Torts and Damages

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

PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of
Agapito Elcano, deceased,plaintiffs-appellants,
vs.
REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian
of said minor, defendants-appellees.
Cruz & Avecilla for appellants.
Marvin R. Hill & Associates for appellees.
BARREDO, J.:
Appeal from the order of the Court of First Instance of Quezon City dated January
29, 1965 in Civil Case No. Q-8102, Pedro Elcano et al. vs. Reginald Hill et al.
dismissing, upon motion to dismiss of defendants, the complaint of plaintiffs for
recovery of damages from defendant Reginald Hill, a minor, married at the time of
the occurrence, and his father, the defendant Marvin Hill, with whom he was living
and getting subsistence, for the killing by Reginald of the son of the plaintiffs,
named Agapito Elcano, of which, when criminally prosecuted, the said accused was
acquitted on the ground that his act was not criminal, because of "lack of intent to
kill, coupled with mistake."
Actually, the motion to dismiss based on the following grounds:
1. The present action is not only against but a violation of section 1, Rule 107, which
is now Rule III, of the Revised Rules of Court;
2. The action is barred by a prior judgment which is now final and or in 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.
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 RESADJUDICTA;
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, defendantappellee 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 abovereferred to.
As We view the foregoing background of this case, the two decisive issues
presented for Our resolution are:
2

1. Is the present civil action for damages barred by the acquittal of Reginald in the
criminal case wherein the action for civil liability, was not reversed?
2. May Article 2180 (2nd and last paragraphs) of the Civil Code he applied against
Atty. Hill, notwithstanding the undisputed fact that at the time of the occurrence
complained of. Reginald, though a minor, living with and getting subsistenee from
his father, was already legally married?
The first issue presents no more problem than the need for a reiteration and further
clarification of the dual character, criminal and civil, of fault or negligence as a
source of obligation which was firmly established in this jurisdiction in Barredo vs.
Garcia, 73 Phil. 607. In that case, this Court postulated, on the basis of a scholarly
dissertation by Justice Bocobo on the nature of culpa aquiliana in relation to culpa
criminal or delito and mereculpa or fault, with pertinent citation of decisions of the
Supreme Court of Spain, the works of recognized civilians, and earlier jurisprudence
of our own, that the same given act can result in civil liability not only under the
Penal Code but also under the Civil Code. Thus, the opinion holds:
The, above case is pertinent because it shows that the same act machinist. come
under both the Penal Code and the Civil Code. In that case, the action of the agent
killeth unjustified and fraudulent and therefore could have been the subject of a
criminal action. And yet, it was held to be also a proper subject of a civil action
under article 1902 of the Civil Code. It is also to be noted that it was the employer
and not the employee who was being sued. (pp. 615-616, 73 Phil.). 1
It will be noticed that the defendant in the above case could have been prosecuted
in a criminal case because his negligence causing the death of the child was
punishable by the Penal Code. Here is therefore a clear instance of the same act of
negligence being a proper subject matter either of a criminal action with its
consequent civil liability arising from a crime or of an entirely separate and
independent civil action for fault or negligence under article 1902 of the Civil Code.
Thus, in this jurisdiction, the separate individuality of a cuasi-delito or culpa
aquiliana, under the Civil Code has been fully and clearly recognized, even with
regard to a negligent act for which the wrongdoer could have been prosecuted and
convicted in a criminal case and for which, after such a conviction, he could have
been sued for this civil liability arising from his crime. (p. 617, 73 Phil.) 2
It is most significant that in the case just cited, this Court specifically applied article
1902 of the Civil Code. It is thus that although J. V. House could have been
criminally prosecuted for reckless or simple negligence and not only punished but
also made civilly liable because of his criminal negligence, nevertheless this Court
awarded damages in an independent civil action for fault or negligence under article
1902 of the Civil Code. (p. 618, 73 Phil.) 3
The legal provisions, authors, and cases already invoked should ordinarily be
sufficient to dispose of this case. But inasmuch as we are announcing doctrines that
3

have been little understood, in the past, it might not he inappropriate to indicate
their foundations.
Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also
simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code
refer only to fault or negligence not punished by law, accordingly to the literal
import of article 1093 of the Civil Code, the legal institution of culpa aquiliana would
have very little scope and application in actual life. Death or injury to persons and
damage to property- through any degree of negligence - even the slightest - would
have to be Idemnified only through the principle of civil liability arising from a crime.
In such a state of affairs, what sphere would remain for cuasi-delito or culpa
aquiliana? We are loath to impute to the lawmaker any intention to bring about a
situation so absurd and anomalous. Nor are we, in the interpretation of the laws,
disposed to uphold the letter that killeth rather than the spirit that giveth life. We
will not use the literal meaning of the law to smother and render almost lifeless a
principle of such ancient origin and such full-grown development as culpa
aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to
1910 of the Spanish Civil Code.
Secondary, to find the accused guilty in a criminal case, proof of guilt beyond
reasonable doubt is required, while in a civil case, preponderance of evidence is
sufficient to make the defendant pay in damages. There are numerous cases of
criminal negligence which can not be shown beyond reasonable doubt, but can be
proved by a preponderance of evidence. In such cases, the defendant can and
should be made responsible in a civil action under articles 1902 to 1910 of the Civil
Code. Otherwise. there would be many instances of unvindicated civil wrongs. "Ubi
jus Idemnified remedium." (p. 620,73 Phil.)
Fourthly, because of the broad sweep of the provisions of both the Penal Code and
the Civil Code on this subject, which has given rise to the overlapping or
concurrence of spheres already discussed, and for lack of understanding of the
character and efficacy of the action for culpa aquiliana, there has grown up a
common practice to seek damages only by virtue of the civil responsibility arising
from a crime, forgetting that there is another remedy, which is by invoking articles
1902-1910 of the Civil Code. Although this habitual method is allowed by, our laws,
it has nevertheless rendered practically useless and nugatory the more expeditious
and effective remedy based on culpa aquiliana or culpa extra-contractual. In the
present case, we are asked to help perpetuate this usual course. But we believe it is
high time we pointed out to the harms done by such practice and to restore the
principle of responsibility for fault or negligence under articles 1902 et seq. of the
Civil Code to its full rigor. It is high time we caused the stream of quasi-delict
or culpa aquiliana to flow on its own natural channel, so that its waters may no
longer be diverted into that of a crime under the Penal Code. This will, it is believed,
make for the better safeguarding or private rights because it realtor, an ancient and
additional remedy, and for the further reason that an independent civil action, not
4

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 fullgrown 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:
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 "cuasidelito" has been sustained by decision of the Supreme Court of Spain and
maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish
5

jurist. Therefore, under the proposed Article 2177, acquittal from an accusation of
criminal negligence, whether on reasonable doubt or not, shall not be a bar to a
subsequent civil action, not for civil liability arising from criminal negligence, but for
damages due to a quasi-delict or 'culpa aquiliana'. But said article forestalls a
double recovery.", (Report of the Code) Commission, p. 162.)
Although, again, this Article 2177 does seem to literally refer to only acts of
negligence, the same argument of Justice Bacobo about construction that upholds
"the spirit that giveth lift- rather than that which is literal that killeth the intent of
the lawmaker should be observed in applying the same. And considering that the
preliminary chapter on human relations of the new Civil Code definitely establishes
the separability and independence of liability in a civil action for acts criminal in
character (under Articles 29 to 32) from the civil responsibility arising from crime
fixed by Article 100 of the Revised Penal Code, and, in a sense, the Rules of Court,
under Sections 2 and 3 (c), Rule 111, contemplate also the same separability, it is
"more congruent with the spirit of law, equity and justice, and more in harmony with
modern progress"- to borrow the felicitous relevant language in Rakes vs. Atlantic.
Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where it
refers to "fault or negligencia covers not only acts "not punishable by law" but also
acts criminal in character, whether intentional and voluntary or negligent.
Consequently, a separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided
that the offended party is not allowed, if he is actually charged also criminally, to
recover damages on both scores, and would be entitled in such eventuality only to
the bigger award of the two, assuming the awards made in the two cases vary. In
other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule
111, refers exclusively to civil liability founded on Article 100 of the Revised Penal
Code, whereas the civil liability for the same act considered as a quasi-delict only
and not as a crime is not estinguished even by a declaration in the criminal case
that the criminal act charged has not happened or has not been committed by the
accused. Briefly stated, We here hold, in reiteration of Garcia, thatculpa
aquiliana includes voluntary and negligent acts which may be punishable by law. 4
It results, therefore, that the acquittal of Reginal Hill in the criminal case has not
extinguished his liability for 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,
6

emancipation by marriage of the minor is not really full or absolute. Thus

"(E)mancipation by marriage or by voluntary concession shall terminate parental
authority over the child's person. It shall enable the minor to administer his property
as though he were of age, but he cannot borrow money or alienate or encumber
real property without the consent of his father or mother, or guardian. He can sue
and be sued in court only with the assistance of his father, mother or guardian."
Now under Article 2180, "(T)he obligation imposed by article 2176 is demandable
not only for one's own acts or omissions, but also for those of persons for whom one
is responsible. The father and, in case of his death or incapacity, the mother, are
responsible. The father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in their
company." In the instant case, it is not controverted that Reginald, although
married, was living with his father and getting subsistence from him at the time of
the occurrence in question. Factually, therefore, Reginald was still subservient to
and dependent on his father, a situation which is not unusual.
It must be borne in mind that, according to Manresa, the reason behind the joint
and solidary liability of presuncion with their offending child under Article 2180 is
that is the obligation of the parent to supervise their minor children in order to
prevent them from causing damage to third persons. 5 On the other hand, the clear
implication of Article 399, in providing that a minor emancipated by marriage may
not, nevertheless, sue or be sued without the assistance of the parents, is that such
emancipation does not carry with it freedom to enter into transactions or do any act
that can give rise to judicial litigation. (See Manresa, Id., Vol. II, pp. 766-767, 776.)
And surely, killing someone else invites judicial action. Otherwise stated, the
marriage of a minor child does not relieve the parents of the duty to see to it that
the child, while still a minor, does not give answerable for the borrowings of money
and alienation or encumbering of real property which cannot be done by their minor
married child without their consent. (Art. 399; Manresa, supra.)
Accordingly, in Our considered view, Article 2180 applies to Atty. Hill
notwithstanding the emancipation by marriage of Reginald. However, inasmuch as it
is evident that Reginald is now of age, as a matter of equity, the liability of Atty. Hill
has become milling, subsidiary to that of his son.
WHEREFORE, the order appealed from is reversed and the trial court is ordered to
proceed in accordance with the foregoing opinion. Costs against appellees.
[G.R. No. 150255. April 22, 2005]
SCHMITZ TRANSPORT & BROKERAGE CORPORATION, petitioner,
vs. TRANSPORT VENTURE, INC., INDUSTRIAL INSURANCE COMPANY, LTD.,
and BLACK SEA SHIPPING AND DODWELL now INCHCAPE SHIPPING
SERVICES, respondents.
7

DECISION
CARPIO-MORALES, J.:
On petition for review is the June 27, 2001 Decision [1] of the Court of Appeals, as
well as its Resolution[2] dated September 28, 2001 denying the motion for
reconsideration, which affirmed that of Branch 21 of the Regional Trial Court (RTC) of
Manila in Civil Case No. 92-63132[3] holding petitioner Schmitz Transport Brokerage
Corporation (Schmitz Transport), together with Black Sea Shipping Corporation
(Black Sea), represented by its ship agent Inchcape Shipping Inc. (Inchcape), and
Transport Venture (TVI), solidarily liable for the loss of 37 hot rolled steel sheets in
coil that were washed overboard a barge.
On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of
Ilyichevsk, Russia on board M/V Alexander Saveliev (a vessel of Russian registry and
owned by Black Sea) 545 hot rolled steel sheets in coil weighing 6,992,450 metric
tons.
The cargoes, which were to be discharged at the port of Manila in favor of the
consignee, Little Giant Steel Pipe Corporation (Little Giant), [4]were insured against all
risks with Industrial Insurance Company Ltd. (Industrial Insurance) under Marine
Policy No. M-91-3747-TIS.[5]
The vessel arrived at the port of Manila on October 24, 1991 and the Philippine Ports
Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila
South Harbor.[6]
Schmitz Transport, whose services the consignee engaged to secure the requisite
clearances, to receive the cargoes from the shipside, and to deliver them to its (the
consignees) warehouse at Cainta, Rizal,[7] in turn engaged the services of TVI to
send a barge and tugboat at shipside.
On October 26, 1991, around 4:30 p.m., TVIs tugboat Lailani towed the barge Erika
V to shipside.[8]
By 7:00 p.m. also of October 26, 1991, the tugboat, after positioning the barge
alongside the vessel, left and returned to the port terminal. [9] At 9:00 p.m., arrastre
operator Ocean Terminal Services Inc. commenced to unload 37 of the 545 coils
from the vessel unto the barge.
By 12:30 a.m. of October 27, 1991 during which the weather condition had become
inclement due to an approaching storm, the unloading unto the barge of the 37 coils
was accomplished.[10] No tugboat pulled the barge back to the pier, however.
At around 5:30 a.m. of October 27, 1991, due to strong waves, [11] the crew of the
barge abandoned it and transferred to the vessel. The barge pitched and rolled with
the waves and eventually capsized, washing the 37 coils into the sea. [12] At 7:00
8

a.m., a tugboat finally arrived to pull the already empty and damaged barge back to
the pier.[13]
Earnest efforts on the part of both the consignee Little Giant and Industrial
Insurance to recover the lost cargoes proved futile. [14]
Little Giant thus filed a formal claim against Industrial Insurance which paid it the
amount of P5,246,113.11. Little Giant thereupon executed a subrogation
receipt[15] in favor of Industrial Insurance.
Industrial Insurance later filed a complaint against Schmitz Transport, TVI, and Black
Sea through its representative Inchcape (the defendants) before the RTC of Manila,
for the recovery of the amount it paid to Little Giant plus adjustment fees, attorneys
fees, and litigation expenses.[16]
Industrial Insurance faulted the defendants for undertaking the unloading of the
cargoes while typhoon signal No. 1 was raised in Metro Manila. [17]
By Decision of November 24, 1997, Branch 21 of the RTC held all the defendants
negligent for unloading the cargoes outside of the breakwater notwithstanding the
storm signal.[18] The dispositive portion of the decision reads:
WHEREFORE, premises considered, the Court renders judgment in favor of the
plaintiff, ordering the defendants to pay plaintiff jointly and severally the sum
of P5,246,113.11 with interest from the date the complaint was filed until fully
satisfied, as well as the sum of P5,000.00 representing the adjustment fee plus the
sum of 20% of the amount recoverable from the defendants as attorneys fees plus
the costs of suit. The counterclaims and cross claims of defendants are hereby
DISMISSED for lack of [m]erit.[19]
To the trial courts decision, the defendants Schmitz Transport and TVI filed a joint
motion for reconsideration assailing the finding that they are common carriers and
the award of excessive attorneys fees of more than P1,000,000. And they argued
that they were not motivated by gross or evident bad faith and that the incident
was caused by a fortuitous event. [20]
By resolution of February 4, 1998, the trial court denied the motion for
reconsideration. [21]
All the defendants appealed to the Court of Appeals which, by decision of June 27,
2001, affirmed in toto the decision of the trial court, [22] it finding that all the
defendants were common carriers Black Sea and TVI for engaging in the transport
of goods and cargoes over the seas as a regular business and not as an isolated
transaction,[23] and Schmitz Transport for entering into a contract with Little Giant to
transport the cargoes from ship to port for a fee. [24]

In holding all the defendants solidarily liable, the appellate court ruled that each one
was essential such that without each others contributory negligence the incident
would not have happened and so much so that the person principally liable cannot
be distinguished with sufficient accuracy. [25]
In discrediting the defense of fortuitous event, the appellate court held that
although defendants obviously had nothing to do with the force of nature, they
however had control of where to anchor the vessel, where discharge will take place
and even when the discharging will commence. [26]
The defendants respective motions for reconsideration having been denied by
Resolution[27] of September 28, 2001, Schmitz Transport (hereinafter referred to as
petitioner) filed the present petition against TVI, Industrial Insurance and Black Sea.
Petitioner asserts that in chartering the barge and tugboat of TVI, it was acting for
its principal, consignee Little Giant, hence, the transportation contract was by and
between Little Giant and TVI.[28]
By Resolution of January 23, 2002, herein respondents Industrial Insurance, Black
Sea, and TVI were required to file their respective Comments. [29]
By its Comment, Black Sea argued that the cargoes were received by the consignee
through petitioner in good order, hence, it cannot be faulted, it having had no
control and supervision thereover. [30]
For its part, TVI maintained that it acted as a passive party as it merely received the
cargoes and transferred them unto the barge upon the instruction of petitioner. [31]
In issue then are:
(1) Whether the loss of the cargoes was due to a fortuitous event, independent of
any act of negligence on the part of petitioner Black Sea and TVI, and
(2) If there was negligence, whether liability for the loss may attach to Black Sea,
petitioner and TVI.
When a fortuitous event occurs, Article 1174 of the Civil Code absolves any party
from any and all liability arising therefrom:
ART. 1174. Except in cases expressly specified by the law, or when it is otherwise
declared by stipulation, or when the nature of the obligation requires the
assumption of risk, no person shall be responsible for those events which could not
be foreseen, or which though foreseen, were inevitable.
In order, to be considered a fortuitous event, however, (1) the cause of the
unforeseen and unexpected occurrence, or the failure of the debtor to comply with
his obligation, must be independent of human will; (2) it must be impossible to
foresee the event which constitute the caso fortuito, or if it can be foreseen it must
10

be impossible to avoid; (3) the occurrence must be such as to render it impossible

for the debtor to fulfill his obligation in any manner; and (4) the obligor must be free
from any participation in the aggravation of the injury resulting to the creditor. [32]
[T]he principle embodied in the act of God doctrine strictly requires that the act
must be occasioned solely by the violence of nature. Human intervention is to be
excluded from creating or entering into the cause of the mischief. When the effect is
found to be in part the result of the participation of man, whether due to his active
intervention or neglect or failure to act, the whole occurrence is then humanized
and removed from the rules applicable to the acts of God. [33]
The appellate court, in affirming the finding of the trial court that human
intervention in the form of contributory negligence by all the defendants resulted to
the loss of the cargoes,[34] held that unloading outside the breakwater, instead of
inside the breakwater, while a storm signal was up constitutes negligence. [35] It thus
concluded that the proximate cause of the loss was Black Seas negligence in
deciding to unload the cargoes at an unsafe place and while a typhoon was
approaching.[36]
From a review of the records of the case, there is no indication that there was
greater risk in loading the cargoes outside the breakwater. As the defendants
proffered, the weather on October 26, 1991 remained normal with moderate sea
condition such that port operations continued and proceeded normally. [37]
The weather data report,[38] furnished and verified by the Chief of the Climate Data
Section of PAG-ASA and marked as a common exhibit of the parties, states that
while typhoon signal No. 1 was hoisted over Metro Manila on October 23-31, 1991,
the sea condition at the port of Manila at 5:00 p.m. - 11:00 p.m. of October 26, 1991
was moderate. It cannot, therefore, be said that the defendants were negligent in
not unloading the cargoes upon the barge on October 26, 1991 inside the
breakwater.
That no tugboat towed back the barge to the pier after the cargoes were completely
loaded by 12:30 in the morning[39] is, however, a material fact which the appellate
court failed to properly consider and appreciate [40] the proximate cause of the loss of
the cargoes. Had the barge been towed back promptly to the pier, the deteriorating
sea conditions notwithstanding, the loss could have been avoided. But the barge
was left floating in open sea until big waves set in at 5:30 a.m., causing it to sink
along with the cargoes.[41] The loss thus falls outside the act of God doctrine.
The proximate cause of the loss having been determined, who among the parties
is/are responsible therefor?
Contrary to petitioners insistence, this Court, as did the appellate court, finds that
petitioner is a common carrier. For it undertook to transport the cargoes from the
shipside of M/V Alexander Saveliev to the consignees warehouse at Cainta, Rizal. As
11

the appellate court put it, as long as a person or corporation holds [itself] to the
public for the purpose of transporting goods as [a] business, [it] is already
considered a common carrier regardless if [it] owns the vehicle to be used or has to
hire one.[42] That petitioner is a common carrier, the testimony of its own VicePresident and General Manager Noel Aro that part of the services it offers to its
clients as a brokerage firm includes the transportation of cargoes reflects so.
Atty. Jubay: Will you please tell us what [are you] functions x x x as Executive VicePresident and General Manager of said Company?
Mr. Aro: Well, I oversee the entire operation of the brokerage and transport business
of the company. I also handle the various division heads of the company for
operation matters, and all other related functions that the President may assign to
me from time to time, Sir.
Q: Now, in connection [with] your duties and functions as you mentioned, will you
please tell the Honorable Court if you came to know the company by the name Little
Giant Steel Pipe Corporation?
A: Yes, Sir. Actually, we are the brokerage firm of that Company.
Q: And since when have you been the brokerage firm of that company, if you can
recall?
A: Since 1990, Sir.
Q: Now, you said that you are the brokerage firm of this Company. What work or
duty did you perform in behalf of this company?
A: We handled the releases (sic) of their cargo[es] from the Bureau of Customs. We
[are] also in-charged of the delivery of the goods to their warehouses. We also
handled the clearances of their shipment at the Bureau of Customs, Sir.
xxx
Q: Now, what precisely [was] your agreement with this Little Giant Steel Pipe
Corporation with regards to this shipment? What work did you do with this
shipment?
A: We handled the unloading of the cargo[es] from vessel to lighter and then the
delivery of [the] cargo[es] from lighter to BASECO then to the truck and to the
warehouse, Sir.
Q: Now, in connection with this work which you are doing, Mr. Witness, you are
supposed to perform, what equipment do (sic) you require or did you use in order to
effect this unloading, transfer and delivery to the warehouse?

12

A: Actually, we used the barges for the ship side operations, this unloading [from]
vessel to lighter, and on this we hired or we sub-contracted with [T]ransport
Ventures, Inc. which [was] in-charged (sic) of the barges. Also, in BASECO compound
we are leasing cranes to have the cargo unloaded from the barge to trucks, [and]
then we used trucks to deliver [the cargoes] to the consignees warehouse, Sir.
Q: And whose trucks do you use from BASECO compound to the consignees
warehouse?
A: We utilized of (sic) our own trucks and we have some other contracted trucks, Sir.
xxx
ATTY. JUBAY: Will you please explain to us, to the Honorable Court why is it you have
to contract for the barges of Transport Ventures Incorporated in this particular
operation?
A: Firstly, we dont own any barges. That is why we hired the services of another firm
whom we know [al]ready for quite sometime, which is Transport Ventures, Inc.
(Emphasis supplied)[43]
It is settled that under a given set of facts, a customs broker may be regarded as a
common carrier. Thus, this Court, in A.F. Sanchez Brokerage, Inc. v. The Honorable
Court of Appeals,[44] held:
The appellate court did not err in finding petitioner, a customs broker, to be also a
common carrier, as defined under Article 1732 of the Civil Code, to wit,
Art. 1732. 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 compensation, offering their services to the public.
xxx
Article 1732 does not distinguish between one whose principal business activity is
the carrying of goods and one who does such carrying only as an ancillary activity.
The contention, therefore, of petitioner that it is not a common carrier but a
customs broker whose principal function is to prepare the correct customs
declaration and proper shipping documents as required by law is bereft of merit. It
suffices that petitioner undertakes to deliver the goods for pecuniary consideration.
[45]

And in Calvo v. UCPB General Insurance Co. Inc.,[46] this Court held that as the
transportation of goods is an integral part of a customs broker, the customs broker
is also a common carrier. For to declare otherwise would be to deprive those with
whom [it] contracts the protection which the law affords them notwithstanding the

13

fact that the obligation to carry goods for [its] customers, is part and parcel of
petitioners business.[47]
As for petitioners argument that being the agent of Little Giant, any negligence it
committed was deemed the negligence of its principal, it does not persuade.
True, petitioner was the broker-agent of Little Giant in securing the release of the
cargoes. In effecting the transportation of the cargoes from the shipside and into
Little Giants warehouse, however, petitioner was discharging its own personal
obligation under a contact of carriage.
Petitioner, which did not have any barge or tugboat, engaged the services of TVI as
handler[48] to provide the barge and the tugboat. In their Service Contract, [49] while
Little Giant was named as the consignee, petitioner did not disclose that it was
acting on commission and was chartering the vessel for Little Giant. [50] Little Giant
did not thus automatically become a party to the Service Contract and was not,
therefore, bound by the terms and conditions therein.
Not being a party to the service contract, Little Giant cannot directly sue TVI based
thereon but it can maintain a cause of action for negligence.[51]
In the case of TVI, while it acted as a private carrier for which it was under no duty
to observe extraordinary diligence, it was still required to observe ordinary diligence
to ensure the proper and careful handling, care and discharge of the carried goods.
Thus, Articles 1170 and 1173 of the Civil Code provide:
ART. 1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof,
are liable for damages.
ART. 1173. The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence shows
bad faith, the provisions of articles 1171 and 2202, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be required.
Was the reasonable care and caution which an ordinarily prudent person would have
used in the same situation exercised by TVI?[52]
This Court holds not.
TVIs failure to promptly provide a tugboat did not only increase the risk that might
have been reasonably anticipated during the shipside operation, but was
the proximate cause of the loss. A man of ordinary prudence would not leave a
heavily loaded barge floating for a considerable number of hours, at such a
14

precarious time, and in the open sea, knowing that the barge does not have any
power of its own and is totally defenseless from the ravages of the sea. That it was
nighttime and, therefore, the members of the crew of a tugboat would be charging
overtime pay did not excuse TVI from calling for one such tugboat.
As for petitioner, for it to be relieved of liability, it should, following Article 1739 [53] of
the Civil Code, prove that it exercised due diligence to prevent or minimize the loss,
before, during and after the occurrence of the storm in order that it may be
exempted from liability for the loss of the goods.
While petitioner sent checkers[54] and a supervisor[55] on board the vessel to countercheck the operations of TVI, it failed to take all available and reasonable precautions
to avoid the loss. After noting that TVI failed to arrange for the prompt towage of
the barge despite the deteriorating sea conditions, it should have summoned the
same or another tugboat to extend help, but it did not.
This Court holds then that petitioner and TVI are solidarily liable [56] for the loss of the
cargoes. The following pronouncement of the Supreme Court is instructive:
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 2176 and related provisions, in conjunction with
Article 2180 of the Civil Code. x x x [O]ne might ask further, how then must the
liability of the common carrier, on 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 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.[57]
As for Black Sea, its duty as a common carrier extended only from the time the
goods were surrendered or unconditionally placed in its possession and received for
transportation until they were delivered actually or constructively to consignee Little
Giant.[58]
15

Parties to a contract of carriage may, however, agree upon a definition of delivery

that extends the services rendered by the carrier. In the case at bar, Bill of Lading
No. 2 covering the shipment provides that delivery be made to the port of
discharge or so near thereto as she may safely get, always afloat.[59] The delivery of
the goods to the consignee was not from pier to pier but from the shipside of M/V
Alexander Saveliev and into barges, for which reason the consignee contracted the
services of petitioner. Since Black Sea had constructively delivered the cargoes to
Little Giant, through petitioner, it had discharged its duty. [60]
In fine, no liability may thus attach to Black Sea.
Respecting the award of attorneys fees in an amount over P1,000,000.00 to
Industrial Insurance, for lack of factual and legal basis, this Court sets it aside. While
Industrial Insurance was compelled to litigate its rights, such fact by itself does not
justify the award of attorneys fees under Article 2208 of the Civil Code. For no
sufficient showing of bad faith would be reflected in a partys persistence in a case
other than an erroneous conviction of the righteousness of his cause. [61] To award
attorneys fees to a party just because the judgment is rendered in its favor would
be tantamount to imposing a premium on ones right to litigate or seek judicial
redress of legitimate grievances. [62]
On the award of adjustment fees: The adjustment fees and expense of divers were
incurred by Industrial Insurance in its voluntary but unsuccessful efforts to locate
and retrieve the lost cargo. They do not constitute actual damages. [63]
As for the court a quos award of interest on the amount claimed, the same calls for
modification following the ruling in Eastern Shipping Lines, Inc. v. Court of
Appeals[64] that when the demand cannot be reasonably established at the time the
demand is made, the interest shall begin to run not from the time the claim is made
judicially or extrajudicially but from the date the judgment of the court is made (at
which the time the quantification of damages may be deemed to have been
reasonably ascertained).[65]
WHEREFORE, judgment is hereby rendered ordering petitioner Schmitz Transport &
Brokerage Corporation, and Transport Venture Incorporation jointly and severally
liable for the amount of P5,246,113.11 with the MODIFICATION that interest at SIX
PERCENT per annum of the amount due should be computed from the promulgation
on November 24, 1997 of the decision of the trial court.
Costs against petitioner.
SO ORDERED.
G.R. No. 114791 May 29, 1997
NANCY GO AND ALEX GO, petitioners,
vs.
16

THE HONORABLE COURT OF APPEALS, HERMOGENES ONG and JANE C.

ONG, respondents.

ROMERO, J.:
No less than the Constitution commands us to protect marriage as an inviolable
social institution and the foundation of the family. 1 In our society, the importance of
a wedding ceremony cannot be underestimated as it is the matrix of the family and,
therefore, an occasion worth reliving in the succeeding years.
It is in this light that we narrate the following undisputed facts:
Private respondents spouses Hermogenes and Jane Ong were married on June 7,
1981, in Dumaguete City. The video coverage of the wedding was provided by
petitioners at a contract price of P1,650.00. Three times thereafter, the newlyweds
tried to claim the video tape of their wedding, which they planned to show to their
relatives in the United States where they were to spend their honeymoon, and
thrice they failed because the tape was apparently not yet processed. The parties
then agreed that the tape would be ready upon private respondents' return.
When private respondents came home from their honeymoon, however, they found
out that the tape had been erased by petitioners and therefore, could no longer be
delivered.
Furious at the loss of the tape which was supposed to be the only record of their
wedding, private respondents filed on September 23, 1981 a complaint for specific
performance and damages against petitioners before the Regional Trial Court, 7th
Judicial District, Branch 33, Dumaguete City. After a protracted trial, the court a
quorendered a decision, to wit:
WHEREFORE, judgment is hereby granted:
1. Ordering the rescission of the agreement entered into between plaintiff
Hermogenes Ong and defendant Nancy Go;
2. Declaring defendants Alex Go and Nancy Go jointly and severally liable to
plaintiffs Hermogenes Ong and Jane C. Ong for the following sums:
a) P450.00 , the down payment made at contract time;
b) P75,000.00, as moral damages;
c) P20,000.00, as exemplary damages;
d) P5,000.00, as attorney's fees; and
e) P2,000.00, as litigation expenses;
17

Defendants are also ordered to pay the costs.

SO ORDERED.
Dissatisfied with the decision, petitioners elevated the case to the Court of Appeals
which, on September 14, 1993, dismissed the appeal and affirmed the trial court's
decision.
Hence, this petition.
Petitioners contend that the Court of Appeals erred in not appreciating the evidence
they presented to prove that they acted only as agents of a certain Pablo Lim and,
as such, should not have been held liable. In addition, they aver that there is no
evidence to show that the erasure of the tape was done in bad faith so as to justify
the award of damages. 2
The petition is not meritorious.
Petitioners claim that for the video coverage, the cameraman was employed by
Pablo Lim who also owned the video equipment used. They further assert that they
merely get a commission for all customers solicited for their principal. 3
This contention is primarily premised on Article 1883 of the Civil Code which states
thus:
Art. 1883. If an agent acts in his own name, the principal has no right of action
against the persons with whom the agent has contracted; neither have such
persons against the principal.
In such case the agent is the one directly bound in favor of the person with whom
he has contracted, as if the transaction were his own, except when the contract
involves things belonging to the principal.
xxx xxx xxx
Petitioners' argument that since the video equipment used belonged to Lim and
thus the contract was actually entered into between private respondents and Lim is
not deserving of any serious consideration. In the instant case, the contract entered
into is one of service, that is, for the video coverage of the wedding. Consequently,
it can hardly be said that the object of the contract was the video equipment used.
The use by petitioners of the video equipment of another person is of no
consequence.
It must also be noted that in the course of the protracted trial below, petitioners did
not even present Lim to corroborate their contention that they were mere agents of
the latter. It would not be unwarranted to assume that their failure to present such a
vital witness would have had an adverse result on the case. 4
18

As regards the award of damages, petitioners would impress upon this Court their
lack of malice or fraudulent intent in the erasure of the tape. They insist that since
private respondents did not claim the tape after the lapse of thirty days, as agreed
upon in their contract, the erasure was done in consonance with consistent business
practice to minimize losses. 5
We are not persuaded.
As correctly observed by the Court of Appeals, it is contrary to human nature for any
newlywed couple to neglect to claim the video coverage of their wedding; the fact
that private respondents filed a case against petitioners belies such assertion.
Clearly, petitioners are guilty of actionable delay for having failed to process the
video tape. Considering that private respondents were about to leave for the United
States, they took care to inform petitioners that they would just claim the tape upon
their return two months later. Thus, the erasure of the tape after the lapse of thirty
days was unjustified.
In this regard, Article 1170 of the Civil Code provides that "those who in the
performance of their obligations are guilty of fraud, negligence or delay, and those
who is any manner contravene the tenor thereof, are liable for damages."
In the instant case, petitioners and private respondents entered into a contract
whereby, for a fee, the former undertook to cover the latter's wedding and deliver
to them a video copy of said event. For whatever reason, petitioners failed to
provide private respondents with their tape. Clearly, petitioners are guilty of
contravening their obligation to said private respondents and are thus liable for
damages.
The grant of actual or compensatory damages in the amount of P450.00 is justified,
as reimbursement of the downpayment paid by private respondents to petitioners. 6
Generally, moral damages cannot be recovered in an action for breach of contract
because this case is not among those enumerated in Article 2219 of the Civil Code.
However, it is also accepted in this jurisdiction that liability for a quasi-delict may
still exist despite the presence of contractual relations, that is, the act which
violates the contract may also constitute a quasi-delict. 7 Consequently, moral
damages are recoverable for the breach of contract
which was palpably wanton, reckless, malicious or in bad faith, oppressive or
abusive. 8
Petitioners' act or omission in recklessly erasing the video coverage of private
respondents' wedding was precisely the cause of the suffering private respondents
had to undergo.
As the appellate court aptly observed:

19

Considering the sentimental value of the tapes and the fact that the event therein
recorded a wedding which in our culture is a significant milestone to be cherished
and remembered could no longer be reenacted and was lost forever, the trial
court was correct in awarding the appellees moral damages albeit in the amount of
P75,000.00, which was a great reduction from plaintiffs' demand in the complaint in
compensation for the mental anguish, tortured feelings, sleepless nights and
humiliation that the appellees suffered and which under the circumstances could be
awarded as allowed under Articles 2217 and 2218 of the Civil Code. 9
Considering the attendant wanton negligence committed by petitioners in the case
at bar, the award of exemplary damages by the trial court is justified 10 to serve as a
warning to all entities engaged in the same business to observe due diligence in the
conduct of their affairs.
The award of attorney' s fees and litigation expenses are likewise proper, consistent
with Article 2208 11 of the Civil Code.
Finally, petitioner Alex Go questions the finding of the trial and appellate courts
holding him jointly and severally liable with his wife Nancy regarding the pecuniary
liabilities imposed. He argues that when his wife entered into the contract with
private respondent, she was acting alone for her sole interest. 12
We find merit in this contention. Under Article 117 of the Civil Code (now Article 73
of the Family Code), the wife may exercise any profession, occupation or engage in
business without the consent of the husband. In the instant case, we are convinced
that it was only petitioner Nancy Go who entered into the contract with private
respondent. Consequently, we rule that she is solely liable to private respondents
for the damages awarded below, pursuant to the principle that contracts produce
effect only as between the parties who execute them. 13
WHEREFORE, the assailed decision dated September 14, 1993 is hereby AFFIRMED
with the MODIFICATION that petitioner Alex Go is absolved from any liability to
private respondents and that petitioner Nancy Go is solely liable to said private
respondents for the judgment award. Costs against petitioners.
SO ORDERED.
G.R. No. L-21438

September 28, 1966

AIR FRANCE, petitioner,

vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF
APPEALS, respondents.
Lichauco, Picazo and Agcaoili for petitioner.
Bengzon Villegas and Zarraga for respondent R. Carrascoso.
20

SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael
Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary
damages; P393.20 representing the difference in fare between first class and tourist
class for the portion of the trip Bangkok-Rome, these various amounts with interest
at the legal rate, from the date of the filing of the complaint until paid; plus
P3,000.00 for attorneys' fees; and the costs of suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on
Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealed
decision "in all other respects", with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully supported by the evidence of
record", are:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left
Manila for Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent,
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket
from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but
at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first
class" seat that he was occupying because, in the words of the witness Ernesto G.
Cuento, there was a "white man", who, the Manager alleged, had a "better right" to
the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be
expected, refused, and told defendant's Manager that his seat would be taken over
his dead body; a commotion ensued, and, according to said Ernesto G. Cuento,
"many of the Filipino passengers got nervous in the tourist class; when they found
out that Mr. Carrascoso was having a hot discussion with the white man [manager],
they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat
to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff
reluctantly gave his "first class" seat in the plane. 3
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of
respondent Court of Appeals. Petitioner charges that respondent court failed to
make complete findings of fact on all the issues properly laid before it. We are asked
to consider facts favorable to petitioner, and then, to overturn the appellate court's
decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered
by any court of record without expressing therein clearly and distinctly the facts and
the law on which it is based". 5 This is echoed in the statutory demand that a
21

judgment determining the merits of the case shall state "clearly and distinctly the
facts and the law on which it is based"; 6 and that "Every decision of the Court of
Appeals shall contain complete findings of fact on all issues properly raised before
it". 7
A decision with absolutely nothing to support it is a nullity. It is open to direct
attack. 8 The law, however, solely insists that a decision state the "essential ultimate
facts" upon which the court's conclusion is drawn. 9 A court of justice is not
hidebound to write in its decision every bit and piece of evidence 10 presented by
one party and the other upon the issues raised. Neither is it to be burdened with the
obligation "to specify in the sentence the facts"which a party "considered as
proved". 11 This is but a part of the mental process from which the Court draws the
essential ultimate facts. A decision is not to be so clogged with details such that
prolixity, if not confusion, may result. So long as the decision of the Court of Appeals
contains the necessary facts to warrant its conclusions, it is no error for said court to
withhold therefrom "any specific finding of facts with respect to the evidence for the
defense". Because as this Court well observed, "There is no law that so
requires". 12 Indeed, "the mere failure to specify (in the decision) the contentions of
the appellant and the reasons for refusing to believe them is not sufficient to hold
the same contrary to the requirements of the provisions of law and the
Constitution". It is in this setting that in Manigque, it was held that the mere fact
that the findings "were based entirely on the evidence for the prosecution without
taking into consideration or even mentioning the appellant's side in the controversy
as shown by his own testimony", would not vitiate the judgment. 13 If the court did
not recite in the decision the testimony of each witness for, or each item of
evidence presented by, the defeated party, it does not mean that the court has
overlooked such testimony or such item of evidence. 14 At any rate, the legal
presumptions are that official duty has been regularly performed, and that all the
matters within an issue in a case were laid before the court and passed upon by
it. 15
Findings of fact, which the Court of Appeals is required to make, maybe defined as
"the written statement of the ultimate facts as found by the court ... and essential
to support the decision and judgment rendered thereon". 16They consist of the
court's "conclusions" with respect to the determinative facts in issue". 17 A question
of law, upon the other hand, has been declared as "one which does not call for an
examination of the probative value of the evidence presented by the parties." 18
2. By statute, "only questions of law may be raised" in an appeal by certiorari from a
judgment of the Court of Appeals. 19 That judgment is conclusive as to the facts. It is
not appropriately the business of this Court to alter the facts or to review the
questions of fact. 20
With these guideposts, we now face the problem of whether the findings of fact of
the Court of Appeals support its judgment.
22

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

It is conceded in all quarters that on March 28, 1958 he paid to and received from
petitioner a first class ticket. But petitioner asserts that said ticket did not represent
the true and complete intent and agreement of the parties; that said respondent
knew that he did not have confirmed reservations for first class on any specific
flight, although he had tourist class protection; that, accordingly, the issuance of a
first class ticket was no guarantee that he would have a first class ride, but that
such would depend upon the availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its
brief before the Court of Appeals under its third assignment of error, which reads:
"The trial court erred in finding that plaintiff had confirmed reservations for, and a
right to, first class seats on the "definite" segments of his journey, particularly that
from Saigon to Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that the issuance of a first-class
ticket was no guarantee that the passenger to whom the same had been issued,
would be accommodated in the first-class compartment, for as in the case of
plaintiff he had yet to make arrangements upon arrival at every station for the
necessary first-class reservation. We are not impressed by such a reasoning. We
cannot understand how a reputable firm like defendant airplane company could
have the indiscretion to give out tickets it never meant to honor at all. It received
the corresponding amount in payment of first-class tickets and yet it allowed the
passenger to be at the mercy of its employees. It is more in keeping with the
ordinary course of business that the company should know whether or riot the
tickets it issues are to be honored or not.22
Not that the Court of Appeals is alone. The trial court similarly disposed of
petitioner's contention, thus:
On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be
no question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1,"
"B-2", "C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed
plaintiff's testimony and testified as follows:
Q. In these tickets there are marks "O.K." From what you know, what does this OK
mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)

23

xxx

xxx

xxx

Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and
Rafael Altonaga that although plaintiff paid for, and was issued a "first class"
airplane ticket, the ticket was subject to confirmation in Hongkong. The court cannot
give credit to the testimony of said witnesses. Oral evidence cannot prevail over
written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the
testimony of said witnesses, and clearly show that the plaintiff was issued, and paid
for, a first class ticket without any reservation whatever.
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga
testified that the reservation for a "first class" accommodation for the plaintiff was
confirmed. The court cannot believe that after such confirmation defendant had a
verbal understanding with plaintiff that the "first class" ticket issued to him by
defendant would be subject to confirmation in Hongkong. 23
We have heretofore adverted to the fact that except for a slight difference of a few
pesos in the amount refunded on Carrascoso's ticket, the decision of the Court of
First Instance was affirmed by the Court of Appeals in all other respects. We hold the
view that such a judgment of affirmance has merged the judgment of the lower
court. 24Implicit in that affirmance is a determination by the Court of Appeals that
the proceeding in the Court of First Instance was free from prejudicial error and "all
questions raised by the assignments of error and all questions that might have been
raised are to be regarded as finally adjudicated against the appellant". So also, the
judgment affirmed "must be regarded as free from all error". 25 We reached this
policy construction because nothing in the decision of the Court of Appeals on this
point would suggest that its findings of fact are in any way at war with those of the
trial court. Nor was said affirmance by the Court of Appeals upon a ground or
grounds different from those which were made the basis of the conclusions of the
trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class
seat, notwithstanding the fact that seat availability in specific flights is therein
confirmed, then an air passenger is placed in the hollow of the hands of an airline.
What security then can a passenger have? It will always be an easy matter for an
airline aided by its employees, to strike out the very stipulations in the ticket, and
say that there was a verbal agreement to the contrary. What if the passenger had a
schedule to fulfill? We have long learned that, as a rule, a written document speaks
a uniform language; that spoken word could be notoriously unreliable. If only to
achieve stability in the relations between passenger and air carrier, adherence to
the ticket so issued is desirable. Such is the case here. The lower courts refused to
believe the oral evidence intended to defeat the covenants in the ticket.
The foregoing are the considerations which point to the conclusion that there are
facts upon which the Court of Appeals predicated the finding that respondent
24

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

25

xxx

xxx

xxx

The foregoing, in our opinion, substantially aver: First, That there was a contract to
furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran
leg; Second, That said contract was breached when petitioner failed to furnish first
class transportation at Bangkok; and Third, that there was bad faith when
petitioner's employee compelled Carrascoso to leave his first class accommodation
berth "after he was already, seated" and to take a seat in the tourist class, by
reason of which he suffered inconvenience, embarrassments and humiliations,
thereby causing him mental anguish, serious anxiety, wounded feelings and social
humiliation, resulting in moral damages. It is true that there is no specific mention
of the term bad faith in the complaint. But, the inference of bad faith is there, it may
be drawn from the facts and circumstances set forth therein. 34 The contract was
averred to establish the relation between the parties. But the stress of the action is
put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of the trial, respondent's
counsel placed petitioner on guard on what Carrascoso intended to prove: That
while sitting in the plane in Bangkok, Carrascoso was oustedby petitioner's manager
who gave his seat to a white man; 35 and (b) evidence of bad faith in the fulfillment
of the contract was presented without objection on the part of the petitioner. It is,
therefore, unnecessary to inquire as to whether or not there is sufficient averment
in the complaint to justify an award for moral damages. Deficiency in the complaint,
if any, was cured by the evidence. An amendment thereof to conform to the
evidence is not even required. 36 On the question of bad faith, the Court of Appeals
declared:
That the plaintiff was forced out of his seat in the first class compartment of the
plane belonging to the defendant Air France while at Bangkok, and was transferred
to the tourist class not only without his consent but against his will, has been
sufficiently established by plaintiff in his testimony before the court, corroborated
by the corresponding entry made by the purser of the plane in his notebook which
notation reads as follows:
"First-class passenger was forced to go to the tourist class against his will, and that
the captain refused to intervene",
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a copassenger. 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
26

Neither is there evidence as to whether or not a prior reservation was made by the
white man. Hence, if the employees of the defendant at Bangkok sold a first-class
ticket to him when all the seats had already been taken, surely the plaintiff should
not have been picked out as the one to suffer the consequences and to be
subjected to the humiliation and indignity of being ejected from his seat in the
presence of others. Instead of explaining to the white man the improvidence
committed by defendant's employees, the manager adopted the more drastic step
of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are
strengthened in our belief that this probably was what happened there, by the
testimony of defendant's witness Rafael Altonaga who, when asked to explain the
meaning of the letters "O.K." appearing on the tickets of plaintiff, said "that the
space is confirmed for first class. Likewise, Zenaida Faustino, another witness for
defendant, who was the chief of the Reservation Office of defendant, testified as
follows:
"Q How does the person in the ticket-issuing office know what reservation the
passenger has arranged with you?
A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19,
1959)
In this connection, we quote with approval what the trial Judge has said on this
point:
Why did the, using the words of witness Ernesto G. Cuento, "white man" have a
"better right" to the seat occupied by Mr. Carrascoso? The record is silent. The
defendant airline did not prove "any better", nay, any right on the part of the "white
man" to the "First class" seat that the plaintiff was occupying and for which he paid
and was issued a corresponding "first class" ticket.
If there was a justified reason for the action of the defendant's Manager in Bangkok,
the defendant could have easily proven it by having taken the testimony of the said
Manager by deposition, but defendant did not do so; the presumption is that
evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules
of Court]; and, under the circumstances, the Court is constrained to find, as it does
find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first
class" seat because the said Manager wanted to accommodate, using the words of
the witness Ernesto G. Cuento, the "white man". 38
It is really correct to say that the Court of Appeals in the quoted portion first
transcribed did not use the term "bad faith". But can it be doubted that the recital of
facts therein points to bad faith? The manager not only prevented Carrascoso from
enjoying his right to a first class seat; worse, he imposed his arbitrary will; he
forcibly ejected him from his seat, made him suffer the humiliation of having to go
to the tourist class compartment - just to give way to another passenger whose
27

right thereto has not been established. Certainly, this is bad faith. Unless, of course,
bad faith has assumed a meaning different from what is understood in law. For, "bad
faith" contemplates a "state of mind affirmatively operating with furtive design or
with some motive of self-interest or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is the express finding of bad
faith in the judgment of the Court of First Instance, thus:
The evidence shows that the defendant violated its contract of transportation with
plaintiff in bad faith, with the aggravating circumstances that defendant's Manager
in Bangkok went to the extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the "first class" seat that
he was occupying to, again using the words of the witness Ernesto G. Cuento, a
"white man" whom he (defendant's Manager) wished to accommodate, and the
defendant has not proven that this "white man" had any "better right" to occupy the
"first class" seat that the plaintiff was occupying, duly paid for, and for which the
corresponding "first class" ticket was issued by the defendant to him. 40
5. The responsibility of an employer for the tortious act of its employees need not
be essayed. It is well settled in law. 41 For the willful malevolent act of petitioner's
manager, petitioner, his employer, must answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for
the damage.
In parallel circumstances, we applied the foregoing legal precept; and, we held that
upon the provisions of Article 2219 (10), Civil Code, moral damages are
recoverable. 42
6. A contract to transport passengers is quite different in kind and degree from any
other contractual relation. 43And this, because of the relation which an air-carrier
sustains with the public. Its business is mainly with the travelling public. It invites
people to avail of the comforts and advantages it offers. The contract of air carriage,
therefore, generates a relation attended with a public duty. Neglect or malfeasance
of the carrier's employees, naturally, could give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be
treated by the carrier's employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. So it is, that any
rule or discourteous conduct on the part of employees towards a passenger gives
the latter an action for damages against the carrier. 44
Thus, "Where a steamship company 45 had accepted a passenger's check, it was a
breach of contract and a tort, giving a right of action for its agent in the presence of
28

third persons to falsely notify her that the check was worthless and demand
payment under threat of ejection, though the language used was not insulting and
she was not ejected." 46 And this, because, although the relation of passenger and
carrier is "contractual both in origin and nature" nevertheless "the act that breaks
the contract may be also a tort". 47 And in another case, "Where a passenger on a
railroad train, when the conductor came to collect his fare tendered him the cash
fare to a point where the train was scheduled not to stop, and told him that as soon
as the train reached such point he would pay the cash fare from that point to
destination, there was nothing in the conduct of the passenger which justified the
conductor in using insulting language to him, as by calling him a lunatic," 48 and the
Supreme Court of South Carolina there held the carrier liable for the mental
suffering of said passenger.1awphl.nt
Petitioner's contract with Carrascoso is one attended with public duty. The stress of
Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a
violation of public duty by the petitioner air carrier a case of quasi-delict.
Damages are proper.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus
Q You mentioned about an attendant. Who is that attendant and purser?
A When we left already that was already in the trip I could not help it. So one
of the flight attendants approached me and requested from me my ticket and I said,
What for? and she said, "We will note that you transferred to the tourist class". I
said, "Nothing of that kind. That is tantamount to accepting my transfer." And I also
said, "You are not going to note anything there because I am protesting to this
transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you feel uncomfortable and you don't have
enough leg room, I stood up and I went to the pantry that was next to me and the
purser was there. He told me, "I have recorded the incident in my notebook." He
read it and translated it to me because it was recorded in French "First class
passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene."
Mr. VALTE
I move to strike out the last part of the testimony of the witness because the best
evidence would be the notes. Your Honor.

29

COURT
I will allow that as part of his testimony.

49

Petitioner charges that the finding of the Court of Appeals that the purser made an
entry in his notebook reading "First class passenger was forced to go to the tourist
class against his will, and that the captain refused to intervene" is predicated upon
evidence [Carrascoso's testimony above] which is incompetent. We do not think so.
The subject of inquiry is not the entry, but the ouster incident. Testimony on the
entry does not come within the proscription of the best evidence rule. Such
testimony is admissible. 49a
Besides, from a reading of the transcript just quoted, when the dialogue happened,
the impact of the startling occurrence was still fresh and continued to be felt. The
excitement had not as yet died down. Statements then, in this environment, are
admissible as part of the res gestae. 50 For, they grow "out of the nervous
excitement and mental and physical condition of the declarant". 51 The utterance of
the purser regarding his entry in the notebook was spontaneous, and related to the
circumstances of the ouster incident. Its trustworthiness has been guaranteed. 52 It
thus escapes the operation of the hearsay rule. It forms part of the res gestae.
At all events, the entry was made outside the Philippines. And, by an employee of
petitioner. It would have been an easy matter for petitioner to have contradicted
Carrascoso's testimony. If it were really true that no such entry was made, the
deposition of the purser could have cleared up the matter.
We, therefore, hold that the transcribed testimony of Carrascoso is admissible in
evidence.
8. Exemplary damages are well awarded. The Civil Code gives the court ample
power to grant exemplary damages in contracts and quasi- contracts. The only
condition is that defendant should have "acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner." 53 The manner of ejectment of respondent
Carrascoso from his first class seat fits into this legal precept. And this, in addition
to moral damages.54
9. The right to attorney's fees is fully established. The grant of exemplary damages
justifies a similar judgment for attorneys' fees. The least that can be said is that the
courts below felt that it is but just and equitable that attorneys' fees be given. 55 We
do not intend to break faith with the tradition that discretion well exercised as it
was here should not be disturbed.
10. Questioned as excessive are the amounts decreed by both the trial court and
the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of
exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these
amounts is primarily with the trial court. 56 The Court of Appeals did not interfere
30

with the same. The dictates of good sense suggest that we give our imprimatur
thereto. Because, the facts and circumstances point to the reasonableness thereof. 57
On balance, we say that the judgment of the Court of Appeals does not suffer from
reversible error. We accordingly vote to affirm the same. Costs against petitioner. So
ordered.
G.R. No. L-28589 January 8, 1973
RAFAEL ZULUETA, ET AL., plaintiffs-appellees,
vs.
PAN AMERICAN WORLD AIRWAYS, INC., defendant-appellant.
Alfredo L. Benipayo for plaintiffs-appellee Rafael Zulueta and Carolina Zulueta.
Justo L. Albert for plaintiff-appellee Telly Albert Zulueta.
V.E. del Rosario and Associates and Salcedo, Del Rosario, Bito, Misa and Lozada for
defendant-appellant.
RESOLUTION

CONCEPCION, C.J.:
Both parties in this case have moved for the reconsideration of the decision of this
Court promulgated on February 29, 1972. Plaintiffs maintain that the decision
appealed from should be affirmed in toto. The defendant, in turn, prays that the
decision of this Court be "set aside ... with or without a new trial, ... and that the
complaint be dismissed, with costs; or, in the alternative, that the amount of the
award embodied therein be considerably reduced." .
Subsequently to the filing of its motion for reconsideration, the defendant filed a
"petition to annul proceedings and/or to order the dismissal of plaintiffs-appellees'
complaint" upon the ground that "appellees' complaint actually seeks the recovery
of only P5,502.85 as actual damages, because, for the purpose of determining the
jurisdiction of the lower court, the unspecified sums representing items of alleged
damages, may not be considered, under the settled doctrines of this Honorable
Court," and "the jurisdiction of courts of first instance when the complaint in the
present case was filed on Sept. 30, 1965" was limited to cases "in which the
demand, exclusive of interest, or the value of the property in controversy amounts
to more than ten thousand pesos" and "the mere fact that the complaint also prays
for unspecified moral damages and attorney's fees, does not bring the action within
the jurisdiction of the lower court."
We find no merit in this contention. To begin with, it is not true that "the unspecified
sums representing items or other alleged damages, may not be considered" for
31

the purpose of determining the jurisdiction of the court "under the settled
doctrines of this Honorable Court." In fact, not a single case has been cited in
support of this allegation.
Secondly, it has been held that a clam for moral damages is one not susceptible of
pecuniary estimation. 1 In fact, Article 2217 of the Civil Code of the Philippines
explicitly provides that "(t)hough incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendant's
wrongful act or omission." Hence, "(n)o proof pecuniary loss necessary" pursuant
to Article 2216 of the same Code "in order that moral ... damages may be
adjudicated." And "(t)he assessment of such damages ... is left to the discretion of
the court" - said article adds - "according to the circumstances of each case."
Appellees' complaint is, therefore, within the original jurisdiction of courts of first
instance, which includes "all civil actions in which the subject of the litigation is not
capable of pecuniary estimation." 2
Thirdly, in its answer to plaintiffs' original and amended complainants, defendant
had set up a counterclaim in the aggregate sum of P12,000, which is, also, within
the original jurisdiction of said courts, thereby curing the alleged defect if any, in
plaintiffs' complaint. 3
We need not consider the jurisdictional controversy as to the amount the appellant
sues to recover because the counterclaim interposed establishes the jurisdiction of
the District Court. Merchants' Heat & Light Co. v. James B. Clow & Sons, 204 U.S.
286, 27 S. Ct. 285, 51 L. Ed. 488; O. J. Lewis Mercantile Co. v. Klepner, 176 F. 343
(C.C.A. 2), certiorari denied 216 U.S. 620, 30 S Ct. 575, 54 L. Ed. 641. ... . 4
... courts have said that "when the jurisdictional amount is in question, the
tendering of a counterclaim in an amount which in itself, or added to the amount
claimed in the petition, makes up a sum equal to the amount necessary to the
jurisdiction of this court, jurisdiction is established, whatever may be the state of
the plaintiff's complaint." American Sheet & Tin Plate Co. v. Winzeler (D.C.) 227 F.
321, 324. 5
Thus, in Ago v. Buslon, 6 We held:
... . Then, too, petitioner's counterclaim for P37,000.00 was, also, within the
exclusive original jurisdiction of the latter courts, and there are ample precedents to
the effect that "although the original claim involves less than the jurisdictional
amount, ... jurisdiction can be sustained if the counterclaim (of the compulsory
type)" such as the one set up by petitioner herein, based upon the damages
allegedly suffered by him in consequence of the filing of said complaint "exceeds
the jurisdictional amount." (Moore Federal Practice, 2nd ed. [1948], Vol. 3, p. 41;
Ginsburg vs. Pacific Mutual Life Ins. Co. of California, 69 Fed. [2d] 97; Home Life Ins.
Co. vs. Sipp., 11 Fed. [2d]474; American Sheet & Tin Plate Co. vs. Winzeler [D.C.],
32

227 Fed. 321, 324; Brix vs. People's Mutual Life Ins. Co., 41 P. 2d. 537, 2 Cal. 2d.
446; Emery vs. Pacific Employees Ins. Co., 67 P. 2d. 1046, 8 Cal. 2d. 663).
Needless to say, having not only failed to question the jurisdiction of the trial court
either in that court or in this Court, before the rendition of the latter's decision,
and even subsequently thereto, by filing the aforementioned motion for
reconsideration and seeking the reliefs therein prayed for but, also, urged both
courts to exercise jurisdiction over the merits of the case, defendant is now
estopped from impugning said jurisdiction. 7
Before taking up the specific questions raised in defendant's motion for
reconsideration, it should be noted that the same is mainly predicated upon the
premise that plaintiffs' version is inherently incredible, and that this Court should
accept the theory of the defense to the effect that petitioner was off-loaded
because of a bomb-scare allegedly arising from his delay in boarding the aircraft
and subsequent refusal to open his bags for inspection. We need not repeat here
the reasons given in Our decision for rejecting defendant's contention and not
disturbing the findings of fact of His Honor, the Trial Judge, who had the decided
advantage denied to Us of observing the behaviour of the witnesses in the
course of the trial and found those of the plaintiffs worthy of credence, not the
evidence for the defense.
It may not be amiss however, to stress the fact that, in his written report, made in
transit from Wake to Manila or immediately after the occurrence and before the
legal implications or consequences thereof could have been the object of mature
deliberation, so that it could, in a way, be considered as part of the res gestae
Capt. Zentner stated that Zulueta had been off-loaded "due to drinking" and
"belligerent attitude," thereby belying the story of the defense about said alleged
bomb-scare, and confirming the view that said agent of the defendant had acted
out of resentment because his ego had been hurt by Mr. Zulueta's adamant refusal
to be bullied by him. Indeed, had there been an iota of truth in said story of the
defense, Capt. Zentner would have caused every one of the passengers to be
frisked or searched and the luggage of all of them examined as it is done now
before resuming the flight from Wake Island. His failure to do so merely makes the
artificious nature of defendant's version more manifest. Indeed, the fact that Mrs.
Zulueta and Miss Zulueta were on board the plane shows beyond doubt that Mr.
Zulueta could not possibly have intended to blow it up.
The defense tries to explain its failure to introduce any evidence to contradict the
testimony of Mr. Zulueta as to why he had gone to the beach and what he did there,
alleging that, in the very nature of things, nobody else could have witnessed it.
Moreover, the defense insists, inter alia, that the testimony of Mr. Zulueta is
inherently incredible because he had no idea as to how many toilets the plane had;
it could not have taken him an hour to relieve himself in the beach; there were eight
(8) commodes at the terminal toilet for men ; if he felt the need of relieving himself,
33

he would have seen to it that the soldiers did not beat him to the terminal toilets; he
did not tell anybody about the reason for going to the beach, until after the plane
had taken off from Wake.
We find this pretense devoid of merit. Although Mr. Zulueta had to look for a
secluded place in the beach to relieve himself, beyond the view of others,
defendant's airport manager, whom Mr. Zulueta informed about it,soon after the
departure of the plane, could have forthwith checked the veracity of Mr. Zulueta's
statement by asking him to indicate the specific place where he had been in the
beach and then proceeding thereto for purposes of verification.
Then, again, the passenger of a plane seldom knows how many toilets it has. As a
general rule, his knowledge is limited to the toilets for the class first class or
tourist class in which he is. Then, too, it takes several minutes for the passengers
of big aircrafts, like those flying from the U.S. to the Philippines, to deplane. Besides,
the speed with which a given passenger may do so depends, largely, upon the
location of his seat in relation to the exit door. He cannot go over the heads of those
nearer than he thereto. Again, Mr. Zulueta may have stayed in the toilet terminal for
some time, expecting one of the commodes therein to be vacated soon enough,
before deciding to go elsewhere to look for a place suitable to his purpose. But he
had to walk, first, from the plane to the terminal building and, then, after vainly
waiting therein for a while, cover a distance of about 400 yards therefrom to the
beach, and seek there a place not visible by the people in the plane and in the
terminal, inasmuch as the terrain at Wake Island is flat. What is more, he must have
had to takeoff part, at least, of his clothing, because, without the facilities of a toilet,
he had to wash himself and, then, dry himself up before he could be properly attired
and walk back the 400 yards that separated him from the terminal building and/or
the plane. Considering, in addition to the foregoing, the fact that he was not feeling
well, at that time, We are not prepared to hold that it could not have taken him
around an hour to perform the acts narrated by him.
But, why asks the defendant did he not reveal the same before the plane took
off? The record shows that, even before Mr. Zulueta had reached the ramp leading
to the plane, Capt. Zentner was already demonstrating at him in an intemperate
and arrogant tone and attitude ("What do you think you are?), thereby impelling Mr.
Zulueta to answer back in the same vein. As a consequence, there immediately
ensued an altercation in the course of which each apparently tried to show that he
could not be cowed by the other. Then came the order of Capt. Zentner to off-load
all of the Zuluetas, including Mrs. Zulueta and the minor Miss Zulueta, as well as
their luggage, their overcoats and other effects handcarried by them; but, Mr.
Zulueta requested that the ladies be allowed to continue the trip. Meanwhile, it had
taken time to locate his four (4) pieces of luggage. As a matter of fact, only three (3)
of them were found, and the fourth eventually remained in the plane. In short, the
issue between Capt. Zentner and Mr. Zulueta had been limited to determining
whether the latter would allow himself to be browbeaten by the former. In the heat
34

of the altercation, nobody had inquired about the cause of Mr. Zulueta's delay in
returning to the plane, apart from the fact that it was rather embarrassing for him to
explain, in the presence and within the hearing of the passengers and the crew,
then assembled around them, why he had gone to the beach and why it had taken
him some time to answer there a call of nature, instead of doing so in the terminal
building.
Defendant's motion for reconsideration assails: (1) the amount of damages awarded
as excessive; (2) the propriety of accepting as credible plaintiffs' theory; (3)
plaintiffs' right to recover either moral or exemplary damages; (4) plaintiffs' right to
recover attorney's fees; and (5) the non-enforcement of the compromise agreement
between the defendant and plaintiff's wife, Mrs. Zulueta. Upon the other hand,
plaintiffs' motion for reconsideration contests the decision of this Court reducing the
amount of damages awarded by the trial court to approximately one-half thereof,
upon the ground, not only that, contrary to the findings of this Court, in said
decision, plaintiff had not contributed to the aggravation of his altercation or
incident with Capt. Zentner by reacting to his provocation with extreme belligerency
thereby allowing himself to be dragged down to the level on which said agent of the
defendant had placed himself, but, also, because the purchasing power of our local
currency is now much lower than when the trial court rendered its appealed
decision, over five (5) years ago, on July 5, 1967, which is an undeniable and
undisputed fact. Precisely, for this reason, defendant's characterization as
exorbitant of the aggregate award of over P700,000 by way of damages, apart from
attorney's fees in the sum of P75,000, is untenable. Indeed, said award is now
barely equivalent to around 100,000 U. S. dollars.
It further support of its contention, defendant cites the damages awarded in
previous cases to passengers of airlines, 8 as well as in several criminal cases, and
some cases for libel and slander. None of these cases is, however, in point. Said
cases against airlines referred to passengers who were merely constrained to take
a tourist class accommodation, despite the fact that they had first class tickets, and
that although, in one of such cases, there was proof that the airline involved had
acted as it did to give preference to a "white" passenger, this motive was not
disclosed until the trial in court. In the case at bar, plaintiff Rafael Zulueta was "offloaded" at Wake Island, for having dared to retort to defendant's agent in a tone
and manner matching, if not befitting his intemperate language and arrogant
attitude. As a consequence, Capt. Zentner's attempt to humiliate Rafael Zulueta
had boomeranged against him (Zentner), in the presence of the other passengers
and the crew. It was, also, in their presence that defendant's agent had referred to
the plaintiffs as "monkeys," a racial insult not made openly and publicly in the
abovementioned previous cases against airlines.
In other words, Mr. Zulueta was off-loaded, not to protect the safety of the aircraft
and its passengers, but to retaliate and punish him for the embarrassment and loss
of face thus suffered by defendant's agent. This vindictive motive is made more
35

manifest by the note delivered to Mr. Zulueta by defendant's airport manager at

Wake Island, Mr. Sitton, stating that the former's stay therein would be "for
a minimum of one week," during which he would be charged $13.30 per day. This
reference to a "minimum of one week" revealed the intention to keep him there
stranded that long, for no other plane, headed for Manila, was expected within said
period of time, although Mr. Zulueta managed to board, days later, a plane that
brought him to Hawaii, whence he flew back to the Philippines, via Japan.
Neither may criminal cases, nor the cases for libel and slander cited in the
defendant's motion for reconsideration, be equated with the present case. Indeed,
in ordinary criminal cases, the award for damages is, in actual practice, of purely
academic value, for the convicts generally belong to the poorest class of society.
There is, moreover, a fundamental difference between said cases and the one at
bar. The Zuluetas had a contract of carriage with the defendant, as a common
carrier, pursuant to which the latter was bound, for a substantial monetary
considerationpaid by the former, not merely to transport them to Manila, but, also,
to do so with "extraordinary diligence" or "utmost diligence." 9 The responsibility of
the common carrier, under said contract, as regards the passenger's safety, is of
such a nature, affecting as it does public interest, that it "cannot be dispensed with"
or even "lessened by stipulation, by the posting of notices, by statements on tickets,
or otherwise." 10 In the present case, the defendant did not only fail to comply with
its obligation to transport Mr. Zulueta to Manila, but, also, acted in a
manner calculated to humiliate him, to chastise him, to make him suffer, to cause to
him the greatest possible inconvenience, by leaving him in a desolate island, in the
expectation that he would be stranded there for a "minimum of one week" and, in
addition thereto, charged therefor $13.30 a day.
It is urged by the defendant that exemplary damages are not recoverable in quasidelicts, pursuant to Article 2231 of our Civil Code, except when the defendant has
acted with "gross negligence," and that there is no specific finding that it had so
acted. It is obvious, however, that in off-loading plaintiff at Wake Island, under the
circumstances heretofore adverted to, defendant's agents had acted with malice
aforethought and evident bad faith. If "gross negligence" warrants the award of
exemplary damages, with more reason is its imposition justified when the act
performed is deliberate, malicious and tainted with bad faith. Thus, in Lopez v.
PANAM, 11 We held:
The rationale behind exemplary or corrective damages is, as the name implies, to
provide an example or correction for public good. Defendant having breached its
contracts in bad faith, the court, as stated earlier, may award exemplary damages
in addition to moral damages (Articles 2229, 2232, New Civil Code.)
Similarly, in NWA v. Cuenca, 12 this Court declared that an award for exemplary
damages was justified by the fact that the airline's "agent had acted in a wanton,
reckless and oppressive manner" in compelling Cuenca, upon arrival at Okinawa, to
36

transfer, over his objection, from the first class, where he was accommodated from
Manila to Okinawa, to the tourist class, in his trip to Japan, "under threat of
otherwise leaving him in Okinawa," despite the fact that he had paid in full the first
class fare and was issued in Manila a first class ticket.
Defendant cites Rotea v. Halili, 13 in support of the proposition that a principal is not
liable for exemplary damages owing to acts of his agent unless the former has
participated in said acts or ratified the same. Said case involved, however, the
subsidiary civil liability of an employer arising from criminal acts of his employee,
and "exemplary damages ... may be imposed when the crime was committed with
one or more aggravating circumstances." 14 Accordingly, the Rotea case is not in
point, for the case at bar involves a breach of contract, as well as a quasi-delict.
Neither may the case of Palisoc v. Brillantes, 15 invoked by the defendant, be
equated with the case at bar. The Palisoc case dealt with the liability of school
officials for damages arising from the death of a student (Palisoc) due to fist blows
given by another student (Daffon), in the course of a quarrel between them, while in
a laboratory room of the Manila Technical Institute. In an action for damages, the
head thereof and the teacher in charge of said laboratory were held jointly and
severally liable with the student who caused said death, for failure of the school to
provide "adequate supervision over the activities of the students in the school
premises," to protect them "from harm, whether at the hands of fellow students or
other parties." Such liability was predicated upon Article 2180 of our Civil Code, the
pertinent part of which reads:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for one's
own acts or omissions, but also for those of persons for whom one is responsible.
xxx xxx xxx
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, so long as they remain
in their custody.
xxx xxx xxx
Obviously, the amount of damages warded in the Palisoc case is not and cannot
serve as the measure of the damages recoverable in the present case, the latter
having been caused directly and intentionally by an employee or agent of the
defendant, whereas the student who killed the young Palisoc was in no wise an
agent of the school. Moreover, upon her arrival in the Philippines, Mrs. Zulueta
reported her husband's predicament to defendant's local manager and asked him to
forthwith have him (Mr. Zulueta) brought to Manila, which defendant's
aforementioned manager refused to do, thereby impliedly ratifying the off-loading of
Mr. Zulueta at Wake Island.

37

It is next urged that, under the contract of carriage with the defendant, Mr. Zulueta
was bound to be present at the time scheduled for the departure of defendant's
plane and that he had, consequently, violated said contract when he did not show
up at such time. This argument might have had some weight had defendant's plane
taken off before Mr. Zulueta had shown up. But the fact is that he was ready, willing
and able to board the plane about two hours before it actually took off, and that he
was deliberately and maliciously off-loaded on account of his altercation with Capt.
Zentner. It should, also, be noted that, although Mr. Zulueta was delayed some 20 to
30 minutes, the arrival or departure of planes is often delayed for much longer
periods of time. Followed to its logical conclusion, the argument adduced by the
defense suggests that airlines should be held liable for damages due to the
inconvenience and anxiety, aside from actual damages, suffered by many
passengers either in their haste to arrive at the airport on scheduled time just to
find that their plane will not take off until later, or by reason of the late arrival of the
aircraft at its destination.
PANAM impugns the award of attorney's fees upon the ground that no penalty
should be imposed upon the right to litigate; that, by law, it may be awarded only in
exceptional cases; that the claim for attorney's fees has not been proven; and that
said defendant was justified in resisting plaintiff's claim "because it was patently
exorbitant."
Nothing, however, can be farther from the truth. Indeed apart from plaintiff's claim
for actual damages, the amount of which is not contested, plaintiffs did not ask any
specific sum by way of exemplary and moral damages, as well as attorney's fees,
and left the amount thereof to the "sound discretion" of the lower court. This,
precisely, is the reason why PANAM, now, alleges without justification that the
lower court had no jurisdiction over the subject matter of the present case.
Moreover, Article 2208 of our Civil Code expressly authorizes the award of
attorney's fees "when exemplary damages are awarded," as they are in this case
as well as "in any other case where the court deems it just and equitable that
attorney's fees ... be recovered," and We so deem it just and equitable in the
present case, considering the "exceptional" circumstances obtaining therein,
particularly the bad faith with which defendant's agent had acted, the place where
and the conditions under which Rafael Zulueta was left at Wake Island, the absolute
refusal of defendant's manager in Manila to take any step whatsoever to alleviate
Mr. Zulueta's predicament at Wake and have him brought to Manila which, under
their contract of carriage, was defendant's obligation to discharge with "extraordinary" or "utmost" diligence and, the "racial" factor that had, likewise, tainted
the decision of defendant's agent, Capt. Zentner, to off-load him at Wake Island.
As regards the evidence necessary to justify the sum of P75,000 awarded as
attorney's fees in this case, suffice it to say that the quantity and quality of the
services rendered by plaintiffs' counsel appearing on record, apart from the nature
38

of the case and the amount involved therein, as well as his prestige as one of the
most distinguished members of the legal profession in the Philippines, of which
judicial cognizance may be taken, amply justify said award, which is a little over
10% of the damages (P700,000) collectible by plaintiffs herein. Indeed, the
attorney's fees in this case is proportionally much less than that adjudged in Lopez
v. PANAM 16 in which the judgment rendered for attorney's fees (P50,000) was
almost 20% of the damages (P275,000) recovered by the plaintiffs therein.
The defense assails the last part of the decision sought to be reconsidered, in which
relying upon Article 172 of our Civil Code, which provides that "(t)he wife cannot
bind the conjugal partnership without the husband's consent, except in cases
provided by law," and it is not claimed that this is one of such cases We denied a
motion, filed by Mrs. Zulueta, for the dismissal of this case, insofar as she is
concerned - she having settled all her differences with the defendant, which
appears to have paid her the sum of P50,000 therefor - "without prejudice to this
sum being deducted from the award made in said decision." Defendant now alleges
that this is tantamount to holding that said compromise agreement is both effective
and ineffective.
This, of course, is not true. The payment is effective, insofar as it is deductible from
the award, and, because it is due (or part of the amount due) from the
defendant, with or without its compromise agreement with Mrs. Zulueta. What is
ineffective is the compromise agreement, insofar as the conjugal partnership is
concerned. Mrs. Zulueta's motion was for the dismissal of the case insofar as she
was concerned, and the defense cited in support thereof Article 113 of said Code,
pursuant to which "(t)he husband must be joined in all suits by or against the wife
except: ... (2) If they have in fact been separated for at least one year." This
provision, We held, however, refers to suits in which the wife is the principal or real
party in interest, not to the case at bar, "in which the husband is the main party in
interest, both as the person principally aggrieved and as administrator of the
conjugal partnership ... he having acted in this capacity in entering into the contract
of carriage with PANAM and paid the amount due to the latter, under the contract,
with funds of the conjugal partnership," to which the amounts recoverable for
breach of said contract, accordingly, belong. The damages suffered by Mrs. Zulueta
were mainly an in accident of the humiliation to which her husband had been
subjected. The Court ordered that said sum of P50,00 paid by PANAM to Mrs.
Zulueta be deducted from the aggregate award in favor of the plaintiffs herein for
the simple reason that upon liquidation of the conjugal partnership, as provided by
law, said amount would have to be reckoned with, either as part of her share in the
partnership, or as part of the support which might have been or may be due to her
as wife of Rafael Zulueta. It would surely be inane to sentence the defendant to pay
the P700,000 due to the plaintiffs and to direct Mrs. Zulueta to return said P50,000
to the defendant.

39

In this connection, it is noteworthy that, for obvious reasons of public policy, she is
not allowed by law to waive her share in the conjugal partnership, before the
dissolution thereof. 17 She cannot even acquire any property by gratuitous title,
without the husband's consent, except from her ascendants, descendants, parentsin-law, and collateral relatives within the fourth degree. 18
It is true that the law favors and encourages the settlement of litigations by
compromise agreement between the contending parties, but, it certainly does not
favor a settlement with one of the spouses, both of whom are plaintiffs or
defendants in a common cause, such as the defense of the rights of the conjugal
partnership, when the effect, even if indirect, of the compromise is to jeopardize
"the solidarity of the family" which the
law 19 seeks to protect by creating an additional cause for the misunderstanding
that had arisen between such spouses during the litigation, and thus rendering
more difficult a reconciliation between them.
It is urged that there is no proof as to the purpose of the trip of the plaintiffs, that
neither is there any evidence that the money used to pay the plane tickets came
from the conjugal funds and that the award to Mrs. Zulueta was for her personal
suffering or injuries. There was, however, no individual or specific award in favor of
Mrs. Zulueta or any of the plaintiffs. The award was made in their favor collectively.
Again, in the absence of said proof, the presumption is that the purpose of the trip
was for the common benefit of the plaintiffs and that the money had come from the
conjugal funds, for, unless there is proof to the contrary, it is presumed "(t)hat
things have happened according to the ordinary course of nature and the ordinary
habits of life." 20 In fact Manresa maintains21 that they are deemed conjugal, when
the source of the money used therefor is not established, even if the purchase had
been made by the wife. 22 And this is the rule obtaining in the Philippines. Even
property registered, under the Torrens system, in the name of one of the spouses, or
in that of the wife only, if acquired during the marriage, is presumed to belong to
the conjugal partnership, unless there is competent proof to the contrary. 23
PANAM maintains that the damages involved in the case at bar are not among those
forming part of the conjugal partnership pursuant to Article 153 of the Civil Code,
reading:
ART. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the marriage at the expense of
the common fund, whether the acquisition be for the partnership, or for only one of
the spouses;
(2) That which is obtained by the industry, or work, or as salary of the spouses, or of
either of them;

40

(3) The fruits, rents or interests received or due during the marriage, coming from
the common property or from the exclusive property of each spouse.
Considering that the damages in question have arisen from, inter alia, a breach of
plaintiffs' contract of carriage with the defendant, for which plaintiffs paid their fare
with funds presumably belonging to the conjugal partnership, We hold that said
damages fall under paragraph (1) of said Article 153, the right thereto having been
"acquired byonerous title during the marriage ... ." This conclusion is bolstered up
by Article 148 of our Civil Code, according to which:
ART. 148. The following shall be the exclusive property of each spouse:
(1) That which is brought to the marriage as his or her own;
(2) That which each acquires, during the marriage, by lucrative title;
(3) That which is acquired by right of redemption or by exchange with other
property belonging to only one of the spouses;
(4) That which is purchased with exclusive money of the wife or of the husband.
The damages involved in the case at bar do not come under any of these provisions
or of the other provisions forming part of Chapter 3, Title VI, of Book I of the Civil
Code, which chapter is entitled "Paraphernal Property." What is more, if "(t)hat
which is acquired by right of redemption or by exchange with other property
belonging to only one of the spouses," and "(t)hat which is purchased with exclusive
money of the wife or of the husband," 24belong exclusively to such wife or husband,
it follows necessarily that that which is acquired with money of the conjugal
partnership belongs thereto or forms part thereof. The rulings in Maramba v.
Lozano 25 and Perez v. Lantin, 26 cited in defendant's motion for reconsideration, are,
in effect, adverse thereto. In both cases, it was merely held that the presumption
under Article 160 of our Civil Code to the effect that all property of the
marriage belong to the conjugal partnership does not apply unless it is shown
that it was acquired during marriage. In the present case, the contract of carriage
was concededly entered into, and the damages claimed by the plaintiffs were
incurred, during marriage. Hence, the rights accruing from said contract, including
those resulting from breach thereof by the defendant, are presumed to belong to
the conjugal partnership of Mr. and Mrs. Zulueta. The fact that such breach of
contract was coupled, also, with a quasi-delict constitutes an aggravating
circumstance and can not possibly have the effect of depriving the conjugal
partnership of such property rights.
Defendant insists that the use of conjugal funds to redeem property does not make
the property redeemed conjugal if the right of redemption pertained to the wife. In
the absence, however, of proof that such right of redemption pertains to the wife
and there is no proof that the contract of carriage with PANAM or the money paid
41

therefor belongs to Mrs. Zulueta the property involved, or the rights arising
therefrom, must be presumed, therefore, to form part of the conjugal partnership.
It is true that in Lilius v. Manila Railroad Co., 27 it was held that the "patrimonial and
moral damages" awarded to a young and beautiful woman by reason of a scar in
consequence of an injury resulting from an automobile accident which disfigured
her face and fractured her left leg, as well as caused a permanent deformity, are
her paraphernal property. Defendant cites, also, in support of its contention the
following passage from Colin y Capitant:
No esta resuelta expresamente en la legislacion espaola la cuestion de si las
indemnizaciones debidas por accidentes del trabaho tienen la consideracion de
gananciales, o son bienes particulares de los conyuges.
Inclinan a la solucion de que estas indemnizaciones deben ser consideradas como
gananciales, el hecho de que la sociedad pierde la capacidad de trabajocon el
accidente, que a ella le pertenece, puesto que de la sociedad son losfrutos de ese
trabajo; en cambio, la consideracion de que igual manera que losbienes que
sustituyen a los que cada conyuge lleva al matrimonio como propiostienen el
caracter de propios, hace pensar que las indemnizaciones que vengana suplir la
capacidad de trabajo aportada por cada conyuge a la sociedad, debenser
juridicamente reputadas como bienes propios del conyuge que haya sufrido
elaccidente. Asi se llega a la misma solucion aportada por la jurisprudencia
francesca. 28
This opinion is, however, undecisive, to say the least. It should be noted that Colin y
Capitant were commenting on the French Civil Code; that their comment referred to
indemnities due in consequence of "accidentes del trabajo "resulting
in physical injuries sustained by one of the spouses (which Mrs. Zulueta
has not suffered); and that said commentators admit that the question whether or
not said damages are paraphernal property or belong to the conjugal partnership is
not settled under the Spanish law. 29 Besides, the French law and jurisprudence to
which the comments of Planiol and Ripert, likewise, refer are inapposite to the
question under consideration, becausethey differ basically from the Spanish law in
the treatment of the property relations between husband and wife. Indeed, our Civil
Code, like the Spanish Civil Code, favors the system of conjugal partnership of
gains. Accordingly, the former provides that, "(i)n the absence of marriage
settlements, or when the same are void, the system of relative community or
conjugal partnership of gains ... shall govern the property relations between" the
spouses. 30 Hence, "(a)ll property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains exclusively to the husband
or to the wife." 31
No similar rules are found in the French Civil Code. What is more, under the
provisions thereof, the conjugal partnership exists only when so stipulated in the
42

"capitulaciones matrimoniales" or by way of exception. In the language of Manresa

Prescindimos de los preceptos de los Condigos de Francia, Italia, Holanda, Portugal,

Alemania y Suiza, porsue solo excepcionalmente, o cuando asi se pacta en las
capitulaciones, admiten el sistema de gananciales. 32
Again, Colin y Capitant, as well as the Lilius case, refer to damages recovered
for physical injuries suffered by the wife. In the case at bar, the party mainly injured,
although not physically, is the husband.
Accordingly, the other Philippine cases 33 and those from Louisiana whose civil
law is based upon the French Civil Code cited by the defendant, which similarly
refer to moral damages due to physical injuries suffered by the wife, are, likewise,
inapplicable to the case at bar.
We find, therefore, no plausible reason to disturb the views expressed in Our
decision promulgated on February 29, 1972.
WHEREFORE, the motions for reconsideration above-referred to should be, as they
are hereby denied.
G.R. No. 180440

December 5, 2012

DR. GENEVIEVE L. HUANG, Petitioner,

vs.
PHILIPPINE HOTELIERS, INC., DUSIT THANI PUBLIC CO., LTD. And FIRST
LEPANTO TAISHO INSURANCE CORPORATION, Respondents.
DECISION
PEREZ, J.:
For this Courts resolution is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court, assailing the Decision1 of the Court of Appeals in CA-G.R. CV No.
87065 dated 9 August 2007, affirming the Decision 2 of Branch 56 of the Regional
Trial Court (RTC) of Makati City in Civil Case No. 96-1367 dated 21 February 2006,
dismissing for lack of merit herein petitioner Dr. Genevieve L. Huangs Complaint for
Damages. Assailed as well is the Court of Appeals Resolution 3 dated 5 November
2007 denying for lack of merit petitioners Motion for Reconsideration.
This case stemmed from a Complaint for Damages filed on 28 August 1996 by
petitioner Dr. Genevieve L. Huang4 against herein respondents Philippine Hoteliers,
Inc. (PHI)5 and Dusit Thani Public Co., Ltd. (DTPCI),6 as owners of Dusit Thani Hotel
Manila (Dusit Hotel);7 and co-respondent First Lepanto Taisho Insurance Corporation
(First Lepanto),8 as insurer of the aforesaid hotel. The said Complaint was premised
on the alleged negligence of respondents PHI and DTPCIs staff, in the untimely
43

putting off all the lights within the hotels swimming pool area, as well as the locking
of the main entrance door of the area, prompting petitioner to grope for a way out.
While doing so, a folding wooden counter top fell on her head causing her serious
brain injury. The negligence was allegedly compounded by respondents PHI and
DTPCIs failure to render prompt and adequate medical assistance.
Petitioners version of the antecedents of this case is as follows:
On 11 June 1995, Delia Goldberg (Delia), a registered guest of Dusit Hotel, invited
her friend, petitioner Dr. Genevieve L. Huang, for a swim at the hotels swimming
pool facility. They started bathing at around 5:00 p.m. At around 7:00 p.m., the
hotels swimming pool attendant informed them that the swimming pool area was
about to be closed. The two subsequently proceeded to the shower room adjacent
to the swimming pool to take a shower and dress up. However, when they came out
of the bathroom, the entire swimming pool area was already pitch black and there
was no longer any person around but the two of them. They carefully walked
towards the main door leading to the hotel but, to their surprise, the door was
locked.9
Petitioner and Delia waited for 10 more minutes near the door hoping someone
would come to their rescue but they waited in vain. Delia became anxious about
their situation so petitioner began to walk around to look for a house phone. Delia
followed petitioner. After some time, petitioner saw a phone behind the lifeguards
counter. While slowly walking towards the phone, a hard and heavy object, which
later turned out to be the folding wooden counter top, fell on petitioners head that
knocked her down almost unconscious.10
Delia immediately got hold of the house phone and notified the hotel telephone
operator of the incident. Not long after, the hotel staff arrived at the main entrance
door of the swimming pool area but it took them at least 20 to 30 minutes to get
inside. When the door was finally opened, three hotel chambermaids assisted
petitioner by placing an ice pack and applying some ointment on her head. After
petitioner had slightly recovered, she requested to be assisted to the hotels coffee
shop to have some rest. Petitioner demanded the services of the hotel physician. 11
Dr. Violeta Dalumpines (Dr. Dalumpines) arrived. She approached petitioner and
introduced herself as the hotel physician. However, instead of immediately
providing the needed medical assistance, Dr. Dalumpines presented a "Waiver" and
demanded that it be signed by petitioner, otherwise, the hotel management will not
render her any assistance. Petitioner refused to do so. 12
After eating her dinner and having rested for a while, petitioner left the hotels
coffee shop and went home. Thereupon, petitioner started to feel extraordinary
dizziness accompanied by an uncomfortable feeling in her stomach, which lasted
until the following day. Petitioner was constrained to stay at home, thus, missing all
44

her important appointments with her patients. She also began experiencing "on"
and "off" severe headaches that caused her three (3) sleepless nights. 13
Petitioner, thus, decided to consult a certain Dr. Perry Noble (Dr. Noble), a
neurologist from Makati Medical Center, who required her to have an X-ray and a
Magnetic Resonance Imaging (MRI) tests.14 The MRI Report15dated 23 August 1995
revealed the following findings:
CONSULTATION REPORT:
MRI examination of the brain shows scattered areas of intraparenchymal contusions
and involving mainly the left middle and posterior temporal and slightly the right
anterior temporal lobe.
Other small areas of contusions with suggestive pertechiae are seen in the left
fronto-parietal, left parieto-occipital and with deep frontal periventricular subcortical
and cortical regions. There is no mass effect nor signs of localized hemorrhagic
extravasation.
The ventricles are not enlarged, quite symmetrical without shifts or deformities; the
peripheral sulci are within normal limits.
The C-P angles, petromastoids, sella, extrasellar and retro orbital areas appear
normal.
The brainstem is unremarkable.
IMPRESSION: Scattered small intraparenchymal contusions mainly involving the left
middle-posterior temporal lobe and also right medial anterior temporal, both deep
frontal subcortical, left parieto-occipital subcortical and cortical regions. Ischemic
etiology not ruled out. No localized intra - or extracerebral hemorrhage. 16
Petitioner claimed that the aforesaid MRI result clearly showed that her head was
bruised. Based also on the same MRI result, Dr. Noble told her that she has a very
serious brain injury. In view thereof, Dr. Noble prescribed the necessary medicine for
her condition.17
Petitioner likewise consulted a certain Dr. Ofelia Adapon, also a neurologist from
Makati Medical Center, who required her to undergo an Electroencephalogram
examination (EEG) to measure the electrostatic in her brain. 18Based on its
result,19 Dr. Ofelia Adapon informed her that she has a serious conditiona
permanent one. Dr. Ofelia Adapon similarly prescribed medicines for her brain
injury.20
Petitioners condition did not get better. Hence, sometime in September 1995, she
consulted another neuro-surgeon by the name of Dr. Renato Sibayan (Dr. Sibayan),
who required her to have an X-ray test. 21 According to petitioner, Dr. Sibayans
45

finding was the same as those of the previous doctors that she had consultedshe
has a serious brain injury.22
By reason of the unfortunate 11 June 1995 incident inside the hotels swimming
pool area, petitioner also started to feel losing her memory, which greatly affected
and disrupted the practice of her chosen profession. 23 Thus, on 25 October 1995,
petitioner, through counsel, sent a demand letter 24 to respondents PHI and DTPCI
seeking payment of an amount not less than P100,000,000.00 representing loss of
earnings on her remaining life span. But, petitioners demand was unheeded.
In November 1995, petitioner went to the United States of America (USA) for further
medical treatment. She consulted a certain Dr. Gerald Steinberg and a certain Dr.
Joel Dokson25 from Mount Sinai Hospital who both found that she has "post
traumatic-post concussion/contusion cephalgias-vascular and neuralgia." 26 She was
then prescribed to take some medications for severe pain and to undergo physical
therapy. Her condition did not improve so she returned to the Philippines. 27
Petitioner, once again, consulted Dr. Sibayan, who simply told her to just relax and
to continue taking her medicines. Petitioner also consulted other neurologists, who
all advised her to just continue her medications and to undergo physical therapy for
her neck pain.28
Sometime in 1996, petitioner consulted as well a certain Dr. Victor Lopez (Dr.
Lopez), an ophthalmologist from the Makati Medical Center, because of her poor
vision, which she has experienced for several months. 29 Petitioners Eye Report
dated 5 March 199630 issued by Dr. Lopez stated: "IMPRESSION: Posterior vitreous
detachment, right eye of floaters." Dr. Lopez told petitioner that her detached eye is
permanent and very serious. Dr. Lopez then prescribed an eye drop to petitioner. 31
For petitioners frustration to dissipate and to regain her former strength and
physical well-being, she consulted another neuro-surgeon from Makati Medical
Center by the name of Dr. Leopoldo P. Pardo, Jr. (Dr. Pardo, Jr.). 32She disclosed to Dr.
Pardo, Jr. that at the age of 18 she suffered a stroke due to mitral valve disease and
that she was given treatments, which also resulted in thrombocytopenia. In Dr.
Pardo, Jr.s medical evaluation of petitioner dated 15 May 1996, 33 he made the
following diagnosis and opinion:
DIAGNOSIS AND OPINION:
This patient sustained a severe head injury in (sic) 11 June 1995 and as a result of
which she developed the following injuries:
1. Cerebral Concussion and Contusion
2. Post-traumatic Epilepsy
3. Post-concussional Syndrome
46

4. Minimal Brain Dysfunction

5. Cervical Sprain, chronic recurrent
It is my opinion that the symptoms she complained of in the foregoing history are all
related to and a result of the injury sustained on 11 June 1995.
It is further my opinion that the above diagnosis and complaints do materially affect
her duties and functions as a practicing physician and dermatologist, and that she
will require treatment for an undetermined period of time.
The percentage of disability is not calculated at this time and will require further
evaluation and observation.34
Dr. Pardo, Jr. then advised petitioner to continue her medications. 35
Petitioner likewise consulted a certain Dr. Tenchavez 36 for her follow-up EEG.37 He
similarly prescribed medicine for petitioners deep brain injury. He also gave her
pain killer for her headache and advised her to undergo physical therapy. Her
symptoms, however, persisted all the more.38
In 1999, petitioner consulted another neurologist at the Makati Medical Center by
the name of Dr. Martesio Perez (Dr. Perez) because of severe fleeting pains in her
head, arms and legs; difficulty in concentration; and warm sensation of the legs,
which symptoms also occurred after the 11 June 1995 incident. Upon examination,
Dr. Perez observed that petitioner has been experiencing severe pains and she has
a slight difficulty in concentration. He likewise noted that there was a slight spasm
of petitioners neck muscle but, otherwise, there was no objective neurologic
finding. The rest of petitioners neurologic examination was essentially normal. 39
Dr. Perezs neurologic evaluation 40 of petitioner reflected, among others: (1)
petitioners past medical history, which includes, among others, mitral valve
stenosis; (2) an interpretation of petitioners EEG results in October 1995 and in
January 1999, i.e., the first EEG showed sharp waves seen bilaterally more on the
left while the second one was normal; and (3) interpretation of petitioners second
MRI result, i.e., petitioner has a permanent damage in the brain, which can happen
either after a head injury or after a stroke. Dr. Perez concluded that petitioner has
post-traumatic or post concussion syndrome.41
Respondents, on the other hand, denied all the material allegations of petitioner
and, in turn, countered the latters statement of facts, thus:
According to respondents PHI and DTPCI, a sufficient notice had been posted on the
glass door of the hotel leading to the swimming pool area to apprise the people,
especially the hotel guests, that the swimming pool area is open only from 7:00
a.m. to 7:00 p.m.42 Though the hotels swimming pool area is open only between the
aforestated time, the lights thereon are kept on until 10:00 p.m. for, (1) security
47

reasons; (2) housekeeping personnel to do the cleaning of the swimming pool

surroundings; and (3) people doing their exercise routine at the Slimmers World
Gym adjacent to the swimming pool area, which was then open until 10:00 p.m., to
have a good view of the hotels swimming pool. Even granting that the lights in the
hotels swimming pool area were turned off, it would not render the area completely
dark as the Slimmers World Gym near it was well-illuminated. 43
Further, on 11 June 1995, at round 7:00 p.m., the hotels swimming pool attendant
advised petitioner and Delia to take their showers as it was already closing time.
Afterwards, at around 7:40 p.m., Pearlie Benedicto-Lipana (Ms. Pearlie), the hotel
staff nurse, who was at the hotel clinic located at the mezzanine floor, received a
call from the hotel telephone operator informing her that there was a guest
requiring medical assistance at the hotels swimming pool area located one floor
above the clinic.44
Immediately, Ms. Pearlie got hold of her medical kit and hurriedly went to the
hotels swimming pool area. There she saw Delia and petitioner, who told her that
she was hit on the head by a folding wooden counter top. Although petitioner looked
normal as there was no indication of any blood or bruise on her head, Ms. Pearlie
still asked her if she needed any medical attention to which petitioner replied that
she is a doctor, she was fine and she did not need any medical attention. Petitioner,
instead, requested for a hirudoid cream to which Ms. Pearlie acceded. 45
At about 8:00 p.m., after attending to petitioner, Ms. Pearlie went back to the hotel
clinic to inform Dr. Dalumpines of the incident at the hotels swimming pool area.
But before she could do that, Dr. Dalumpines had already chanced upon Delia and
petitioner at the hotels coffee shop and the latter reported to Dr. Dalumpines that
her head was hit by a folding wooden counter top while she was inside the hotels
swimming pool area. When asked by Dr. Dalumpines how she was, petitioner
responded she is a doctor, she was fine and she was already attended to by the
hotel nurse, who went at the hotels swimming pool area right after the accident. Dr.
Dalumpines then called Ms. Pearlie to verify the same, which the latter confirmed. 46
Afterwards, Dr. Dalumpines went back to petitioner and checked the latters
condition. Petitioner insisted that she was fine and that the hirudoid cream was
enough. Having been assured that everything was fine, Dr. Dalumpines requested
petitioner to execute a handwritten certification 47 regarding the incident that
occurred that night. Dr. Dalumpines then suggested to petitioner to have an X-ray
test. Petitioner replied that it was not necessary. Petitioner also refused further
medical attention.48
On 13 June 1995, petitioner called up Dr. Dalumpines. The call, however, had
nothing to do with the 11 June 1995 incident. Instead, petitioner merely engaged in
small talk with Dr. Dalumpines while having her daily massage. The two talked
about petitioners personal matters, i.e., past medical history, differences with
48

siblings and family over inheritance and difficulty in practice. Petitioner even
disclosed to Dr. Dalumpines that she once fell from a horse; that she had a stroke;
had hysterectomy and is incapable of having children for her uterus had already
been removed; that she had blood disorder, particularly lack of platelets, that can
cause bleeding; and she had an "on" and "off" headaches. Petitioner oftentimes
called Dr. Dalumpines at the hotel clinic to discuss topics similar to those discussed
during their 13 June 1995 conversation.49
Also, during one of their telephone conversations, petitioner requested for a
certification regarding the 11 June 1995 incident inside the hotels swimming pool
area. Dr. Dalumpines accordingly issued Certification dated 7 September 1995,
which states that:50
CERTIFICATION
This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to
an accident at the poolside at 7:45PM on 11 June 1995.
Same records show that there, she saw petitioner who claimed the folding
countertop fell on her head when she lifted it to enter the lifeguards counter to use
the phone. She asked for Hirudoid.
The same evening petitioner met Dr. Dalumpines at the Coffee Shop. After narrating
the poolside incident and declining Dr. Dalumpines offer of assistance, she
reiterated that the Hirudoid cream was enough and that petitioner being a doctor
herself, knew her condition and she was all right.
This certification is given upon the request of petitioner for whatever purpose it may
serve, 7 September 1995 at Makati City.51 (Emphasis supplied).
Petitioner personally picked up the afore-quoted Certification at the hotel clinic
without any objection as to its contents.52
From 11 June 1995 until 7 September 1995, the hotel clinic never received any
complaint from petitioner regarding the latters condition. The hotel itself neither
received any written complaint from petitioner. 53
After trial, the court a quo in its Decision dated 21 February 2006 dismissed
petitioners Complaint for lack of merit.
The trial court found petitioners testimony self-serving, thus, devoid of credibility.
Petitioner failed to present any evidence to substantiate her allegation that the
lights in the hotels swimming pool area were shut off at the time of the incident.
She did not even present her friend, Delia, to corroborate her testimony. More so,
petitioners testimony was contradicted by one of the witnesses presented by the
respondents who positively declared that it has been a normal practice of the hotel
management not to put off the lights until 10:00 p.m. to allow the housekeepers to
49

do the cleaning of the swimming pool surroundings, including the toilets and
counters. Also, the lights were kept on for security reasons and for the people in the
nearby gym to have a good view of the swimming pool while doing their exercise
routine. Besides, there was a remote possibility that the hotels swimming pool area
was in complete darkness as the aforesaid gym was then open until 10:00 p.m., and
the lights radiate to the hotels swimming pool area. As such, petitioner would not
have met the accident had she only acted with care and caution. 54
The trial court further struck down petitioners contention that the hotel
management did not extend medical assistance to her in the aftermath of the
accident. Records showed that the hotel management immediately responded after
being notified of the accident. The hotel nurse and the two chambermaids placed an
ice pack on petitioners head. They were willing to extend further emergency
assistance but petitioner refused and merely asked for a hirudoid cream. Petitioner
even told them she is a doctor and she was fine. Even the medical services offered
by the hotel physician were turned down by petitioner. Emphatically, petitioner
cannot fault the hotel for the injury she sustained as she herself did not heed the
warning that the swimming pool area is open only from 7:00 a.m. to 7:00 p.m. As
such, since petitioners own negligence was the immediate and proximate cause of
her injury, she cannot recover damages. 55
The trial court similarly observed that the records revealed no indication that the
head injury complained of by petitioner was the result of the alleged 11 June 1995
accident. Firstly, petitioner had a past medical history which might have been the
cause of her recurring brain injury. Secondly, the findings of Dr. Perez did not prove
a causal relation between the 11 June 1995 accident and the brain damage suffered
by petitioner. Even Dr. Perez himself testified that the symptoms being experienced
by petitioner might have been due to factors other than the head trauma she
allegedly suffered. It bears stressing that petitioner had been suffering from
different kinds of brain problems since she was 18 years old, which may have been
the cause of the recurring symptoms of head injury she is experiencing at present.
Absent, therefore, of any proof establishing the causal relation between the injury
she allegedly suffered on 11 June 1995 and the head pains she now suffers, her
claim must fail. Thirdly, Dr. Teresita Sanchezs (Dr. Sanchez) testimony cannot be
relied upon since she testified on the findings and conclusions of persons who were
never presented in court. Ergo, her testimony thereon was hearsay. Fourthly, the
medical reports/evaluations/certifications issued by myriads of doctors whom
petitioner sought for examination or treatment were neither identified nor testified
to by those who issued them. Being deemed as hearsay, they cannot be given
probative value. Even assuming that petitioner suffered head injury as a
consequence of the 11 June 1995 accident, she cannot blame anyone but herself for
staying at the hotels swimming pool area beyond its closing hours and for lifting
the folding wooden counter top that eventually hit her head. 56

50

For petitioners failure to prove that her serious and permanent injury was the result
of the 11 June 1995 accident, thus, her claim for actual or compensatory damages,
loss of income, moral damages, exemplary damages and attorneys fees, must all
fail.57
With regard to respondent First Lepantos liability, the trial court ruled that under
the contract of insurance, suffice it to state that absent any cause for any liability
against respondents PHI and DTPCI, respondent First Lepanto cannot be made liable
thereon.
Dissatisfied, petitioner elevated the matter to the Court of Appeals with the
following assignment of errors: (1) the trial court erred in finding that the testimony
of petitioner is self-serving and thus void of credibility; (2) the trial court erred in
applying the doctrine of proximate cause in cases of breach of contract and even
assuming arguendo that the doctrine is applicable, petitioner was able to prove by
sufficient evidence the causal connection between her injuries and respondents PHI
and DTPCIs negligent act; and (3) the trial court erred in holding that petitioner is
not entitled to damages.58
On 9 August 2007, the Court of Appeals rendered a Decision affirming the findings
and conclusions of the trial court.
The Court of Appeals ratiocinated in this wise:
At the outset, it is necessary for our purpose to determine whether to decide this
case on the theory that herein respondents PHI and DTPCI are liable for breach of
contract or on the theory of quasi-delict.
xxxx
It cannot be gainsaid that herein petitioners use of the hotels pool was only upon
the invitation of Delia, the hotels registered guest. As such, she cannot claim
contractual relationship between her and the hotel. Since the circumstances of the
present case do not evince a contractual relation between petitioner and
respondents, the rules on quasi-delict , thus, govern.
The pertinent provision of Art. 2176 of the Civil Code which states: "Whoever by act
or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called quasi-delict."
A perusal of Article 2176 shows that obligations arising from quasi-delict or tort, also
known as extra-contractual obligations, arise only between parties not otherwise
bound by contract, whether express or implied. Thus, to sustain a claim liability
under quasi-delict, the following requisites must concur: (a) damages suffered by
the plaintiff; (b) fault or negligence of the defendant, or some other person for
51

whose acts he must respond; and (c) the connection of cause and effect between
the fault or negligence of the defendant and the damages incurred by the plaintiff.
Viewed from the foregoing, the question now is whether respondents PHI and DTPCI
and its employees were negligent? We do not think so. Several factors militate
against petitioners contention.
One. Petitioner recognized the fact that the pool areas closing time is 7:00 p.m..
She, herself, admitted during her testimony that she was well aware of the sign
when she and Delia entered the pool area. Hence, upon knowing, at the outset, of
the pools closing time, she took the risk of overstaying when she decided to take
shower and leave the area beyond the closing hour. In fact, it was only upon the
advise of the pool attendants that she thereafter took her shower.
Two. She admitted, through her certification that she lifted the wooden bar
countertop, which then fell onto her head. The admission in her certificate proves
the circumstances surrounding the occurrence that transpired on the night of 11
June 1995. This is contrary to her assertion in the complaint and testimony that,
while she was passing through the counter door, she was suddenly knocked out by
a hard and heavy object. In view of the fact that she admitted having lifted the
counter top, it was her own doing, therefore, that made the counter top fell on to
her head.
Three. We cannot likewise subscribe to petitioners assertion that the pool area was
totally dark in that she herself admitted that she saw a telephone at the counter
after searching for one. It must be noted that petitioner and Delia had walked
around the pool area with ease since they were able to proceed to the glass
entrance door from shower room, and back to the counter area where the telephone
was located without encountering any untoward incident. Otherwise, she could have
easily stumbled over, or slid, or bumped into something while searching for the
telephone. This negates her assertion that the pool area was completely dark,
thereby, totally impairing her vision.
xxxx
The aforementioned circumstances lead us to no other conclusion than that the
proximate and immediate cause of the injury of petitioner was due to her own
negligence.
Moreover, petitioner failed to sufficiently substantiate that the medical symptoms
she is currently experiencing are the direct result of the head injury she sustained
on 11 June 1995 as was aptly discussed in the lower courts findings.
xxxx
It bears stressing that in civil cases, the law requires that the party who alleges a
fact and substantially asserts the affirmative of the issue has the burden of proving
52

it. Hence, for petitioner to be entitled to damages, she must show that she had
suffered an actionable injury. Regrettably, petitioner failed in this
regard.59 (Emphasis supplied).
Petitioners Motion for Reconsideration was denied for lack of merit in a Resolution
dated 5 November 2007.
Hence, this Petition raising the following issues:
(1) Whether or not the findings of fact of the trial court and of the Court of Appeals
are conclusive in this case.
(2) Whether or not herein respondents PHI and DTPCI are responsible by implied
contract to exercise due care for the safety and welfare of the petitioner.
(3) Whether or not the cause of action of the petitioner can be based on both
breach of contract and tort.
(4) Whether or not it is respondents PHI and DTPCI and its employees who are liable
to the petitioner for negligence, applying the well-established doctrines of res ipsa
loquitur and respondeat superior.
(5) Whether the petitioners debilitating and permanent injuries were a result of the
accident she suffered at the hotel on 11 June 1995.
(6) Whether or not the petitioner is entitled to the payment of damages, attorneys
fees, interest, and the costs of suit.
(7) Whether or not the respondent insurance company is liable, even directly, to the
petitioner.
(8) Whether or not petitioners motion for reconsideration of the decision of the
Court of Appeals is pro forma.60
Petitioner argues that the rule that "findings of fact of the lower courts are
conclusive and must be respected on appeal" finds no application herein because
this case falls under the jurisprudentially established exceptions. Moreover, since
the rationale behind the afore-mentioned rule is that "the trial judge is in a vantage
point to appreciate the conduct and behavior of the witnesses and has the
unexcelled opportunity to evaluate their testimony," one logical exception to the
rule that can be deduced therefrom is when the judge who decided the case is not
the same judge who heard and tried the case.
Petitioner further faults the Court of Appeals in ruling that no contractual
relationship existed between her and respondents PHI and DTPCI since her use of
the hotels swimming pool facility was only upon the invitation of the hotels
registered guest. On the contrary, petitioner maintains that an implied contract
existed between them in view of the fact that the hotel guest status extends to all
53

those who avail of its servicesits patrons and invitees. It follows then that all those
who patronize the hotel and its facilities, including those who are invited to partake
of those facilities, like petitioner, are generally regarded as guests of the hotel. As
such, respondents PHI and DTPCI are responsible by implied contract for the safety
and welfare of petitioner while the latter was inside their premises by exercising due
care, which they failed to do.
Petitioner even asserts that the existence of a contract between the parties does
not bar any liability for tort since the act that breaks a contract may also be a tort.
Hence, the concept of change of theory of cause of action pointed to by
respondents is irrelevant.
Petitioner similarly avows that the doctrines of res ipsa loquitur and respondeat
superior are applicable in this case. She argues that a person who goes in a hotel
without a "bukol" or hematoma and comes out of it with a "bukol" or hematoma is a
clear case of res ipsa loquitur. It was an accident caused by the fact that the hotel
staff was not present to lift the heavy counter top for petitioner as is normally
expected of them because they negligently locked the main entrance door of the
hotels swimming pool area. Following the doctrine of res ipsa loquitur, respondents
PHI and DTPCIs negligence is presumed and it is incumbent upon them to prove
otherwise but they failed to do so. Further, respondents PHI and DTPCI failed to
observe all the diligence of a good father of a family in the selection and supervision
of their employees, hence, following the doctrine of respondeat superior, they were
liable for the negligent acts of their staff in not verifying if there were still people
inside the swimming pool area before turning off the lights and locking the door.
Had respondents PHI and DTPCIs employees done so, petitioner would not have
been injured. Since respondents PHI and DTPCIs negligence need not be proved,
the lower courts erred in shifting the burden to petitioner and, thereafter, holding
the hotel and its employees not negligent for petitioners failure to prove their
negligence. Moreover, petitioner alleges that there was no contributory negligence
on her part for she did not do anything that could have contributed to her injury.
And, even if there was, the same does not bar recovery.
Petitioner equally declares that the evidence on record, including the objective
medical findings, had firmly established that her permanent debilitating injuries
were the direct result of the 11 June 1995 accident inside the hotels swimming pool
area. This fact has not been totally disputed by the respondents. Further, the
medical experts who had been consulted by petitioner were in unison in their
diagnoses of her condition. Petitioner was also able to prove that the falling of the
folding wooden counter top on her head while she was at the hotels swimming pool
area was the cause of her head, eye and neck injuries.
Petitioner reiterates her claim for an award of damages, to wit: actual, including loss
of income; moral, exemplary; as well as attorneys fees, interest and costs of suit.
She states that respondents PHI and DTPCI are liable for quasi-delict under Articles
54

19, 2176 and 2180 of the New Civil Code. At the same time, they are liable under an
implied contract for they have a public duty to give due courtesy, to exercise
reasonable care and to provide safety to hotel guests, patrons and invitees.
Respondent First Lepanto, on the other hand, is directly liable under the express
contract of insurance.
Lastly, petitioner contends that her Motion for Reconsideration before the Court of
Appeals was not pro forma for it specifically pointed out the alleged errors in the
Court of Appeals Decision.
The instant Petition is devoid of merit.
Primarily, only errors of law and not of facts are reviewable by this Court in a
Petition for Review on Certiorari under Rule 45 of the Rules of Court. 61 This Court is
not a trier of facts and it is beyond its function to re-examine and weigh anew the
respective evidence of the parties.62 Besides, this Court adheres to the long
standing doctrine that the factual findings of the trial court, especially when
affirmed by the Court of Appeals, are conclusive on the parties and this
Court.63 Nonetheless, this Court has, at times, allowed exceptions thereto, to wit:
(a) When the findings are grounded entirely on speculation, surmises, or
conjectures;
(b) When the inference made is manifestly mistaken, absurd, or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the Court of Appeals went beyond the issues of the
case, or its findings are contrary to the admissions of both the appellant and the
appellee;
(g) When the Court of Appeals findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific evidence on which
they are based;
(i) When the facts set forth in the petition as well as in the petitioners main and
reply briefs are not disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or

55

(k) When the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would justify a different
conclusion.64
Upon meticulous perusal of the records, however, this Court finds that none of these
exceptions is obtaining in this case. No such justifiable or compelling reasons exist
for this Court to depart from the general rule. This Court will not disturb the factual
findings of the trial court as affirmed by the Court of Appeals and adequately
supported by the evidence on record.
Also, this Court will not review the factual findings of the trial court simply because
the judge who heard and tried the case was not the same judge who penned the
decision. This fact alone does not diminish the veracity and correctness of the
factual findings of the trial court. 65 Indeed, "the efficacy of a decision is not
necessarily impaired by the fact that its writer only took over from a colleague who
had earlier presided at the trial, unless there is showing of grave abuse of discretion
in the factual findings reached by him." 66 In this case, there was none.
It bears stressing that in this jurisdiction there is a disputable presumption that the
trial courts decision is rendered by the judge in the regular performance of his
official duties. While the said presumption is only disputable, it is satisfactory unless
contradicted or overcame by other evidence. Encompassed in this presumption of
regularity is the presumption that the trial court judge, in resolving the case and
drafting the decision, reviewed, evaluated, and weighed all the evidence on record.
That the said trial court judge is not the same judge who heard the case and
received the evidence is of little consequence when the records and transcripts of
stenographic notes (TSNs) are complete and available for consideration by the
former,67 just like in the present case.
Irrefragably, the fact that the judge who penned the trial courts decision was not
the same judge who heard the case and received the evidence therein does not
render the findings in the said decision erroneous and unreliable. While the conduct
and demeanor of witnesses may sway a trial court judge in deciding a case, it is not,
and should not be, his only consideration. Even more vital for the trial court judges
decision are the contents and substance of the witnesses testimonies, as borne out
by the TSNs, as well as the object and documentary evidence submitted and made
part of the records of the case.68
This Court examined the records, including the TSNs, and found no reason to disturb
the factual findings of both lower courts. This Court, thus, upholds their
conclusiveness.
In resolving the second and third issues, a determination of the cause of action on
which petitioners Complaint for Damages was anchored upon is called for.

56

Initially, petitioner was suing respondents PHI and DTPCI mainly on account of their
negligence but not on any breach of contract. Surprisingly, when the case was
elevated on appeal to the Court of Appeals, petitioner had a change of heart and
later claimed that an implied contract existed between her and respondents PHI and
DTPCI and that the latter were liable for breach of their obligation to keep her safe
and out of harm. This allegation was never an issue before the trial court. It was not
the cause of action relied upon by the petitioner not until the case was before the
Court of Appeals. Presently, petitioner claims that her cause of action can be based
both on quasi-delict and breach of contract.
A perusal of petitioners Complaint evidently shows that her cause of action was
based solely on quasi-delict. Telling are the following allegations in petitioners
Complaint:
6. THAT, in the evening of 11 June 1995, between the hours from 7:00 to 8:00
oclock, after herein petitioner and her friend from New York, Delia, the latter being
then a Hotel guest, were taking their shower after having a dip in the hotels
swimming pool, without any notice or warning, the Hotels staff put off all the lights
within the pool area including the lights on the hallway and also locked the main
entrance door of the pool area, x x x;
7. THAT, Hotel guest Delia started to panic while petitioner pacified her by telling
her not to worry as they would both find their way out. Petitioner knowing that
within the area there is a house phone, started to look around while Delia was
following her, eventually petitioner saw a phone behind the counter x x x, that while
slowly moving on towards the phone on a stooping manner due to the darkness
CAUSED BY UNTIMELY AND NEGLIGENTLY PUTTING OFF WITH THE LIGHTS BY THE
HEREIN RESPONDENTS PHI AND DTPCIS EMPLOYEE while passing through the open
counter door with its Folding Counter Top also opened, x x x, a hard and heavy
object fell onto the head of the petitioner that knocked her down almost
unconscious which hard and heavy object turned out to be the Folding Counter Top;
8. THAT, Delia immediately got hold of the house phone and notified the Hotel
Telephone Operator about the incident, immediately the hotel staffs (sic) arrived but
they were stranded behind the main door of the pool entrance and it too (sic) them
more than twenty (20) minutes to locate the hotel maintenance employee who
holds the key of the said main entrance door;
9. THAT, when the door was opened, two Hotel Chamber Maids assisted the
petitioner to get out of the counter door. Petitioner being a Physician tried to control
her feelings although groggy and requested for a HURIDOID, a medicine for
HEMATOMA, as a huge lump developed on her head while the two Chamber Maids
assisted petitioner by holding the bag of ice on her head and applying the medicine
on the huge lump;

57

10. THAT, petitioner after having recovered slightly from her nightmare, though still
feeling weak, asked to be assisted to the Hotel Coffee Shop to take a rest but
requested for the hotels Physician. Despite her insistent requests, the Dusit Hotel
refused to lift a finger to assists petitioner who was then in distress until a lady
approached and introduced herself as the Hotels house Doctor. Instead however of
assisting petitioner by asking her what kind of assistance the Hotel could render, in
a DISCOURTEOUS MANNER presented instead a paper and demanding petitioner to
affix her signature telling her that the Hotel Management would only assists and
answer for all expenses incurred if petitioner signs the paper presented, but she
refused and petitioner instead wrote a marginal note on the said paper stating her
reason therefore, said paper later on turned out to be a WAIVER OF RIGHT or QUIT
CLAIM;
xxxx
14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCIs
gross negligence despite medical assistance, petitioner started to feel losing her
memory that greatly affected and disrupted the practice of her chosen profession x
x x.
xxxx
19. THAT, due to respondents PHI and DTPCIs gross negligence as being narrated
which caused petitioner to suffer sleepless nights, depression, mental anguish,
serious anxiety, wounded feelings, and embarrassment with her Diplomate friends
in the profession and industry, her social standing in the community was greatly
affected and hence, respondents PHI and DTPCI must be imposed the hereunder
damages, prayed for x x x and Artile (sic) 2176 and 2199 of the New Civil Code of
the Philippines x x x.
xxxx
22. THAT, as to Moral, Exemplary and Actual Damages, as well as petitioners Loss
of Income, the amounts are stated in its prayer hereunder. 69
It is clear from petitioners allegations that her Complaint for Damages was
predicated on the alleged negligence of respondents PHI and DTPCIs staff in the
untimely putting off of all the lights within the hotels swimming pool area, as well
as the locking of its main door, prompting her to look for a way out leading to the
fall of the folding wooden counter top on her head causing her serious brain injury.
The said negligence was allegedly compounded by respondents PHI and DTPCIs
failure to render prompt and adequate medical assistance. These allegations in
petitioners Complaint constitute a cause of action for quasi-delict, which under the
New Civil Code is defined as an act, or omission which causes damage to another,
there being fault or negligence.70

58

It is evident from petitioners Complaint and from her open court testimony that the
reliance was on the alleged tortious acts committed against her by respondents PHI
and DTPCI, through their management and staff. It is now too late in the day to
raise the said argument for the first time before this Court. 71
Petitioners belated reliance on breach of contract as her cause of action cannot be
sanctioned by this Court. Well-settled is the rule that a party is not allowed to
change the theory of the case or the cause of action on appeal. Matters, theories or
arguments not submitted before the trial court cannot be considered for the first
time on appeal or certiorari.72 When a party adopts a certain theory in the court
below, he will not be permitted to change his theory on appeal for to permit him to
do so would not only be unfair to the other party but it would also be offensive to
the basic rules of fair play, justice and due process. 73 Hence, a party is bound by the
theory he adopts and by the cause of action he stands on and cannot be permitted
after having lost thereon to repudiate his theory and cause of action and adopt
another and seek to re-litigate the matter anew either in the same forum or on
appeal.74
In that regard, this Court finds it significant to take note of the following differences
between quasi-delict (culpa aquilina) and breach of contract (culpa contractual). In
quasi-delict, negligence is direct, substantive and independent, while in breach of
contract, negligence is merely incidental to the performance of the contractual
obligation; there is a pre-existing contract or obligation. 75 In quasi-delict, the
defense of "good father of a family" is a complete and proper defense insofar as
parents, guardians and employers are concerned, while in breach of contract, such
is not a complete and proper defense in the selection and supervision of
employees.76 In quasi- delict , there is no presumption of negligence and it is
incumbent upon the injured party to prove the negligence of the defendant,
otherwise, the formers complaint will be dismissed, while in breach of contract,
negligence is presumed so long as it can be proved that there was breach of the
contract and the burden is on the defendant to prove that there was no negligence
in the carrying out of the terms of the contract; the rule of respondeat superior is
followed.77
Viewed from the foregoing, petitioners change of theory or cause of action from
quasi-delict to breach of contract only on appeal would necessarily cause injustice
to respondents PHI and DTPCI. First, the latter will have no more opportunity to
present evidence to contradict petitioners new argument. Second, the burden of
proof will be shifted from petitioner to respondents PHI and DTPCI. Petitioners
change of theory from quasi-delict to breach ofcontract must be repudiated.
As petitioners cause of action is based on quasi-delict, it is incumbent upon her to
prove the presence of the following requisites before respondents PHI and DTPCI
can be held liable, to wit: (a) damages suffered by the plaintiff; (b) fault or
negligence of the defendant, or some other person for whose acts he must respond;
59

and (c) the connection of cause and effect between the fault or negligence of the
defendant and the damages incurred by the plaintiff. 78 Further, since petitioners
case is for quasi-delict , the negligence or fault should be clearly established as it is
the basis of her action.79 The burden of proof is upon petitioner. Section 1, Rule 131
of the Rules of Court provides that "burden of proof is the duty of a party to present
evidence on the facts in issue necessary to establish his claim or defense by the
amount of evidence required by law." It is then up for the plaintiff to establish his
cause of action or the defendant to establish his defense. Therefore, if the plaintiff
alleged in his complaint that he was damaged because of the negligent acts of the
defendant, he has the burden of proving such negligence. It is even presumed that
a person takes ordinary care of his concerns. The quantum of proof required is
preponderance of evidence.80
In this case, as found by the trial court and affirmed by the Court of Appeals,
petitioner utterly failed to prove the alleged negligence of respondents PHI and
DTPCI. Other than petitioners self-serving testimony that all the lights in the hotels
swimming pool area were shut off and the door was locked, which allegedly
prompted her to find a way out and in doing so a folding wooden counter top fell on
her head causing her injury, no other evidence was presented to substantiate the
same. Even her own companion during the night of the accident inside the hotels
swimming pool area was never presented to corroborate her allegations. Moreover,
petitioners aforesaid allegations were successfully rebutted by respondents PHI and
DTPCI. Here, we quote with conformity the observation of the trial court, thus:
x x x Besides not being backed up by other supporting evidence, said statement is
being contradicted by the testimony of Engineer Dante L. Costas, 81 who positively
declared that it has been a normal practice of the Hotel management not to put off
the lights until 10:00P.M. in order to allow the housekeepers to do the cleaning of
the pools surrounding, the toilets and the counters. It was also confirmed that the
lights were kept on for security reasons and so that the people exercising in the
nearby gym may be able to have a good view of the swimming pool. This Court also
takes note that the nearby gymnasium was normally open until 10:00 P.M. so that
there was a remote possibility the pool area was in complete darkness as was
alleged by herein petitioner, considering that the illumination which reflected from
the gym. Ergo, considering that the area were sufficient (sic) illuminated when the
alleged incident occurred, there could have been no reason for the petitioner to
have met said accident, much less to have been injured as a consequence thereof,
if she only acted with care and caution, which every ordinary person is expected to
do.82
More telling is the ratiocination of the Court of Appeals, to wit:
Viewed from the foregoing, the question now is whether respondents PHI and DTPCI
and its employees were negligent? We do not think so. Several factors militate
against petitioners contention.
60

One. Petitioner recognized the fact that the pool areas closing time is 7:00 p.m..
She, herself, admitted during her testimony that she was well aware of the sign
when she and Delia entered the pool area. Hence, upon knowing, at the outset, of
the pools closing time, she took the risk of overstaying when she decided to take
shower and leave the area beyond the closing hour. In fact, it was only upon the
advise of the pool attendants that she thereafter took her shower.
Two. She admitted, through her certification, that she lifted the wooden bar
countertop, which then fell on to her head. The admission in her certificate proves
the circumstances surrounding the occurrence that transpired on the night of 11
June 1995. This is contrary to her assertion in the complaint and testimony that,
while she was passing through the counter door, she was suddenly knocked out by
a hard and heavy object. In view of the fact that she admitted having lifted the
countertop, it was her own doing, therefore, that made the counter top fell on to her
head.
Three. We cannot likewise subscribe to petitioners assertion that the pool area was
totally dark in that she herself admitted that she saw a telephone at the counter
after searching for one. It must be noted that petitioner and Delia had walked
around the pool area with ease since they were able to proceed to the glass
entrance door from the shower room, and back to the counter area where the
telephone was located without encountering any untoward incident. Otherwise, she
could have easily stumbled over, or slid, or bumped into something while searching
for the telephone. This negates her assertion that the pool area was completely
dark, thereby, totally impairing her vision.
xxxx
The aforementioned circumstances lead us to no other conclusion than that the
proximate and immediate cause of the injury of petitioner was due to her own
negligence.83 (Emphasis supplied).
Even petitioners assertion of negligence on the part of respondents PHI and DTPCI
in not rendering medical assistance to her is preposterous. Her own Complaint
affirmed that respondents PHI and DTPCI afforded medical assistance to her after
she met the unfortunate accident inside the hotels swimming pool facility. Below is
the portion of petitioners Complaint that would contradict her very own statement,
thus:
14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCIs
gross negligence despite medical assistance, petitioner started to feel losing her
memory that greatly affected and disrupted the practice of her chosen profession. x
x x.84 (Emphasis supplied).

61

Also, as observed by the trial court, respondents PHI and DTPCI, indeed, extended
medical assistance to petitioner but it was petitioner who refused the same. The
trial court stated, thus:
Further, herein petitioners asseverations that the Hotel Management did not extend
medical assistance to her in the aftermath of the alleged accident is not true. Again,
this statement was not supported by any evidence other that the sole and selfserving testimony of petitioner. Thus, this Court cannot take petitioners statement
as a gospel truth. It bears stressing that the Hotel Management immediately
responded after it received notice of the incident. As a matter of fact, Ms. Pearlie,
the Hotel nurse, with two chambermaids holding an ice bag placed on petitioners
head came to the petitioner to extend emergency assistance when she was notified
of the incident, but petitioner merely asked for Hirudoid, saying she was fine, and
that she was a doctor and know how to take care of herself. Also, the Hotel, through
its in-house physician, Dr. Dalumpines offered its medical services to petitioner
when they met at the Hotels coffee shop, but again petitioner declined the offer.
Moreover, the Hotel as a show of concern for the petitioners welfare, shouldered
the expenses for the MRI services performed on petitioner at the Makati Medical
Center. Emphatically, petitioner herself cannot fault the Hotel for the injury she
allegedly suffered because she herself did not heed the warning at the pool to the
effect that it was only open from 7:00 to 7:00 P.M. Thus, when the petitioners own
negligence was the immediate and proximate cause of his injury, shecannot recover
damages x x x.85
With the foregoing, the following were clearly established, to wit: (1) petitioner
stayed in the hotels swimming pool facility beyond its closing hours; (2) she lifted
the folding wooden counter top that eventually hit her head; and (3) respondents
PHI and DTPCI extended medical assistance to her. As such, no negligence can be
attributed either to respondents PHI and DTPCI or to their staff and/or management.
Since the question of negligence is one of fact, this Court is bound by the said
factual findings made by the lower courts. It has been repeatedly held that the trial
court's factual findings, when affirmed by the Court of Appeals, are conclusive and
binding upon this Court, if they are not tainted with arbitrariness or oversight of
some fact or circumstance of significance and influence. Petitioner has not
presented sufficient ground to warrant a deviation from this rule. 86
With regard to petitioners contention that the principles of res ipsa loquitur and
respondeat superior are applicable in this case, this Court holds otherwise.
Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction
speaks for itself." It relates to the fact of an injury that sets out an inference to the
cause thereof or establishes the plaintiffs prima facie case. The doctrine rests on
inference and not on presumption. The facts of the occurrence warrant the
supposition of negligence and they furnish circumstantial evidence of negligence
when direct evidence is lacking.87 Simply stated, this doctrine finds no application if
62

there is direct proof of absence or presence of negligence. If there is sufficient proof

showing the conditions and circumstances under which the injury occurred, then the
creative reason for the said doctrine disappears. 88
Further, the doctrine of res ipsa loquitur applies where, (1) the accident was of such
character as to warrant an inference that it would not have happened except for the
defendants negligence; (2) the accident must have been caused by an agency or
instrumentality within the exclusive management or control of the person charged
with the negligence complained of; and (3) the accident must not have been due to
any voluntary action or contribution on the part of the person injured. 89
In the case at bench, even granting that respondents PHI and DTPCIs staff
negligently turned off the lights and locked the door, the folding wooden counter top
would still not fall on petitioners head had she not lifted the same. Although the
folding wooden counter top is within the exclusive management or control of
respondents PHI and DTPCI, the falling of the same and hitting the head of
petitioner was not due to the negligence of the former. As found by both lower
courts, the folding wooden counter top did not fall on petitioners head without any
human intervention. Records showed that petitioner lifted the said folding wooden
counter top that eventually fell and hit her head. The same was evidenced by the,
(1) 11 June 1995 handwritten certification of petitioner herself; (2) her Letter dated
30 August 1995 addressed to Mr. Yoshikazu Masuda (Mr. Masuda), General Manager
of Dusit Hotel; and, (3) Certification dated 7 September 1995 issued to her by Dr.
Dalumpines upon her request, which contents she never questioned.
Here, we, respectively, quote the 11 June 1995 handwritten certification of
petitioner; her letter to Mr. Masuda dated 30 August 1995; and Dr. Dalumpines
Certification dated 7 September 1995, to wit:
Petitioners 11 June 1995 Handwritten Certification:
I was requested by Dr. Dalumpines to write that I was assured of assistance should
it be necessary with regard an accident at the pool. x x x The phone was in an
enclosed area on a chair I lifted the wooden bar counter top which then fell on my
head producing a large hematoma x x x.90
Petitioners Letter addressed to Mr. Masuda dated 30 August 1995:
Dear Mr. Masuda,
xxxx
x x x We searched and saw a phone on a chair behind a towel counter. However, in
order to get behind the counter I had to lift a hinged massive wooden section of the
counter which subsequently fell and knocked me on my head x x x. 91
Dr. Dalumpines Certification dated 7 September 1995:
63

CERTIFICATION
This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to
an accident at the poolside at 7:45PM on 11 June 1995.
Same records show that there, she saw petitioner who claimed the folding
countertop fell on her head when she lifted it to enter the lifeguards counter to use
the phone. She asked for Hirudoid.
The same evening petitioner met Dr. Dalumpnes at the Coffee Shop. After narrating
the poolside incident and declining Dr. Dalumpines offer of assistance, she
reiterated that the Hirudoid cream was enough and that petitioner]being a doctor
herself, knew her condition and she was all right.
This certification is given upon the request of petitioner for whatever purpose it may
serve, 7 September 1995 at Makati City.92 (Emphasis supplied).
This Court is not unaware that in petitioners Complaint and in her open court
testimony, her assertion was, "while she was passing through the counter door, she
was suddenly knocked out by a hard and heavy object, which turned out to be the
folding wooden counter top." However, in her open court testimony, particularly
during cross-examination, petitioner confirmed that she made such statement that
"she lifted the hinge massive wooden section of the counter near the swimming
pool."93 In view thereof, this Court cannot acquiesce petitioners theory that her
case is one of res ipsa loquitur as it was sufficiently established how petitioner
obtained that "bukol" or "hematoma."
The doctrine of respondeat superior finds no application in the absence of any
showing that the employees of respondents PHI and DTPCI were negligent. Since in
this case, the trial court and the appellate court found no negligence on the part of
the employees of respondents PHI and DTPCI, thus, the latter cannot also be held
liable for negligence and be made to pay the millions of pesos damages prayed for
by petitioner.
The issue on whether petitioners debilitating and permanent injuries were the
result of the accident she suffered at the hotels swimming pool area on 11 June
1995 is another question of fact, which is beyond the function of this Court to
resolve. More so, this issue has already been properly passed upon by the trial court
and the Court of Appeals. To repeat, this Court is bound by the factual findings of
the lower courts and there is no cogent reason to depart from the said rule.
The following observations of the trial court are controlling on this matter:
Firstly, petitioner had a past medical history which might have been the cause of
her recurring brain injury.

64

Secondly, the findings of Dr. Perez did not prove a causal relation between the 11
June 1995 accident and the brain damage suffered by petitioner. Dr. Perez himself
testified that the symptoms being experienced by petitioner might have been due
to factors other than the head trauma she allegedly suffered. Emphasis must be
given to the fact that petitioner had been suffering from different kinds of brain
problems since she was 18 years old, which may have been the cause of the
recurring symptoms of head injury she is experiencing at present.
Thirdly, Dr. Sanchezs testimony cannot be relied upon since she testified on the
findings and conclusions of persons who were never presented in court. Ergo, her
testimony thereon was hearsay. A witness can testify only with regard to facts of
which they have personal knowledge. Testimonial or documentary evidence is
hearsay if it is based, not on the personal knowledge of the witness, but on the
knowledge of some other person not on the witness stand. Consequently, hearsay
evidence -- whether objected to or not -- has no probative value. 94
Fourthly, the medical reports/evaluations/certifications issued by myriads of doctors
whom petitioner sought for examination or treatment were neither identified nor
testified to by those who issued them. Being deemed as hearsay, they cannot be
given probative value.1wphi1
The aforesaid medical reports/evaluations/certifications of different doctors in favor
of petitioner cannot be given probative value and their contents cannot be deemed
to constitute proof of the facts stated therein. It must be stressed that a document
or writing which is admitted not as independent evidence but merely as part of the
testimony of a witness does not constitute proof of the facts related therein. 95 In the
same vein, the medical certificate which was identified and interpreted in court by
another doctor was not accorded probative value because the doctor who prepared
it was not presented for its identification. Similarly, in this case, since the doctors
who examined petitioner were not presented to testify on their findings, the medical
certificates issued on their behalf and identified by another doctor cannot be
admitted as evidence. Since a medical certificate involves an opinion of one who
must first be established as an expert witness, it cannot be given weight or credit
unless the doctor who issued it is presented in court to show his
qualifications.96 Thus, an unverified and unidentified private document cannot be
accorded probative value. It is precluded because the party against whom it is
presented is deprived of the right and opportunity to cross-examine the person to
whom the statements or writings are attributed. Its executor or author should be
presented as a witness to provide the other party to the litigation the opportunity to
question its contents. Being mere hearsay evidence, failure to present the author of
the letter renders its contents suspect and of no probative value. 97
All told, in the absence of negligence on the part of respondents PHI and DTPCI, as
well as their management and staff, they cannot be made Iiable to pay for the
millions of damages prayed for by the petitioner. Since respondents PHI and DTPCI
65

arc not liable, it necessarily follows that respondent First Lepanto cannot also be
made liable under the contract or Insurance.
WHEREFORE, premises considered, the Decision and Resolution or the Court of
Appeals in CA-G.R. CV No. 87065 dated 9 August 2007 and 5 November 2007,
respectively, are hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
LOADMASTERS CUSTOMS
SERVICES, INC.,

G.R. No. 17944

Petitioner,
- versus GLODEL BROKERAGE
CORPORATION and

Promulgated:

R&B INSURANCE CORPORATION,

Respondents.

January 10, 2011

X -------------------------------------------------------------------------------------- X
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
assailing the August 24, 2007 Decision[1]of the Court of Appeals (CA) in CA-G.R. CV
No. 82822, entitled R&B Insurance Corporation v. Glodel Brokerage Corporation and
Loadmasters Customs Services, Inc., which held petitioner Loadmasters Customs
Services, Inc. (Loadmasters) liable to respondent Glodel Brokerage
Corporation (Glodel) in the amount of P1,896,789.62 representing the insurance
indemnity which R&B Insurance Corporation (R&B Insurance) paid to the insuredconsignee, Columbia Wire and Cable Corporation (Columbia).
THE FACTS:
On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in
favor of Columbia to insure the shipment of 132 bundles of electric copper cathodes
against All Risks. On August 28, 2001, the cargoes were shipped on board the
vessel Richard Rey from Isabela, Leyte, to Pier 10, North Harbor, Manila. They
arrived on the same date.

66

Columbia engaged the services of Glodel for the release and withdrawal of the
cargoes from the pier and the subsequent delivery to its warehouses/plants. Glodel,
in turn, engaged the services of Loadmasters for the use of its delivery trucks to
transport the cargoes to Columbias warehouses/plants in Bulacan
and Valenzuela City.
The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven
by its employed drivers and accompanied by its employed truck helpers. Six (6)
truckloads of copper cathodes were to be delivered to Balagtas, Bulacan, while the
other six (6) truckloads were destined for Lawang Bato, Valenzuela City. The cargoes
in six truckloads for Lawang Bato were duly delivered in Columbias warehouses
there. Of the six (6) trucks en route to Balagtas, Bulacan, however, only five (5)
reached the destination. One (1) truck, loaded with 11 bundles or 232 pieces of
copper cathodes, failed to deliver its cargo.
Later on, the said truck, an Isuzu with Plate No. NSD-117, was recovered but without
the copper cathodes. Because of this incident, Columbia filed with R&B Insurance a
claim for insurance indemnity in the amount of P1,903,335.39. After the requisite
investigation and adjustment, R&B Insurance paid Columbia the amount
of P1,896,789.62 as insurance indemnity.
R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters
and Glodel before the Regional Trial Court, Branch 14, Manila (RTC), docketed as
Civil Case No. 02-103040. It sought reimbursement of the amount it had paid
toColumbia for the loss of the subject cargo. It claimed that it had been subrogated
to the right of the consignee to recover from the party/parties who may be held
legally liable for the loss.[2]
On November 19, 2003, the RTC rendered a decision [3] holding Glodel liable for
damages for the loss of the subject cargo and dismissing Loadmasters counterclaim
for damages and attorneys fees against R&B Insurance. The dispositive portion of
the decision reads:
WHEREFORE, all premises considered, the plaintiff having established by
preponderance of evidence its claims against defendant Glodel Brokerage
Corporation, judgment is hereby rendered ordering the latter:
1.
To pay plaintiff R&B Insurance Corporation the sum of P1,896,789.62 as
actual and compensatory damages, with interest from the date of complaint until
fully paid;
2.
To pay plaintiff R&B Insurance Corporation the amount equivalent to 10% of
the principal amount recovered as and for attorneys fees plus P1,500.00 per
appearance in Court;

67

3.
To pay plaintiff R&B Insurance Corporation the sum of P22,427.18 as litigation
expenses.
WHEREAS, the defendant Loadmasters Customs Services, Inc.s counterclaim for
damages and attorneys fees against plaintiff are hereby dismissed.
With costs against defendant Glodel Brokerage Corporation.
SO ORDERED.[4]
Both R&B Insurance and Glodel appealed the RTC decision to the CA.
On August 24, 2007, the CA rendered the assailed decision which reads in part:
Considering that appellee is an agent of appellant Glodel, whatever liability the
latter owes to appellant R&B Insurance Corporation as insurance indemnity must
likewise be the amount it shall be paid by appellee Loadmasters.
WHEREFORE, the foregoing considered, the appeal is PARTLY GRANTED in that the
appellee Loadmasters is likewise held liable to appellant Glodel in the amount
of P1,896,789.62 representing the insurance indemnity appellant Glodel has been
held liable to appellant R&B Insurance Corporation.
Appellant Glodels appeal to absolve it from any liability is herein DISMISSED.
SO ORDERED.[5]
Hence, Loadmasters filed the present petition for review on certiorari before this
Court presenting the following
ISSUES
1. Can Petitioner Loadmasters be held liable to Respondent Glodel in spite
of the fact that the latter respondent Glodel did not file a cross-claim
against it (Loadmasters)?
2. Under the set of facts established and undisputed in the case, can
petitioner Loadmasters be legally considered as an Agent of respondent
Glodel?[6]
To totally exculpate itself from responsibility for the lost goods, Loadmasters argues
that it cannot be considered an agent of Glodel because it never represented the
latter in its dealings with the consignee. At any rate, it further contends that Glodel
has no recourse against it for its (Glodels) failure to file a cross-claim pursuant to
Section 2, Rule 9 of the 1997 Rules of Civil Procedure.
Glodel, in its Comment,[7] counters that Loadmasters is liable to it under its crossclaim because the latter was grossly negligent in the transportation of the subject
cargo. With respect to Loadmasters claim that it is already estopped from filing a
68

cross-claim, Glodel insists that it can still do so even for the first time on appeal
because there is no rule that provides otherwise. Finally, Glodel argues that its
relationship with Loadmasters is that of Charter wherein the transporter
(Loadmasters) is only hired for the specific job of delivering the merchandise. Thus,
the diligence required in this case is merely ordinary diligence or that of a good
father of the family, not the extraordinary diligence required of common carriers.
R&B Insurance, for its part, claims that Glodel is deemed to have interposed a crossclaim against Loadmasters because it was not prevented from presenting evidence
to prove its position even without amending its Answer. As to the relationship
between Loadmasters and Glodel, it contends that a contract of agency existed
between the two corporations.[8]
Subrogation is the substitution of one person in the place of another with reference
to a lawful claim or right, so that he who is substituted succeeds to the rights of the
other in relation to a debt or claim, including its remedies or securities. [9]Doubtless,
R&B Insurance is subrogated to the rights of the insured to the extent of the amount
it paid the consignee under the marine insurance, as provided under Article 2207 of
the Civil Code, which reads:
ART. 2207. If the plaintiffs property has been insured, and he has received indemnity
from the insurance company for the injury or loss arising out of the wrong or breach
of contract complained of, the insurance company shall be subrogated to the rights
of the insured against the wrong-doer or the person who has violated the contract. If
the amount paid by the insurance company does not fully cover the injury or loss,
the aggrieved party shall be entitled to recover the deficiency from the person
causing the loss or injury.
As subrogee of the rights and interest of the consignee, R&B Insurance has the right
to seek reimbursement from either Loadmasters or Glodel or both for breach of
contract and/or tort.
The issue now is who, between Glodel and Loadmasters, is liable to pay R&B
Insurance for the amount of the indemnity it paid Columbia.
At the outset, it is well to resolve the issue of whether Loadmasters and Glodel are
common carriers to determine their liability for the loss of the subject cargo. Under
Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or
associations engaged in the business of carrying or transporting passenger or
goods, or both by land, water or air for compensation, offering their services to the
public.
Based on the aforecited definition, Loadmasters is a common carrier because it is
engaged in the business of transporting goods by land, through its trucking
service. It is a common carrier as distinguished from a private carrier wherein
the carriage is generally undertaken by special agreement and it does not hold itself
69

out to carry goods for the general public. [10] The distinction is significant in the sense
that the rights and obligations of the parties to a contract of private carriage are
governed principally by their stipulations, not by the law on common carriers. [11]
In the present case, there is no indication that the undertaking in the contract
between Loadmasters and Glodel was private in character. There is no showing that
Loadmasters solely and exclusively rendered services to Glodel.
In fact, Loadmasters admitted that it is a common carrier.[12]
In the same vein, Glodel is also considered a common carrier within the context of
Article 1732. In its Memorandum,[13]it states that it is a corporation duly organized
and existing under the laws of the Republic of the Philippines and is engaged in the
business of customs brokering. It cannot be considered otherwise because as held
by this Court in Schmitz Transport & Brokerage Corporation v. Transport Venture,
Inc.,[14] a customs broker is also regarded as a common carrier, the transportation of
goods being an integral part of its business.
Loadmasters and Glodel, being both common carriers, are mandated from the
nature of their business and for reasons of public policy, to observe the
extraordinary diligence in the vigilance over the goods transported by them
according to all the circumstances of such case, as required by Article 1733 of the
Civil Code. When the Court speaks of extraordinary diligence, itis that extreme
measure of care and caution which persons of unusual prudence and
circumspection observe for securing and preserving their own property or rights.
[15]
This exacting standard imposed on common carriers in a contract of carriage of
goods is intended to tilt the scales in favor of the shipper who is at the mercy of the
common carrier once the goods have been lodged for shipment. [16] Thus, in case of
loss of the goods, the common carrier is presumed to have been at fault or to have
acted negligently.[17] This presumption of fault or negligence, however, may be
rebutted by proof that the common carrier has observed extraordinary diligence
over the goods.
With respect to the time frame of this extraordinary responsibility, the Civil Code
provides that the exercise of extraordinary diligence lasts from the time the goods
are unconditionally placed in the possession of, and received by, the carrier for
transportation until the same are delivered, actually or constructively, by the carrier
to the consignee, or to the person who has a right to receive them. [18]
Premises considered, the Court is of the view that both Loadmasters and Glodel are
jointly and severally liable to R & B Insurance for the loss of the subject
cargo. Under Article 2194 of the New Civil Code, the responsibility of two or more
persons who are liable for a quasi-delict is solidary.
Loadmasters claim that it was never privy to the contract entered into by Glodel
with the consignee Columbia or R&B Insurance as subrogee, is not a valid
70

defense. It may not have a direct contractual relation with Columbia, but it is liable
for tort under the provisions of Article 2176 of the Civil Code on quasi-delicts which
expressly provide:
ART. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter.
Pertinent is the ruling enunciated in the case of Mindanao Terminal and Brokerage
Service, Inc. v. Phoenix Assurance Company of New York,/McGee & Co., Inc. [19] where
this Court held that a tort may arise despite the absence of a contractual
relationship, to wit:
We agree with the Court of Appeals that the complaint filed by Phoenix and McGee
against Mindanao Terminal, from which the present case has arisen, states a cause
of action. The present action is based on quasi-delict, arising from the negligent
and careless loading and stowing of the cargoes belonging to Del Monte Produce.
Even assuming that both Phoenix and McGee have only been subrogated in the
rights of Del Monte Produce, who is not a party to the contract of service between
Mindanao Terminal and Del Monte, still the insurance carriers may have a cause of
action in light of the Courts consistent ruling that the act that breaks the
contract may be also a tort. In fine, a liability for tort may arise even under a
contract, where tort is that which breaches the contract. In the present
case, Phoenix and McGee are not suing for damages for injuries arising from
the breach of the contract of service but from the alleged negligent
manner by which Mindanao Terminal handled the cargoes belonging to Del Monte
Produce. Despite the absence of contractual relationship between Del Monte
Produce and Mindanao Terminal, the allegation of negligence on the part of the
defendant should be sufficient to establish a cause of action arising from quasidelict. [Emphases supplied
In connection therewith, Article 2180 provides:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones
own acts or omissions, but also for those of persons for whom one is responsible.
xxxx
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the
former are not engaged in any business or industry.
It is not disputed that the subject cargo was lost while in the custody of
Loadmasters whose employees (truck driver and helper) were instrumental in the
hijacking or robbery of the shipment. As employer, Loadmasters should be made
71

answerable for the damages caused by its employees who acted within the scope of
their assigned task of delivering the goods safely to the warehouse.
Whenever an employees negligence causes damage or injury to another, there
instantly arises a presumption juris tantumthat the employer failed to
exercise diligentissimi patris families in the selection (culpa in eligiendo) or
supervision (culpa in vigilando) of its employees.[20] To avoid liability for a quasidelict committed by its employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good
father of a family in the selection and supervision of his employee. [21] In this regard,
Loadmasters failed.
Glodel is also liable because of its failure to exercise extraordinary diligence. It
failed to ensure that Loadmasters would fully comply with the undertaking to safely
transport the subject cargo to the designated destination. It should have been more
prudent in entrusting the goods to Loadmasters by taking precautionary measures,
such as providing escorts to accompany the trucks in delivering the cargoes. Glodel
should, therefore, be held liable with Loadmasters. Its defense of force majeure is
unavailing.
At this juncture, the Court clarifies that there exists no principal-agent relationship
between Glodel and Loadmasters, as erroneously found by the CA. Article 1868 of
the Civil Code provides: By the contract of agency a person binds himself to render
some service or to do something in representation or on behalf of another, with the
consent or authority of the latter. The elements of a contract of agency are: (1)
consent, express or implied, of the parties to establish the relationship; (2) the
object is the execution of a juridical act in relation to a third person; (3) the agent
acts as a representative and not for himself; (4) the agent acts within the scope of
his authority.[22]
Accordingly, there can be no contract of agency between the parties. Loadmasters
never represented Glodel. Neither was it ever authorized to make such
representation. It is a settled rule that the basis for agency is representation, that is,
the agent acts for and on behalf of the principal on matters within the scope of his
authority and said acts have the same legal effect as if they were personally
executed by the principal. On the part of the principal, there must be an actual
intention to appoint or an intention naturally inferable from his words or actions,
while on the part of the agent, there must be an intention to accept the
appointment and act on it.[23] Such mutual intent is not obtaining in this case.
What then is the extent of the respective liabilities of Loadmasters and Glodel? Each
wrongdoer is liable for the total damage suffered by R&B Insurance. Where there
are several causes for the resulting damages, a party is not relieved from liability,
even partially. It is sufficient that the negligence of a party is an efficient cause
without which the damage would not have resulted. It is no defense to one of the
72

concurrent tortfeasors that the damage would not have resulted from his negligence
alone, without the negligence or wrongful acts of the other concurrent tortfeasor. As
stated in the case of Far Eastern Shipping v. Court of Appeals, [24]
X x x. Where several causes producing an injury are concurrent and each is an
efficient cause without which the injury would not have happened, the injury may
be attributed to all or any of the causes and recovery may be had against any or all
of the responsible persons although under the circumstances of the case, it may
appear that one of them was more culpable, and that the duty owed by them to the
injured person was not the same. No actor's negligence ceases to be a proximate
cause merely because it does not exceed the negligence of other actors. Each
wrongdoer is responsible for the entire result and is liable as though his acts were
the sole cause of the injury.
There is no contribution between joint tortfeasors whose liability is solidary since
both of them are liable for the total damage. Where the concurrent or successive
negligent acts or omissions of two or more persons, although acting independently,
are in combination the direct and proximate cause of a single injury to a third
person, it is impossible to determine in what proportion each contributed to the
injury and either of them is responsible for the whole injury. Where their
concurring negligence resulted in injury or damage to a third party, they become
joint tortfeasors and are solidarily liable for the resulting damage under Article 2194
of the Civil Code. [Emphasis supplied]
The Court now resolves the issue of whether Glodel can collect from Loadmasters, it
having failed to file a cross-claim against the latter.
Undoubtedly, Glodel has a definite cause of action against Loadmasters for breach
of contract of service as the latter is primarily liable for the loss of the subject
cargo. In this case, however, it cannot succeed in seeking judicial sanction against
Loadmasters because the records disclose that it did not properly interpose a crossclaim against the latter. Glodel did not even pray that Loadmasters be liable for any
and all claims that it may be adjudged liable in favor of R&B Insurance. Under the
Rules, a compulsory counterclaim, or a cross-claim, not set up shall be barred.
[25]
Thus, a cross-claim cannot be set up for the first time on appeal.
For the consequence, Glodel has no one to blame but itself. The Court cannot come
to its aid on equitable grounds. Equity,which has been aptly described as a justice
outside legality, is applied only in the absence of, and never against, statutory law
or judicial rules of procedure. [26] The Court cannot be a lawyer and take the cudgels
for a party who has been at fault or negligent.
WHEREFORE, the petition is PARTIALLY GRANTED. The August 24, 2007 Decision
of the Court of Appeals isMODIFIED to read as follows:

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WHEREFORE, judgment is rendered declaring petitioner Loadmasters Customs

Services, Inc. and respondent Glodel Brokerage Corporation jointly and severally
liable to respondent R&B Insurance Corporation for the insurance indemnity it paid
to consignee Columbia Wire & Cable Corporation and ordering both parties to pay,
jointly and severally, R&B Insurance Corporation a] the amount of P1,896,789.62
representing the insurance indemnity; b] the amount equivalent to ten (10%)
percent thereof for attorneys fees; and c] the amount ofP22,427.18 for litigation
expenses.
The cross-claim belatedly prayed for by respondent Glodel Brokerage Corporation
against petitioner Loadmasters Customs Services, Inc. is DENIED.
SO ORDERED.

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