the negligence of
their employees to persons to whom they are not bound by contract, is not based, as in the
English Common Law, upon the principle ofrespondeat superior if it were, the master would
be liable in every case and unconditionally but upon the principle announced in article 1902
of the Civil Code, which imposes upon all persons who by their fault or negligence, do injury to
another, the obligation of making good the damage caused. One who places a powerful
automobile in the hands of a servant whom he knows to be ignorant of the method of managing
such a vehicle, is himself guilty of an act of negligence which makes him liable for all the
consequences of his imprudence. The obligation to make good the damage arises at the very
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instant that the unskillful servant, while acting within the scope of his employment causes the
injury. The liability of the master is personal and direct. But, if the master has not been guilty of
any negligence whatever in the selection and direction of the servant, he is not liable for the acts
of the latter, whatever done within the scope of his employment or not, if the damage done by the
servant does not amount to a breach of the contract between the master and the person injured.
It is not accurate to say that proof of diligence and care in the selection and control of the servant
relieves the master from liability for the latter's acts on the contrary, that proof shows that the
responsibility has never existed. As Manresa says (vol. 8, p. 68) the liability arising from extracontractual culpa is always based upon a voluntary act or omission which, without willful intent,
but by mere negligence or inattention, has caused damage to another. A master who exercises all
possible care in the selection of his servant, taking into consideration the qualifications they
should possess for the discharge of the duties which it is his purpose to confide to them, and
directs them with equal diligence, thereby performs his duty to third persons to whom he is
bound by no contractual ties, and he incurs no liability whatever if, by reason of the negligence
of his servants, even within the scope of their employment, such third person suffer damage.
True it is that under article 1903 of the Civil Code the law creates a presumption that he has been
negligent in the selection or direction of his servant, but the presumption is rebuttable and yield
to proof of due care and diligence in this respect.
The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico
Code, has held that these articles are applicable to cases of extra-contractual culpa exclusively.
(Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)
This distinction was again made patent by this Court in its decision in the case of
Bahia vs. Litonjua and Leynes, (30 Phil. rep., 624), which was an action brought upon the theory
of the extra-contractual liability of the defendant to respond for the damage caused by the
carelessness of his employee while acting within the scope of his employment. The Court, after
citing the last paragraph of article 1903 of the Civil Code, said:
From this article two things are apparent: (1) That when an injury is caused by the
negligence of a servant or employee there instantly arises a presumption of law that there
was negligence on the part of the master or employer either in selection of the servant or
employee, or in supervision over him after the selection, or both; and (2) that that
presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It
follows necessarily that if the employer shows to the satisfaction of the court that in
selection and supervision he has exercised the care and diligence of a good father of a
family, the presumption is overcome and he is relieved from liability.
This theory bases the responsibility of the master ultimately on his own negligence and
not on that of his servant. This is the notable peculiarity of the Spanish law of negligence.
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It is, of course, in striking contrast to the American doctrine that, in relations with
strangers, the negligence of the servant in conclusively the negligence of the master.
The opinion there expressed by this Court, to the effect that in case of extracontractual culpa based upon negligence, it is necessary that there shall have been some fault
attributable to the defendant personally, and that the last paragraph of article 1903 merely
establishes a rebuttable presumption, is in complete accord with the authoritative opinion of
Manresa, who says (vol. 12, p. 611) that the liability created by article 1903 is imposed by reason
of the breach of the duties inherent in the special relations of authority or superiority existing
between the person called upon to repair the damage and the one who, by his act or omission,
was the cause of it.
On the other hand, the liability of masters and employers for the negligent acts or omissions of
their servants or agents, when such acts or omissions cause damages which amount to the breach
of a contact, is not based upon a mere presumption of the master's negligence in their selection or
control, and proof of exercise of the utmost diligence and care in this regard does not relieve the
master of his liability for the breach of his contract.
Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual
obligation has its source in the breach or omission of those mutual duties which civilized society
imposes upon it members, or which arise from these relations, other than contractual, of certain
members of society to others, generally embraced in the concept of status. The legal rights of
each member of society constitute the measure of the corresponding legal duties, mainly negative
in character, which the existence of those rights imposes upon all other members of society. The
breach of these general duties whether due to willful intent or to mere inattention, if productive
of injury, give rise to an obligation to indemnify the injured party. The fundamental distinction
between obligations of this character and those which arise from contract, rests upon the fact that
in cases of non-contractual obligation it is the wrongful or negligent act or omission itself which
creates the vinculum juris, whereas in contractual relations the vinculum exists independently of
the breach of the voluntary duty assumed by the parties when entering into the contractual
relation.
With respect to extra-contractual obligation arising from negligence, whether of act or omission,
it is competent for the legislature to elect and our Legislature has so elected whom such an
obligation is imposed is morally culpable, or, on the contrary, for reasons of public policy, to
extend that liability, without regard to the lack of moral culpability, so as to include responsibility
for the negligence of those person who acts or mission are imputable, by a legal fiction, to others
who are in a position to exercise an absolute or limited control over them. The legislature which
adopted our Civil Code has elected to limit extra-contractual liability with certain welldefined exceptions to cases in which moral culpability can be directly imputed to the persons
to be charged. This moral responsibility may consist in having failed to exercise due care in the
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selection and control of one's agents or servants, or in the control of persons who, by reason of
their status, occupy a position of dependency with respect to the person made liable for their
conduct.
The position of a natural or juridical person who has undertaken by contract to render service to
another, is wholly different from that to which article 1903 relates. When the sources of the
obligation upon which plaintiff's cause of action depends is a negligent act or omission, the
burden of proof rests upon plaintiff to prove the negligence if he does not his action fails. But
when the facts averred show a contractual undertaking by defendant for the benefit of plaintiff,
and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for
plaintiff to specify in his pleadings whether the breach of the contract is due to willful fault or to
negligence on the part of the defendant, or of his servants or agents. Proof of the contract and of
its nonperformance is sufficientprima facie to warrant a recovery.
As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor
should assume the burden of proof of its existence, as the only fact upon which his action
is based; while on the contrary, in a case of negligence which presupposes the existence
of a contractual obligation, if the creditor shows that it exists and that it has been broken,
it is not necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]).
As it is not necessary for the plaintiff in an action for the breach of a contract to show that the
breach was due to the negligent conduct of defendant or of his servants, even though such be in
fact the actual cause of the breach, it is obvious that proof on the part of defendant that the
negligence or omission of his servants or agents caused the breach of the contract would not
constitute a defense to the action. If the negligence of servants or agents could be invoked as a
means of discharging the liability arising from contract, the anomalous result would be that
person acting through the medium of agents or servants in the performance of their contracts,
would be in a better position than those acting in person. If one delivers a valuable watch to
watchmaker who contract to repair it, and the bailee, by a personal negligent act causes its
destruction, he is unquestionably liable. Would it be logical to free him from his liability for the
breach of his contract, which involves the duty to exercise due care in the preservation of the
watch, if he shows that it was his servant whose negligence caused the injury? If such a theory
could be accepted, juridical persons would enjoy practically complete immunity from damages
arising from the breach of their contracts if caused by negligent acts as such juridical persons can
of necessity only act through agents or servants, and it would no doubt be true in most instances
that reasonable care had been taken in selection and direction of such servants. If one delivers
securities to a banking corporation as collateral, and they are lost by reason of the negligence of
some clerk employed by the bank, would it be just and reasonable to permit the bank to relieve
itself of liability for the breach of its contract to return the collateral upon the payment of the
debt by proving that due care had been exercised in the selection and direction of the clerk?

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This distinction between culpa aquiliana, as the source of an obligation, and culpa
contractual as a mere incident to the performance of a contract has frequently been recognized
by the supreme court of Spain. (Sentencias of June 27, 1894; November 20, 1896; and December
13, 1896.) In the decisions of November 20, 1896, it appeared that plaintiff's action arose ex
contractu, but that defendant sought to avail himself of the provisions of article 1902 of the Civil
Code as a defense. The Spanish Supreme Court rejected defendant's contention, saying:
These are not cases of injury caused, without any pre-existing obligation, by fault or
negligence, such as those to which article 1902 of the Civil Code relates, but of damages
caused by the defendant's failure to carry out the undertakings imposed by the
contracts . . . .
A brief review of the earlier decision of this court involving the liability of employers for damage
done by the negligent acts of their servants will show that in no case has the court ever decided
that the negligence of the defendant's servants has been held to constitute a defense to an action
for damages for breach of contract.
In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the owner of a carriage
was not liable for the damages caused by the negligence of his driver. In that case the court
commented on the fact that no evidence had been adduced in the trial court that the defendant
had been negligent in the employment of the driver, or that he had any knowledge of his lack of
skill or carefulness.
In the case of Baer Senior & Co's Successors vs. Compania Maritima (6 Phil. Rep., 215), the
plaintiff sued the defendant for damages caused by the loss of a barge belonging to plaintiff
which was allowed to get adrift by the negligence of defendant's servants in the course of the
performance of a contract of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if
the "obligation of the defendant grew out of a contract made between it and the plaintiff . . . we
do not think that the provisions of articles 1902 and 1903 are applicable to the case."
In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to
recover damages for the personal injuries caused by the negligence of defendant's chauffeur
while driving defendant's automobile in which defendant was riding at the time. The court found
that the damages were caused by the negligence of the driver of the automobile, but held that the
master was not liable, although he was present at the time, saying:
. . . unless the negligent acts of the driver are continued for a length of time as to give the
owner a reasonable opportunity to observe them and to direct the driver to desist
therefrom. . . . The act complained of must be continued in the presence of the owner for
such length of time that the owner by his acquiescence, makes the driver's acts his own.

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In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil.
Rep., 8), it is true that the court rested its conclusion as to the liability of the defendant upon
article 1903, although the facts disclosed that the injury complaint of by plaintiff constituted a
breach of the duty to him arising out of the contract of transportation. The express ground of the
decision in this case was that article 1903, in dealing with the liability of a master for the
negligent acts of his servants "makes the distinction between private individuals and public
enterprise;" that as to the latter the law creates a rebuttable presumption of negligence in the
selection or direction of servants; and that in the particular case the presumption of negligence
had not been overcome.
It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as
though founded in tort rather than as based upon the breach of the contract of carriage, and an
examination of the pleadings and of the briefs shows that the questions of law were in fact
discussed upon this theory. Viewed from the standpoint of the defendant the practical result must
have been the same in any event. The proof disclosed beyond doubt that the defendant's servant
was grossly negligent and that his negligence was the proximate cause of plaintiff's injury. It also
affirmatively appeared that defendant had been guilty of negligence in its failure to exercise
proper discretion in the direction of the servant. Defendant was, therefore, liable for the injury
suffered by plaintiff, whether the breach of the duty were to be regarded as constituting culpa
aquiliana or culpa contractual. As Manresa points out (vol. 8, pp. 29 and 69) whether negligence
occurs an incident in the course of the performance of a contractual undertaking or its itself the
source of an extra-contractual undertaking obligation, its essential characteristics are identical.
There is always an act or omission productive of damage due to carelessness or inattention on the
part of the defendant. Consequently, when the court holds that a defendant is liable in damages
for having failed to exercise due care, either directly, or in failing to exercise proper care in the
selection and direction of his servants, the practical result is identical in either case. Therefore, it
follows that it is not to be inferred, because the court held in the Yamada case that defendant was
liable for the damages negligently caused by its servants to a person to whom it was bound by
contract, and made reference to the fact that the defendant was negligent in the selection and
control of its servants, that in such a case the court would have held that it would have been a
good defense to the action, if presented squarely upon the theory of the breach of the contract,
for defendant to have proved that it did in fact exercise care in the selection and control of the
servant.
The true explanation of such cases is to be found by directing the attention to the relative spheres
of contractual and extra-contractual obligations. The field of non- contractual obligation is much
more broader than that of contractual obligations, comprising, as it does, the whole extent of
juridical human relations. These two fields, figuratively speaking, concentric; that is to say, the
mere fact that a person is bound to another by contract does not relieve him from extracontractual liability to such person. When such a contractual relation exists the obligor may

60 | P a g e

break the contract under such conditions that the same act which constitutes the source of an
extra-contractual obligation had no contract existed between the parties.
The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry
him in safety and to provide safe means of entering and leaving its trains (civil code, article
1258). That duty, being contractual, was direct and immediate, and its non-performance could
not be excused by proof that the fault was morally imputable to defendant's servants.
The railroad company's defense involves the assumption that even granting that the negligent
conduct of its servants in placing an obstruction upon the platform was a breach of its contractual
obligation to maintain safe means of approaching and leaving its trains, the direct and proximate
cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait
until the train had come to a complete stop before alighting. Under the doctrine of comparative
negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's own
negligence, no liability is imposed upon defendant's negligence and plaintiff's negligence merely
contributed to his injury, the damages should be apportioned. It is, therefore, important to
ascertain if defendant was in fact guilty of negligence.
It may be admitted that had plaintiff waited until the train had come to a full stop before
alighting, the particular injury suffered by him could not have occurred. Defendant contends, and
cites many authorities in support of the contention, that it is negligence per se for a passenger to
alight from a moving train. We are not disposed to subscribe to this doctrine in its absolute form.
We are of the opinion that this proposition is too badly stated and is at variance with the
experience of every-day life. In this particular instance, that the train was barely moving when
plaintiff alighted is shown conclusively by the fact that it came to stop within six meters from the
place where he stepped from it. Thousands of person alight from trains under these conditions
every day of the year, and sustain no injury where the company has kept its platform free from
dangerous obstructions. There is no reason to believe that plaintiff would have suffered any
injury whatever in alighting as he did had it not been for defendant's negligent failure to perform
its duty to provide a safe alighting place.
We are of the opinion that the correct doctrine relating to this subject is that expressed in
Thompson's work on Negligence (vol. 3, sec. 3010) as follows:
The test by which to determine whether the passenger has been guilty of negligence in
attempting to alight from a moving railway train, is that of ordinary or reasonable care. It
is to be considered whether an ordinarily prudent person, of the age, sex and condition of
the passenger, would have acted as the passenger acted under the circumstances disclosed
by the evidence. This care has been defined to be, not the care which may or should be
used by the prudent man generally, but the care which a man of ordinary prudence would

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use under similar circumstances, to avoid injury." (Thompson, Commentaries on

Negligence, vol. 3, sec. 3010.)
Or, it we prefer to adopt the mode of exposition used by this court in Picart vs. Smith (37 Phil.
rep., 809), we may say that the test is this; Was there anything in the circumstances surrounding
the plaintiff at the time he alighted from the train which would have admonished a person of
average prudence that to get off the train under the conditions then existing was dangerous? If so,
the plaintiff should have desisted from alighting; and his failure so to desist was contributory
negligence.1awph!l.net
As the case now before us presents itself, the only fact from which a conclusion can be drawn to
the effect that plaintiff was guilty of contributory negligence is that he stepped off the car without
being able to discern clearly the condition of the platform and while the train was yet slowly
moving. In considering the situation thus presented, it should not be overlooked that the plaintiff
was, as we find, ignorant of the fact that the obstruction which was caused by the sacks of
melons piled on the platform existed; and as the defendant was bound by reason of its duty as a
public carrier to afford to its passengers facilities for safe egress from its trains, the plaintiff had
a right to assume, in the absence of some circumstance to warn him to the contrary, that the
platform was clear. The place, as we have already stated, was dark, or dimly lighted, and this also
is proof of a failure upon the part of the defendant in the performance of a duty owing by it to the
plaintiff; for if it were by any possibility concede that it had right to pile these sacks in the path
of alighting passengers, the placing of them adequately so that their presence would be revealed.
As pertinent to the question of contributory negligence on the part of the plaintiff in this case the
following circumstances are to be noted: The company's platform was constructed upon a level
higher than that of the roadbed and the surrounding ground. The distance from the steps of the
car to the spot where the alighting passenger would place his feet on the platform was thus
reduced, thereby decreasing the risk incident to stepping off. The nature of the platform,
constructed as it was of cement material, also assured to the passenger a stable and even surface
on which to alight. Furthermore, the plaintiff was possessed of the vigor and agility of young
manhood, and it was by no means so risky for him to get off while the train was yet moving as
the same act would have been in an aged or feeble person. In determining the question of
contributory negligence in performing such act that is to say, whether the passenger acted
prudently or recklessly the age, sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the passenger, and should be considered.
Women, it has been observed, as a general rule are less capable than men of alighting with safety
under such conditions, as the nature of their wearing apparel obstructs the free movement of the
limbs. Again, it may be noted that the place was perfectly familiar to the plaintiff as it was his
daily custom to get on and of the train at this station. There could, therefore, be no uncertainty in
his mind with regard either to the length of the step which he was required to take or the
character of the platform where he was alighting. Our conclusion is that the conduct of the
62 | P a g e

plaintiff in undertaking to alight while the train was yet slightly under way was not characterized
by imprudence and that therefore he was not guilty of contributory negligence.
The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a
copyist clerk, and that the injuries he has suffered have permanently disabled him from
continuing that employment. Defendant has not shown that any other gainful occupation is open
to plaintiff. His expectancy of life, according to the standard mortality tables, is approximately
thirty-three years. We are of the opinion that a fair compensation for the damage suffered by him
for his permanent disability is the sum of P2,500, and that he is also entitled to recover of
defendant the additional sum of P790.25 for medical attention, hospital services, and other
incidental expenditures connected with the treatment of his injuries.
The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of
P3,290.25, and for the costs of both instances. So ordered.
Arellano, C.J., Torres, Street and Avancea, JJ., concur.
Separate Opinions
MALCOLM, J., dissenting:
With one sentence in the majority decision, we are of full accord, namely, "It may be admitted
that had plaintiff waited until the train had come to a full stop before alighting, the particular
injury suffered by him could not have occurred." With the general rule relative to a passenger's
contributory negligence, we are likewise in full accord, namely, "An attempt to alight from a
moving train is negligence per se." Adding these two points together, should be absolved from
the complaint, and judgment affirmed.
Johnson, J., concur.

DIGEST
FACTS:

January 20, 1915 around 7 to 8 p.m.: Jose Cangco arose from his seat in the 2nd class-car
where he was riding and, making, his exit through the door, took his position upon the steps
of the coach, seizing the upright guardrail with his right hand for support

As the train slowed down another passenger and also an employee of the railroad
company Emilio Zuiga got off the same car alighting safely at the point where the platform
begins to rise from the level of the ground.

63 | P a g e

When the train had proceeded a little farther Cangco stepped off but 1 or both of his feet
came in contact with a sack of watermelons so his feet slipped from under him and he fell
violently on the platform.
His body rolled from the platform and was drawn under the moving car, where his
right arm was badly crushed and lacerated.
the car moved forward possibly 6 meters before it came to a full stop
He was bought to the hospital in the city of Manila where an examination was made and
his arm was amputated
operation was unsatisfactory so he had second operation at another hospital was
performed and the member was again amputated higher up near the shoulder expending a
total of P790.25
It is customary season for harvesting these melons and a large lot had been brought to the
station for the shipment to the market
CFI: favored Manila Railroad Co. (MRR)- Cangco had failed to use due caution in
alighting from the coach and was therefore precluded form recovering

ISSUE:
W/N MRR should be held liable.
HELD:
YES. lower court is reversed, and judgment is hereby rendered plaintiff for the sum of P3,290.25

It can not be doubted that the employees of the railroad company were guilty of
negligence. It necessarily follows that the defendant company is liable for the damage
thereby occasioned unless recovery is barred by the plaintiff's own contributory negligence.
In resolving this problem it is necessary that each of these conceptions of liability, to-wit,
the primary responsibility of the defendant company and the contributory negligence of the
plaintiff should be separately examined
Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but
only to extra-contractual obligations or to use the technical form of expression, that article
relates only to culpa aquiliana and not to culpa contractual
article 1903 of the Civil Code is not applicable to acts of negligence which
constitute the breach of a contract
two things are apparent: (1) That when an injury is caused by the negligence of a servant
or employee there instantly arises a presumption of law that there was negligence on the part
of the master or employer either in selection of the servant or employee, or in supervision
over him after the selection, or both; and (2) that that presumption is juris tantum and
not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the
employer shows to the satisfaction of the court that in selection and supervision he has
exercised the care and diligence of a good father of a family, the presumption is overcome
and he is relieved from liability.
As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor
should assume the burden of proof of its existence, as the only fact upon which his action is
based; while on the contrary, in a case of negligence which presupposes the existence of a
64 | P a g e

contractual obligation, if the creditor shows that it exists and that it has been broken, it is not
necessary for him to prove negligence.
The test by which to determine whether the passenger has been guilty of negligence in
attempting to alight from a moving railway train, is that of ordinary or reasonable care. It is
to be considered whether an ordinarily prudent person, of the age, sex and condition of the
passenger, would have acted as the passenger acted under the circumstances disclosed by the
evidence. This care has been defined to be, not the care which may or should be used by the
prudent man generally, but the care which a man of ordinary prudence would use under
similar circumstances, to avoid injury.
Women, it has been observed, as a general rule are less capable than men of
alighting with safety under such conditions, as the nature of their wearing apparel obstructs
the free movement of the limbs. Again, it may be noted that the place was perfectly familiar
to the plaintiff as it was his daily custom to get on and of the train at this station. There could,
therefore, be no uncertainty in his mind with regard either to the length of the step which he
was required to take or the character of the platform where he was alighting. Our conclusion
is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly
under way was not characterized by imprudence and that therefore he was not guilty of
contributory negligence.
at the time of the accident, was earning P25 a month as a copyist clerk, and that the
injuries he has suffered have permanently disabled him from continuing that
employment. Defendant has not shown that any other gainful occupation is open to plaintiff.
His expectancy of life, according to the standard mortality tables, is approximately thirtythree years. We are of the opinion that a fair compensation for the damage suffered by him
for his permanent disability is the sum of P2,500, and that he is also entitled to recover of
defendant the additional sum of P790.25 for medical attention, hospital services, and other
incidental expenditures connected with the treatment of his injuries.

65 | P a g e

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 141910

August 6, 2002

FGU INSURANCE CORPORATION, petitioner,

vs.
G.P. SARMIENTO TRUCKING CORPORATION and LAMBERT M.
EROLES, respondents.
VITUG, J.:
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30)
units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert
Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in Alabang,
Metro Manila, to the Central Luzon Appliances in Dagupan City. While the truck was traversing
the north diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it
collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the
cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries,
Inc., the value of the covered cargoes in the sum of P204,450.00. FGU, in turn, being the
subrogee of the rights and interests of Concepcion Industries, Inc., sought reimbursement of the
amount it had paid to the latter from GPS. Since the trucking company failed to heed the claim,
FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver
Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City. In its answer,
respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc.,
since 1988, and it was not so engaged in business as a common carrier. Respondents further
claimed that the cause of damage was purely accidental.1wphi1.nt
The issues having thus been joined, FGU presented its evidence, establishing the extent of
damage to the cargoes and the amount it had paid to the assured. GPS, instead of submitting its
evidence, filed with leave of court a motion to dismiss the complaint by way of demurrer to
evidence on the ground that petitioner had failed to prove that it was a common carrier.
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The trial court, in its order of 30 April 1996,1 granted the motion to dismiss, explaining thusly:
"Under Section 1 of Rule 131 of the Rules of Court, it is provided that Each party must
prove his own affirmative allegation, xxx.
"In the instant case, plaintiff did not present any single evidence that would prove that
defendant is a common carrier.
"x x x

xxx

xxx

"Accordingly, the application of the law on common carriers is not warranted and the
presumption of fault or negligence on the part of a common carrier in case of loss,
damage or deterioration of goods during transport under 1735 of the Civil Code is not
availing.
"Thus, the laws governing the contract between the owner of the cargo to whom the
plaintiff was subrogated and the owner of the vehicle which transports the cargo are the
laws on obligation and contract of the Civil Code as well as the law on quasi delicts.
"Under the law on obligation and contract, negligence or fault is not presumed. The law
on quasi delict provides for some presumption of negligence but only upon the
attendance of some circumstances. Thus, Article 2185 provides:
Art. 2185. Unless there is proof to the contrary, it is presumed that a person
driving a motor vehicle has been negligent if at the time of the mishap, he was
violating any traffic regulation.
"Evidence for the plaintiff shows no proof that defendant was violating any traffic
regulation. Hence, the presumption of negligence is not obtaining.
"Considering that plaintiff failed to adduce evidence that defendant is a common carrier
and defendants driver was the one negligent, defendant cannot be made liable for the
damages of the subject cargoes."2
The subsequent motion for reconsideration having been denied,3 plaintiff interposed an appeal to
the Court of Appeals, contending that the trial court had erred (a) in holding that the appellee
corporation was not a common carrier defined under the law and existing jurisprudence; and (b)
in dismissing the complaint on a demurrer to evidence.
The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. The appellate
court, in its decision of 10 June 1999,4 discoursed, among other things, that -

67 | P a g e

"x x x in order for the presumption of negligence provided for under the law governing
common carrier (Article 1735, Civil Code) to arise, the appellant must first prove that the
appellee is a common carrier. Should the appellant fail to prove that the appellee is a
common carrier, the presumption would not arise; consequently, the appellant would have
to prove that the carrier was negligent.
"x x x

xxx

xxx

"Because it is the appellant who insists that the appellees can still be considered as a
common carrier, despite its `limited clientele, (assuming it was really a common carrier),
it follows that it (appellant) has the burden of proving the same. It (plaintiff-appellant)
`must establish his case by a preponderance of evidence, which means that the evidence
as a whole adduced by one side is superior to that of the other. (Summa Insurance
Corporation vs. Court of Appeals, 243 SCRA 175). This, unfortunately, the appellant
failed to do -- hence, the dismissal of the plaintiffs complaint by the trial court is
justified.
"x x x

xxx

xxx

"Based on the foregoing disquisitions and considering the circumstances that the appellee
trucking corporation has been `its exclusive contractor, hauler since 1970, defendant has
no choice but to comply with the directive of its principal, the inevitable conclusion is
that the appellee is a private carrier.
"x x x

xxx

xxx

"x x x the lower court correctly ruled that 'the application of the law on common carriers
is not warranted and the presumption of fault or negligence on the part of a common
carrier in case of loss, damage or deterioration of good[s] during transport under [article]
1735 of the Civil Code is not availing.' x x x.
"Finally, We advert to the long established rule that conclusions and findings of fact of a
trial court are entitled to great weight on appeal and should not be disturbed unless for
strong and valid reasons."5
Petitioner's motion for reconsideration was likewise denied;6 hence, the instant petition,7 raising
the following issues:
I
WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON
CARRIER AS DEFINED UNDER THE LAW AND EXISTING JURISPRUDENCE.
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II
WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A
PRIVATE CARRIER, MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN
THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY
DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.
III
WHETHER THE DOCTRINE OF RES IPSA LOQUITUR IS APPLICABLE IN THE
INSTANT CASE.
On the first issue, the Court finds the conclusion of the trial court and the Court of Appeals to be
amply justified. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc.,
rendering or offering its services to no other individual or entity, cannot be considered a common
carrier. Common carriers are persons, corporations, firms or associations engaged in the business
of carrying or transporting passengers or goods or both, by land, water, or air, for hire or
compensation, offering their services to the public,8 whether to the public in general or to a
limited clientele in particular, but never on an exclusive basis.9 The true test of a common carrier
is the carriage of passengers or goods, providing space for those who opt to avail themselves of
its transportation service for a fee.10 Given accepted standards, GPS scarcely falls within the term
"common carrier."
The above conclusion nothwithstanding, GPS cannot escape from liability.
In culpa contractual, upon which the action of petitioner rests as being the subrogee of
Concepcion Industries, Inc., the mere proof of the existence of the contract and the failure of its
compliance justify, prima facie, a corresponding right of relief.11 The law, recognizing the
obligatory force of contracts,12 will not permit a party to be set free from liability for any kind of
misperformance of the contractual undertaking or a contravention of the tenor thereof.13 A breach
upon the contract confers upon the injured party a valid cause for recovering that which may
have been lost or suffered. The remedy serves to preserve the interests of the promisee that may
include his "expectation interest," which is his interest in having the benefit of his bargain by
being put in as good a position as he would have been in had the contract been performed, or his
"reliance interest," which is his interest in being reimbursed for loss caused by reliance on the
contract by being put in as good a position as he would have been in had the contract not been
made; or his "restitution interest," which is his interest in having restored to him any benefit that
he has conferred on the other party.14 Indeed, agreements can accomplish little, either for their
makers or for society, unless they are made the basis for action.15 The effect of every infraction is
to create a new duty, that is, to make recompense to the one who has been injured by the failure
of another to observe his contractual obligation16 unless he can show extenuating circumstances,
69 | P a g e

like proof of his exercise of due diligence (normally that of the diligence of a good father of a
family or, exceptionally by stipulation or by law such as in the case of common carriers, that of
extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing
liability.
Respondent trucking corporation recognizes the existence of a contract of carriage between it
and petitioners assured, and admits that the cargoes it has assumed to deliver have been lost or
damaged while in its custody. In such a situation, a default on, or failure of compliance with, the
obligation in this case, the delivery of the goods in its custody to the place of destination gives rise to a presumption of lack of care and corresponding liability on the part of the
contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.
Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not
himself be ordered to pay petitioner. The driver, not being a party to the contract of carriage
between petitioners principal and defendant, may not be held liable under the agreement. A
contract can only bind the parties who have entered into it or their successors who have assumed
their personality or their juridical position.17 Consonantly with the axiom res inter alios acta aliis
neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioners
civil action against the driver can only be based on culpa aquiliana, which, unlike culpa
contractual, would require the claimant for damages to prove negligence or fault on the part of
the defendant.18
A word in passing. Res ipsa loquitur, a doctrine being invoked by petitioner, holds a defendant
liable where the thing which caused the injury complained of is shown to be under the latters
management and the accident is such that, in the ordinary course of things, cannot be expected to
happen if those who have its management or control use proper care. It affords reasonable
evidence, in the absence of explanation by the defendant, that the accident arose from want of
care.19 It is not a rule of substantive law and, as such, it does not create an independent ground of
liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it
furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of
negligence. The maxim simply places on the defendant the burden of going forward with the
proof.20 Resort to the doctrine, however, may be allowed only when (a) the event is of a kind
which does not ordinarily occur in the absence of negligence; (b) other responsible causes,
including the conduct of the plaintiff and third persons, are sufficiently eliminated by the
evidence; and (c) the indicated negligence is within the scope of the defendant's duty to the
plaintiff.21 Thus, it is not applicable when an unexplained accident may be attributable to one of
several causes, for some of which the defendant could not be responsible.22
Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists
between the plaintiff and the defendant, for the inference of negligence arises from the
circumstances and nature of the occurrence and not from the nature of the relation of the
70 | P a g e

parties.23 Nevertheless, the requirement that responsible causes other than those due to
defendants conduct must first be eliminated, for the doctrine to apply, should be understood as
being confined only to cases of pure (non-contractual) tort since obviously the presumption of
negligence in culpa contractual, as previously so pointed out, immediately attaches by a failure
of the covenant or its tenor. In the case of the truck driver, whose liability in a civil action is
predicated on culpa acquiliana, while he admittedly can be said to have been in control and
management of the vehicle which figured in the accident, it is not equally shown, however, that
the accident could have been exclusively due to his negligence, a matter that can allow,
forthwith, res ipsa loquitur to work against him.
If a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant
shall be deemed to have waived the right to present evidence.24 Thus, respondent corporation
may no longer offer proof to establish that it has exercised due care in transporting the cargoes of
the assured so as to still warrant a remand of the case to the trial court.1wphi1.nt
WHEREFORE, the order, dated 30 April 1996, of the Regional Trial Court, Branch 66, of
Makati City, and the decision, dated 10 June 1999, of the Court of Appeals,
are AFFIRMED only insofar as respondent Lambert M. Eroles is concerned, but said assailed
order of the trial court and decision of the appellate court are REVERSEDas regards G.P.
Sarmiento Trucking Corporation which, instead, is hereby ordered to pay FGU Insurance
Corporation the value of the damaged and lost cargoes in the amount of P204,450.00. No costs.
SO ORDERED.
Davide, Jr., C.J., Kapunan, Ynares-Santiago, and Austria-Martinez, JJ., concur.

DIGEST
FACTS:
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of
Condura S.D. white refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central
Luzon Appliances in Dagupan City. While traversing the North Diversion Road along McArthur
highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it
to fall into a deep canal, resulting in damage to the cargoes.
FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to
Concepcion Industries, Inc.,. Being subrogee of CIIs rights & interests, FGU, in turn, sought
reimbursement from GPS. Since GPS failed to heed the claim, FGU filed a complaint for
71 | P a g e

damages & breach of contract of carriage against GPS and Eroles with the RTC. In its answer,
respondents asserted that GPS was only the exclusive hauler of CII since 1988, and it was not so
engaged in business as a common carrier. Respondents further claimed that the cause of damage
was purely accidental.
GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that
petitioner had failed to prove that it was a common carrier.
The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed the
complaint holding that GPS was not a common carrier defined under the law & existing
jurisprudence. The subsequent motion for reconsideration having been denied, FGU interposed
an appeal to the CA. The CA rejected the FGUs appeal & ruled in favor of GPS. It also denied
petitioners motion for reconsideration.
ISSUES:
1. WON GPS may be considered a common carrier as defined under the law & existing
jurisprudence.
2. WON GPS, either as a common carrier or a private carrier, may be presumed to have been
negligent when the goods it undertook to transport safely were subsequently damaged while in
its protective custody & possession.
3. Whether the doctrine of Res ipsa loquitur is applicable in the instant case.

HELD:
1. The SC finds the conclusion of the RTC and the CA to be amply justified. GPS, being an
exclusive contractor & hauler of Concepcion Industries, Inc., rendering/offering its services to no
other individual or entity, cannot be considered a common carrier. Common carriers are persons,
corporations, firms or associations engaged in the business of carrying or transporting passengers
or goods or both, by land, water, or air, for hire or compensation, offering their services to the
public, whether to the public in general or to a limited clientele in particular, but never on an
exclusive basis. The true test of a common carrier is the carriage of passengers/goods, providing
space for those who opt to avail themselves of its transportation service for a fee. Given accepted
standards, GPS scarcely falls within the term common carrier.
2. GPS cannot escape from liability. In culpa contractual, the mere proof of the existence of the
contract & the failure of its compliance justify, prima facie, a corresponding right of relief. The
law will not permit a party to be set free from liability for any kind of misperformance of the
72 | P a g e

contractual undertaking or a contravention of the tenor thereof. A breach upon the contract
confers upon the injured party a valid cause for recovering that which may have been
lost/suffered. The remedy serves to preserve the interests of the promisee that may include his:
1. Expectation interest interest in having the benefit of his bargain by being put in as good a
position as he would have been in had the contract been performed;
2. Reliance interest interest in being reimbursed for loss caused by reliance on the contract by
being put in as good a position as he would have been in had the contract not been made;
3. Restitution interest interest in having restored to him any benefit that he has conferred on the
other party.
Agreements can accomplish little unless they are made the basis for action. The effect of every
infraction is to create a new duty, or to make recompense to the one who has been injured by the
failure of another to observe his contractual obligation unless he can show extenuating
circumstances, like proof of his exercise of due diligence (normally that of the diligence of a
good father of a family or, exceptionally by stipulation or by law such as in the case of common
carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him
from his ensuing liability.
A default on, or failure of compliance with, the obligation gives rise to a presumption of lack of
care & corresponding liability on the part of the contractual obligor the burden being on him to
establish otherwise. GPS has failed to do so.
Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof of his
negligence/fault. The driver, not being a party to the contract of carriage between petitioners
principal and defendant, may not be held liable under the agreement. A contract can only bind the
parties who have entered into it or their successors who have assumed their personality/juridical
position. Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract
can neither favor nor prejudice a third person. Petitioners civil action against the driver can only
be based on culpa aquiliana, which would require the claimant for damages to prove the
defendants negligence/fault.
3. Res ipsa loquitur holds a defendant liable where the thing which caused the injury complained
of is shown to be under the latters management and the accident is such that, in the ordinary
course of things, cannot be expected to happen if those who have its management/control use
proper care. In the absence of the defendants explanation, it affords reasonable evidence that the
accident arose from want of care. It is not a rule of substantive law and does not create an
independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural
convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of
73 | P a g e

producing specific proof of negligence. The maxim simply places the burden of going forward
with the proof on the defendant.
However, resort to the doctrine may only be allowed when:
(a) the event is of a kind which does not ordinarily occur in the absence of negligence;
(b) other responsible causes are sufficiently eliminated by the evidence (includes the conduct of
the plaintiff and third persons); and
(c) the indicated negligence is within the scope of the defendants duty to the plaintiff.
Thus, it is not applicable when an unexplained accident may be attributable to one of several
causes, for some of which the defendant could not be responsible.
Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists
between the plaintiff and the defendant, for the inference of negligence arises from the
circumstances and nature of the occurrence and not from the nature of the relation of the parties.
Nevertheless, for the doctrine to apply, the requirement that responsible causes (other than those
due to defendants conduct) must first be eliminated should be understood as being confined only
to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa
contractual immediately attaches by a failure of the covenant or its tenor.
On the other hand, while the truck driver, whose civil liability is predicated on culpa acquiliana,
can be said to have been in control & management of the vehicle, it is not equally shown that the
accident has been exclusively due to his negligence. If it were so, the negligence could allow res
ipsa loquitur to properly work against him. However, clearly this is not the case.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
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G.R. No. 122039 May 31, 2000

VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO
SALVA, respondents.

MENDOZA, J.:
This is a petition for review on certiorari of the decision1 of the Court of Appeals, dated March
31, 1991, reversing the contrary decision of the Regional Trial Court, Branch 36, Dumaguete
City, and awarding damages instead to private respondent Eliza Jujeurche Sunga as plaintiff in an
action for breach of contract of carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga,
then a college freshman majoring in Physical Education at the Siliman University, took a
passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was filled to
capacity of about 24 passengers, Sunga was given by the conductor an "extension seat," a
wooden stool at the back of the door at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off.
As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as
she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva
bumped the left rear portion of the jeepney. As a result, Sunga was injured. She sustained a
fracture of the "distal third of the left tibia-fibula with severe necrosis of the underlying skin."
Closed reduction of the fracture, long leg circular casting, and case wedging were done under
sedation. Her confinement in the hospital lasted from August 23 to September 7, 1989. Her
attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon, certified she would remain on
a cast for a period of three months and would have to ambulate in crutches during said period.
On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation of
the contract of carriage by the former in failing to exercise the diligence required of him as a
common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva,
the owner of the Isuzu truck.
The lower court rendered judgment against Salva as third-party defendant and absolved Calalas
of liability, holding that it was the driver of the Isuzu truck who was responsible for the accident.
It took cognizance of another case (Civil Case No. 3490), filed by Calalas against Salva and
75 | P a g e

Verena, for quasi-delict, in which Branch 37 of the same court held Salva and his driver Verena
jointly liable to Calalas for the damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that
Sunga's cause of action was based on a contract of carriage, not quasi-delict, and that the
common carrier failed to exercise the diligence required under the Civil Code. The appellate
court dismissed the third-party complaint against Salva and adjudged Calalas liable for damages
to Sunga. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from is hereby REVERSED and SET
ASIDE, and another one is entered ordering defendant-appellee Vicente Calalas to
pay plaintiff-appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the
negligence of Verena was the proximate cause of the accident negates his liability and that to rule
otherwise would be to make the common carrier an insurer of the safety of its passengers. He
contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito.
Petitioner further assails the award of moral damages to Sunga on the ground that it is not
supported by evidence.
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the
owner of the truck liable for quasi-delict ignores the fact that she was never a party to that case
and, therefore, the principle ofres judicata does not apply.
Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil
Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the
damage caused to petitioner's jeepney. On the other hand, the issue in this case is whether
petitioner is liable on his contract of carriage. The first, quasi-delict, also known as culpa
aquiliana or culpa extra contractual, has as its source the negligence of the tortfeasor.
The second, breach of contract or culpa contractual, is premised upon the negligence in the
performance of a contractual obligation.

76 | P a g e

Consequently, in quasi-delict, the negligence or fault should be clearly established because it is

the basis of the action, whereas in breach of contract, the action can be prosecuted merely by
proving the existence of the contract and the fact that the obligor, in this case the common
carrier, failed to transport his passenger safely to his destination.2 In case of death or injuries to
passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have
been at fault or to have acted negligently unless they prove that they observed extraordinary
diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the
common carrier the burden of proof.
There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva
and his driver Verena liable for the damage to petitioner's jeepney, should be binding on Sunga. It
is immaterial that the proximate cause of the collision between the jeepney and the truck was the
negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for
quasi-delict, not in actions involving breach of contract. The doctrine is a device for imputing
liability to a person where there is no relation between him and another party. In such a case, the
obligation is created by law itself. But, where there is a pre-existing contractual relation between
the parties, it is the parties themselves who create the obligation, and the function of the law is
merely to regulate the relation thus created. Insofar as contracts of carriage are concerned, some
aspects regulated by the Civil Code are those respecting the diligence required of common
carriers with regard to the safety of passengers as well as the presumption of negligence in cases
of death or injury to passengers. It provides:
Art. 1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers transported by them, according to
all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed
in articles 1734, 1735, and 1746, Nos. 5, 6, and 7, while the extraordinary
diligence for the safety of the passengers is further set forth in articles 1755 and
1756.
Art. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances.
Art. 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that
they observed extraordinary diligence as prescribed by articles 1733 and 1755.
In the case at bar, upon the happening of the accident, the presumption of negligence at once
arose, and it became the duty of petitioner to prove that he had to observe extraordinary diligence
in the care of his passengers.
Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could
provide, using the utmost diligence of very cautious persons, with due regard for all the
77 | P a g e

circumstances" as required by Art. 1755? We do not think so. Several factors militate against
petitioner's contention.
First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion
being exposed about two meters from the broad shoulders of the highway, and facing the middle
of the highway in a diagonal angle. This is a violation of the R.A. No. 4136, as amended, or the
Land Transportation and Traffic Code, which provides:
Sec. 54. Obstruction of Traffic. No person shall drive his motor vehicle in such
a manner as to obstruct or impede the passage of any vehicle, nor, while
discharging or taking on passengers or loading or unloading freight, obstruct the
free passage of other vehicles on the highway.
Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating
capacity of the jeepney, a violation of 32(a) of the same law. It provides:
Exceeding registered capacity. No person operating any motor vehicle shall
allow more passengers or more freight or cargo in his vehicle than its registered
capacity.
The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to
which the other passengers were exposed. Therefore, not only was petitioner unable to overcome
the presumption of negligence imposed on him for the injury sustained by Sunga, but also, the
evidence shows he was actually negligent in transporting passengers.
We find it hard to give serious thought to petitioner's contention that Sunga's taking an
"extension seat" amounted to an implied assumption of risk. It is akin to arguing that the injuries
to the many victims of the tragedies in our seas should not be compensated merely because those
passengers assumed a greater risk of drowning by boarding an overloaded ferry. This is also true
of petitioner's contention that the jeepney being bumped while it was improperly parked
constitutes caso fortuito. A caso fortuito is an event which could not be foreseen, or which,
though foreseen, was inevitable.3 This requires that the following requirements be present: (a) the
cause of the breach is independent of the debtor's will; (b) the event is unforeseeable or
unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill his obligation
in a normal manner, and (d) the debtor did not take part in causing the injury to the
creditor.4 Petitioner should have foreseen the danger of parking his jeepney with its body
protruding two meters into the highway.
Finally, petitioner challenges the award of moral damages alleging that it is excessive and
without basis in law. We find this contention well taken.
In awarding moral damages, the Court of Appeals stated:
Plaintiff-appellant at the time of the accident was a first-year college student in
that school year 1989-1990 at the Silliman University, majoring in Physical
Education. Because of the injury, she was not able to enroll in the second semester
78 | P a g e

of that school year. She testified that she had no more intention of continuing with
her schooling, because she could not walk and decided not to pursue her degree,
major in Physical Education "because of my leg which has a defect already."
Plaintiff-appellant likewise testified that even while she was under confinement,
she cried in pain because of her injured left foot. As a result of her injury, the
Orthopedic Surgeon also certified that she has "residual bowing of the fracture
side." She likewise decided not to further pursue Physical Education as her major
subject, because "my left leg . . . has a defect already."
Those are her physical pains and moral sufferings, the inevitable bedfellows of the
injuries that she suffered. Under Article 2219 of the Civil Code, she is entitled to
recover moral damages in the sum of P50,000.00, which is fair, just and
reasonable.
As a general rule, moral damages are not recoverable in actions for damages predicated on a
breach of contract for it is not one of the items enumerated under Art. 2219 of the Civil
Code.5 As an exception, such damages are recoverable: (1) in cases in which the mishap results
in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil
Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as provided in Art.
2220.6
In this case, there is no legal basis for awarding moral damages since there was no factual
finding by the appellate court that petitioner acted in bad faith in the performance of the contract
of carriage. Sunga's contention that petitioner's admission in open court that the driver of the
jeepney failed to assist her in going to a nearby hospital cannot be construed as an admission of
bad faith. The fact that it was the driver of the Isuzu truck who took her to the hospital does not
imply that petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is
merely implied recognition by Verena that he was the one at fault for the accident.
WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its resolution,
dated September 11, 1995, are AFFIRMED, with the MODIFICATION that the award of moral
damages is DELETED.
SO ORDERED.
Bellosillo and Buena, JJ., concur.
Quisumbing and De Leon, Jr., JJ., are on leave.

DIGEST
Facts:

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At 10 o'clock in the morning of August 23, 1989, Sunga, then a college freshman , took a
passenger jeepney owned and operated by Calalas. As the jeepney was filled to capacity of about
24 passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the back
of the door at the rear end of the vehicle. On the way to Poblacion Sibulan, Negros Occidental,
the jeepney stopped to let a passenger off. As she was seated at the rear of the vehicle, Sunga
gave way to the outgoing passenger" Just as she was doing so, an Isuzu truck driven by Verena
and owned by Salva bumped the left rear portion of the jeepney, injuring Sunga necessitating her
confinement and to ambulate in crutches for 3 months" Sunga filed a complaint for damages
against Calalas, alleging violation of the contract of carriage, to which Calalas in turn filed a
third-party complaint against Salva, the owner of the Isuzu truck". The lower court rendered
judgment against Salva as third-party defendant and absolved Calalas of liability, holding that it
was the driver of the Isuzu truck who was responsible for the accident, taking cognizance of
another case (Civil Case No. 3490), filed by Calalas against Salva and Verena, for quasi-delict, in
which Branch 37 of the same court held Salva and his driver Verena jointly liable to Calalas for
the damage to his jeepney " On appeal, the CA reversed on the ground that Sunga's cause of
action was based on a contract of carriage, not quasi-delict, and that the common carrier failed to
exercise the diligence required under the Civil Code, and dismissed the third-party complaint
against Salva and adjudged Calalas liable for damages to Sunga
Issue:
WON Calalas is liable for damages
Held:
Yes
Ratio:
The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to
which the other passengers were exposed. Therefore, not only was Calalas unable to overcome
the presumption of negligence imposed on him for the injury sustained by Sunga, but also, the
evidence shows he was actually negligent in transporting passengers

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

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G.R. No. L-12163

March 4, 1959

PAZ FORES, petitioner,

vs.
IRENEO MIRANDA, respondent.
Alberto O. Villaraza for petitioner.
Almazan and Ereneta for respondent.
REYES, J.B.L., J.:
Defendant-petitioner Paz Fores brings this petition for review of the decision of the Court of
Appeals (C.A. Case No. 1437-R) awarding to the plaintiff-respondent Ireneo Miranda the sums
of P5,000 by way of actual damages and counsel fees, and P10,000 as moral damages, with
costs.
Respondent was one of the passengers on a jeepney driven by Eugenio Luga. While the vehicle
was descending the Sta. Mesa bridge at an excessive rate of speed, the driver lost control thereof,
causing it to swerve and to his the bridge wall. The accident occurred on the morning of March
22, 1953. Five of the passengers were injured, including the respondent who suffered a fracture
of the upper right humerus. He was taken to the National Orthopedic Hospital for treatment, and
later was subjected to a series of operations; the first on May 23, 1953, when wire loops were
wound around the broken bones and screwed into place; a second, effected to insert a metal
splint, and a third one to remove such splint. At the time of the trial, it appears that respondent
had not yet recovered the use of his right arm.
The driver was charged with serious physical injuries through reckless imprudence, and upon
interposing a plea of guilty was sentenced accordingly.
The contention that the evidence did not sufficiently establish the identity of the vehicle as the
belonging to the petitioner was rejected by the appellate court which found, among other things,
that is carried plate No. TPU-1163, SERIES OF 1952, Quezon City, registered in the name of
Paz Fores, (appellant herein) and that the vehicle even had the name of "Doa Paz" painted
below its wind shield. No evidence to the contrary was introduced by the petitioner, who relied
on an attack upon the credibility of the two policemen who went to the scene of the incident.
A point to be further remarked is petitioner's contention that on March 21, 1953, or one day
before the accident happened, she allegedly sold the passenger jeep that was involved therein to a
certain Carmen Sackerman.
The initial problem raised by the petitioner in this appeal may be formulated thus "Is the
approval of the Public Service Commission necessary for the sale of a public service
81 | P a g e

vehicle even without conveying therewith the authority to operate the same?" Assuming
the dubious sale to be a fact, the court of Appeals answered the query in the affirmative. The
ruling should be upheld.
Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:
Sec. 20. Subject to established limitations and exceptions and saving provisions to the
contrary, it shall be unlawful for any public service or for the owner, lessee or operator
thereof, without the previous approval and authority of the Commission previously had

xxx

xxx

xxx

(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates,
privileges, or rights, or any part thereof; or merge or consolidate its property, franchises,
privileges or rights, or any part thereof, with those of any other public service. The
approval herein required shall be given, after notice to the public and after hearing the
persons interested at a public hearing, if it be shown that there are just and reasonable
grounds for making the mortgage or encumbrance, for liabilities of more than one year
maturity, or the sale, alienation, lease, merger, or consolidation to be approved and that
the same are not detrimental to the public interest, and in case of a sale, the date on which
the same is to be consummated shall be fixed in the order of
approval: Provided, however, That nothing herein contained shall be construed to prevent
the transaction from being negotiated or completed before its approval or to prevent the
sale, alienation, or lease by any public service of any of its property in the ordinary
course of its business.
Interpreting the effects of this particular provision of law, we have held in the recent cases
of Montoya vs. Ignacio,* 50 Off. Gaz. No. 1, p. 108; Timbol vs. Osias, et al., G. R. No. L-7547,
April 30, 1955, and Medina vs. Cresencia, 99 Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that a
transfer contemplated by the law, if made without the requisite approval of the Public Service
Commission, is not effective and binding in so far as the responsibility of the grantee under the
franchise in relation to the public is concerned. Petitioner assails, however, the applicability of
these rulings to the instant case, contending that in those cases, the operator did not convey, by
lease or by sale, the vehicle independently of his rights under the franchise. This line of
reasoning does not find support in the law. The provisions of the statute are clear and prohibit the
sale, alienation, lease, or encumbrance of the property, franchise, certificate, privileges or rights,
or any part thereof of the owner or operator of the public service Commission. The law was
designed primarily for the protection of the public interest; and until the approval of the public
Service Commission is obtained the vehicle is, in contemplation of law, still under the service of

82 | P a g e

the owner or operator standing in the records of the Commission which the public has a right to
rely upon.
The proviso contained in the aforequoted law, to the effect that nothing therein shall be construed
"to prevent the transaction from being negotiated or complete before its approval", means only
that the sale without the required approval is still valid and binding between the parties (Montoya
vs. Ignacio, supra). The phrase "in the ordinary course of its business" found in the
other proviso" or to prevent the sale, alienation, or lease by any public service of any of its
property". As correctly observed by the lower court, could not have been intended to include the
sale of the vehicle itself, but at most may refer only to such property that may be conceivably
disposed or by the carrier in the ordinary course of its business, like junked equipment or spare
parts.
The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is enlightening; and there, it
was held:
Under the law, the Public Service Commission has not only general supervision and
regulation of, but also full jurisdiction and control over all public utilities including the
property, equipment and facilities used, and the property rights and franchise enjoyed by
every individual and company engaged i the performance of a public service in the sense
this phrase is used in the Public Service Act or Act No. 3108). By virtue of the provisions
of said Act, motor vehicles used in the performance of a service, as the transportation of
freightfrom one point to another, have to this date been considered and they cannot but
be so considered-public service property; and, by reason of its own nature, a TH truck,
which means that the operator thereof places it at the disposal of anybody who is willing
to pay a rental of its use, when he desires to transfer or carry his effects, merchandise or
any other cargo from one place to another, is necessarily a public service property.
(Emphasis supplied)
Of course, this court has held in the case of Bachrach Motor co. vs. Zamboanga Transportation
Co., 52 Phil., 244, that there may be a nunc pro tunc authorization which has the effect of having
the approval retroact to the date of the transfer; but such outcome cannot prejudice rights
intervening in the meantime. It appears that no such approval was given by the Commission
before the accident occurred.
The P10,000 actual damages awarded by the Court of First Instance of Manila were reduced by
the Court of Appeals to only P2,000, on the ground that a review of the records failed to disclose
a sufficient basis for the trial court's appraisal, since the only evidence presented on this point
consisted of respondent's bare statement that his expenses and loss of income amounted to
P20,000. On the other hand, "it cannot be denied," the lower court said, "that appellee
(respondent) did incur expenses"' It is well to note further that respondent was a painter by
83 | P a g e

profession and a professor of Fine Arts, so that the amount of P2,000 awarded cannot be said to
be excessive (see Arts. 2224 and 2225, Civil Code of the Philippines). The attorney's fees in the
sum of P3,000 also awarded to the respondent are assailed on the ground that the Court of First
Instance did not provided for the same, and since no appeal was interposed by said respondent, it
was allegedly error for the Court of Appeals to award themmotu proprio. Petitioner fails to note
that attorney's fees are included in the concept of actual damages under the Civil Code and may
be awarded whenever the court deems it is just and equitable (Art. 2208, Civil Code of the
Philippines). We see no reason to alter these awards.
Anent the moral damages ordered to be paid to the respondent, the same must be discarded. We
have repeatedly ruled (Cachero vs. Manila Yellow Taxicab Co. Inc., 101 Phil., 523; 54 Off. Gaz.,
[26], 6599; Necesito, et al vs. Paras, 104 Phil., 75; 56 Off. Gaz., [23] 4023, that moral damages
are not recoverable in damage actions predicted on a breach of the contract of transportation, in
view of Articles 2219 and 2220 of the new Civil Code, which provide as follows:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
xxx

xxx

xxx

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages
if the court should find that, under circumstances, such damages are justify due. The same
rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.
By contrasting the provisions of these two article it immediately becomes apparent that:
(a) In case of breach of contract (including one of transportation) proof of bad faith or fraud
(dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an award of moral
damages; and
(b) That a breach of contract can not be considered included in the descriptive term "analogous
cases" used in Art. 2219; not only because Art. 2220 specifically provides for the damages that
are caused by contractual breach, but because the definition of quasi-delict in Art. 2176 of the
Code expressly excludes the cases where there is a "preexisting contractual relation between the
parties."
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage dome. Such fault or negligence, if there is no
84 | P a g e

pre-existing contractual relation between the parties, is called a quasi-delict and is

governed by the provisions of this Chapter.
The exception to the basic rule of damages now under consideration is a mishap resulting in the
death of a passenger, in which case Article 1764 makes the common carrier expressly subject to
the rule of Art. 2206, that entitles the deceased passenger to "demand moral damages for mental
anguish by reason of the death of the deceased" (Necesito vs. Paras, 104 Phil., 84, Resolution on
motion to reconsider, September 11, 1958). But the exceptional rule of Art. 1764 makes it all the
more evident that where the injured passenger does not die, moral damages are not recoverable
unless it is proved that the carrier was guilty of malice or bad faith. We think it is clear that the
mere carelessness of the carrier's driver does not per se constitute of justify an inference of
malice or bad faith on the part of the carrier; and in the case at bar there is no other evidence of
such malice to support the award of moral damages by the Court of Appeals. To award moral
damages for breach of contract, therefore, without proof of bad faith or malice on the part of the
defendant, as required by Art. 220, would be to violate the clear provisions of the law, and
constitute unwarranted judicial legislation.
The Court of Appeals has invoked our rulings in Castro vs. Acro Taxicab Co., G.R. No. 49155,
December 14, 1948 and Layda vs. Court of Appeals, 90 Phil., 724; but these doctrines were
predicated upon our former law of damages, before judicial discretion in fixing them became
limited by the express provisions of the new Civil Code (previously quoted). Hence, the
aforesaid rulings are now inapplicable.
Upon the other hand, the advantageous position of a party suing a carrier for breach of the
contract of transportations explains, to some extent, the limitations imposed by the new Code on
the amount of the recovery. The action for breach of contract imposes on the defendant carrier a
presumption of liability upon mere proof of injury to the passenger; that latter is relieved from
the duty to established the fault of the carrier, or of his employees, and the burden is placed on
the carrier to prove that it was due to an unforseen event or to force majeure (Cangco vs. Manila
Railroad Co., 38 Phil., 768, 777). Moreover, the carrier, unlike in suits for quasi-delict, may not
escape liability by proving that it has exercised due diligence in the selection and supervision of
its employees (Art. 1759, new civil code; Cangco vs. Manila Railroad Co., supra; Prado vs.
Manila Electric Co., 51 Phil., 900).
The difference in conditions, defenses and proof, as well as the codal concept of quasi-delict as
essentially extracontractual negligence, compel us to differentiate between action ex
contractu, and actions quasi ex delicto, and prevent us from viewing the action for breach of
contract as simultaneously embodying an action on tort. Neither can this action be taken as one
to enforce on employee's liability under Art. 103 of the Revised Penal Code, since the
responsibility is not alleged to be subsidiary, nor is there on record any averment or proof that the
driver of appellant was insolvent. In fact, he is not even made a party to the suit.
85 | P a g e

It is also suggested that a carrier's violation of its engagement to safety transport the passenger
involves a breach of the passenger's confidence, and therefore should be regarded as a breach of
contract in bad faith, justifying recovery of moral damages under Art. 2220. This theory is
untenable, for under it the carrier would always be deemed in bad faith, in every case its
obligation to the passenger is infringed, and it would be never accountable for simple negligence;
while under the law (Art. 1756). the presumption is that common carriers acted negligently(and
not maliciously), and Art. 1762 speaks of negligence of the common carrier.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed
to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in article 1733 and 1755.
ART. 1762. The contributory negligence of the passenger does not bar recovery of
damages for his death or injuries, if the proximate cause thereof is the negligence of the
common carrier, but the amount of damages shall be equitably reduced.
The distinction between fraud, bad faith or malice in the sense of deliberate or wanton wrong
doing and negligence (as mere carelessness) is too fundamental in our law to be ignored (Arts.
1170-1172); their consequences being clearly differentiated by the Code.
ART. 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is liable shall be those that are the natural and probable consequences
of the breach of the obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non-performance of the
obligation.
It is to be presumed, in the absence of statutory provision to the contrary, that this difference was
in the mind of the lawmakers when in Art. 2220 they limited recovery of moral damages to
breaches of contract in bad faith. It is true that negligence may be occasionally so gross as to
amount to malice; but that fact must be shown in evidence, and a carrier's bad faith is not to be
lightly inferred from a mere finding that the contract was breached through negligence of the
carrier's employees.
In view of the foregoing considerations, the decision of the Court of Appeals is modified by
eliminating the award of P5,000.00 by way of moral damages. (Court of Appeals Resolution of
May 5, 1957). In all other respects, the judgment is affirmed. No costs in this instance. So
ordered.

86 | P a g e

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion
and Endencia, JJ.,concur.

DIGEST
Facts:
Respondent was one of the passengers of a jeepney driven by Eugenio Luga. While the vehicle
was descending the Sta. Mesa bridge at an excessive speed, the driver lost control, and the
jeepney swerved to the bridge wall. Serious injuries were suffered by the defendant. The driver
was charged with serious physical injuries through reckless imprudence, and upon interposing a
plea of guilty was sentenced accordingly. Petitioner denies liability for breach of contract of
carriage, contending that a day before the accident, the jeepney was sold to a certain Carmen
Sackerman.

Issues:
(1) Is the approval of the Public Service Commission necessary for the sale of a public service
vehicle even without conveying therewith the authority to operate the same?
(2) To what damages is the respondent entitled?
Held:
(1) Assuming the dubious sale to be a fact, the court of Appeals answered the query in the
affirmative. The ruling should be upheld. The provisions of the statute are clear and prohibit the
sale, alienation, lease, or encumbrance of the property, franchise, certificate, privileges or rights,
or any part thereof of the owner or operator of the public service Commission. The law was
designed primarily for the protection of the public interest; and until the approval of the public
Service Commission is obtained the vehicle is, in contemplation of law, still under the service of
the owner or operator standing in the records of the Commission which the public has a right to
rely upon.
(2) The P10,000 actual damages awarded by the Court of First Instance of Manila were reduced
by the Court of Appeals to only P2,000, on the ground that a review of the records failed to
disclose a sufficient basis for the trial court's appraisal, since the only evidence presented on this
point consisted of respondent's bare statement that his expenses and loss of income amounted to
P20,000. On the other hand, "it cannot be denied," the lower court said, "that appellee
(respondent) did incur expenses"' It is well to note further that respondent was a painter by
profession and a professor of Fine Arts, so that the amount of P2,000 awarded cannot be said to
be excessive. The attorney's fees in the sum of P3,000 also awarded to the respondent are
87 | P a g e

assailed on the ground that the Court of First Instance did not provided for the same, and since
no appeal was interposed by said respondent, it was allegedly error for the Court of Appeals to
award them motu proprio. Petitioner fails to note that attorney's fees are included in the concept
of actual damages under the Civil Code and may be awarded whenever the court deems it is just
and equitable. We see no reason to alter these awards.
Anent the moral damages ordered to be paid to the respondent, the same must be discarded. We
have repeatedly ruled that moral damages are not recoverable in damage actions predicted on a
breach of the contract of transportation. Where the injured passenger does not die, moral
damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith.
We think it is clear that the mere carelessness of the carrier's driver does not per se constitute of
justify an inference of malice or bad faith on the part of the carrier; and in the case at bar there is
no other evidence of such malice to support the award of moral damages by the Court of
Appeals.

Republic of the Philippines

Supreme Court
Manila
FIRST DIVISION
G.R. No. 138569

September 11, 2003

THE CONSOLIDATED BANK and TRUST CORPORATION, petitioner,

vs.
COURT OF APPEALS and L.C. DIAZ and COMPANY, CPAs, respondents.
DECISION
CARPIO, J.:
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The Case
Before us is a petition for review of the Decision [1] of the Court of Appeals dated 27 October
1998 and its Resolution dated 11 May 1999. The assailed decision reversed the Decision[2] of the
Regional Trial Court of Manila, Branch 8, absolving petitioner Consolidated Bank and Trust
Corporation, now known as Solidbank Corporation (Solidbank), of any liability. The
questioned resolution of the appellate court denied the motion for reconsideration of Solidbank
but modified the decision by deleting the award of exemplary damages, attorneys fees, expenses
of litigation and cost of suit.
The Facts
Solidbank is a domestic banking corporation organized and existing under Philippine
laws. Private respondent L.C. Diaz and Company, CPAs (L.C. Diaz), is a professional
partnership engaged in the practice of accounting.
Sometime in March 1976, L.C. Diaz opened a savings account with Solidbank, designated as
Savings Account No. S/A 200-16872-6.
On 14 August 1991, L.C. Diaz through its cashier, Mercedes Macaraya (Macaraya), filled up a
savings (cash) deposit slip for P990 and a savings (checks) deposit slip for P50. Macaraya
instructed the messenger of L.C. Diaz, Ismael Calapre (Calapre), to deposit the money with
Solidbank. Macaraya also gave Calapre the Solidbank passbook.
Calapre went to Solidbank and presented to Teller No. 6 the two deposit slips and the
passbook. The teller acknowledged receipt of the deposit by returning to Calapre the duplicate
copies of the two deposit slips. Teller No. 6 stamped the deposit slips with the words
DUPLICATE and SAVING TELLER 6 SOLIDBANK HEAD OFFICE. Since the
transaction took time and Calapre had to make another deposit for L.C. Diaz with Allied Bank,
he left the passbook with Solidbank. Calapre then went to Allied Bank. When Calapre returned
to Solidbank to retrieve the passbook, Teller No. 6 informed him that somebody got the
passbook.[3] Calapre went back to L.C. Diaz and reported the incident to Macaraya.
Macaraya immediately prepared a deposit slip in duplicate copies with a check
of P200,000. Macaraya, together with Calapre, went to Solidbank and presented to Teller No. 6
the deposit slip and check. The teller stamped the words DUPLICATE and SAVING
TELLER 6 SOLIDBANK HEAD OFFICE on the duplicate copy of the deposit slip. When
Macaraya asked for the passbook, Teller No. 6 told Macaraya that someone got the passbook but
she could not remember to whom she gave the passbook. When Macaraya asked Teller No. 6 if
Calapre got the passbook, Teller No. 6 answered that someone shorter than Calapre got the
passbook. Calapre was then standing beside Macaraya.
89 | P a g e

Teller No. 6 handed to Macaraya a deposit slip dated 14 August 1991 for the deposit of a check
for P90,000 drawn on Philippine Banking Corporation (PBC). This PBC check of L.C. Diaz
was a check that it had long closed. [4] PBC subsequently dishonored the check because of
insufficient funds and because the signature in the check differed from PBCs specimen
signature. Failing to get back the passbook, Macaraya went back to her office and reported the
matter to the Personnel Manager of L.C. Diaz, Emmanuel Alvarez.
The following day, 15 August 1991, L.C. Diaz through its Chief Executive Officer, Luis C. Diaz
(Diaz), called up Solidbank to stop any transaction using the same passbook until L.C. Diaz
could open a new account.[5] On the same day, Diaz formally wrote Solidbank to make the same
request. It was also on the same day that L.C. Diaz learned of the unauthorized withdrawal the
day before, 14 August 1991, of P300,000 from its savings account. The withdrawal slip for
the P300,000 bore the signatures of the authorized signatories of L.C. Diaz, namely Diaz and
Rustico L. Murillo. The signatories, however, denied signing the withdrawal slip. A certain Noel
Tamayo received the P300,000.
In an Information[6] dated 5 September 1991, L.C. Diaz charged its messenger, Emerano Ilagan
(Ilagan) and one Roscon Verdazola with Estafa through Falsification of Commercial
Document. The Regional Trial Court of Manila dismissed the criminal case after the City
Prosecutor filed a Motion to Dismiss on 4 August 1992.
On 24 August 1992, L.C. Diaz through its counsel demanded from Solidbank the return of its
money. Solidbank refused.
On 25 August 1992, L.C. Diaz filed a Complaint[7] for Recovery of a Sum of Money against
Solidbank with the Regional Trial Court of Manila, Branch 8. After trial, the trial court rendered
on 28 December 1994 a decision absolving Solidbank and dismissing the complaint.
L.C. Diaz then appealed[8] to the Court of Appeals. On 27 October 1998, the Court of Appeals
issued its Decision reversing the decision of the trial court.
On 11 May 1999, the Court of Appeals issued its Resolution denying the motion for
reconsideration of Solidbank. The appellate court, however, modified its decision by deleting
the award of exemplary damages and attorneys fees.
The Ruling of the Trial Court
In absolving Solidbank, the trial court applied the rules on savings account written on the
passbook. The rules state that possession of this book shall raise the presumption of ownership
and any payment or payments made by the bank upon the production of the said book and entry
therein of the withdrawal shall have the same effect as if made to the depositor personally.[9]
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At the time of the withdrawal, a certain Noel Tamayo was not only in possession of the
passbook, he also presented a withdrawal slip with the signatures of the authorized signatories of
L.C. Diaz. The specimen signatures of these persons were in the signature cards. The teller
stamped the withdrawal slip with the words Saving Teller No. 5. The teller then passed on the
withdrawal slip to Genere Manuel (Manuel) for authentication. Manuel verified the signatures
on the withdrawal slip. The withdrawal slip was then given to another officer who compared the
signatures on the withdrawal slip with the specimen on the signature cards. The trial court
concluded that Solidbank acted with care and observed the rules on savings account when it
allowed the withdrawal ofP300,000 from the savings account of L.C. Diaz.
The trial court pointed out that the burden of proof now shifted to L.C. Diaz to prove that the
signatures on the withdrawal slip were forged. The trial court admonished L.C. Diaz for not
offering in evidence the National Bureau of Investigation (NBI) report on the authenticity of
the signatures on the withdrawal slip for P300,000. The trial court believed that L.C. Diaz did
not offer this evidence because it is derogatory to its action.
Another provision of the rules on savings account states that the depositor must keep the
passbook under lock and key.[10] When another person presents the passbook for withdrawal
prior to Solidbanks receipt of the notice of loss of the passbook, that person is considered as the
owner of the passbook. The trial court ruled that the passbook presented during the questioned
transaction was now out of the lock and key and presumptively ready for a business
transaction.[11]
Solidbank did not have any participation in the custody and care of the passbook. The trial court
believed that Solidbanks act of allowing the withdrawal of P300,000 was not the direct and
proximate cause of the loss. The trial court held that L.C. Diazs negligence caused the
unauthorized withdrawal. Three facts establish L.C. Diazs negligence: (1) the possession of the
passbook by a person other than the depositor L.C. Diaz; (2) the presentation of a signed
withdrawal receipt by an unauthorized person; and (3) the possession by an unauthorized person
of a PBC check long closed by L.C. Diaz, which check was deposited on the day of the
fraudulent withdrawal.
The trial court debunked L.C. Diazs contention that Solidbank did not follow the precautionary
procedures observed by the two parties whenever L.C. Diaz withdrew significant amounts from
its account. L.C. Diaz claimed that a letter must accompany withdrawals of more
than P20,000. The letter must request Solidbank to allow the withdrawal and convert the amount
to a managers check. The bearer must also have a letter authorizing him to withdraw the same
amount. Another person driving a car must accompany the bearer so that he would not walk
from Solidbank to the office in making the withdrawal. The trial court pointed out that L.C. Diaz
disregarded these precautions in its past withdrawal. On 16 July 1991, L.C. Diaz

91 | P a g e

withdrew P82,554 without any separate letter of authorization or any communication with
Solidbank that the money be converted into a managers check.
The trial court further justified the dismissal of the complaint by holding that the case was a last
ditch effort of L.C. Diaz to recover P300,000 after the dismissal of the criminal case against
Ilagan.
The dispositive portion of the decision of the trial court reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered DISMISSING the complaint.
The Court further renders judgment in favor of defendant bank pursuant to its counterclaim the
amount of Thirty Thousand Pesos (P30,000.00) as attorneys fees.
With costs against plaintiff.
SO ORDERED.[12]
The Ruling of the Court of Appeals
The Court of Appeals ruled that Solidbanks negligence was the proximate cause of the
unauthorized withdrawal of P300,000 from the savings account of L.C. Diaz. The appellate
court reached this conclusion after applying the provision of the Civil Code on quasi-delict, to
wit:
Article 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this chapter.
The appellate court held that the three elements of a quasi-delict are present in this case, namely:
(a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other
person for whose acts he must respond; and (c) the connection of cause and effect between the
fault or negligence of the defendant and the damage incurred by the plaintiff.
The Court of Appeals pointed out that the teller of Solidbank who received the withdrawal slip
for P300,000 allowed the withdrawal without making the necessary inquiry. The appellate court
stated that the teller, who was not presented by Solidbank during trial, should have called up the
depositor because the money to be withdrawn was a significant amount. Had the teller called up
L.C. Diaz, Solidbank would have known that the withdrawal was unauthorized. The teller did not
even verify the identity of the impostor who made the withdrawal. Thus, the appellate court
found Solidbank liable for its negligence in the selection and supervision of its employees.
92 | P a g e

The appellate court ruled that while L.C. Diaz was also negligent in entrusting its deposits to its
messenger and its messenger in leaving the passbook with the teller, Solidbank could not escape
liability because of the doctrine of last clear chance. Solidbank could have averted the injury
suffered by L.C. Diaz had it called up L.C. Diaz to verify the withdrawal.
The appellate court ruled that the degree of diligence required from Solidbank is more than that
of a good father of a family. The business and functions of banks are affected with public
interest. Banks are obligated to treat the accounts of their depositors with meticulous care,
always having in mind the fiduciary nature of their relationship with their clients. The Court of
Appeals found Solidbank remiss in its duty, violating its fiduciary relationship with L.C. Diaz.
The dispositive portion of the decision of the Court of Appeals reads:
WHEREFORE, premises considered, the decision appealed from is hereby REVERSED and a
new one entered.
1.
Ordering defendant-appellee Consolidated Bank and Trust Corporation to pay plaintiffappellant the sum of Three Hundred Thousand Pesos (P300,000.00), with interest thereon at the
rate of 12% per annum from the date of filing of the complaint until paid, the sum of P20,000.00
as exemplary damages, and P20,000.00 as attorneys fees and expenses of litigation as well as
the cost of suit; and
2.
Ordering the dismissal of defendant-appellees counterclaim in the amount of P30,000.00
as attorneys fees.
SO ORDERED.[13]
Acting on the motion for reconsideration of Solidbank, the appellate court affirmed its decision
but modified the award of damages. The appellate court deleted the award of exemplary
damages and attorneys fees. Invoking Article 2231[14] of the Civil Code, the appellate court ruled
that exemplary damages could be granted if the defendant acted with gross negligence. Since
Solidbank was guilty of simple negligence only, the award of exemplary damages was not
justified. Consequently, the award of attorneys fees was also disallowed pursuant to Article 2208
of the Civil Code. The expenses of litigation and cost of suit were also not imposed on
Solidbank.
The dispositive portion of the Resolution reads as follows:
WHEREFORE, foregoing considered, our decision dated October 27, 1998 is affirmed with
modification by deleting the award of exemplary damages and attorneys fees, expenses of
litigation and cost of suit.
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SO ORDERED.[15]
Hence, this petition.
The Issues
Solidbank seeks the review of the decision and resolution of the Court of Appeals on these
grounds:
I.
THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER BANK
SHOULD SUFFER THE LOSS BECAUSE ITS TELLER SHOULD HAVE FIRST CALLED
PRIVATE RESPONDENT BY TELEPHONE BEFORE IT ALLOWED THE WITHDRAWAL
OF P300,000.00 TO RESPONDENTS MESSENGER EMERANO ILAGAN, SINCE THERE
IS NO AGREEMENT BETWEEN THE PARTIES IN THE OPERATION OF THE SAVINGS
ACCOUNT, NOR IS THERE ANY BANKING LAW, WHICH MANDATES THAT A BANK
TELLER SHOULD FIRST CALL UP THE DEPOSITOR BEFORE ALLOWING A
WITHDRAWAL OF A BIG AMOUNT IN A SAVINGS ACCOUNT.
II.
THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF LAST
CLEAR CHANCE AND IN HOLDING THAT PETITIONER BANKS TELLER HAD THE
LAST OPPORTUNITY TO WITHHOLD THE WITHDRAWAL WHEN IT IS UNDISPUTED
THAT THE TWO SIGNATURES OF RESPONDENT ON THE WITHDRAWAL SLIP ARE
GENUINE AND PRIVATE RESPONDENTS PASSBOOK WAS DULY PRESENTED, AND
CONTRARIWISE RESPONDENT WAS NEGLIGENT IN THE SELECTION AND
SUPERVISION OF ITS MESSENGER EMERANO ILAGAN, AND IN THE SAFEKEEPING
OF ITS CHECKS AND OTHER FINANCIAL DOCUMENTS.
III.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE INSTANT CASE
IS A LAST DITCH EFFORT OF PRIVATE RESPONDENT TO RECOVER ITS P300,000.00
AFTER FAILING IN ITS EFFORTS TO RECOVER THE SAME FROM ITS EMPLOYEE
EMERANO ILAGAN.
IV. THE COURT OF APPEALS ERRED IN NOT MITIGATING THE DAMAGES
AWARDED AGAINST PETITIONER UNDER ARTICLE 2197 OF THE CIVIL CODE,
NOTWITHSTANDING ITS FINDING THAT PETITIONER BANKS NEGLIGENCE WAS
ONLY CONTRIBUTORY.[16]
The Ruling of the Court
The petition is partly meritorious.
Solidbanks Fiduciary Duty under the Law
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The rulings of the trial court and the Court of Appeals conflict on the application of the law. The
trial court pinned the liability on L.C. Diaz based on the provisions of the rules on savings
account, a recognition of the contractual relationship between Solidbank and L.C. Diaz, the latter
being a depositor of the former. On the other hand, the Court of Appeals applied the law on
quasi-delict to determine who between the two parties was ultimately negligent. The law on
quasi-delict or culpa aquiliana is generally applicable when there is no pre-existing contractual
relationship between the parties.
We hold that Solidbank is liable for breach of contract due to negligence, or culpa contractual.
The contract between the bank and its depositor is governed by the provisions of the Civil Code
on simple loan.[17] Article 1980 of the Civil Code expressly provides that x x x savings x x x
deposits of money in banks and similar institutions shall be governed by the provisions
concerning simple loan. There is a debtor-creditor relationship between the bank and its
depositor. The bank is the debtor and the depositor is the creditor. The depositor lends the bank
money and the bank agrees to pay the depositor on demand. The savings deposit agreement
between the bank and the depositor is the contract that determines the rights and obligations of
the parties.
The law imposes on banks high standards in view of the fiduciary nature of banking. Section 2
of Republic Act No. 8791 (RA 8791), [18] which took effect on 13 June 2000, declares that the
State recognizes the fiduciary nature of banking that requires high standards of integrity and
performance.[19] This new provision in the general banking law, introduced in 2000, is a
statutory affirmation of Supreme Court decisions, starting with the 1990 case of Simex
International v. Court of Appeals,[20] holding that the bank is under obligation to treat the
accounts of its depositors with meticulous care, always having in mind the fiduciary nature of
their relationship.[21]
This fiduciary relationship means that the banks obligation to observe high standards of
integrity and performance is deemed written into every deposit agreement between a bank and
its depositor. The fiduciary nature of banking requires banks to assume a degree of diligence
higher than that of a good father of a family. Article 1172 of the Civil Code states that the degree
of diligence required of an obligor is that prescribed by law or contract, and absent such
stipulation then the diligence of a good father of a family.[22] Section 2 of RA 8791 prescribes the
statutory diligence required from banks that banks must observe high standards of integrity
and performance in servicing their depositors. Although RA 8791 took effect almost nine years
after the unauthorized withdrawal of the P300,000 from L.C. Diazs savings account,
jurisprudence[23] at the time of the withdrawal already imposed on banks the same high standard
of diligence required under RA No. 8791.

95 | P a g e

However, the fiduciary nature of a bank-depositor relationship does not convert the contract
between the bank and its depositors from a simple loan to a trust agreement, whether express or
implied. Failure by the bank to pay the depositor is failure to pay a simple loan, and not a breach
of trust.[24] The law simply imposes on the bank a higher standard of integrity and performance
in complying with its obligations under the contract of simple loan, beyond those required of
non-bank debtors under a similar contract of simple loan.
The fiduciary nature of banking does not convert a simple loan into a trust agreement because
banks do not accept deposits to enrich depositors but to earn money for themselves. The law
allows banks to offer the lowest possible interest rate to depositors while charging the highest
possible interest rate on their own borrowers. The interest spread or differential belongs to the
bank and not to the depositors who are not cestui que trust of banks. If depositors are cestui que
trust of banks, then the interest spread or income belongs to the depositors, a situation that
Congress certainly did not intend in enacting Section 2 of RA 8791.
Solidbanks Breach of its Contractual Obligation
Article 1172 of the Civil Code provides that responsibility arising from negligence in the
performance of every kind of obligation is demandable. For breach of the savings deposit
agreement due to negligence, or culpa contractual, the bank is liable to its depositor.
Calapre left the passbook with Solidbank because the transaction took time and he had to go to
Allied Bank for another transaction. The passbook was still in the hands of the employees of
Solidbank for the processing of the deposit when Calapre left Solidbank. Solidbanks rules on
savings account require that the deposit book should be carefully guarded by the depositor and
kept under lock and key, if possible. When the passbook is in the possession of Solidbanks
tellers during withdrawals, the law imposes on Solidbank and its tellers an even higher degree of
diligence in safeguarding the passbook.
Likewise, Solidbanks tellers must exercise a high degree of diligence in insuring that they return
the passbook only to the depositor or his authorized representative. The tellers know, or should
know, that the rules on savings account provide that any person in possession of the passbook is
presumptively its owner. If the tellers give the passbook to the wrong person, they would be
clothing that person presumptive ownership of the passbook, facilitating unauthorized
withdrawals by that person. For failing to return the passbook to Calapre, the authorized
representative of L.C. Diaz, Solidbank and Teller No. 6 presumptively failed to observe such
high degree of diligence in safeguarding the passbook, and in insuring its return to the party
authorized to receive the same.
In culpa contractual, once the plaintiff proves a breach of contract, there is a presumption that
the defendant was at fault or negligent. The burden is on the defendant to prove that he was not
96 | P a g e

at fault or negligent. In contrast, in culpa aquiliana the plaintiff has the burden of proving that
the defendant was negligent. In the present case, L.C. Diaz has established that Solidbank
breached its contractual obligation to return the passbook only to the authorized representative of
L.C. Diaz. There is thus a presumption that Solidbank was at fault and its teller was negligent in
not returning the passbook to Calapre. The burden was on Solidbank to prove that there was no
negligence on its part or its employees.
Solidbank failed to discharge its burden. Solidbank did not present to the trial court Teller No. 6,
the teller with whom Calapre left the passbook and who was supposed to return the passbook to
him. The record does not indicate that Teller No. 6 verified the identity of the person who
retrieved the passbook. Solidbank also failed to adduce in evidence its standard procedure in
verifying the identity of the person retrieving the passbook, if there is such a procedure, and that
Teller No. 6 implemented this procedure in the present case.
Solidbank is bound by the negligence of its employees under the principle of respondeat
superior or command responsibility. The defense of exercising the required diligence in the
selection and supervision of employees is not a complete defense in culpa contractual, unlike
in culpa aquiliana.[25]
The bank must not only exercise high standards of integrity and performance, it must also
insure that its employees do likewise because this is the only way to insure that the bank will
comply with its fiduciary duty. Solidbank failed to present the teller who had the duty to return
to Calapre the passbook, and thus failed to prove that this teller exercised the high standards of
integrity and performance required of Solidbanks employees.
Proximate Cause of the Unauthorized Withdrawal
Another point of disagreement between the trial and appellate courts is the proximate cause of
the unauthorized withdrawal. The trial court believed that L.C. Diazs negligence in not securing
its passbook under lock and key was the proximate cause that allowed the impostor to withdraw
the P300,000. For the appellate court, the proximate cause was the tellers negligence in
processing the withdrawal without first verifying with L.C. Diaz. We do not agree with either
court.
Proximate cause is that cause which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury and without which the result would not have
occurred.[26] Proximate cause is determined by the facts of each case upon mixed considerations
of logic, common sense, policy and precedent.[27]
L.C. Diaz was not at fault that the passbook landed in the hands of the impostor. Solidbank was
in possession of the passbook while it was processing the deposit. After completion of the
97 | P a g e

transaction, Solidbank had the contractual obligation to return the passbook only to Calapre, the
authorized representative of L.C. Diaz. Solidbank failed to fulfill its contractual obligation
because it gave the passbook to another person.
Solidbanks failure to return the passbook to Calapre made possible the withdrawal of
the P300,000 by the impostor who took possession of the passbook. Under Solidbanks rules on
savings account, mere possession of the passbook raises the presumption of ownership. It was
the negligent act of Solidbanks Teller No. 6 that gave the impostor presumptive ownership of
the passbook. Had the passbook not fallen into the hands of the impostor, the loss of P300,000
would not have happened. Thus, the proximate cause of the unauthorized withdrawal was
Solidbanks negligence in not returning the passbook to Calapre.
We do not subscribe to the appellate courts theory that the proximate cause of the unauthorized
withdrawal was the tellers failure to call up L.C. Diaz to verify the withdrawal. Solidbank did
not have the duty to call up L.C. Diaz to confirm the withdrawal. There is no arrangement
between Solidbank and L.C. Diaz to this effect. Even the agreement between Solidbank and
L.C. Diaz pertaining to measures that the parties must observe whenever withdrawals of large
amounts are made does not direct Solidbank to call up L.C. Diaz.
There is no law mandating banks to call up their clients whenever their representatives withdraw
significant amounts from their accounts. L.C. Diaz therefore had the burden to prove that it is
the usual practice of Solidbank to call up its clients to verify a withdrawal of a large amount of
money. L.C. Diaz failed to do so.
Teller No. 5 who processed the withdrawal could not have been put on guard to verify the
withdrawal. Prior to the withdrawal of P300,000, the impostor deposited with Teller No. 6
the P90,000 PBC check, which later bounced. The impostor apparently deposited a large amount
of money to deflect suspicion from the withdrawal of a much bigger amount of money. The
appellate court thus erred when it imposed on Solidbank the duty to call up L.C. Diaz to confirm
the withdrawal when no law requires this from banks and when the teller had no reason to be
suspicious of the transaction.
Solidbank continues to foist the defense that Ilagan made the withdrawal. Solidbank claims that
since Ilagan was also a messenger of L.C. Diaz, he was familiar with its teller so that there was
no more need for the teller to verify the withdrawal. Solidbank relies on the following statements
in the Booking and Information Sheet of Emerano Ilagan:
xxx Ilagan also had with him (before the withdrawal) a forged check of PBC and indicated the
amount of P90,000 which he deposited in favor of L.C. Diaz and Company. After successfully
withdrawing this large sum of money, accused Ilagan gave alias Rey (Noel Tamayo) his share of
the loot. Ilagan then hired a taxicab in the amount of P1,000 to transport him (Ilagan) to his
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home province at Bauan, Batangas. Ilagan extravagantly and lavishly spent his money but a big
part of his loot was wasted in cockfight and horse racing. Ilagan was apprehended and meekly
admitted his guilt.[28] (Emphasis supplied.)
L.C. Diaz refutes Solidbanks contention by pointing out that the person who withdrew
the P300,000 was a certain Noel Tamayo. Both the trial and appellate courts stated that this Noel
Tamayo presented the passbook with the withdrawal slip.
We uphold the finding of the trial and appellate courts that a certain Noel Tamayo withdrew
the P300,000. The Court is not a trier of facts. We find no justifiable reason to reverse the
factual finding of the trial court and the Court of Appeals. The tellers who processed the deposit
of the P90,000 check and the withdrawal of the P300,000 were not presented during trial to
substantiate Solidbanks claim that Ilagan deposited the check and made the questioned
withdrawal. Moreover, the entry quoted by Solidbank does not categorically state that Ilagan
presented the withdrawal slip and the passbook.
Doctrine of Last Clear Chance
The doctrine of last clear chance states that where both parties are negligent but the negligent act
of one is appreciably later than that of the other, or where it is impossible to determine whose
fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss
but failed to do so, is chargeable with the loss.[29] Stated differently, the antecedent negligence of
the plaintiff does not preclude him from recovering damages caused by the supervening
negligence of the defendant, who had the last fair chance to prevent the impending harm by the
exercise of due diligence.[30]
We do not apply the doctrine of last clear chance to the present case. Solidbank is liable for
breach of contract due to negligence in the performance of its contractual obligation to L.C.
Diaz. This is a case of culpa contractual, where neither the contributory negligence of the
plaintiff nor his last clear chance to avoid the loss, would exonerate the defendant from liability.
[31]
Such contributory negligence or last clear chance by the plaintiff merely serves to reduce the
recovery of damages by the plaintiff but does not exculpate the defendant from his breach of
contract.[32]
Mitigated Damages
Under Article 1172, liability (for culpa contractual) may be regulated by the courts, according
to the circumstances. This means that if the defendant exercised the proper diligence in the
selection and supervision of its employee, or if the plaintiff was guilty of contributory
negligence, then the courts may reduce the award of damages. In this case, L.C. Diaz was guilty

99 | P a g e

of contributory negligence in allowing a withdrawal slip signed by its authorized signatories to

fall into the hands of an impostor. Thus, the liability of Solidbank should be reduced.
In Philippine Bank of Commerce v. Court of Appeals,[33] where the Court held the depositor
guilty of contributory negligence, we allocated the damages between the depositor and the bank
on a 40-60 ratio. Applying the same ruling to this case, we hold that L.C. Diaz must shoulder
40% of the actual damages awarded by the appellate court. Solidbank must pay the other 60% of
the actual damages.
WHEREFORE,
the
decision
of
the
Court
of
Appeals
is AFFIRMED with MODIFICATION. Petitioner Solidbank Corporation shall pay private
respondent L.C. Diaz and Company, CPAs only 60% of the actual damages awarded by the
Court of Appeals. The remaining 40% of the actual damages shall be borne by private
respondent L.C. Diaz and Company, CPAs. Proportionate costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, and Ynares-Santiago, JJ., concur.
Azcuna, J., on official leave.

DIGEST
L.C. Diaz and Company (LC Diaz), an accounting firm, has a savings account with Consolidated
Bank and Trust Corporation (now called Solidbank Corporation).
On August 14, 1991, the firms messenger, a certain Ismael Calapre, deposited an amount with
the bank but due to a long line and the fact that he still needs to deposit a certain amount in
another bank, the messenger left the firms passbook with a teller of Solidbank. But when the
messenger returned, the passbook is already missing. Apparently, the teller returned the passbook
to someone else.
On August 15, 1991, LC Diaz made a formal request ordering Solidbank not to honor any
transaction concerning their account with them until the firm is able to acquire a new passbook.
It appears however that in the afternoon of August 14, 1991, the amount of P300,000.00 was
already withdrawn from the firms account.
LC Diaz demanded Solidbank to refund the said amount which the bank refused. LC Diaz then
sued Solidbank.

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In its defense, Solidbank contends that under their banking rules, they are authorized to honor
withdrawals if presented with the passbook; that when the P300k was withdrawn, the passbook
was presented. Further, the withdrawer presented a withdrawal slip which bore the signatures of
the representatives of LC Diaz.
The RTC ruled in favor of Solidbank. It found LC Diaz to be negligent in handling its passbook.
The loss of the P300k was not the result of Solidbanks negligence.
On appeal, the Court of Appeals reversed the decision of the RTC. The CA used the rules on
quasi-delict (Article 2176 of the Civil Code).
ISSUE:
Whether or not the relations between Solidbank and LC Diaz, the depositor, is governed by
quasi-delict in determining the liability of Solidbank.
HELD:
No. Solidbank is liable for the loss of the P300k but its liability is grounded on culpa
contractual.
The contract between the bank and its depositor is governed by the provisions of the Civil Code
on simple loan (Article 1980, Civil Code). There is a debtor-creditor relationship between the
bank and its depositor. The bank is the debtor and the depositor is the creditor. The depositor
lends the bank money and the bank agrees to pay the depositor on demand. The savings deposit
agreement between the bank and the depositor is the contract that determines the rights and
obligations of the parties.
Under their contract, it is the duty of LC Diaz to secure its passbook. However, this duty is also
applicable to Solidbank when it gains possession of said passbook which it did when the
messenger left it to the banks possession through the banks teller. The act of the teller returning
the passbook to someone else other than Calapre, the firms authorized messenger, is a clear
breach of contract. Such negligence binds the bank under the principle of respondeat superior or
command responsibility.
No contract of trust between bank and depositor
The Supreme Court emphasized that the contractual relation between the bank and the depositor
is that of a simple loan. This is despite the wording of Section 2 of Republic Act 8791 (The
General Banking Law of 2000) which states that the State recognizes the fiduciary nature of
banking that requires high standards of integrity and performance. That the bank is under
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obligation to treat the accounts of its depositors with meticulous care, always having in mind the
fiduciary nature of their relationship.
This fiduciary relationship means that the banks obligation to observe high standards of
integrity and performance is deemed written into every deposit agreement between a bank and
its depositor. The fiduciary nature of banking requires banks to assume a degree of diligence
higher than that of a good father of a family.
However, the fiduciary nature of a bank-depositor relationship does not convert the contract
between the bank and its depositors from a simple loan to a trust agreement, whether express or
implied. Failure by the bank to pay the depositor is failure to pay a simple loan, and not a breach
of trust.
In short, the General Banking Act simply imposes on the bank a higher standard of integrity and
performance in complying with its obligations under the contract of simple loan, beyond those
required of non-bank debtors under a similar contract of simple loan. The General Banking Law
in no way modified Article 1980 of the Civil Code.

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 Bangkok102 | P a g e

Rome, these various amounts with interest at the legal rate, from the date of the filing of the
complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane
ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects",
with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left
Manila for Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine
Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to
Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the
Manager of the defendant airline forced plaintiff to vacate the "first class" seat that he
was occupying because, in the words of the witness Ernesto G. Cuento, there was a
"white man", who, the Manager alleged, had a "better right" to the seat. When asked to
vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told
defendant's Manager that his seat would be taken over his dead body; a commotion
ensued, and, according to said Ernesto G. Cuento, "many of the Filipino passengers got
nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot
discussion with the white man [manager], they came all across to Mr. Carrascoso and
pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12, Hearing of
May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane.3
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent
Court of Appeals. Petitioner charges that respondent court failed to make complete findings of
fact on all the issues properly laid before it. We are asked to consider facts favorable to
petitioner, and then, to overturn the appellate court's decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered by any court
of record without expressing therein clearly and distinctly the facts and the law on which it is
based". 5 This is echoed in the statutory demand that a judgment determining the merits of the
case shall state "clearly and distinctly the facts and the law on which it is based"; 6 and that
"Every decision of the Court of Appeals shall contain complete findings of fact on all issues
properly raised before it". 7

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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
104 | P a g e

reservations for first class on any specific flight, although he had tourist class protection; that,
accordingly, the issuance of a first class ticket was no guarantee that he would have a first class
ride, but that such would depend upon the availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its brief before the
Court of Appeals under its third assignment of error, which reads: "The trial court erred in
finding that plaintiff had confirmed reservations for, and a right to, first class seats on the
"definite" segments of his journey, particularly that from Saigon to Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that the issuance of a first-class ticket was
no guarantee that the passenger to whom the same had been issued, would be
accommodated in the first-class compartment, for as in the case of plaintiff he had yet to
make arrangements upon arrival at every station for the necessary first-class reservation.
We are not impressed by such a reasoning. We cannot understand how a reputable firm
like defendant airplane company could have the indiscretion to give out tickets it never
meant to honor at all. It received the corresponding amount in payment of first-class
tickets and yet it allowed the passenger to be at the mercy of its employees. It is more in
keeping with the ordinary course of business that the company should know whether or
riot the tickets it issues are to be honored or not.22
Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's
contention, thus:
On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question.
Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1",
and defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as
follows:
Q. In these tickets there are marks "O.K." From what you know, what does this OK
mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx

xxx

xxx

105 | P a g e

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", "Al", "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
106 | P a g e

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 compelled by defendant's employees to leave the First Class
accommodation berths at Bangkok after he was already seated.
6. That consequently, the plaintiff, desiring no repetition of the inconvenience and
embarrassments brought by defendant's breach of contract was forced to take a Pan
American World Airways plane on his return trip from Madrid to Manila.32
xxx

xxx

xxx

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

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

xxx

xxx
107 | P a g e

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

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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
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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
110 | P a g e

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.
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."
111 | P a g e

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.
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10. Questioned as excessive are the amounts decreed by both the trial court and the Court of
Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and
P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial
court. 56 The Court of Appeals did not interfere with the same. The dictates of good sense suggest
that we give our imprimatur thereto. Because, the facts and circumstances point to the
reasonableness thereof.57
On balance, we say that the judgment of the Court of Appeals does not suffer from reversible
error. We accordingly vote to affirm the same. Costs against petitioner. So ordered.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro, JJ.,
concur.
Bengzon, J.P., J., took no part.

DIGEST
In March 1958, Rafael Carrascoso and several other Filipinos were tourists en route to Rome
from Manila. Carrascoso was issued a first class round trip ticket by Air France. But during a
stop-over in Bangkok, he was asked by the plane manager of Air France to vacate his seat
because a white man allegedly has a better right than him. Carrascoso protested but when
things got heated and upon advise of other Filipinos on board, Carrascoso gave up his seat and
was transferred to the planes tourist class.
After their tourist trip when Carrascoso was already in the Philippines, he sued Air France for
damages for the embarrassment he suffered during his trip. In court, Carrascoso testified, among
others, that he when he was forced to take the tourist class, he went to the planes pantry where
he was approached by a plane purser who told him that he noted in the planes journal the
following:

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

The said testimony was admitted in favor of Carrascoso. The trial court eventually awarded
damages in favor of Carrascoso. This was affirmed by the Court of Appeals.

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Air France is assailing the decision of the trial court and the CA. It avers that the issuance of a
first class ticket to Carrascoso was not an assurance that he will be seated in first class because
allegedly in truth and in fact, that was not the true intent between the parties.
Air France also questioned the admissibility of Carrascosos testimony regarding the note made
by the purser because the said note was never presented in court.

ISSUE 1:
Whether or not Air France is liable for damages and on what basis.

ISSUE 2:
Whether or not the testimony of Carrasoso regarding the note which was not presented in court is
admissible in evidence.

HELD 1:
Yes. It appears that Air Frances liability is based on culpa-contractual and on culpa aquiliana.
Culpa Contractual
There exists a contract of carriage between Air France and Carrascoso. There was a contract to
furnish Carrasocoso a first class passage; Second, That said contract was breached when Air
France failed to furnish first class transportation at Bangkok; and Third, that there was bad faith
when Air Frances 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.
The Supreme Court did not give credence to Air Frances claim that the issuance of a first class
ticket to a passenger is not an assurance that he will be given a first class seat. Such claim is
simply incredible.
Culpa Aquiliana

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Here, the SC ruled, even though there is a contract of carriage between Air France and
Carrascoso, there is also a tortuous act based on culpa aquiliana. Passengers do not contract
merely for transportation. They have a right to be treated by the carriers 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. Air Frances contract with Carrascoso is one
attended with public duty. The stress of Carrascosos action is placed upon his wrongful
expulsion. This is a violation of public duty by the Air France a case of quasi-delict. Damages
are proper.

HELD: 2:
Yes. The testimony of Carrascoso must be admitted based on res gestae. 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. Besides, when the dialogue
between Carrascoso and the purser 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. 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. It thus escapes the operation of the hearsay rule. It forms
part of the res gestae.

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Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 108164 February 23, 1995

FAR EAST BANK AND TRUST COMPANY, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, LUIS A. LUNA and CLARITA S.
LUNA, respondents.

VITUG, J.:
Some time in October 1986, private respondent Luis A. Luna applied for, and was accorded, a
FAREASTCARD issued by petitioner Far East Bank and Trust Company ("FEBTC") at its Pasig
Branch. Upon his request, the bank also issued a supplemental card to private respondent Clarita
S. Luna.
In August 1988, Clarita lost her credit card. FEBTC was forthwith informed. In order to replace
the lost card, Clarita submitted an affidavit of loss. In cases of this nature, the bank's internal
security procedures and policy would appear to be to meanwhile so record the lost card, along
with the principal card, as a "Hot Card" or "Cancelled Card" in its master file.
On 06 October 1988, Luis tendered a despedida lunch for a close friend, a Filipino-American,
and another guest at the Bahia Rooftop Restaurant of the Hotel Intercontinental Manila. To pay
for the lunch, Luis presented his FAREASTCARD to the attending waiter who promptly had it
verified through a telephone call to the bank's Credit Card Department. Since the card was not
honored, Luis was forced to pay in cash the bill amounting to P588.13. Naturally, Luis felt
embarrassed by this incident.

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In a letter, dated 11 October 1988, private respondent Luis Luna, through counsel, demanded
from FEBTC the payment of damages. Adrian V. Festejo, a vice-president of the bank, expressed
the bank's apologies to Luis. In his letter, dated 03 November 1988, Festejo, in part, said:
In cases when a card is reported to our office as lost, FAREASTCARD undertakes the
necessary action to avert its unauthorized use (such as tagging the card as hotlisted), as it
is always our intention to protect our cardholders.
An investigation of your case however, revealed that FAREASTCARD failed to inform
you about its security policy. Furthermore, an overzealous employee of the Bank's Credit
Card Department did not consider the possibility that it may have been you who was
presenting the card at that time (for which reason, the unfortunate incident occurred). 1
Festejo also sent a letter to the Manager of the Bahia Rooftop Restaurant to assure the latter that
private respondents were "very valued clients" of FEBTC. William Anthony King, Food and
Beverage Manager of the Intercontinental Hotel, wrote back to say that the credibility of private
respondent had never been "in question." A copy of this reply was sent to Luis by Festejo.
Still evidently feeling aggrieved, private respondents, on 05 December 1988, filed a complaint
for damages with the Regional Trial Court ("RTC") of Pasig against FEBTC.
On 30 March 1990, the RTC of Pasig, given the foregoing factual settings, rendered a decision
ordering FEBTC to pay private respondents (a) P300,000.00 moral damages; (b) P50,000.00
exemplary damages; and (c) P20,000.00 attorney's fees.
On appeal to the Court of Appeals, the appellate court affirmed the decision of the trial court.
Its motion for reconsideration having been denied by the appellate court, FEBTC has come to
this Court with this petition for review.
There is merit in this appeal.
In culpa contractual, moral damages may be recovered where the defendant is shown to have
acted in bad faith or with malice in the breach of the contract. 2 The Civil Code provides:
Art. 2220. 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. (Emphasis supplied)

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Bad faith, in this context, includes gross, but not simple, negligence. 3 Exceptionally, in a contract
of carriage, moral damages are also allowed in case of death of a passenger attributable to the
fault (which is presumed 4) of the common carrier. 5
Concededly, the bank was remiss in indeed neglecting to personally inform Luis of his own
card's cancellation. Nothing in the findings of the trial court and the appellate court, however,
can sufficiently indicate any deliberate intent on the part of FEBTC to cause harm to private
respondents. Neither could FEBTC's negligence in failing to give personal notice to Luis be
considered so gross as to amount to malice or bad faith.
Malice or bad faith implies a conscious and intentional design to do a wrongful act for a
dishonest purpose or moral obliquity; it is different from the negative idea of negligence in that
malice or bad faith contemplates a state of mind affirmatively operating with furtive design or ill
will. 6
We are not unaware of the previous rulings of this Court, such as in American Express
International, Inc., vs.Intermediate Appellate Court (167 SCRA 209) and Bank of Philippine
Islands vs. Intermediate Appellate Court(206 SCRA 408), sanctioning the application of Article
21, in relation to Article 2217 and Article 2219 7 of the Civil Code to a contractual breach similar
to the case at bench. Article 21 states:
Art. 21. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.
Article 21 of the Code, it should be observed, contemplates a conscious act to cause harm. Thus,
even if we are to assume that the provision could properly relate to a breach of contract, its
application can be warranted only when the defendant's disregard of his contractual obligation is
so deliberate as to approximate a degree of misconduct certainly no less worse than fraud or bad
faith. Most importantly, Article 21 is a mere declaration of a general principle in human relations
that clearly must, in any case, give way to the specific provision of Article 2220 of the Civil
Code authorizing the grant of moral damages in culpa contractual solely when the breach is due
to fraud or bad faith.
Mr. Justice Jose B.L. Reyes, in his ponencia in Fores vs. Miranda 8 explained with great clarity
the predominance that we should give to Article 2220 in contractual relations; we quote:
Anent the moral damages ordered to be paid to the respondent, the same must be
discarded. We have repeatedly ruled (Cachero vs. Manila Yellow Taxicab Co. Inc., 101
Phil. 523; 54 Off. Gaz., [26], 6599; Necesito, et al. vs. Paras, 104 Phil., 75; 56 Off. Gaz.,
[23] 4023), that moral damages are not recoverable in damage actions predicated on a
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breach of the contract of transportation, in view of Articles 2219 and 2220 of the new
Civil Code, which provide as follows:
Art. 2219. Moral damages may be recovered in the following and
analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
xxx xxx xxx
Art. 2220. Wilful 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.
By contrasting the provisions of these two articles it immediately becomes apparent that:
(a) In case of breach of contract (including one of transportation) proof of bad faith or
fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an
award of moral damages; and
(b) That a breach of contract can not be considered included in the descriptive term
"analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides for
the damages that are caused contractual breach, but because the definition of quasi-delict
in Art. 2176 of the Code expressly excludes the cases where there is a "preexisitng
contractual relations between the parties."
Art. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of
this Chapter.
The exception to the basic rule of damages now under consideration is a mishap resulting
in the death of a passenger, in which case Article 1764 makes the common carrier
expressly subject to the rule of Art. 2206, that entitles the spouse, descendants and
ascendants of the deceased passenger to "demand moral damages for mental anguish by
reason of the death of the deceased" (Necesito vs. Paras, 104 Phil. 84, Resolution on
motion to reconsider, September 11, 1958). But the exceptional rule of Art. 1764 makes it
all the more evident that where the injured passenger does not die, moral damages are not
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recoverable unless it is proved that the carrier was guilty of malice or bad faith. We think
it is clear that the mere carelessness of the carrier's driver does not per se constitute or
justify an inference of malice or bad faith on the part of the carrier; and in the case at bar
there is no other evidence of such malice to support the award of moral damages by the
Court of Appeals. To award moral damages for breach of contract, therefore, without
proof of bad faith or malice on the part of the defendant, as required by Art. 2220, would
be to violate the clear provisions of the law, and constitute unwarranted judicial
legislation.
xxx xxx xxx
The distinction between fraud, bad faith or malice in the sense of deliberate or wanton
wrong doing and negligence (as mere carelessness) is too fundamental in our law to be
ignored (Arts. 1170-1172); their consequences being clearly differentiated by the Code.
Art. 2201. In contracts and quasi-contracts, the damages for which the
obligor who acted in good faith is liable shall be those that are the natural
and probable consequences of the breach of the obligation, and which the
parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the
non-performance of the obligation.
It is to be presumed, in the absence of statutory provision to the contrary, that this
difference was in the mind of the lawmakers when in Art. 2220 they limited recovery of
moral damages to breaches of contract in bad faith. It is true that negligence may be
occasionally so gross as to amount to malice; but the fact must be shown in evidence, and
a carrier's bad faith is not to be lightly inferred from a mere finding that the contract was
breached through negligence of the carrier's employees.
The Court has not in the process overlooked another rule that a quasi-delict can be the cause for
breaching a contract that might thereby permit the application of applicable principles on
tort 9 even where there is a pre-existing contract between the plaintiff and the defendant (Phil.
Airlines vs. Court of Appeals, 106 SCRA 143; Singson vs. Bank of Phil. Islands, 23 SCRA 1117;
and Air France vs. Carrascoso, 18 SCRA 155). This doctrine, unfortunately, cannot improve
private respondents' case for it can aptly govern only where the act or omission complained of
would constitute an actionable tort independently of the contract. The test (whether a quasi-delict
can be deemed to underlie the breach of a contract) can be stated thusly: Where, without a preexisting contract between two parties, an act or omission can nonetheless amount to an
120 | P a g e

actionable tort by itself, the fact that the parties are contractually bound is no bar to the
application of quasi-delict provisions to the case. Here, private respondents' damage claim is
predicated solely on their contractual relationship; without such agreement, the act or omission
complained of cannot by itself be held to stand as a separate cause of action or as an independent
actionable tort.
The Court finds, therefore, the award of moral damages made by the court a quo, affirmed by the
appellate court, to be inordinate and substantially devoid of legal basis.
Exemplary or corrective damages, in turn, are intended to serve as an example or as correction
for the public good in addition to moral, temperate, liquidated or compensatory damages (Art.
2229, Civil Code; seePrudenciado vs. Alliance Transport System, 148 SCRA 440; Lopez vs. Pan
American World Airways, 16 SCRA 431). In criminal offenses, exemplary damages are imposed
when the crime is committed with one or more aggravating circumstances (Art. 2230, Civil
Code). In quasi-delicts, such damages are granted if the defendant is shown to have been so
guilty of gross negligence as to approximate malice (See Art. 2231, Civil Code; CLLC E.G.
Gochangco Workers Union vs. NLRC, 161 SCRA 655; Globe Mackay Cable and Radio Corp.
vs. CA, 176 SCRA 778). In contracts and quasi-contracts, the court may award exemplary
damages if the defendant is found to have acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner (Art. 2232, Civil Code; PNB vs. Gen. Acceptance and Finance Corp., 161
SCRA 449).
Given the above premises and the factual circumstances here obtaining, it would also be just as
arduous to sustain the exemplary damages granted by the courts below (see De Leon vs. Court of
Appeals, 165 SCRA 166).
Nevertheless, the bank's failure, even perhaps inadvertent, to honor its credit card issued to
private respondent Luis should entitle him to recover a measure of damages sanctioned under
Article 2221 of the Civil Code providing thusly:
Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be vindicated or recognized, and not
for the purpose of indemnifying the plaintiff for any loss suffered by him.
Reasonable attorney's fees may be recovered where the court deems such recovery to be just and
equitable (Art. 2208, Civil Code). We see no issue of sound discretion on the part of the appellate
court in allowing the award thereof by the trial court.
WHEREFORE, the petition for review is given due course. The appealed decision is MODIFIED
by deleting the award of moral and exemplary damages to private respondents; in its stead,

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petitioner is ordered to pay private respondent Luis A. Luna an amount of P5,000.00 by way of
nominal damages. In all other respects, the appealed decision is AFFIRMED. No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo,
Quiason, Puno, Kapunan, Mendoza and Francisco, JJ., concur.

DIGEST
Facts:
Luis Luna applied for a far east card issued by far east bank at its Pasig branch. Upon his request,
the bank also issued a supplemental card to private respondent Clarita Luna. Then Clarita lost her
credit card and submitted an affidavit of loss. Later on October 6, 1988 in a restaurant, Luis'
credit card was not honored.
Luis thru a counsel then demanded from far east to pay damages for the humiliation he felt. The
vice-president of the bank expressed bank's apologies to Luis.
Still evidently feeling aggrieved, private respondents, on 05 December 1988, filed a complaint
for damages with the Regional Trial Court ("RTC") of Pasig against FEBTC.
On 30 March 1990, the RTC of Pasig, given the foregoing factual settings, rendered a decision
ordering FEBTC to pay private respondents (a) P300,000.00 moral damages; (b) P50,000.00
exemplary damages; and (c) P20,000.00 attorney's fees.
On appeal to the Court of Appeals, the appellate court affirmed the decision of the trial court.
Its motion for reconsideration having been denied by the appellate court, FEBTC has come to
this Court with this petition for review.
There is merit in this appeal.
In culpa contractual, moral damages may be recovered where the defendant is shown to have
acted in bad faith or with malice in the breach of the contract. The Civil Code provides:
Art. 2220. 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.
Bad faith, in this context, includes gross, but not simple, negligence. Exceptionally, in a contract
of carriage, moral damages are also allowed in case of death of a passenger attributable to the
fault (which is presumed) of the common carrier.
Held:
The Court has not in the process overlooked another rule that a quasi-delict can be the cause for
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breaching a contract that might thereby permit the application of applicable principles on tort 9
even where there is a pre-existing contract between the plaintiff and the defendant. This doctrine,
unfortunately, cannot improve private respondents' case for it can aptly govern only where the
act or omission complained of would constitute an actionable tort independently of the contract.
The test (whether a quasi-delict can be deemed to underlie the breach of a contract) can be stated
thusly: Where, without a pre-existing contract between two parties, an act or omission can
nonetheless amount to an actionable tort by itself, the fact that the parties are contractually bound
is no bar to the application of quasi-delict provisions to the case. Here, private respondents'
damage claim is predicated solely on their contractual relationship; without such agreement, the
act or omission complained of cannot by itself be held to stand as a separate cause of action or as
an independent actionable tort.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 84698 February 4, 1992

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PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D. LIM, BENJAMIN

P. PAULINO, ANTONIO M. MAGTALAS, COL. PEDRO SACRO and LT. M.
SORIANO, petitioners,
vs.
COURT OF APPEALS, HON. REGINA ORDOEZ-BENITEZ, in her capacity as
Presiding Judge of Branch 47, Regional Trial Court, Manila, SEGUNDA R. BAUTISTA
and ARSENIA D. BAUTISTA, respondents.
Balgos and Perez for petitioners.
Collantes, Ramirez & Associates for private respondents.

PADILLA, J.:
A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the
second-floor premises of the Philippine School of Business Administration (PSBA) prompted the
parents of the deceased to file suit in the Regional Trial Court of Manila (Branch 47) presided
over by Judge (now Court of Appeals justice) Regina Ordoez-Benitez, for damages against the
said PSBA and its corporate officers. At the time of his death, Carlitos was enrolled in the third
year commerce course at the PSBA. It was established that his assailants were not members of
the school's academic community but were elements from outside the school.
Specifically, the suit impleaded the PSBA and the following school authorities: Juan D. Lim
(President), Benjamin P. Paulino (Vice-President), Antonio M. Magtalas (Treasurer/Cashier),
Col. Pedro Sacro (Chief of Security) and a Lt. M. Soriano (Assistant Chief of Security).
Substantially, the plaintiffs (now private respondents) sought to adjudge them liable for the
victim's untimely demise due to their alleged negligence, recklessness and lack of security
precautions, means and methods before, during and after the attack on the victim. During the
proceedings a quo, Lt. M. Soriano terminated his relationship with the other petitioners by
resigning from his position in the school.
Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since they are
presumably sued under Article 2180 of the Civil Code, the complaint states no cause of action
against them, as jurisprudence on the subject is to the effect that academic institutions, such as
the PSBA, are beyond the ambit of the rule in the afore-stated article.
The respondent trial court, however, overruled petitioners' contention and thru an order dated 8
December 1987, denied their motion to dismiss. A subsequent motion for reconsideration was
similarly dealt with by an order dated 25 January 1988. Petitioners then assailed the trial court's
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disposition before the respondent appellate court which, in a decision * promulgated on 10 June
1988, affirmed the trial court's orders. On 22 August 1988, the respondent appellate court
resolved to deny the petitioners' motion for reconsideration. Hence, this petition.
At the outset, it is to be observed that the respondent appellate court primarily anchored its
decision on the law ofquasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil
Code. 1 Pertinent portions of the appellate court's now assailed ruling state:
Article 2180 (formerly Article 1903) of the Civil Code is an adoption from the old
Spanish Civil Code. The comments of Manresa and learned authorities on its
meaning should give way to present day changes. The law is not fixed and
flexible (sic); it must be dynamic. In fact, the greatest value and significance of
law as a rule of conduct in (sic) its flexibility to adopt to changing social
conditions and its capacity to meet the new challenges of progress.
Construed in the light of modern day educational system, Article 2180 cannot be
construed in its narrow concept as held in the old case of Exconde
vs. Capuno 2 and Mercado vs. Court of Appeals; 3hence, the ruling in
the Palisoc 4 case that it should apply to all kinds of educational institutions,
academic or vocational.
At any rate, the law holds the teachers and heads of the school staff liable unless
they relieve themselves of such liability pursuant to the last paragraph of Article
2180 by "proving that they observed all the diligence to prevent damage." This
can only be done at a trial on the merits of the case. 5
While we agree with the respondent appellate court that the motion to dismiss the complaint was
correctly denied and the complaint should be tried on the merits, we do not however agree with
the premises of the appellate court's ruling.
Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in loco
parentis. This Court discussed this doctrine in the afore-cited cases of Exconde, Mendoza,
Palisoc and, more recently, in Amadora vs.Court of Appeals. 6 In all such cases, it had been
stressed that the law (Article 2180) plainly provides that the damage should have been caused or
inflicted by pupils or students of he educational institution sought to be held liable for the acts of
its pupils or students while in its custody. However, this material situation does not exist in the
present case for, as earlier indicated, the assailants of Carlitos were not students of the PSBA, for
whose acts the school could be made liable.
However, does the appellate court's failure to consider such material facts mean the exculpation
of the petitioners from liability? It does not necessarily follow.
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When an academic institution accepts students for enrollment, there is established

a contract between them, resulting in bilateral obligations which both parties are bound to
comply with. 7 For its part, the school undertakes to provide the student with an education that
would presumably suffice to equip him with the necessary tools and skills to pursue higher
education or a profession. On the other hand, the student covenants to abide by the school's
academic requirements and observe its rules and regulations.
Institutions of learning must also meet the implicit or "built-in" obligation of providing their
students with an atmosphere that promotes or assists in attaining its primary undertaking of
imparting knowledge. Certainly, no student can absorb the intricacies of physics or higher
mathematics or explore the realm of the arts and other sciences when bullets are flying or
grenades exploding in the air or where there looms around the school premises a constant threat
to life and limb. Necessarily, the school must ensure that adequate steps are taken to maintain
peace and order within the campus premises and to prevent the breakdown thereof.
Because the circumstances of the present case evince a contractual relation between the PSBA
and Carlitos Bautista, the rules on quasi-delict do not really govern. 8 A perusal of Article 2176
shows that obligations arising from quasi-delicts or tort, also known as extra-contractual
obligations, arise only between parties not otherwise bound by contract, whether express or
implied. However, this impression has not prevented this Court from determining the existence
of a tort even when there obtains a contract. In Air France vs. Carrascoso (124 Phil. 722), the
private respondent was awarded damages for his unwarranted expulsion from a first-class seat
aboard the petitioner airline. It is noted, however, that the Court referred to the petitioner-airline's
liability as one arising from tort, not one arising from a contract of carriage. In effect, Air
France is authority for the view that liability from tort may exist even if there is a contract, for
the act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248
Fed. 231).
This view was not all that revolutionary, for even as early as 1918, this Court was already of a
similar mind. InCangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:
The field of non-contractual obligation is much broader than that of contractual
obligation, comprising, as it does, the whole extent of juridical human relations.
These two fields, figuratively speaking, concentric; that is to say, the mere fact
that a person is bound to another by contract does not relieve him from extracontractual liability to such person. When such a contractual relation exists the
obligor may break the contract under such conditions that the same act which
constitutes a breach of the contract would have constituted the source of an extracontractual obligation had no contract existed between the parties.

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Immediately what comes to mind is the chapter of the Civil Code on Human Relations,
particularly Article 21, which provides:
Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good custom or public policy shall compensate the latter for
the damage. (emphasis supplied).
Air France penalized the racist policy of the airline which emboldened the petitioner's employee
to forcibly oust the private respondent to cater to the comfort of a white man who allegedly "had
a better right to the seat." InAustro-American, supra, the public embarrassment caused to the
passenger was the justification for the Circuit Court of Appeals, (Second Circuit), to award
damages to the latter. From the foregoing, it can be concluded that should the act which breaches
a contract be done in bad faith and be violative of Article 21, then there is a cause to view the act
as constituting a quasi-delict.
In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the
contract between the school and Bautista had been breached thru the former's negligence in
providing proper security measures. This would be for the trial court to determine. And, even if
there be a finding of negligence, the same could give rise generally to a breach of contractual
obligation only. Using the test of Cangco, supra, the negligence of the school would not be
relevant absent a contract. In fact, that negligence becomes material only because of the
contractual relation between PSBA and Bautista. In other words, a contractual relation is a
condition sine qua nonto the school's liability. The negligence of the school cannot exist
independently of the contract, unless the negligence occurs under the circumstances set out in
Article 21 of the Civil Code.
This Court is not unmindful of the attendant difficulties posed by the obligation of schools,
above-mentioned, for conceptually a school, like a common carrier, cannot be an insurer of its
students against all risks. This is specially true in the populous student communities of the socalled "university belt" in Manila where there have been reported several incidents ranging from
gang wars to other forms of hooliganism. It would not be equitable to expect of schools to
anticipate all types of violent trespass upon their premises, for notwithstanding the security
measures installed, the same may still fail against an individual or group determined to carry out
a nefarious deed inside school premises and environs. Should this be the case, the school may
still avoid liability by proving that the breach of its contractual obligation to the students was not
due to its negligence, here statutorily defined to be the omission of that degree of diligence
which is required by the nature of the obligation and corresponding to the circumstances of
persons, time and place. 9

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As the proceedings a quo have yet to commence on the substance of the private respondents'
complaint, the record is bereft of all the material facts. Obviously, at this stage, only the trial
court can make such a determination from the evidence still to unfold.
WHEREFORE, the foregoing premises considered, the petition is DENIED. The court of origin
(RTC, Manila, Br. 47) is hereby ordered to continue proceedings consistent with this ruling of the
Court. Costs against the petitioners.
SO ORDERED.
Melencio-Herrera, Paras, Regalado and Nocon, JJ., concur.

DIGEST
FACTS:
Carlitos Bautista, a third-year commerce student of PSBA, was stabbed to death while on the
second-floor premises of the school. The assailants were not members of the schools academic
community but were elements from outside the school. The parents of Carlitos filed a civil action
against the school authorities, alleging them negligent, reckless and with failure to take security
precautions, means and methods before, during and after the attack on the victim. The appellate
court found in their favor, primarily anchoring its decision on the law of quasi-delicts.
Hence, the petition.
ISSUE:
Whether or not the appellate court was correct in deciding the case based on Article
2180 (in loco parentis)
o
Whether or not the application of the law on quasi-delict is proper when there is a
pre-existing contract
o

HELD:
The SC did not agree with the premises of the CAs ruling. Article 2180, in conjunction with
Article 2176 of the Civil Code, establishes the rule in in loco parentis. It had been stressed that
the law (Article 2180) plainly provides that the damage should have been caused or inflicted by
pupils or students of the educational institution sought to be held liable for the acts of its pupils
or students while in its custody. However, this material situation does not exist in the present case
for, as earlier indicated, the assailants of Carlitos were not students of PSBA, for whose acts the
128 | P a g e

school could have been made liable.

IS PSBA EXCULPATED FROM LIABILITY?
It does not necessarily follow. When an academic institution accepts students for enrollment,
there is established a contract between them, resulting in bilateral obligations which both parties
are bound to comply with. Moreover, there is that built-in obligation to provide students with
an atmosphere that promotes or assists in attaining its primary undertaking of imparting
knowledge. The school must ensure that adequate steps are taken to maintain peace and order
within the campus premises and to prevent the breakdown thereof.
Because the circumstances of the present case evince a contractual relation between PSBA and
Carlitos, the rules on quasi-delict do not really govern. However, the mere fact that a person is
bound to another by contract does not relieve him from extra-contractual liability to such person.
When such a contractual relation exists the obligor may break the contract under such conditions
that the same act which constitutes a breach of the contract would have constituted the source of
an extra-contractual obligation had no contract existed between the parties. Art. 21 of the Civil
Code comes to mind, so that should the act which breaches a contract be done in bad faith and
violative of Art. 21, then there is a cause to view the act as constituting a quasi-delict.
In the present case, there is no finding that the contract between the school and Carlitos had been
breached thru the formers negligence in providing proper security measures.

129 | P a g e

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 98695 January 27, 1993

JUAN J. SYQUIA, CORAZON C. SYQUIA, CARLOTA C. SYQUIA, CARLOS C.
SYQUIA and ANTHONY C. SYQUIA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, and THE MANILA MEMORIAL PARK
CEMETERY, INC.,respondents.
Pacis & Reyes Law Offices for petitioners.
Augusto S. San Pedro & Ari-Ben C. Sebastian for private respondents.

CAMPOS, JR., J.:

Herein petitioners, Juan J. Syquia and Corazon C. Syquia, Carlota C. Syquia, Carlos C. Syquia,
and Anthony Syquia, were the parents and siblings, respectively, of the deceased Vicente Juan
Syquia. On March 5, 1979, they filed a complaint 1 in the then Court of First Instance against
herein private respondent, Manila Memorial Park Cemetery, Inc. for recovery of damages arising
from breach of contract and/or quasi-delict. The trial court dismissed the complaint.
130 | P a g e

The antecedent facts, as gathered by the respondent Court, are as follows:

On March 5, 1979, Juan, Corazon, Carlota and Anthony all surnamed Syquia,
plaintiff-appellants herein, filed a complaint for damages against defendantappellee, Manila Memorial Park Cemetery, Inc.
The complaint alleged among others, that pursuant to a Deed of Sale (Contract
No. 6885) dated August 27, 1969 and Interment Order No. 7106 dated July 21,
1978 executed between plaintiff-appellant Juan J. Syquia and defendant-appellee,
the former, father of deceased Vicente Juan J. Syquia authorized and instructed
defendant-appellee to inter the remains of deceased in the Manila Memorial Park
Cemetery in the morning of July 25, 1978 conformably and in accordance with
defendant-appellant's (sic) interment procedures; that on September 4, 1978,
preparatory to transferring the said remains to a newly purchased family plot also
at the Manila Memorial Park Cemetery, the concrete vault encasing the coffin of
the deceased was removed from its niche underground with the assistance of
certain employees of defendant-appellant (sic); that as the concrete vault was
being raised to the surface, plaintiffs-appellants discovered that the concrete vault
had a hole approximately three (3) inches in diameter near the bottom of one of
the walls closing out the width of the vault on one end and that for a certain length
of time (one hour, more or less), water drained out of the hole; that because of the
aforesaid discovery, plaintiffs-appellants became agitated and upset with concern
that the water which had collected inside the vault might have risen as it in fact
did rise, to the level of the coffin and flooded the same as well as the remains of
the deceased with ill effects thereto; that pursuant to an authority granted by the
Municipal Court of Paraaque, Metro Manila on September 14, 1978, plaintiffsappellants with the assistance of licensed morticians and certain personnel of
defendant-appellant (sic) caused the opening of the concrete vault on September
15, 1978; that upon opening the vault, the following became apparent to the
plaintiffs-appellants: (a) the interior walls of the concrete vault showed evidence
of total flooding; (b) the coffin was entirely damaged by water, filth and silt
causing the wooden parts to warp and separate and to crack the viewing glass
panel located directly above the head and torso of the deceased; (c) the entire
lining of the coffin, the clothing of the deceased, and the exposed parts of the
deceased's remains were damaged and soiled by the action of the water and silt
and were also coated with filth.
Due to the alleged unlawful and malicious breach by the defendant-appellee of its
obligation to deliver a defect-free concrete vault designed to protect the remains
of the deceased and the coffin against the elements which resulted in the
desecration of deceased's grave and in the alternative, because of defendant131 | P a g e

appellee's gross negligence conformably to Article 2176 of the New Civil Code in
failing to seal the concrete vault, the complaint prayed that judgment be rendered
ordering defendant-appellee to pay plaintiffs-appellants P30,000.00 for actual
damages, P500,000.00 for moral damages, exemplary damages in the amount
determined by the court, 20% of defendant-appellee's total liability as attorney's
fees, and expenses of litigation and costs of suit. 2
In dismissing the complaint, the trial court held that the contract between the parties did not
guarantee that the cement vault would be waterproof; that there could be no quasi-delict because
the defendant was not guilty of any fault or negligence, and because there was a pre-existing
contractual relation between the Syquias and defendant Manila Memorial Park Cemetery, Inc..
The trial court also noted that the father himself, Juan Syquia, chose the gravesite despite
knowing that said area had to be constantly sprinkled with water to keep the grass green and that
water would eventually seep through the vault. The trial court also accepted the explanation
given by defendant for boring a hole at the bottom side of the vault: "The hole had to be bored
through the concrete vault because if it has no hole the vault will (sic) float and the grave would
be filled with water and the digging would caved (sic) in the earth, the earth would caved (sic) in
the (sic) fill up the grave." 3
From this judgment, the Syquias appealed. They alleged that the trial court erred in holding that
the contract allowed the flooding of the vault; that there was no desecration; that the boring of
the hole was justifiable; and in not awarding damages.
The Court of Appeals in the Decision 4 dated December 7, 1990 however, affirmed the judgment
of dismissal. Petitioner's motion for reconsideration was denied in a Resolution dated April 25,
1991. 5
Unsatisfied with the respondent Court's decision, the Syquias filed the instant petition. They
allege herein that the Court of Appeals committed the following errors when it:
1. held that the contract and the Rules and Resolutions of private respondent
allowed the flooding of the vault and the entrance thereto of filth and silt;
2. held that the act of boring a hole was justifiable and corollarily, when it held
that no act of desecration was committed;
3. overlooked and refused to consider relevant, undisputed facts, such as those
which have been stipulated upon by the parties, testified to by private respondent's
witnesses, and admitted in the answer, which could have justified a different
conclusion;

132 | P a g e

4. held that there was no tort because of a pre-existing contract and the absence of
fault/negligence; and
5. did not award the P25,000.00 actual damages which was agreed upon by the
parties, moral and exemplary damages, and attorney's fees.
At the bottom of the entire proceedings is the act of boring a hole by private respondent on the
vault of the deceased kin of the bereaved petitioners. The latter allege that such act was either a
breach of private respondent's contractual obligation to provide a sealed vault, or, in the
alternative, a negligent act which constituted a quasi-delict. Nonetheless, petitioners claim that
whatever kind of negligence private respondent has committed, the latter is liable for desecrating
the grave of petitioners' dead.
In the instant case, We are called upon to determine whether the Manila Memorial Park
Cemetery, Inc., breached its contract with petitioners; or, alternatively, whether private
respondent was guilty of a tort.
We understand the feelings of petitioners and empathize with them. Unfortunately, however, We
are more inclined to answer the foregoing questions in the negative. There is not enough ground,
both in fact and in law, to justify a reversal of the decision of the respondent Court and to uphold
the pleas of the petitioners.
With respect to herein petitioners' averment that private respondent has committed culpa
aquiliana, the Court of Appeals found no negligent act on the part of private respondent to justify
an award of damages against it. Although a pre-existing contractual relation between the parties
does not preclude the existence of a culpa aquiliana, We find no reason to disregard the
respondent's Court finding that there was no negligence.
Art. 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict . . . . (Emphasis supplied).
In this case, it has been established that the Syquias and the Manila Memorial Park
Cemetery, Inc., entered into a contract entitled "Deed of Sale and Certificate of Perpetual
Care" 6 on August 27, 1969. That agreement governed the relations of the parties and
defined their respective rights and obligations. Hence, had there been actual negligence
on the part of the Manila Memorial Park Cemetery, Inc., it would be held liable not for
a quasi-delict orculpa aquiliana, but for culpa contractual as provided by Article 1170 of
the Civil Code, to wit:

133 | P a g e

Those who in the performance of their obligations are guilty of fraud, negligence,
or delay, and those who in any manner contravene the tenor thereof, are liable for
damages.
The Manila Memorial Park Cemetery, Inc. bound itself to provide the concrete box to be send in
the interment. Rule 17 of the Rules and Regulations of private respondent provides that:
Rule 17. Every earth interment shall be made enclosed in a concrete box, or in an
outer wall of stone, brick or concrete, the actual installment of which shall be
made by the employees of the Association. 7
Pursuant to this above-mentioned Rule, a concrete vault was provided on July 27, 1978, the day
before the interment, and was, on the same day, installed by private respondent's employees in
the grave which was dug earlier. After the burial, the vault was covered by a cement lid.
Petitioners however claim that private respondent breached its contract with them as the latter
held out in the brochure it distributed that the . . . lot may hold single or double internment (sic)
underground in sealed concrete vault." 8 Petitioners claim that the vault provided by private
respondent was not sealed, that is, not waterproof. Consequently, water seeped through the
cement enclosure and damaged everything inside it.
We do not agree. There was no stipulation in the Deed of Sale and Certificate of Perpetual Care
and in the Rules and Regulations of the Manila Memorial Park Cemetery, Inc. that the vault
would be waterproof. Private respondent's witness, Mr. Dexter Heuschkel, explained that the
term "sealed" meant "closed." 9 On the other hand, the word "seal" is defined as . . . any of
various closures or fastenings . . . that cannot be opened without rupture and that serve as a check
against tampering or unauthorized opening." 10 The meaning that has been given by private
respondent to the word conforms with the cited dictionary definition. Moreover, it is also quite
clear that "sealed" cannot be equated with "waterproof". Well settled is the rule that when the
terms of the contract are clear and leave no doubt as to the intention of the contracting parties,
then the literal meaning of the stipulation shall control. 11 Contracts should be interpreted
according to their literal meaning and should not be interpreted beyond their obvious
intendment. 12 As ruled by the respondent Court:
When plaintiff-appellant Juan J. Syquia affixed his signature to the Deed of Sale
(Exhibit "A") and the attached Rules and Regulations (Exhibit "1"), it can be
assumed that he has accepted defendant-appellee's undertaking to merely provide
a concrete vault. He can not now claim that said concrete vault must in addition,
also be waterproofed (sic). It is basic that the parties are bound by the terms of
their contract, which is the law between them (Rizal Commercial Banking
Corporation vs. Court of Appeals, et al. 178 SCRA 739). Where there is nothing
134 | P a g e

in the contract which is contrary to law, morals, good customs, public order, or
public policy, the validity of the contract must be sustained (Phil. American
Insurance Co. vs. Judge Pineda, 175 SCRA 416). Consonant with this ruling, a
contracting party cannot incur a liability more than what is expressly specified in
his undertaking. It cannot be extended by implication, beyond the terms of the
contract (Rizal Commercial Banking Corporation vs. Court of Appeals, supra).
And as a rule of evidence, where the terms of an agreement are reduced to
writing, the document itself, being constituted by the parties as the expositor of
their intentions, is the only instrument of evidence in respect of that agreement
which the law will recognize, so long as its (sic) exists for the purpose of evidence
(Starkie, Ev., pp. 648, 655, Kasheenath vs. Chundy, 5 W.R. 68 cited in Francisco,
Revised Rules of Court in the Phil. p. 153, 1973 Ed.). And if the terms of the
contract are clear and leave no doubt upon the intention of the contracting parties,
the literal meaning of its stipulations shall control (Santos vs. CA, et al., G. R. No.
83664, Nov. 13, 1989; Prudential Bank & Trust Co. vs. Community Builders Co.,
Inc., 165 SCRA 285; Balatero vs. IAC, 154 SCRA 530). 13
We hold, therefore, that private respondent did not breach the tenor of its obligation to the
Syquias. While this may be so, can private respondent be liable for culpa aquiliana for boring
the hole on the vault? It cannot be denied that the hole made possible the entry of more water and
soil than was natural had there been no hole.
The law defines negligence as the "omission of that diligence which is required by the nature of
the obligation and corresponds with the circumstances of the persons, of the time and of the
place." 14 In the absence of stipulation or legal provision providing the contrary, the diligence to
be observed in the performance of the obligation is that which is expected of a good father of a
family.
The circumstances surrounding the commission of the assailed act boring of the hole
negate the allegation of negligence. The reason for the act was explained by Henry Flores,
Interment Foreman, who said that:
Q It has been established in this particular case that a certain
Vicente Juan Syquia was interred on July 25, 1978 at the
Paraaque Cemetery of the Manila Memorial Park Cemetery, Inc.,
will you please tell the Hon. Court what or whether you have
participation in connection with said internment (sic)?
A A day before Juan (sic) Syquia was buried our personnel dug a
grave. After digging the next morning a vault was taken and placed
in the grave and when the vault was placed on the grave a hole was
135 | P a g e

placed on the vault so that water could come into the vault
because it was raining heavily then because the vault has no hole
the vault will float and the grave would be filled with water and the
digging would caved (sic) in and the earth, the earth would (sic)
caved in and fill up the grave. 15 (Emphasis ours)
Except for the foreman's opinion that the concrete vault may float should there be a heavy
rainfall, from the above-mentioned explanation, private respondent has exercised the diligence of
a good father of a family in preventing the accumulation of water inside the vault which would
have resulted in the caving in of earth around the grave filling the same with earth.
Thus, finding no evidence of negligence on the part of private respondent, We find no reason to
award damages in favor of petitioners.
In the light of the foregoing facts, and construed in the language of the applicable laws and
jurisprudence, We are constrained to AFFIRM in toto the decision of the respondent Court of
Appeals dated December 7, 1990. No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Regalado and Nocon, JJ., concur.

DIGEST
FACTS:
1. Petitioners were the parents and siblings, respectively, of the deceased Vicente Juan Syquia.
On March 5, 1979, they filed a complaint in the then Court of First Instance against herein
private respondent, Manila Memorial Park Cemetery, Inc. for recovery of damages arising from
breach of contract and/or quasi-delict.
2. According to the complaint, the petitioners and respondent to inter the remains of deceased in
the Manila Memorial Park Cemetery in the morning of July 25, 1978. They also alleged that the
concrete vault encasing the coffin of the deceased had a hole approximately three (3) inches in
diameter. Upon opening the vault, it became apparent that there was evidence of total flooding,
the coffin was entirely damaged and the exposed parts of the deceaseds remains were damaged.
3. The complaint prayed that judgment be rendered ordering defendant-appellee to pay plaintiffsappellants P30,000.00 for actual damages, P500,000.00 for moral damages, etc.
DECISION OF LOWER COURTS:
1. Trial Court: dismissed the complaint. the contract between the parties did not guarantee that
the cement vault would be waterproof; that there could be no quasi-delict because the defendant
was not guilty of any fault or negligence, and because there was a pre- existing contractual
relation.
136 | P a g e

Contention of the defense: "The hole had to be bored through the concrete vault because if it
has no hole the vault will (sic) float and the grave would be filled with water and the digging
would caved (sic) in the earth, the earth would caved (sic) in the (sic) fill up the grave."
2. Court of Appeals: affirmed dismissal.
ISSUE: whether the Manila Memorial Park Cemetery, Inc., breached its contract with
petitioners; or, alternatively, whether private respondent was guilty of a tort.
RULING:
NO, there was no negligent act on the part of the cemetery.
Although a pre-existing contractual relation between the parties does not preclude the
existence of aculpa aquiliana, We find no reason to disregard the respondent's Court
finding that there was no negligence.
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi- delict
Syquias and the Manila Memorial Park Cemetery, Inc., entered into a contract entitled "Deed of
Sale and Certificate of Perpetual Care" on August 27, 1969. That agreement governed the
relations of the parties and defined their respective rights and obligations. Hence, had there been
actual negligence on the part of the Manila Memorial Park Cemetery, Inc., it would be held liable
not for a quasi-delict or culpa aquiliana, but for culpa contractual as provided by Article 1170
of the Civil Code, to wit:
Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and
those who in any manner contravene the tenor thereof, are liable for damages.
There was no stipulation in the Deed of Sale and Certificate of Perpetual Care and in the Rules
and Regulations of the Manila Memorial Park Cemetery, Inc. that the vault would be
waterproof.
The law defines negligence as the "omission of that diligence which is required by the
nature of the obligation and corresponds with the circumstances of the persons, of the time
and of the place." In the absence of stipulation or legal provision providing the contrary,
the diligence to be observed in the performance of the obligation is that which is expected
of a good father of a family.
Private respondent has exercised the diligence of a good father of a family in preventing the
accumulation of water inside the vault which would have resulted in the caving in of earth
around the grave filling the same with earth.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
137 | P a g e

G.R. No. 145804

February 6, 2003

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners,

vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT
SECURITY AGENCY, respondents.
DECISION
VITUG, J.:
The case before the Court is an appeal from the decision and resolution of the Court of Appeals,
promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720,
entitled "Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et. al.,"
which has modified the decision of 11 August 1998 of the Regional Trial Court, Branch 266,
Pasig City, exonerating Prudent Security Agency (Prudent) from liability and finding Light Rail
Transit Authority (LRTA) and Rodolfo Roman liable for damages on account of the death of
Nicanor Navidad.
On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor Navidad,
then drunk, entered the EDSA LRT station after purchasing a "token" (representing payment of
the fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the
security guard assigned to the area approached Navidad. A misunderstanding or an altercation
between the two apparently ensued that led to a fist fight. No evidence, however, was adduced to
indicate how the fight started or who, between the two, delivered the first blow or how Navidad
later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by
petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was
killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with
her children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA,
the Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband.
LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin and
Prudent. Prudent, in its answer, denied liability and averred that it had exercised due diligence in
the selection and supervision of its security guards.
The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting
evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was
negligent in his assigned task. On 11 August 1998, the trial court rendered its decision; it
adjudged:

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"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally
the plaintiffs the following:
"a) 1) Actual damages of P44,830.00;
2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;
"b) Moral damages of P50,000.00;
"c) Attorneys fees of P20,000;
"d) Costs of suit.
"The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.
"The compulsory counterclaim of LRTA and Roman are likewise dismissed."1
Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated
its now assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad
and, instead, holding the LRTA and Roman jointly and severally liable thusly:
"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants
from any liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and
the Light Rail Transit Authority (LRTA) are held liable for his death and are hereby directed to
pay jointly and severally to the plaintiffs-appellees, the following amounts:
a) P44,830.00 as actual damages;
b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the deceased; and
e) P20,000.00 as and for attorneys fees."2
The appellate court ratiocinated that while the deceased might not have then as yet boarded the
train, a contract of carriage theretofore had already existed when the victim entered the place
where passengers were supposed to be after paying the fare and getting the corresponding token
139 | P a g e

therefor. In exempting Prudent from liability, the court stressed that there was nothing to link the
security agency to the death of Navidad. It said that Navidad failed to show that Escartin
inflicted fist blows upon the victim and the evidence merely established the fact of death of
Navidad by reason of his having been hit by the train owned and managed by the LRTA and
operated at the time by Roman. The appellate court faulted petitioners for their failure to present
expert evidence to establish the fact that the application of emergency brakes could not have
stopped the train.
The appellate court denied petitioners motion for reconsideration in its resolution of 10 October
2000.
In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz:
"I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE
FINDINGS OF FACTS BY THE TRIAL COURT
"II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
PETITIONERS ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.
"III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
RODOLFO ROMAN IS AN EMPLOYEE OF LRTA."3
Petitioners would contend that the appellate court ignored the evidence and the factual findings
of the trial court by holding them liable on the basis of a sweeping conclusion that the
presumption of negligence on the part of a common carrier was not overcome. Petitioners would
insist that Escartins assault upon Navidad, which caused the latter to fall on the tracks, was an
act of a stranger that could not have been foreseen or prevented. The LRTA would add that the
appellate courts conclusion on the existence of an employer-employee relationship between
Roman and LRTA lacked basis because Roman himself had testified being an employee of Metro
Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court, contended that a contract of carriage
was deemed created from the moment Navidad paid the fare at the LRT station and entered the
premises of the latter, entitling Navidad to all the rights and protection under a contractual
relation, and that the appellate court had correctly held LRTA and Roman liable for the death of
Navidad in failing to exercise extraordinary diligence imposed upon a common carrier.
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Law and jurisprudence dictate that a common carrier, both from the nature of its business and for
reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the
safety of passengers.4 The Civil Code, governing the liability of a common carrier for death of or
injury to its passengers, provides:
"Article 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for
all the circumstances.
"Article 1756. In case of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755."
"Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the formers employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers.
"This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees."
"Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of
the willful acts or negligence of other passengers or of strangers, if the common carriers
employees through the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission."
The law requires common carriers to carry passengers safely using the utmost diligence of very
cautious persons with due regard for all circumstances.5 Such duty of a common carrier to
provide safety to its passengers so obligates it not only during the course of the trip but for so
long as the passengers are within its premises and where they ought to be in pursuance to the
contract of carriage.6 The statutory provisions render a common carrier liable for death of or
injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of
wilful acts or negligence of other passengers or of strangers if the common carriers employees
through the exercise of due diligence could have prevented or stopped the act or omission.7 In
case of such death or injury, a carrier is presumed to have been at fault or been negligent, and8 by
simple proof of injury, the passenger is relieved of the duty to still establish the fault or
negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that
the injury is due to an unforeseen event or to force majeure.9 In the absence of satisfactory
explanation by the carrier on how the accident occurred, which petitioners, according to the
appellate court, have failed to show, the presumption would be that it has been at fault,10 an
exception from the general rule that negligence must be proved.11

141 | P a g e

The foundation of LRTAs liability is the contract of carriage and its obligation to indemnify the
victim arises from the breach of that contract by reason of its failure to exercise the high
diligence required of the common carrier. In the discharge of its commitment to ensure the safety
of passengers, a carrier may choose to hire its own employees or avail itself of the services of an
outsider or an independent firm to undertake the task. In either case, the common carrier is not
relieved of its responsibilities under the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability could only be for tort under the
provisions of Article 217612 and related provisions, in conjunction with Article 2180,13 of the
Civil Code. The premise, however, for the employers liability is negligence or fault on the part
of the employee. Once such fault is established, the employer can then be made liable on the
basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris
families in the selection and supervision of its employees. The liability is primary and can only
be negated by showing due diligence in the selection and supervision of the employee, a factual
matter that has not been shown. Absent such a showing, one might ask further, how then must
the liability of the common carrier, on the one hand, and an independent contractor, on the other
hand, be described? It would be solidary. A contractual obligation can be breached by tort and
when the same act or omission causes the injury, one resulting in culpa contractual and the other
in culpa aquiliana, Article 219414 of the Civil Code can well apply.15 In fine, a liability for tort
may arise even under a contract, where tort is that which breaches the contract.16 Stated
differently, when an act which constitutes a breach of contract would have itself constituted the
source of a quasi-delictual liability had no contract existed between the parties, the contract can
be said to have been breached by tort, thereby allowing the rules on tort to apply.17
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor
Navidad, this Court is concluded by the factual finding of the Court of Appeals that "there is
nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason that the negligence of
its employee, Escartin, has not been duly proven x x x." This finding of the appellate court is not
without substantial justification in our own review of the records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any
culpable act or omission, he must also be absolved from liability. Needless to say, the contractual
tie between the LRT and Navidad is not itself a juridical relation between the latter and Roman;
thus, Roman can be made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is untenable. Nominal damages are
adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him.18 It is an established rule that nominal damages cannot co-exist with
compensatory damages.19

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WHEREFORE, the assailed decision of the appellate court is AFFIRMED with

MODIFICATION but only in that (a) the award of nominal damages is DELETED and (b)
petitioner Rodolfo Roman is absolved from liability. No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur.

DIGEST
FACTS:
Navidad was drunk when he entered the boarding platform of the LRT. He got into an altercation
with the SG Escartin. They had a fistfight and Navidad fell onto the tracks and was killed when a
train came and ran over him.
The Heirs of Navidad filed a complaint for damages against Escartin, the train driver, (Roman)
the LRTA, the Metro Transit Organization and Prudent Security Agency (Prudent). The trial
court found Prudent and Escartin jointly and severally liable for damages to the heirs. The CA
exonerated Prudent and instead held the LRTA and the train driver Romero jointly and severally
liable as well as removing the award for compensatory damages and replacing it with nominal
damages.
The reasoning of the CA was that a contract of carriage already existed between Navidad and
LRTA (by virtue of his havA ing purchased train tickets and the liability was caused by the mere
fact of Navidad's death after being hit by the train being managed by the LRTA and operated by
Roman. The CA also blamed LRTA for not having presented expert evidence showing that the
emergency brakes could not have stopped the train on time.
ISSUES:
(1) Whether or not LRTA and/or Roman is liable for the death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with compensatory damages.
HELD:
(1) Yes. The foundation of LRTA's liability is the contract of carriage and its obligation to
indemnify the victim arising from the breach of that contract by reason of its failure to exercise
the high diligence required of a common carrier.
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(2) Fault was not established. Liability will be based on Tort under Art. 2176 of the New Civil
Code.
(3) No. It is an established rule that nominal damages cannot co-exist with compensatory
damages.
RATIO:
Liability of LRTA Read Arts. 1755,1756, 1759 and 1763 of the New Civil Code
A common carrier is required by these above statutory provisions to use utmost diligence in
carrying passengers with due regard for all circumstances. This obligation exists not only during
the course of the trip but for so long as the passengers are within its premises where they ought
to be in pursuance to then contract of carriage.
Art. 1763 renders a common carrier liable for death of or injury to passengers (a) through
the negligence or wilful acts of its employees or (b) on account of willful acts or negligence of
other passengers or of strangers if the common carriers employees through theexercise of due
diligence could have prevented or stopped the act or omission. In case of such death or injury, a
carrier is presumed to have been at fault or been negligent, and by simple proof of injury, the
passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its
employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen
event or to force majeure.
Liability of Security Agency If Prudent is to be held liable, it would be for a tort under Art.
2176 in conjunction with Art. 2180. Once the fault of the employee Escartin is established, the
employer, Prudent, would be held liable on the presumption that it did not exercise the diligence
of a good father of the family in the selection and supervision of its employees.
Relationship between contractual and non-contractual breach How then must the liability
of the common carrier, on the one hand, and an independent contractor, on the other hand, be
described? It would be solidary. A contractual obligation can be breached by tort and when the
same act or omission causes the injury, one resulting in culpa contractual and the other in culpa
aquiliana, Article 2194 of the Civil Code can well apply. In fine, a liability for tort may arise
even under a contract, where tort is that which breaches the contract. Stated differently, when an
act which constitutes a breach of ontract would have itself constituted the source of a quasidelictual liability had no contract existed between the parties, the contract can be said to have
been breached by tort, thereby allowing the rules on tort to apply.
Nominal Damages - The award of nominal damages in addition to actual damages is untenable.
Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. It is an established rule that nominal
damages cannot co-exist with compensatory damages. The award was deleted/\.

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