TORTS | Aug 5| 1

G.R. No. L-21438

September 28, 1966

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
FRANCE, petitioner, 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.

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

for

Coming into focus is the constitutional mandate that "No decision shall be rendered
expressing therein clearly and distinctly the facts and the
petitioner. by any court of record without
law on which it is based". 5 This is echoed in the statutory demand that a judgment
determining the merits of the case shall state "clearly and distinctly the facts and the law
on which it is based"; 6 and that "Every decision of the Court of Appeals shall contain
complete findings of fact on all issues properly raised before it". 7

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

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

TORTS | Aug 5| 2
With these guideposts, we now face the problem of whether the findings of fact of
the Court of Appeals support its judgment.

A. Yes, "first class". (Transcript, p. 169)

xxx

xxx

xxx

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

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

Not that the Court of Appeals is alone. The trial court similarly disposed of
seat,
notwithstanding the fact that seat availability in specific flights is therein confirmed,
petitioner's contention, thus:
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
On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be employees, to strike out the very stipulations in the ticket, and say that there was a verbal
no question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", agreement to the contrary. What if the passenger had a schedule to fulfill? We have long
"C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's learned that, as a rule, a written document speaks a uniform language; that spoken word
testimony and testified as follows:
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
Q. In these tickets there are marks "O.K." From what you know, what does this OK here. The lower courts refused to believe the oral evidence intended to defeat the
mean?
covenants in the ticket.
A. That the space is confirmed.
Q. Confirmed for first class?

The foregoing are the considerations which point to the conclusion that there are
facts upon which the Court of Appeals predicated the finding that respondent Carrascoso
had a first class ticket and was entitled to a first class seat at Bangkok, which is a stopover

TORTS | Aug 5| 3
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?

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
4. Petitioner assails respondent court's award of moral damages. Petitioner's inference34of bad faith is there, it may be drawn from the facts and circumstances set forth
trenchant claim is that Carrascoso's action is planted upon breach of contract; that to therein. The contract was averred to establish the relation between the parties. But the
authorize an award for moral damages there must be an averment of fraud or bad stress of the action is put on wrongful expulsion.
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:
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
Carrascoso was oustedby petitioner's manager who gave
3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines sitting in the plane in Bangkok,
35
his
seat
to
a
white
man;
and
(b)
evidence of bad faith in the fulfillment of the contract
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 was presented without objection on the part of the petitioner. It is, therefore, unnecessary
furnish plaintiff, First Class passage on defendant's plane during the entire duration of to inquire as to whether or not there is sufficient averment in the complaint to justify an
plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's return award for moral damages. Deficiency in the complaint, if any, was cured36by the evidence.
An amendment thereof to conform to the evidence is not even required. On the question
trip to Manila, ... .
of bad faith, the Court of Appeals declared:
4. That, during the first two legs of the trip from Hongkong to Saigon and from
That the plaintiff was forced out of his seat in the first class compartment of the
Saigon to Bangkok, defendant furnished to the plaintiff First Class accommodation but only
plane
belonging to the defendant Air France while at Bangkok, and was transferred to the
after protestations, arguments and/or insistence were made by the plaintiff with
tourist class not only without his consent but against his will, has been sufficiently
defendant's employees.
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
5. That finally, defendant failed to provide First Class passage, but instead furnished as follows:
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 passenger was forced to go to the tourist class against his will, and that
First Class accommodation berths at Bangkok after he was already seated.
the captain refused to intervene",
6. That consequently, the plaintiff, desiring no repetition of the inconvenience and
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger.
embarrassments brought by defendant's breach of contract was forced to take a Pan
The
captain
of the plane who was asked by the manager of defendant company at
32
American World Airways plane on his return trip from Madrid to Manila.
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
xxx
xxx
xxx
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
2. That likewise, as a result of defendant's failure to furnish First Class
accommodations aforesaid, plaintiff suffered inconveniences, embarrassments, and
The Court of appeals further stated
humiliations, thereby causing plaintiff mental anguish, serious anxiety, wounded feelings,
social humiliation, and the like injury, resulting in moral damages in the amount of
Neither is there evidence as to whether or not a prior reservation was made by the
P30,000.00. 33
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
xxx
xxx
xxx
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

TORTS | Aug 5| 4
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:

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
40
"Q How does the person in the ticket-issuing office know what reservation the was issued by the defendant to him.
passenger has arranged with you?
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,
A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19,
petitioner,
his employer, must answer. Article 21 of the Civil Code says:
1959)
ART. 21. Any person who willfully causes loss or injury to another in a manner that is
In this connection, we quote with approval what the trial Judge has said on this
contrary
to morals, good customs or public policy shall compensate the latter for the
point:
damage.
Why did the, using the words of witness Ernesto G. Cuento, "white man" have a
In parallel circumstances, we applied the foregoing legal precept; and, we held that
"better right" to the seat occupied by Mr. Carrascoso? The record is silent. The defendant
42
airline did not prove "any better", nay, any right on the part of the "white man" to the upon the provisions of Article 2219 (10), Civil Code, moral damages are recoverable.
"First class" seat that the plaintiff was occupying and for which he paid and was issued a
corresponding "first class" ticket.
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
If there was a justified reason for the action of the defendant's Manager in Bangkok, with the public. Its business is mainly with the travelling public. It invites people to avail of
the defendant could have easily proven it by having taken the testimony of the said the comforts and advantages it offers. The contract of air carriage, therefore, generates a
Manager by deposition, but defendant did not do so; the presumption is that evidence relation attended with a public duty. Neglect or malfeasance of the carrier's employees,
willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules of Court]; and, naturally, could give ground for an action for damages.
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
Passengers do not contract merely for transportation. They have a right to be treated
him out of the plane if he did not give up his "first class" seat because the said Manager by the carrier's employees with kindness, respect, courtesy and due consideration. They
wanted to accommodate, using the words of the witness Ernesto G. Cuento, the "white are entitled to be protected against personal misconduct, injurious language, indignities
man".38
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
44
It is really correct to say that the Court of Appeals in the quoted portion first carrier.
transcribed did not use the term "bad faith". But can it be doubted that the recital of facts
therein points to bad faith? The manager not only prevented Carrascoso from enjoying his
right to a first class seat; worse, he imposed his arbitrary will; he forcibly ejected him from
his seat, made him suffer the humiliation of having to go to the tourist class compartment
- just to give way to another passenger whose right thereto has not been established.
Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different
from what is understood in law. For, "bad faith" contemplates a "state of mind affirmatively
operating with furtive design or with some motive of self-interest or will or for ulterior
purpose." 39

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a

breach of contract and a tort, giving a right of action for its agent in the presence of third
persons to falsely notify her that the check was worthless and demand payment under
threat of ejection, though the language used was not insulting and she was not
ejected." 46 And this, because, although the relation of passenger and carrier is
"contractual both in origin and nature" nevertheless "the act that breaks the contract may
be also a tort". 47 And in another case, "Where a passenger on a railroad train, when the
conductor came to collect his fare tendered him the cash fare to a point where the train
was scheduled not to stop, and told him that as soon as the train reached such point he
And if the foregoing were not yet sufficient, there is the express finding of bad 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
faith in the judgment of the Court of First Instance, thus:

TORTS | Aug 5| 5
calling him a lunatic," 48 and the Supreme Court of South Carolina there held the carrier
Besides, from a reading of the transcript just quoted, when the dialogue happened,
liable for the mental suffering of said passenger.1awphl.nt
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
50
"out of the nervous excitement and
Petitioner's contract with Carrascoso is one attended with public duty. The stress of admissible as part of the res gestae. For, they grow
mental
and
physical
condition
of
the
declarant". 51 The utterance of the purser regarding
Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a
to the circumstances of the ouster
violation of public duty by the petitioner air carrier a case of quasi-delict. Damages are his entry in the notebook was spontaneous, and related
52
incident.
Its
trustworthiness
has
been
guaranteed.
It
thus escapes the operation of the
proper.
hearsay rule. It forms part of the res gestae.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus
Q You mentioned about an attendant. Who is that attendant and purser?

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.

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
We, therefore, hold that the transcribed testimony of Carrascoso is admissible in
for? and she said, "We will note that you transferred to the tourist class". I said, "Nothing evidence.
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".
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
Q Was she able to note it?
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
A No, because I did not give my ticket.
class seat fits into this legal precept. And this, in addition to moral damages. 54
Q About that purser?

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
55
We do not
A Well, the seats there are so close that you feel uncomfortable and you don't have below felt that it is but just and equitable that attorneys' fees be given.
intend
to
break
faith
with
the
tradition
that
discretion
well
exercised

as
it
was
here
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 should not be disturbed.
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."
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
Mr. VALTE
with the trial court. 56 The Court of Appeals did not interfere with the same. The dictates of
good sense suggest that we give our imprimatur thereto. Because, the facts and
I move to strike out the last part of the testimony of the witness because the best circumstances point to the reasonableness thereof.57
evidence would be the notes. Your Honor.
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.

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

TORTS | Aug 5| 6
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;
G.R. No. 114791 May 29, 1997
NANCY
vs.
THE HONORABLE
ONG, respondents.

GO
COURT

b) P75,000.00, as moral damages;

AND

OF

APPEALS,

ALEX
HERMOGENES

GO, petitioners,
ONG

and

JANE

c) P20,000.00, as exemplary damages;

C.
d) P5,000.00, as attorney's fees; and
e) P2,000.00, as litigation expenses;

ROMERO, J.:

Defendants are also ordered to pay the costs.

TORTS | Aug 5| 7
SO ORDERED.

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
Dissatisfied with the decision, petitioners elevated the case to the Court of Appeals respondents did not claim the tape after the lapse of thirty days, as agreed upon in their
was done in consonance with consistent business practice to
which, on September 14, 1993, dismissed the appeal and affirmed the trial court's contract, the erasure
minimize losses. 5
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.

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
Petitioners claim that for the video coverage, the cameraman was employed by Pablo performance of their obligations are guilty of fraud, negligence or delay, and those who is
Lim who also owned the video equipment used. They further assert that they merely get a any manner contravene the tenor thereof, are liable for damages."
commission for all customers solicited for their principal. 3
In the instant case, petitioners and private respondents entered into a contract
This contention is primarily premised on Article 1883 of the Civil Code which states whereby, for a fee, the former undertook to cover the latter's wedding and deliver to them
thus:
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
Art. 1883. If an agent acts in his own name, the principal has no right of action to said private respondents and are thus liable for damages.
against the persons with whom the agent has contracted; neither have such persons
against the principal.
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.

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
Generally, moral damages cannot be recovered in an action for breach of contract
things belonging to the principal.
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
xxx xxx xxx
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
of
contract
Petitioners' argument that since the video equipment used belonged to Lim and thus breach
8
which
was
palpably
wanton,
reckless,
malicious
or
in
bad
faith,
oppressive
or
abusive.
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
Petitioners' act or omission in recklessly erasing the video coverage of private
be said that the object of the contract was the video equipment used. The use by respondents' wedding was precisely the cause of the suffering private respondents had to
petitioners of the video equipment of another person is of no consequence.
undergo.
It must also be noted that in the course of the protracted trial below, petitioners did
As the appellate court aptly observed:
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
Considering the sentimental value of the tapes and the fact that the event therein
witness would have had an adverse result on the case. 4
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

TORTS | Aug 5| 8
correct in awarding the appellees moral damages albeit in the amount of P75,000.00,
G.R. No. L-24837
June 27, 1968
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
JULIAN
C.
SINGSON
and
RAMONA
DEL
CASTILLO, plaintiffs,
suffered and which under the circumstances could be awarded as allowed under Articles vs.
2217 and 2218 of the Civil Code. 9
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO FREIXAS, in his capacity as
President of the said Bank, defendants.
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
Gil
B.
Galang
for
plaintiffs.
to all entities engaged in the same business to observe due diligence in the conduct of Aviado and Aranda for defendants.
their affairs.
The award of attorney' s fees and litigation expenses are likewise proper, consistent
with Article 2208 11 of the Civil Code.

CONCEPCION, C.J.:

Appeal by plaintiffs, Julian Singson and his wife, Ramona del Castillo, from a decision
of the Court of First Instance of Manila dismissing their complaint against defendants
Finally, petitioner Alex Go questions the finding of the trial and appellate courts herein, the Bank of the Philippine Islands and Santiago Freixas.
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
It appears that Singson, was one of the defendants in civil case No. 23906 of the
respondent, she was acting alone for her sole interest. 12
Court of First Instance, Manila, in which judgment had been rendered sentencing him and
his co-defendants therein, namely, Celso Lobregat and Villa-Abrille & Co., to pay the sum
We find merit in this contention. Under Article 117 of the Civil Code (now Article 73 of of P105,539.56 to the plaintiff therein, Philippine Milling Co. Singson and Lobregat had
the Family Code), the wife may exercise any profession, occupation or engage in business seasonably appealed from said judgment, but not Villa-Abrille & Co., as against which said
without the consent of the husband. In the instant case, we are convinced that it was only judgment, accordingly, became final and executory. In due course, a writ of garnishment
petitioner Nancy Go who entered into the contract with private respondent. Consequently, was subsequently served upon the Bank of the Philippine Islands in which the Singsons
we rule that she is solely liable to private respondents for the damages awarded below, had a current account insofar as Villa-Abrille's credits against the Bank were concerned.
pursuant to the principle that contracts produce effect only as between the parties who What happened thereafter is set forth in the decision appealed from, from which we quote:
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.

Upon receipt of the said Writ of Garnishment, a clerk of the bank in charge of all
matters of execution and garnishment, upon reading the name of the plaintiff herein in the
title of the Writ of Garnishment as a party defendants, without further reading the body of
the said garnishment and informing himself that said garnishment was merely intended for
the deposits of defendant Villa-Abrille & Co., Valentin Teus, Fernando F. de Villa-Abrille and
Joaquin Bona, prepared a letter for the signature of the President of the Bank informing
the plaintiff Julian C. Singson of the garnishment of his deposits by the plaintiff in that
case. Another letter was also prepared and signed by the said President of the Bank for
the Special Sheriff dated April 17, 1963.
Subsequently, two checks issued by the plaintiff Julian C. Singson, one for the
amount of P383 in favor of B. M. Glass Service dated April 16, 1963 and bearing No. C424852, and check No. C-394996 for the amount of P100 in favor of the Lega Corporation,
and drawn against the said Bank, were deposited by the said drawers with the said bank.
Believing that the plaintiff Singson, the drawer of the check, had no more control over the
balance of his deposits in the said bank, the checks were dishonored and were refused
payment by the said bank. After the first check was returned by the bank to the B. M.
Glass Service, the latter wrote plaintiff Julian C. Singson a letter, dated April 19, 1963,
advising him that his check for P383.00 bearing No. C-424852 was not honored by the
bank for the reason that his account therein had already been garnished. The said B. M.
Glass Service further stated in the said letter that they were constrained to close his credit

TORTS | Aug 5| 9
account with them. In view thereof, plaintiff Julian C. Singson wrote the defendant bank a
WHEREFORE, the judgment appealed from is hereby reversed, and another one shall
letter on April 19, 1963, claiming that his name was not included in the Writ of Execution be entered sentencing the defendant Bank of the Philippine Islands to pay to the plaintiffs
and Notice of Garnishment, which was served upon the bank. The defendant President said sums of P1,000, as nominal damages, and P500, as attorney's fees, apart from the
Santiago Freixas of the said bank took steps to verify this information and after having costs. It is so ordered.
confirmed the same, apologized to the plaintiff Julian C. Singson and wrote him a letter
dated April 22, 1963, requesting him to disregard their letter of April 17, 1963, and that
the action of garnishment from his account had already been removed. A similar letter was
written by the said official of the bank on April 22, 1963 to the Special Sheriff informing
him that his letter dated April 17, 1963 to the said Special Sheriff was considered
cancelled and that they had already removed the Notice of Garnishment from plaintiff
Singson's account. Thus, the defendants lost no time to rectify the mistake that had been
G.R. No. L-17500
May 16, 1967
inadvertently committed, resulting in the temporary freezing of the account of the plaintiff
with the said bank for a short time.
PEOPLE'S BANK AND TRUST CO. and ATLANTIC GULF AND PACIFIC CO. OF
MANILA, plaintiffs-appellants,
vs.
DAHICAN LUMBER COMPANY, DAHICAN AMERICAN LUMBER CORPORATION and
On May 8, 1963, the Singsong commenced the present action against the Bank and CONNELL BROS. CO. (PHIL.), defendants-appellants.
its president, Santiago Freixas, for damages 1 in consequence of said illegal freezing of
plaintiffs' account.1wph1.t
Angel
S.
Gamboa
for
defendants-appellants.
Laurel Law Offices for plaintiffs-appellants.
xxx

xxx

xxx

After appropriate proceedings, the Court of First Instance of Manila rendered

judgment dismissing the complaint upon the ground that plaintiffs cannot recover from the
DIZON, J.:
defendants upon the basis of a quasi-delict, because the relation between the parties is
contractual in nature; because this case does not fall under Article 2219 of our Civil Code,
On September 8, 1948, Atlantic Gulf & Pacific Company of Manila, a West Virginia
upon which plaintiffs rely; and because plaintiffs have not established the amount of corporation licensed to do business in the Philippines hereinafter referred to as
damages allegedly sustained by them.
ATLANTIC sold and assigned all its rights in the Dahican Lumber concession to Dahican
Lumber Company hereinafter referred to as DALCO for the total sum of $500,000.00,
The lower court held that plaintiffs' claim for damages cannot be based upon a tort or of which only the amount of $50,000.00 was paid. Thereafter, to develop the concession,
quasi-delict, their relation with the defendants being contractual in nature. We have DALCO obtained various loans from the People's Bank & Trust Company hereinafter
repeatedly held, however, that the existence of a contract between the parties does not referred to as the BANK amounting, as of July 13, 1950, to P200,000.00. In addition,
bar the commission of a tort by the one against the order and the consequent recovery of DALCO obtained, through the BANK, a loan of $250,000.00 from the Export-Import Bank
damages therefor.2 Indeed, this view has been, in effect, reiterated in a comparatively of Washington D.C., evidenced by five promissory notes of $50,000.00 each, maturing on
recent case. Thus, in Air France vs. Carrascoso,3 involving an airplane passenger who, different dates, executed by both DALCO and the Dahican America Lumber Corporation, a
despite his first-class ticket, had been illegally ousted from his first-class accommodation foreign corporation and a stockholder of DALCO, hereinafter referred to as DAMCO, all
and compelled to take a seat in the tourist compartment, was held entitled to recover payable to the BANK or its order.
damages from the air-carrier, upon the ground of tort on the latter's part, for, although the
relation between a passenger and a carrier is "contractual both in origin and nature ... the
As security for the payment of the abovementioned loans, on July 13, 1950 DALCO
act that breaks the contract may also be a tort".
executed in favor of the BANK the latter acting for itself and as trustee for the ExportIn view, however, of the facts obtaining in the case at bar, and considering,
particularly, the circumstance, that the wrong done to the plaintiff was remedied as soon
as the President of the bank realized the mistake he and his subordinate employee had
committed, the Court finds that an award of nominal damages the amount of which
need not be proven4 in the sum of P1,000, in addition to attorney's fees in the sum of
P500, would suffice to vindicate plaintiff's rights.5

Import Bank of Washington D.C. a deed of mortgage covering five parcels of land
situated in the province of Camarines Norte together with all the buildings and other
improvements existing thereon and all the personal properties of the mortgagor located in
its place of business in the municipalities of Mambulao and Capalonga, Camarines Norte
(Exhibit D). On the same date, DALCO executed a second mortgage on the same
properties in favor of ATLANTIC to secure payment of the unpaid balance of the sale price
of the lumber concession amounting to the sum of $450,000.00 (Exhibit G). Both deeds
contained the following provision extending the mortgage lien to properties to be
subsequently acquired referred to hereafter as "after acquired properties" by the
mortgagor:

TORTS | Aug 5| 10
All property of every nature and description taken in exchange or replacement, and
all buildings, machinery, fixtures, tools equipment and other property which the Mortgagor
may hereafter acquire, construct, install, attach, or use in, to, upon, or in connection with
the premises, shall immediately be and become subject to the lien of this mortgage in the
same manner and to the same extent as if now included therein, and the Mortgagor shall
from time to time during the existence of this mortgage furnish the Mortgagee with an
accurate inventory of such substituted and subsequently acquired property.

On March 4 of the same year, CONNELL, filed a motion for intervention alleging that
it was the owner and possessor of some of the equipments, spare parts and supplies which
DALCO had acquired subsequent to the execution of the mortgages sought to be
foreclosed and which plaintiffs claimed were covered by the lien. In its order of March
18,1953 the Court granted the motion, as well as plaintiffs' motion to set aside the order
discharging the Receiver. Consequently, Evans was reinstated.

On April 1, 1953, CONNELL filed its answer denying the material averment of the
Both mortgages were registered in the Office of the Register of Deeds of Camarines complaint, and asserting affirmative defenses and a counterclaim.
Norte. In addition thereto DALCO and DAMCO pledged to the BANK 7,296 shares of stock
of DALCO and 9,286 shares of DAMCO to secure the same obligations.
Upon motion of the parties the Court, on September 30, 1953, issued an order
transferring the venue of the action to the Court of First Instance of Manila where it was
Upon DALCO's and DAMCO's failure to pay the fifth promissory note upon its docketed as Civil Case No. 20987.
maturity, the BANK paid the same to the Export-Import Bank of Washington D.C., and the
latter assigned to the former its credit and the first mortgage securing it. Subsequently,
On August 30, 1958, upon motion of all the parties, the Court ordered the sale of all
the BANK gave DALCO and DAMCO up to April 1, 1953 to pay the overdue promissory the machineries, equipment and supplies of DALCO, and the same were subsequently sold
note.
for a total consideration of P175,000.00 which was deposited in court pending final
determination of the action. By a similar agreement one-half (P87,500.00) of this amount
After July 13, 1950 the date of execution of the mortgages mentioned above was considered as representing the proceeds obtained from the sale of the "undebated
DALCO purchased various machineries, equipment, spare parts and supplies in addition to, properties" (those not claimed by DAMCO and CONNELL), and the other half as
or in replacement of some of those already owned and used by it on the date aforesaid. representing those obtained from the sale of the "after acquired properties".
Pursuant to the provision of the mortgage deeds quoted theretofore regarding "after
acquired properties," the BANK requested DALCO to submit complete lists of said
After due trial, the Court, on July 15, 1960, rendered judgment as follows:
properties but the latter failed to do so. In connection with these purchases, there
appeared in the books of DALCO as due to Connell Bros. Company (Philippines) a
IN VIEW WHEREFORE, the Court:
domestic corporation who was acting as the general purchasing agent of DALCO
thereinafter called CONNELL the sum of P452,860.55 and to DAMCO, the sum of
P2,151,678.34.
1. Condemns Dahican Lumber Co. to pay unto People's Bank the sum of P200,000,00
with 7% interest per annum from July 13, 1950, Plus another sum of P100,000.00 with
On December 16, 1952, the Board of Directors of DALCO, in a special meeting called 5% interest per annum from July 13, 1950; plus 10% on both principal sums as attorney's
for the purpose, passed a resolution agreeing to rescind the alleged sales of equipment, fees;
spare parts and supplies by CONNELL and DAMCO to it. Thereafter, the corresponding
agreements of rescission of sale were executed between DALCO and DAMCO, on the one
2. Condemns Dahican Lumber Co. to pay unto Atlantic Gulf the sum of P900,000.00
hand and between DALCO and CONNELL, on the other.
with 4% interest per annum from July 3, 1950, plus 10% on both principal as attorney's
fees;
On January 13, 1953, the BANK, in its own behalf and that of ATLANTIC, demanded
that said agreements be cancelled but CONNELL and DAMCO refused to do so. As a result,
on February 12, 1953; ATLANTIC and the BANK, commenced foreclosure proceedings in
the Court of First Instance of Camarines Norte against DALCO and DAMCO. On the same
date they filed an ex-parte application for the appointment of a Receiver and/or for the
issuance of a writ of preliminary injunction to restrain DALCO from removing its properties.
The court granted both remedies and appointed George H. Evans as Receiver. Upon
defendants' motion, however, the court, in its order of February 21, 1953, discharged the
Receiver.

3. Condemns Dahican Lumber Co. to pay unto Connell Bros, the sum of P425,860.55,
and to pay unto Dahican American Lumber Co. the sum of P2,151,678.24 both with legal
interest from the date of the filing of the respective answers of those parties, 10% of the
principals as attorney's fees;

4. Orders that of the sum realized from the sale of the properties of P175,000.00,
after deducting the recognized expenses, one-half thereof be adjudicated unto plaintiffs,
the court no longer specifying the share of each because of that announced intention
under the stipulation of facts to "pool their resources"; as to the other one-half, the same
On March 2, 1953, defendants filed their answer denying the material allegations of should be adjudicated unto both plaintiffs, and defendant Dahican American and Connell
the complaint and alleging several affirmative defenses and a counterclaim.
Bros. in the proportion already set forth on page 9, lines 21, 22 and 23 of the body of this

TORTS | Aug 5| 11
decision; but with the understanding that whatever plaintiffs and Dahican American and of the "after acquired properties" placed under receivership was damnum absque
Connell Bros. should receive from the P175,000.00 deposited in the Court shall be applied injuria and, consequently, in not awarding, to said parties the corresponding damages
to the judgments particularly rendered in favor of each;
claimed in their counterclaim; lastly, in sentencing DALCO and DAMCO to pay attorney's
fees and in requiring DAMCO and CONNELL to pay the costs of the Receivership, instead of
5. No other pronouncement as to costs; but the costs of the receivership as to the sentencing plaintiffs to pay attorney's fees.
debated properties shall be borne by People's Bank, Atlantic Gulf, Connell Bros., and
Dahican American Lumber Co., pro-rata.
On the following day, the Court issued the following supplementary decision:

Plaintiffs' brief as appellants submit six assignments of error, while that of defendants
also as appellants submit a total of seventeen. However, the multifarious issues thus
before Us may be resolved, directly or indirectly, by deciding the following issues:

Firstly, are the so-called "after acquired properties" covered by and subject to the
IN VIEW WHEREOF, the dispositive part of the decision is hereby amended in order to
deeds of mortgage subject of foreclosure?; secondly, assuming that they are subject
add the following paragraph 6:
thereto, are the mortgages valid and binding on the properties aforesaid inspite of the fact
that they were not registered in accordance with the provisions of the Chattel Mortgage
6. If the sums mentioned in paragraphs 1 and 2 are not paid within ninety (90) days, Law?; thirdly, assuming again that the mortgages are valid and binding upon the "after
the Court orders the sale at public auction of the lands object of the mortgages to satisfy acquired properties", what is the effect thereon, if any, of the rescission of sales entered
the said mortgages and costs of foreclosure.
into, on the one hand, between DAMCO and DALCO, and between DALCO and CONNELL,
on the other?; and lastly, was the action to foreclose the mortgages premature?
From the above-quoted decision, all the parties appealed.
A. Under the fourth paragraph of both deeds of mortgage, it is crystal clear that all
property of every nature and description taken in exchange or replacement, as well as all
buildings, machineries, fixtures, tools, equipments, and other property that the mortgagor
may acquire, construct, install, attach; or use in, to upon, or in connection with the
premises that is, its lumber concession "shall immediately be and become subject to
the lien" of both mortgages in the same manner and to the same extent as if already
included therein at the time of their execution. As the language thus used leaves no room
for doubt as to the intention of the parties, We see no useful purpose in discussing the
matter extensively. Suffice it to say that the stipulation referred to is common, and We
might say logical, in all cases where the properties given as collateral are perishable or
subject to inevitable wear and tear or were intended to be sold, or to be used thus
becoming subject to the inevitable wear and tear but with the understanding express
or implied that they shall be replaced with others to be thereafter acquired by the
mortgagor. Such stipulation is neither unlawful nor immoral, its obvious purpose being to
maintain, to the extent allowed by circumstances, the original value of the properties
On the other hand, defendants-appellants contend that the trial court erred: firstly, in given as security. Indeed, if such properties were of the nature already referred to, it
not holding that plaintiffs had no cause of action against them because the promissory would be poor judgment on the part of the creditor who does not see to it that a similar
note sued upon was not yet due when the action to foreclose the mortgages was provision is included in the contract.
commenced; secondly, in not holding that the mortgages aforesaid were null and void as
regards the "after acquired properties" of DALCO because they were not registered in
B. But defendants contend that, granting without admitting, that the deeds of
accordance with the Chattel Mortgage Law, the court erring, as a consequence, in holding mortgage in question cover the "after acquired properties" of DALCO, the same are void
that said properties were subject to the mortgage lien in favor of plaintiffs; thirdly, in not and ineffectual because they were not registered in accordance with the Chattel Mortgage
holding that the provision of the fourth paragraph of each of said mortgages did not Law. In support of this and of the proposition that, even if said mortgages were valid, they
automatically make subject to such mortgages the "after acquired properties", the only should not prejudice them, the defendants argue (1) that the deeds do not describe the
meaning thereof being that the mortgagor was willing to constitute a lien over such mortgaged chattels specifically, nor were they registered in accordance with the Chattel
properties; fourthly, in not ruling that said stipulation was void as against DAMCO and Mortgage Law; (2) that the stipulation contained in the fourth paragraph thereof
CONNELL and in not awarding the proceeds obtained from the sale of the "after acquired constitutes "mere executory agreements to give a lien" over the "after acquired
properties" to the latter exclusively; fifthly, in appointing a Receiver and in holding that the properties" upon their acquisition; and (3) that any mortgage stipulation concerning "after
damages suffered by DAMCO and CONNELL by reason of the depreciation or loss in value
Main contentions of plaintiffs as appellants are the following: that the "after acquired
properties" were subject to the deeds of mortgage mentioned heretofore; that said
properties were acquired from suppliers other than DAMCO and CONNELL; that even
granting that DAMCO and CONNELL were the real suppliers, the rescission of the sales to
DALCO could not prejudice the mortgage lien in favor of plaintiffs; that considering the
foregoing, the proceeds obtained from the sale of the "after acquired properties" as well as
those obtained from the sale of the "undebated properties" in the total sum of
P175,000.00 should have been awarded exclusively to plaintiffs by reason of the mortgage
lien they had thereon; that damages should have been awarded to plaintiffs against
defendants, all of them being guilty of an attempt to defraud the former when they sought
to rescind the sales already mentioned for the purpose of defeating their mortgage lien,
and finally, that defendants should have been made to bear all the expenses of the
receivership, costs and attorney's fees.

TORTS | Aug 5| 12
acquired properties" should not prejudice creditors and other third persons such as concession and that they were purchased in addition to, or in replacement of those already
DAMCO and CONNELL.
existing in the premises on July 13, 1950. In Law, therefore, they must be deemed to
have been immobilized, with the result that the real estate mortgages involved herein
The stipulation under consideration strongly belies defendants contention. As which were registered as such did not have to be registered a second time as chattel
adverted to hereinbefore, it states that all property of every nature, building, machinery mortgages in order to bind the "after acquired properties" and affect third parties.
etc. taken in exchange or replacement by the mortgagor "shall immediately be and
become subject to the lien of this mortgage in the same manner and to the same extent
But defendants, invoking the case of Davao Sawmill Company vs. Castillo, 61 Phil.
as if now included therein". No clearer language could have been chosen.
709, claim that the "after acquired properties" did not become immobilized because
DALCO did not own the whole area of its lumber concession all over which said properties
Conceding, on the other hand, that it is the law in this jurisdiction that, to affect third were scattered.
persons, a chattel mortgage must be registered and must describe the mortgaged chattels
or personal properties sufficiently to enable the parties and any other person to identify
The facts in the Davao Sawmill case, however, are not on all fours with the ones
them, We say that such law does not apply to this case.
obtaining in the present. In the former, the Davao Sawmill Company, Inc., had repeatedly
treated the machinery therein involved as personal property by executing chattel
As the mortgages in question were executed on July 13, 1950 with the old Civil Code mortgages thereon in favor of third parties, while in the present case the parties had
still in force, there can be no doubt that the provisions of said code must govern their treated the "after acquired properties" as real properties by expressly and unequivocally
interpretation and the question of their validity. It happens however, that Articles 334 and agreeing that they shall automatically become subject to the lien of the real estate
1877 of the old Civil Code are substantially reproduced in Articles 415 and 2127, mortgages executed by them. In the Davao Sawmill decision it was, in fact, stated that
respectively, of the new Civil Code. It is, therefore, immaterial in this case whether we "the characterization of the property as chattels by the appellant is indicative of intention
and impresses upon the property the character determined by the parties" (61 Phil. 112,
take the former or the latter as guide in deciding the point under consideration.
emphasis supplied). In the present case, the characterization of the "after acquired
properties" as real property was made not only by one but by both interested parties.
Article 415 does not define real property but enumerates what are considered as There is, therefore, more reason to hold that such consensus impresses upon the
such, among them being machinery, receptacles, instruments or replacements intended by properties the character determined by the parties who must now be held in estoppel to
owner of the tenement for an industry or works which may be carried on in a building or question it.
on a piece of land, and shall tend directly to meet the needs of the said industry or works.
Moreover, quoted in the Davao Sawmill case was that of Valdez vs. Central
On the strength of the above-quoted legal provisions, the lower court held that Altagracia, Inc. (225 U.S. 58) where it was held that while under the general law of Puerto
inasmuch as "the chattels were placed in the real properties mortgaged to plaintiffs, they Rico, machinery placed on property by a tenant does not become immobilized, yet, when
came within the operation of Art. 415, paragraph 5 and Art. 2127 of the New Civil Code".
the tenant places it there pursuant to contract that it shall belong to the owner, it then
becomes immobilized as to that tenant and even as against his assignees and creditors
We find the above ruling in agreement with our decisions on the subject:
who had sufficient notice of such stipulation. In the case at bar it is not disputed that
DALCO purchased the "after acquired properties" to be placed on, and be used in the
(1) In Berkenkotter vs. Cu Unjieng, 61 Phil. 663, We held that Article 334, paragraph development of its lumber concession, and agreed further that the same shall become
5 of the Civil Code (old) gives the character of real property to machinery, liquid immediately subject to the lien constituted by the questioned mortgages. There is also
containers, instruments or replacements intended by the owner of any building or land for abundant evidence in the record that DAMCO and CONNELL had full notice of such
use in connection with any industry or trade being carried on therein and which are stipulation and had never thought of disputed validity until the present case was filed.
Consequently all of them must be deemed barred from denying that the properties in
expressly adapted to meet the requirements of such trade or industry.
question had become immobilized.
(2) In Cu Unjieng e Hijos vs. Mabalacat Sugar Co., 58 Phil. 439, We held that a
What We have said heretofore sufficiently disposes all the arguments adduced by
mortgage constituted on a sugar central includes not only the land on which it is built but
defendants
in support their contention that the mortgages under foreclosure are void, and,
also the buildings, machinery and accessories installed at the time the mortgage was
that,
even
if
valid, are ineffectual as against DAMCO and CONNELL.
constituted as well as the buildings, machinery and accessories belonging to the
mortgagor, installed after the constitution thereof .
Now to the question of whether or not DAMCO CONNELL have rights over the "after
It is not disputed in the case at bar that the "after acquired properties" were acquired properties" superior to the mortgage lien constituted thereon in favor of plaintiffs.
purchased by DALCO in connection with, and for use in the development of its lumber It is defendants' contention that in relation to said properties they are "unpaid sellers";

TORTS | Aug 5| 13
that as such they had not only a superior lien on the "after acquired properties" but also plaintiffs had no cause of action. Upon this question the lower court says the following in
the right to rescind the sales thereof to DALCO.
the appealed judgment;
This contention it is obvious would have validity only if it were true that DAMCO
and CONNELL were the suppliers or vendors of the "after acquired properties". According
to the record, plaintiffs did not know their exact identity and description prior to the filing
of the case bar because DALCO, in violation of its obligation under the mortgages, had
failed and refused theretofore to submit a complete list thereof. In the course of the
proceedings, however, when defendants moved to dissolve the order of receivership and
the writ of preliminary injunction issued by the lower court, they attached to their motion
the lists marked as Exhibits 1, 2 and 3 describing the properties aforesaid. Later on, the
parties agreed to consider said lists as identifying and describing the "after acquire
properties," and engaged the services of auditors to examine the books of DALCO so as to
bring out the details thereof. The report of the auditors and its annexes (Exhibits V, V-1
V4) show that neither DAMCO nor CONNELL had supplied any of the goods of which they
respective claimed to be the unpaid seller; that all items were supplied by different
parties, neither of whom appeared to be DAMCO or CONNELL that, in fact, CONNELL
collected a 5% service charge on the net value of all items it claims to have sold to DALCO
and which, in truth, it had purchased for DALCO as the latter's general agent; that
CONNELL had to issue its own invoices in addition to those o f the real suppliers in order to
collect and justify such service charge.
Taking into account the above circumstances together with the fact that DAMCO was
a stockholder and CONNELL was not only a stockholder but the general agent of DALCO,
their claim to be the suppliers of the "after acquired required properties" would seem to be
preposterous. The most that can be claimed on the basis of the evidence is that DAMCO
and CONNELL probably financed some of the purchases. But if DALCO still owes them any
amount in this connection, it is clear that, as financiers, they can not claim any right over
the "after acquired properties" superior to the lien constituted thereon by virtue of the
deeds of mortgage under foreclosure. Indeed, the execution of the rescission of sales
mentioned heretofore appears to be but a desperate attempt to better or improve DAMCO
and CONNELL's position by enabling them to assume the role of "unpaid suppliers" and
thus claim a vendor's lien over the "after acquired properties". The attempt, of course, is
utterly ineffectual, not only because they are not the "unpaid sellers" they claim to be but
also because there is abundant evidence in the record showing that both DAMCO and
CONNELL had known and admitted from the beginning that the "after acquired properties"
of DALCO were meant to be included in the first and second mortgages under foreclosure.

The other is the defense of prematurity of the causes of action in that plaintiffs, as a
matter of grace, conceded an extension of time to pay up to 1 April, 1953 while the action
was filed on 12 February, 1953, but, as to this, the Court taking it that there is absolutely
no debate that Dahican Lumber Co., was insolvent as of the date of the filing of the
complaint, it should follow that the debtor thereby lost the benefit to the period.
x x x unless he gives a guaranty or security for the debt . . . (Art. 1198, New Civil
Code);
and as the guaranty was plainly inadequate since the claim of plaintiffs reached in
the aggregate, P1,200,000 excluding interest while the aggregate price of the "afteracquired" chattels claimed by Connell under the rescission contracts was P1,614,675.94,
Exh. 1, Exh. V, report of auditors, and as a matter of fact, almost all the properties were
sold afterwards for only P175,000.00, page 47, Vol. IV, and the Court understanding that
when the law permits the debtor to enjoy the benefits of the period notwithstanding that
he is insolvent by his giving a guaranty for the debt, that must mean a new and efficient
guaranty, must concede that the causes of action for collection of the notes were not
premature.
Very little need be added to the above. Defendants, however, contend that the lower
court had no basis for finding that, when the action was commenced, DALCO was insolvent
for purposes related to Article 1198, paragraph 1 of the Civil Code. We find, however, that
the finding of the trial court is sufficiently supported by the evidence particularly the
resolution marked as Exhibit K, which shows that on December 16, 1952 in the words of
the Chairman of the Board DALCO was "without funds, neither does it expect to have
any funds in the foreseeable future." (p. 64, record on appeal).

The remaining issues, namely, whether or not the proceeds obtained from the sale of
the "after acquired properties" should have been awarded exclusively to the plaintiffs or to
DAMCO and CONNELL, and if in law they should be distributed among said parties,
whether or not the distribution should be pro-rata or otherwise; whether or not plaintiffs
are entitled to damages; and, lastly, whether or not the expenses incidental to the
Receivership should be borne by all the parties on a pro-rata basis or exclusively by one or
some of them are of a secondary nature as they are already impliedly resolved by what
The claim that Belden, of ATLANTIC, had given his consent to the rescission, has been said heretofore.
expressly or otherwise, is of no consequence and does not make the rescission valid and
legally effective. It must be stated clearly, however, in justice to Belden, that, as a
As regard the proceeds obtained from the sale of the of after acquired properties"
member of the Board of Directors of DALCO, he opposed the resolution of December 15, and the "undebated properties", it is clear, in view of our opinion sustaining the validity of
1952 passed by said Board and the subsequent rescission of the sales.
the mortgages in relation thereto, that said proceeds should be awarded exclusively to the
plaintiffs in payment of the money obligations secured by the mortgages under
Finally, defendants claim that the action to foreclose the mortgages filed on February foreclosure.
12, 1953 was premature because the promissory note sued upon did not fall due until
April 1 of the same year, concluding from this that, when the action was commenced, the

On the question of plaintiffs' right to recover damages from the defendants, the law
(Articles 1313 and 1314 of the New Civil Code) provides that creditors are protected in

TORTS | Aug 5| 14
cases of contracts intended to defraud them; and that any third person who induces
another to violate his contract shall be liable for damages to the other contracting party.
Similar liability is demandable under Arts. 20 and 21 which may be given retroactive
effect (Arts. 225253) or under Arts. 1902 and 2176 of the Old Civil Code.
The facts of this case, as stated heretofore, clearly show that DALCO and DAMCO,
after failing to pay the fifth promissory note upon its maturity, conspired jointly with
CONNELL to violate the provisions of the fourth paragraph of the mortgages under
foreclosure by attempting to defeat plaintiffs' mortgage lien on the "after acquired
properties". As a result, the plaintiffs had to go to court to protect their rights thus
jeopardized. Defendants' liability for damages is therefore clear.
However, the measure of the damages suffered by the plaintiffs is not what the latter
claim, namely, the difference between the alleged total obligation secured by the
mortgages amounting to around P1,200,000.00, plus the stipulated interest and attorney's
fees, on the one hand, and the proceeds obtained from the sale of "after acquired
properties", and of those that were not claimed neither by DAMCO nor CONNELL, on the
other. Considering that the sale of the real properties subject to the mortgages under
foreclosure has not been effected, and considering further the lack of evidence showing
that the true value of all the properties already sold was not realized because their sale
was under stress, We feel that We do not have before Us the true elements or factors that
should determine the amount of damages that plaintiffs are entitled recover from
defendants. It is, however, our considered opinion that, upon the facts established, all the
expenses of the Receivership, which was deemed necessary to safeguard the rights of the
plaintiffs, should be borne by the defendants, jointly and severally, in the same manner
that all of them should pay to the plaintiffs, jointly a severally, attorney's fees awarded in
the appealed judgment.
In consonance with the portion of this decision concerning the damages that the
plaintiffs are entitled to recover from the defendants, the record of this case shall be
remanded below for the corresponding proceedings.
Modified as above indicated, the appealed judgment is affirmed in all other respects.
With costs.

TORTS | Aug 5| 15
under Act No. 3428, otherwise known as the Workmen's Compensation Act. The motion to
reconsider was denied; hence, this appeal.
The lone issue before us for resolution is whether or not the trial court erred in
dismissing plaintiff's complaint on the ground of lack of jurisdiction.

G.R. No. L-20442 October 4, 1971

CIRIACO

ROBLES, plaintiff-appellant,

vs.
YAP WING, defendant-appellee.
Gerardo P. Moreno, Jr. for plaintiff-appellant.
Pauline Manongdo for defendant-appellee.

MAKALINTAL, J.:
Appeal in forma pauperis taken by the plaintiff from the order of the Court of First
Instance of Manila dated September 12, 1962, dismissing the complaint on the ground of
lack of jurisdiction.
The allegations of the complaint, which for purposes of the motion to dismiss were
deemed admitted, are as follows: that the plaintiff was employee by defendant in its
contracting business; that on July 6, 1961 at about 1:30 p.m. while plaintiff was
dismantling lumber brace in the construction of a bodega which defendant undertook to
construct, defendant negligently failed to provide safety measures within the construction
premises, as a result of which a piece of lumber fell and hit plaintiff on the head, causing
him physical injuries; that immediately thereafter plaintiff was taken to a medical clinic,
where he remained unconscious for several hours; that defendant defrayed Plaintiff's
medical expenses; that since then plaintiff was unable to work, thereby losing his
expected earning at an average of P39.00 a week or a total of P2,340.00, more or less, up
to the filing of the complaint; that because of the physical injuries sustained by plaintiff
due to defendant's negligence, he suffered mental anguish, anxiety, fright and pain; and
that because he was compelled to hire the services of a lawyer he is entitled to recover
attorney's fees.
In his answer defendant alleged by way of affirmative defense that plaintiff's claim is
one for disability resulting from an accident arising out of and in the course of his
employment and thus pertains to the exclusive jurisdiction of the Workmen's
Compensation Commission. Upon defendant's motion for a preliminary hearing on the
alleged lack of jurisdiction of the lower court (which was actually a motion to dismiss) and
after plaintiff had filed its opposition thereto, the lower court dismissed plaintiff's
complaint. Plaintiff moved to reconsider alleging that his claim was for actual damages
under Articles 1711 and 1712 of the New Civil Code and not a claim for compensation

Before the enactment of Republic Act No. 772 (amending Act No. 3428), which took
effect on June 20, 1952, claims for compensation under the Workmen's Compensation Act
were cognizable by the regular courts but since then, as provided in Section 46 therefore
as amended, "the Workmen's Compensation Commission shall have jurisdiction to hear
and decide claims for compensation under the Compensation Act, subject to appeal to the
Supreme court ..." In relation to this, Section 5 of the Act provides that "the rights and
remedies granted by this Act to an employee by reason of a personal injury entitling him
to compensation shall exclude all other rights and, remedies accruing to an employee, his
personal representation dependents or nearest of kin against the employer under the Civil
Code or other laws, because of said injury ..." .
In the case of Manalo vs. Foster Wheeler Corporation, et al., 98 Phil. 856, in
sustaining the order of the trial court dismissing an employee's claim for damages against
the employer for injuries suffered in an accident which happened in the course of his
employment this Court said that "the Legislature evidently deemed it best, in the interest
of expediency and uniformity, that all claims of workmen against their employees for
damages due to accidents suffered in the course of employment shall be investigated and
adjudicated by the Workmen's Compensation Commission subject to the appeal in the law
provided." This was reiterated in at least two subsequent cases, namely, Vda. de Mallari
vs. National Development Company, G.R. No. L-17914, October 31, 1962; and Hudencial
vs. S. P. Marcelo & Co., Inc., G.R. No. L-23969, February 27, 1971.
We are not unmindful of our rulings in the class of Pacaa vs. Cebu Autobus Co., 32
SCRA 442, and Valencia vs. Manila Yacht Club, Inc., G.R. No. L-27346, June 30, 1969. In
the Pacaa case the plaintiff had several other money claims such as for separation pay,
sick leave pay, vacation leave pay, overtime pay, moral damages and attorney's fees aside
from permanent disability compensation benefits. In reversing the trial court's order of
dismissal, we held that the plaintiff had the choice of instituting the action in the regular
courts under Article 1711 of the Civil Code. We said:
... Of course, the plaintiff thus foregoes the far more expeditious procedures for
recovery as provided in the Workmen's Compensation Act, which practically foreclose the
employer from controverting the claim upon failure to file a report of disability with notice
of controversion (section 45) and the liberal presumptions in favor of the employees, inter
alia, that the claim comes within the provision of the Act (section 44). But there may be
cases where, as in the case at bar, the plaintiff is constrained to invoke the provision of
Article 1711 of the Civil Code and files his suit in the regular courts due to his prosecution
of various other money claims, such as separation pay, accrued sick and vacation leave
pay, and overtime pay during his employment, which do not fall under the purview of the
Workmen's Compensation Act.

TORTS | Aug 5| 16
The validity of upholding the lower court's jurisdiction to hear and decide the various
claims of plaintiff in the single case filed by him may readily be seen from the tenuous
jurisdictional arguments raised by defendant, where it would have the plaintiff shuttle to
four different courts and agencies to prosecute his claims, namely, Workmen's
Compensation Commission and Social Security Commission for disability compensation
benefits and sick leave pay, the Court of Industrial Relations for overtime pay and the
Municipal Court for separation pay. Courts do not look with favor on split jurisdiction and
piecemeal litigation. ... (emphasis supplied) .

contention is without merit. Article 1711 provides for the payment by employers of
compensation for the death of or injuries to their employees as well as for illness or
disease arising out of and in the course of the employment, which provision is essentially
the same as that of Section 2 of the Workmen's Compensation Act. The fact that Article
1711 of the Civil Code appears to cover appellant's claim is not decisive of the question: it
should still be prosecuted in accordance with the Workmen's Compensation Act by virtue
of Section 5 thereof which makes the rights and remedies granted by said Act exclusive,
as well as by virtue of Article 2196 of the Civil Code itself, which provides: .

It must be noted that in the above case we upheld the jurisdiction of the trial court in
ART. 2196. The rules under this Title are without prejudice to special provisions on
view of the plaintiff's various other claims which did not fall under the purview of the damages formulated elsewhere in this Code. Compensation for workmen and other
Workmen's Compensation Act, and also to avoid multiplicity of suits. Obviously that case employees in case of death, injury or illness is regulated by special laws ... (emphasis
does not apply to the one at bar.
supplied) .
Similarly, the Valencia ruling is not applicable here. In that case the only issue was
Our Workmen's Compensation Act is patterned after the statutes of Hawaii, New York
"whether claimant's acceptance from the Social Security System of sickness and disability and Minnesota (Labor Standards and Welfare Legislation by Fernandez and Quiazon, Vol.
benefits, which are available to him as a member of the System, precludes further 2, p. 401). American decisions and authorities are therefore relevant in the interpretation
collection from the employer of compensation allowed under the law (Workmen's of our local law on the subject, thus:
Compensation Act) for the same sickness or injury." We there said:
... To deny payment of social security benefits because the death or injury or
confinement is compensable under the Workmen's Compensation Act would be to deprive
the employees members of the System of the statutory benefits bought and paid for by
them, since they contribute their money to the general common fund out of which benefits
are paid. In other words, the benefits provided for in the Workmen's Compensation Act
accrues to the employees concerned due to the hazards involved in their employment and
is made a burden on the employment itself. However, social security benefits are paid to
the System's members, by reason of their membership therein for which they contribute
their money to a general common fund.

The Compensation remedy is exclusive of all other remedies for the same injury, if
the injury falls within the coverage formula of the act. If it does not, as in the case where
occupational diseases are deemed omitted because not within the concept of accidental
injury, the compensation act does not disturb any existing remedy. However, if the injury
itself comes within the coverage formula, common-law action is barred although the
particular element of damage is not compensated for, as in the case of disfigurement in
some states, impotency, or pain and suffering. (Larson's Workmen's Compensation Law,
Vol. 2, p. 135).

The Workmen's Compensation Act supersedes common-law redress in tort and

substitutes a strictly statutory formula for paying compensation without regard to the fault
It may be added that whereas social security benefits are intended to provide of the employer or the contributory negligence or assumption of risk of the employee.
insurance or protection against the hazards or risks for which they are established, e.g., (Dudley vs. Victor Lynn Lines, Inc. (N.J.)161 A. (2) 479 (1960) ).
disability sickness, old age or death, irrespective of whether they arose from or in the
course of the employment or not, the compensation receivable under the Workmen's
The Workmen's Compensation Act are sui generis and create rights, remedies and
Compensation law is in the nature of indemnity for the injury or damage suffered by the procedure which are exclusive; (that) they are in derogation of the common law and are
employee or his dependents on account of the employment.
not controlled or affected by our rules of procedure in suits at law or actions in equity,
The Workmen's Compensation Act provides for two exceptions. The first is in section
6, which gives the injured employee the option to claim compensation benefits against his
employer under the Act or to sue the third person who caused the injury for damages in
the regular courts. The other exception is in Section 42, which refers to small private
employers, in which case claims for compensation by reason of accident or injury shall be
governed by the provisions of Act No. 1874 or by those of the Civil Code. The instant case
does not fall under any of the exceptions.

except as provided therein. (Hudson v. Herschback Drilling Co., 46 N.M. 330, 128 P. (2)
1044 (1942) ).
The Workmen's Compensation statute regulates the relation not between the
workmen and the world at large, but between the workman and employer. ... As between
them the remedies provided therein are exclusive. (Caulfield vs. Elmhurst Contracting Co.,
A.D. 53 N.Y.S. (2) 25 (1945) ).

The Workmen's Compensation Act which gives exclusive rights and remedies, was
Appellant contends that his claim is not for compensation under the Workmen's enacted to exclude common law actions for injury or death caused by accident arising out
Corporation Law but one for damages under Article 1711 of the New Civil Code. The of and in the course of employment. The legislature intended to leave unimpaired common

TORTS | Aug 5| 17
law right of action for damages for injury or death not so arising; in other words to the
extent that the field is not touched by the act, the employee's common law right of action
is preserved inviolate. (Griffith v. Raven Red, etc., Coal., Va. , 20 S.E. (2) 530, 1. c.
533 (1942) ).
To say that compensation as provided for in Article 1711 of the Civil Code is
recoverable by action in the ordinary courts, at the option of the claimant, just because
the Workmen's Compensation Act is not expressly invoked is to ignore the fact that the
grounds upon which compensation may be claimed are practically identical in both statutes
and to ignore likewise the exclusive character of "the rights and remedies granted by this
Act" as stated in Section 6 thereof, as well as the provision of Article 2196 of the Civil
Code.
The suggestion has been made that there is in this case a claim for moral damages
suffered by the plaintiff as a result of the negligence of the defendant and that such
damages do not come within the purview of the Workmen's Compensation Act. It should
be pointed out first, that the negligence alleged in the complaint consists of the
defendant's failure "to provide safety measures within the construction premises," the
nature of which negligence is precisely covered by Section 4-A of the same Act, which
makes the employer liable to pay additional compensation (of 50%) to the claimantemployee for failure "to install and maintain safety appliances, or take other precautions
for the prevention of accident or occupational disease." Secondly, the alleged negligence
was not a quasi-delict inasmuch as there was a pre-existing contractual relation of
employer and employee between the parties (Art. 2176, Civil Code); and in breaches of
contract moral damages may be recovered only where the defendant acted fraudulently or
in bad faith (Art. 2220), and neither fraud nor bad faith is alleged in the complaint here. In
any event, whether or not such an allegation, in relation to the breach of a contract of
employment by the employer, resulting in injury to an employee or laborer, would justify a
claim for moral damages and place it within the jurisdiction of ordinary courts is a question
which we do not decide in this case, not being the issue involved.
In view of all the foregoing, the order appealed from is affirmed, without costs.
Dizon, Zaldivar and Barredo, JJ., concur.

TORTS | Aug 5| 18
Respondent was one of the passengers on a jeepney driven by Eugenio Luga. While
the vehicle was descending the Sta. Mesa bridge at an excessive rate of speed, the driver
lost control thereof, causing it to swerve and to his the bridge wall. The accident occurred
on the morning of March 22, 1953. Five of the passengers were injured, including the
respondent who suffered a fracture of the upper right humerus. He was taken to the
National Orthopedic Hospital for treatment, and later was subjected to a series of
operations; the first on May 23, 1953, when wire loops were wound around the broken
bones and screwed into place; a second, effected to insert a metal splint, and a third one
to remove such splint. At the time of the trial, it appears that respondent had not yet
recovered the use of his right arm.
The driver was charged with serious physical injuries through reckless imprudence,
and upon interposing a plea of guilty was sentenced accordingly.
The contention that the evidence did not sufficiently establish the identity of the
vehicle as the belonging to the petitioner was rejected by the appellate court which found,
among other things, that is carried plate No. TPU-1163, SERIES OF 1952, Quezon City,
registered in the name of Paz Fores, (appellant herein) and that the vehicle even had the
name of "Doa Paz" painted below its wind shield. No evidence to the contrary was
introduced by the petitioner, who relied on an attack upon the credibility of the two
policemen who went to the scene of the incident.
A point to be further remarked is petitioner's contention that on March 21, 1953, or
one day before the accident happened, she allegedly sold the passenger jeep that was
involved therein to a certain Carmen Sackerman.

G.R. No. L-12163

The initial problem raised by the petitioner in this appeal may be formulated thus
"Is the approval of the Public Service Commission necessary for the sale of a public
service vehicle even without conveying therewith the authority to operate the same?"
Assuming the dubious sale to be a fact, the court of Appeals answered the query in the
affirmative. The ruling should be upheld.

March 4, 1959

PAZ
vs.
IRENEO MIRANDA, respondent.
Alberto
O.
Almazan and Ereneta for respondent.
REYES, J.B.L., J.:

FORES, petitioner,
Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:

Villaraza

for

Sec. 20. Subject to established limitations and exceptions and saving provisions to
petitioner. the contrary, it shall be unlawful for any public service or for the owner, lessee or operator
thereof, without the previous approval and authority of the Commission previously had
xxx

xxx

xxx

Defendant-petitioner Paz Fores brings this petition for review of the decision of the
(g) To sell, alienate, mortgage, encumber or lease its property, franchises,
Court of Appeals (C.A. Case No. 1437-R) awarding to the plaintiff-respondent Ireneo certificates, privileges, or rights, or any part thereof; or merge or consolidate its property,
Miranda the sums of P5,000 by way of actual damages and counsel fees, and P10,000 as franchises, privileges or rights, or any part thereof, with those of any other public service.
moral damages, with costs.
The approval herein required shall be given, after notice to the public and after hearing the
persons interested at a public hearing, if it be shown that there are just and reasonable
grounds for making the mortgage or encumbrance, for liabilities of more than one year
maturity, or the sale, alienation, lease, merger, or consolidation to be approved and that

TORTS | Aug 5| 19
the same are not detrimental to the public interest, and in case of a sale, the date on
which the same is to be consummated shall be fixed in the order of
approval: Provided, however, That nothing herein contained shall be construed to prevent
the transaction from being negotiated or completed before its approval or to prevent the
sale, alienation, or lease by any public service of any of its property in the ordinary course
of its business.

any other cargo from one place to another, is necessarily a public service property.
(Emphasis supplied)

Of course, this court has held in the case of Bachrach Motor co. vs. Zamboanga
Transportation Co., 52 Phil., 244, that there may be a nunc pro tunc authorization which
has the effect of having the approval retroact to the date of the transfer; but such
outcome cannot prejudice rights intervening in the meantime. It appears that no such
Interpreting the effects of this particular provision of law, we have held in the recent approval was given by the Commission before the accident occurred.
cases of Montoya vs. Ignacio,* 50 Off. Gaz. No. 1, p. 108; Timbol vs. Osias, et al., G. R.
No. L-7547, April 30, 1955, and Medina vs. Cresencia, 99 Phil., 506; 52 Off. Gaz. No. 10,
The P10,000 actual damages awarded by the Court of First Instance of Manila were
p. 4606, that a transfer contemplated by the law, if made without the requisite approval of reduced by the Court of Appeals to only P2,000, on the ground that a review of the
the Public Service Commission, is not effective and binding in so far as the responsibility of records failed to disclose a sufficient basis for the trial court's appraisal, since the only
the grantee under the franchise in relation to the public is concerned. Petitioner assails, evidence presented on this point consisted of respondent's bare statement that his
however, the applicability of these rulings to the instant case, contending that in those expenses and loss of income amounted to P20,000. On the other hand, "it cannot be
cases, the operator did not convey, by lease or by sale, the vehicle independently of his denied," the lower court said, "that appellee (respondent) did incur expenses"' It is well to
rights under the franchise. This line of reasoning does not find support in the law. The note further that respondent was a painter by profession and a professor of Fine Arts, so
provisions of the statute are clear and prohibit the sale, alienation, lease, or encumbrance that the amount of P2,000 awarded cannot be said to be excessive (see Arts. 2224 and
of the property, franchise, certificate, privileges or rights, or any part thereof of the owner 2225, Civil Code of the Philippines). The attorney's fees in the sum of P3,000 also awarded
or operator of the public service Commission. The law was designed primarily for the to the respondent are assailed on the ground that the Court of First Instance did not
protection of the public interest; and until the approval of the public Service Commission is provided for the same, and since no appeal was interposed by said respondent, it was
obtained the vehicle is, in contemplation of law, still under the service of the owner or allegedly error for the Court of Appeals to award themmotu proprio. Petitioner fails to note
operator standing in the records of the Commission which the public has a right to rely that attorney's fees are included in the concept of actual damages under the Civil Code
upon.
and may be awarded whenever the court deems it is just and equitable (Art. 2208, Civil
Code of the Philippines). We see no reason to alter these awards.
The proviso contained in the aforequoted law, to the effect that nothing therein shall
be construed "to prevent the transaction from being negotiated or complete before its
approval", means only that the sale without the required approval is still valid and binding
between the parties (Montoya vs. Ignacio, supra). The phrase "in the ordinary course of its
business" found in the other proviso" or to prevent the sale, alienation, or lease by any
public service of any of its property". As correctly observed by the lower court, could not
have been intended to include the sale of the vehicle itself, but at most may refer only to
such property that may be conceivably disposed or by the carrier in the ordinary course of
its business, like junked equipment or spare parts.
The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is enlightening;
and there, it was held:

Anent the moral damages ordered to be paid to the respondent, the same must be
discarded. We have repeatedly ruled (Cachero vs. Manila Yellow Taxicab Co. Inc., 101 Phil.,
523; 54 Off. Gaz., [26], 6599; Necesito, et al vs. Paras, 104 Phil., 75; 56 Off. Gaz., [23]
4023, that moral damages are not recoverable in damage actions predicted on a breach of
the contract of transportation, in view of Articles 2219 and 2220 of the new Civil Code,
which provide as follows:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

Under the law, the Public Service Commission has not only general supervision and
regulation of, but also full jurisdiction and control over all public utilities including the
property, equipment and facilities used, and the property rights and franchise enjoyed by
xxx
xxx
xxx
every individual and company engaged i the performance of a public service in the sense
this phrase is used in the Public Service Act or Act No. 3108). By virtue of the provisions of
Art. 2220. Willful injury to property may be a legal ground for awarding moral
said Act, motor vehicles used in the performance of a service, as the transportation of damages if the court should find that, under circumstances, such damages are justify due.
freightfrom one point to another, have to this date been considered and they cannot but The same rule applies to breaches of contract where the defendant acted fraudulently or in
be so considered-public service property; and, by reason of its own nature, a TH truck, bad faith.
which means that the operator thereof places it at the disposal of anybody who is willing
to pay a rental of its use, when he desires to transfer or carry his effects, merchandise or

TORTS | Aug 5| 20
that:

By contrasting the provisions of these two article it immediately becomes apparent that it has exercised due diligence in the selection and supervision of its employees (Art.
1759, new civil code; Cangco vs. Manila Railroad Co., supra; Prado vs. Manila Electric Co.,
51 Phil., 900).

(a) In case of breach of contract (including one of transportation) proof of bad faith
or fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an
The difference in conditions, defenses and proof, as well as the codal concept
award of moral damages; and
of quasi-delict as essentially extracontractual negligence, compel us to differentiate
between action ex contractu, and actions quasi ex delicto, and prevent us from viewing
(b) That a breach of contract can not be considered included in the descriptive term the action for breach of contract as simultaneously embodying an action on tort. Neither
"analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides for can this action be taken as one to enforce on employee's liability under Art. 103 of the
the damages that are caused by contractual breach, but because the definition of quasi- Revised Penal Code, since the responsibility is not alleged to be subsidiary, nor is there on
delict in Art. 2176 of the Code expressly excludes the cases where there is a "preexisting record any averment or proof that the driver of appellant was insolvent. In fact, he is not
even made a party to the suit.
contractual relation between the parties."
It is also suggested that a carrier's violation of its engagement to safety transport the
Art. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage dome. Such fault or negligence, if there is passenger involves a breach of the passenger's confidence, and therefore should be
no pre-existing contractual relation between the parties, is called a quasi-delict and is regarded as a breach of contract in bad faith, justifying recovery of moral damages under
Art. 2220. This theory is untenable, for under it the carrier would always be deemed in
governed by the provisions of this Chapter.
bad faith, in every case its obligation to the passenger is infringed, and it would be never
accountable for simple negligence; while under the law (Art. 1756). the presumption is
The exception to the basic rule of damages now under consideration is a mishap that common carriers acted negligently(and not maliciously), and Art. 1762 speaks
resulting in the death of a passenger, in which case Article 1764 makes the common of negligence of the common carrier.
carrier expressly subject to the rule of Art. 2206, that entitles the deceased passenger to
"demand moral damages for mental anguish by reason of the death of the deceased"
ART. 1756. In case of death of or injuries to passengers, common carriers are
(Necesito vs. Paras, 104 Phil., 84, Resolution on motion to reconsider, September 11,
presumed
to have been at fault or to have acted negligently, unless they prove that they
1958). But the exceptional rule of Art. 1764 makes it all the more evident that where the
injured passenger does not die, moral damages are not recoverable unless it is proved observed extraordinary diligence as prescribed in article 1733 and 1755.
that the carrier was guilty of malice or bad faith. We think it is clear that the mere
carelessness of the carrier's driver does not per se constitute of justify an inference of
ART. 1762. The contributory negligence of the passenger does not bar recovery of
malice or bad faith on the part of the carrier; and in the case at bar there is no other damages for his death or injuries, if the proximate cause thereof is the negligence of the
evidence of such malice to support the award of moral damages by the Court of Appeals. common carrier, but the amount of damages shall be equitably reduced.
To award moral damages for breach of contract, therefore, without proof of bad faith or
malice on the part of the defendant, as required by Art. 220, would be to violate the clear
The distinction between fraud, bad faith or malice in the sense of deliberate or
provisions of the law, and constitute unwarranted judicial legislation.
wanton wrong doing and negligence (as mere carelessness) is too fundamental in our law
to be ignored (Arts. 1170-1172); their consequences being clearly differentiated by the
The Court of Appeals has invoked our rulings in Castro vs. Acro Taxicab Co., G.R. No. Code.
49155, December 14, 1948 and Layda vs. Court of Appeals, 90 Phil., 724; but these
doctrines were predicated upon our former law of damages, before judicial discretion in
ART. 2201. In contracts and quasi-contracts, the damages for which the obligor who
fixing them became limited by the express provisions of the new Civil Code (previously acted in good faith is liable shall be those that are the natural and probable consequences
quoted). Hence, the aforesaid rulings are now inapplicable.
of the breach of the obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
Upon the other hand, the advantageous position of a party suing a carrier for breach
of the contract of transportations explains, to some extent, the limitations imposed by the
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible
new Code on the amount of the recovery. The action for breach of contract imposes on the for all damages which may be reasonably attributed to the non-performance of the
defendant carrier a presumption of liability upon mere proof of injury to the passenger; obligation.
that latter is relieved from the duty to established the fault of the carrier, or of his
employees, and the burden is placed on the carrier to prove that it was due to an
It is to be presumed, in the absence of statutory provision to the contrary, that this
unforseen event or to force majeure (Cangco vs. Manila Railroad Co., 38 Phil., 768, 777).
difference
was in the mind of the lawmakers when in Art. 2220 they limited recovery of
Moreover, the carrier, unlike in suits for quasi-delict, may not escape liability by proving
moral damages to breaches of contract in bad faith. It is true that negligence may be

TORTS | Aug 5| 21
occasionally so gross as to amount to malice; but that fact must be shown in evidence,
and a carrier's bad faith is not to be lightly inferred from a mere finding that the contract
was breached through negligence of the carrier's employees.
In view of the foregoing considerations, the decision of the Court of Appeals is
modified by eliminating the award of P5,000.00 by way of moral damages. (Court of
Appeals Resolution of May 5, 1957). In all other respects, the judgment is affirmed. No
costs in this instance. So ordered.

G.R. No. 22063

September 30, 1924

LUCIO
vs.
CRISPULO ONRUBIA, defendant-appellee.
Raymundo
B.
Paredes, Buencamino & Yulo for appellee.

FRANCISCO, plaintiff-appellant,

Ferrer

for

appellant.

VILLAMOR, J.:
The plaintiff prays for judgment against the defendant, sentencing him to pay the
sum of P4,500 as damages for the death of his son Anselmo Francisco, with the costs of
the action. It is alleged as the cause of action that on or about November 25, 1922, in the
City of Manila, P. I., the said defendant, being the chauffeur and person in charge of
automobile No. 6674, drove and operated said automobile on Calle Azcarraga in a careless
and negligent manner and in violation of the traffic regulation, causing it to run at an
unusual speed, thereby overrunning on said Calle Azcarraga a child 9 years old by the
name of Anselmo Francisco, as a result of which, the said Anselmo Francisco received
wounds on several parts of his body, which caused his death almost instantaneously; that
the aforesaid child Anselmo Francisco is a son of the herein plaintiff, was living under his
custody, and assisted him in his work and labor, and was, also rendering not less valuable
services to his mother; and that by reason of the death of the aforesaid child Anselmo
Francisco, caused by the defendant, the herein plaintiff, as well as his wife, was deprived
of the services that said child was rendering up to the date of his death, and of those he
may render in the future, which must be considered as doubly important, thus having
suffered damages in the sum of four thousand five hundred pesos (P4,500).
The defendant filed a general and specific denial of the facts alleged in the complaint,
and as a special defense, alleged:
1. That prior to the date of the complaint, said defendant was prosecuted in this
same court for homicide through reckless imprudence, criminal case No. 24994, "The
People of the Philippine Islands vs. Crispulo Onrubia y Julian," upon the same facts that
are now alleged as a cause of action of the complaint, as evidenced by a copy of the

TORTS | Aug 5| 22
information presented in that action, which is attached hereto and made a part hereof
By General Orders, No. 58, section 107, the privileges secured by the Spanish law to
marked Exhibit 1.
persons claiming to be injured by the commission of an offense to take part in the
prosecution of the offense and to recover damages for the injury sustained by reason of
2. That the information mentioned in the preceding paragraph was presented upon a the same, are preserved and remain in force, and it is therein expressly provided that the
complaint and at the instance of the herein plaintiff and of the heirs of the deceased court, upon conviction of the accused, may enter judgment in favor of the injured person
Anselmo Francisco, none of whom has reserved the right to bring later such civil action as against the defendant in the criminal case for the damages occasioned by the wrongful
may arise from the facts set forth in the information, nor stated, or indicated in any act.
manner his desire not to be understood as bringing the proper civil action together with
said criminal case.
3. That after the proper proceedings, and the court having full jurisdiction over the
subject-matter and the person of the defendant, accused therein, a judgment of acquittal
was rendered, a copy of which is attached hereto and made a part hereof as Exhibit 2,
holding that the said accused did not deprive the automobile he was operating at an
exaggerated or unreasonable speed, was not responsible for any imprudence, fault,
carelessness or negligence whatsoever, and did not violate any regulation in connection
with said death.

In Rakes vs. Atlantic Gulf and Pacific Company (7 Phil., 359), it was held:
According to article 112, the penal action once started, the civil remedy should be
sought therewith, unless it had been waived by the party injured or been expressly
reserved by him for civil proceedings for the future. If the civil action alone was
prosecuted, arising out of a crime that could be enforced only on private complaint, the
penal action thereunder should be extinguished.
In the case of United States vs. Guy-Sayco (13 Phil., 292), this court, construing
articles 17, 121 and 122 of the Penal Code, held:

At the trial of this case, the attorney for the defendant proposed a stipulation of
facts, which was accepted by the attorney for the plaintiff and is as follows:

In deciding a cause, the civil responsibility incurred by the accused, consequent upon
his criminal liability, must be declared, because every person criminally responsible for a
(a) That prior to the date of the complaint said defendant was prosecuted in this crime or misdemeanor is also civilly liable, and the courts are obliged to fix the amount of
same court for homicide thru reckless imprudence, criminal case No. 24994, entitled "The indemnity for damages in the terms prescribed for the operation of damages caused by
People of the Philippine Islands vs.Crispulo Onrubia y Julina," upon the same facts now the crime. (Arts. 17, 121 and 122, Penal Code.)
alleged as the cause of action of the plaintiff's complaint, a copy of the information therein
filed being attached to the answer as Exhibit 1.
The same doctrine as maintained in United States vs. Bernardo (19 Phil., 265).
(b) That the information mentioned in the preceding paragraph was presented upon a
There is not doubt that under the criminal procedure now in force in this jurisdiction,
complain and at the instance of the herein plaintiff and the heirs of the deceased Anselmo he who alleges having been prejudiced by the commission of a crime or fault may bring a
Francisco.
civil action independently from the criminal; but once the criminal action is instituted, the
civil is deemed also to have been brought, unless the person injured or prejudiced has
(c) That after the proper proceedings, and the court having full jurisdiction over the waived the same or made an express reservation for bringing the same after the
subject-matter and the person of the defendant, accused therein, a judgment of acquittal termination of the criminal case, should he have any right thereto. (Art. 122 of the Law of
was rendered, a copy of which is attached to the answer as Exhibit 2.
Criminal Procedure.) And the civil action reserved by the party injured will be allowed after
the termination of the criminal proceeding only when he has as right thereto, that is to
Upon the facts agreed upon by the parties, the trial judge rendered judgment, say, when the judgment rendered is one of conviction, or, in case the accused is acquitted,
dismissing the case without costs, on the ground that, the defendant having been the complaint is based on some other fact or ground different from the criminal act. But an
acquitted in the criminal case for not having been guilty of any fault, negligence, or action based on the same facts that were the subject-matter of the criminal case cannot
carelessness, no judgment can be rendered against him for the damages arising from the be maintained when by a final judgment it was declared that the fact from which the civil
action could have arisen did not exist, according to article 116 of the said Law of Criminal
same facts.
Procedure, which provides that the extinction of the penal action does not carry with it the
extinction of the civil one, unless the extinction is caused by a declaration in a final
This is the judgment sought by the appellant to be reversed.
judgment that the fact upon which the civil action could have arisen did not exist.
This court has oftentimes discussed the procedure prescribed by the Spanish Law of
And this logically follows from the provision of article 17 of the Penal Code: "Every
Criminal Procedure for determining the civil liability arising from a crime. In the case person criminally liable for a felony or misdemeanor, is also civilly liable." That is to say, if
of Springer vs. Odlin (3 Phil., 344); it was said:

TORTS | Aug 5| 23
the criminal liability carries with it the civil one, the exemption from criminal liability
The accused once found by the court not to have been the author of an offense and
implies exemption from civil liability.
being acquitted of the accusation, under no condition can be made civilly responsible for
the harm caused and for the damages and losses suffered by reason of the criminal act.
The supreme court of Spain in a judgment rendered January 3, 1887, laid down this
doctrine: "In order to establish the civil liability in a criminal case, it is necessary that the
In that decision this court says: "It is not possible to conceived, if it is not permitted
same spring from, or be a consequence of, the criminal liability, and, therefore, if the to find against an accused acquitted of civil responsibility in a criminal case, how he can be
defendant is acquitted of a crime, a judgment, sentencing him to pay a determinate held responsible for the same in a civil case in the absence of any law authorizing the
indemnity by reason of the same crime, violates this article." (The article cited is art. 17 of same, and this is an inexplicable counter-course.
the Penal Code.)
It cannot be conceived legally that an act of setting fire executed intentionally is not
In another judgment rendered December 20, 1882, that high court says: "That a constitutive of the crime of arson, and that its author, without being found personally
person not criminally liable for a crime or misdemeanor cannot be civilly liable, under the responsible according to the penal law, is to be only civilly responsible therefor.
provision of article 18 of the Penal Code (17 of the Philippine) and the trial court not
having held so had violated said articles 18 and 21 and committed the error of law
That case was brought by a writ of error to the Supreme Court of the United States,
mentioned in article 849, case No. 4, of the Revised Compilation."
which in affirming the judgment appealed from (218 U. S., 476; 54 L. ed., 1116; 40 Phil.,
1056), laid the following doctrine:
In a relatively recent judgment, namely, of February 25, 1891, the same supreme
court held: "That a judgment acquitting the defendants on the ground that neither the
A civil action for indemnification for the damages resulting from the malicious or
crime charged, nor the guilt of the accused, was proven decides all the points of the unlawful burning of a storehouse and its contents may not be maintained in the Philippine
prosecution and the defense, and their criminal liability not having been established, it is courts, where there has been a judgment of acquittal against he same defendant for the
impossible to make any finding of civil liability which is accessory to the criminal."
same malicious and unlawful burning, in view of the positive legislation in the Philippine
The question raised in this appeal is the same as that put in issue and decided in the
case of Almeida Chan Tanco vs. Abaroa (8 Phil., 178). In that case, the act complained of
in the civil action brought by the plaintiffs was the same one imputed by one of them to
the defendant, to wit, that of having set fire to, or burnt, a store with the goods therein
contained, which belonged to them, and which was the subject of a criminal prosecution
for the crime of incendiarism against the said defendant Abaroa, although the latter was
acquitted by a judgment of the trial court, affirmed by this court, for lack of sufficient
evidence to show his participation in the criminal act. This court in a decision rendered per
curiam, held:

codes, civil and criminal, drawing a distinction between a civil liability which results from
the mere negligence of the defendant, and a liability for the civil consequences of a crime
by which another has sustained loss or injury, and of the plain inference from article 17 of
the Penal Code, that civil liability springs out of and is dependent upon facts which, if true,
would constitute a crime or misdemeanor, and of the provisions of Code of Criminal
Procedure sections 108, 112, 742, which plainly contemplate that the civil liability of the
defendant shall be ascertained and declared in the criminal proceedings.
In Wise & Co. vs. Larion (45 Phil., 314), the same doctrine was maintained:

While it is true that a civil action may be maintained by an employer to recover

The full and complete acquittal of an accused necessarily implies his innocence of, money misappropriated by his employee without the prior institution of a criminal
and freedom from responsibility for, the crime of which he was accused. (Rule 51 of the proceeding, nevertheless if a criminal prosecution based upon the same misappropriation
Provincial Law for the application of the Penal Code.)
is in fact instituted against the employee and he is acquitted, such acquittal operates as a
bar to any subsequent civil action.
The judgment which fully acquits the accused persons, settles in an explicit manner
all the points in question, not only in the accusation but those of the defense, in
Thus it is seen that the constant jurisprudence of this court upheld by the Supreme
accordance with the established jurisprudence of the supreme tribunal of Spain, the Court of the United States, sustains and supports the judgment appealed from. But the
provisions of article 742 of the Law of Criminal Procedure of 1882, and article 839 of the appellants insists that under article 1902 of the Civil Code, he has the right to institute this
Compilation.
action, notwithstanding the judgment of acquittal rendered in the criminal case against the
defendant upon the same cause of action. We are of the opinion, and so hold, that said
Those persons not criminally responsible for an offense or misdemeanor cannot be article 1902 has no application in the instant case, first, because said article presupposes
made civilly responsible (art. 17 of the Penal Code); from which precept it is a logical the existence of fault or negligence upon which the action is based, and second, it refers
consequence that exemption from criminal responsibility carries with it exemption from to a fault or negligence not punishable by law.
civil responsibility. (Decisions of the supreme court of Spain, January 3, 1877, and
December 20, 1882.)
Article 1902, says:

TORTS | Aug 5| 24
Any person who by an act or omission causes damages to another by his fault or
negligence shall be liable for the damage so done.
This statutory provision, however, must be understood as subordinated to article
1093 of the same code, which provides:
Those arising from wrongful or negligent acts or omissions not punishable by law
shall be subject to the provisions of chapter second of title sixteen of this book.
Article 1902 is found precisely in chapter 2, title 16, book 4, of the Civil Code, so that
in order that said article 1902 may be applied, it is necessary that the negligence or fault
in question be not punished by law. And this is so because if the fault or negligence is
punished by the law, it ceases to be the quasi crime of negligence having purely civil
effects, and becomes a crime or misdemeanor, according to the gravity of the penalty
imposed by the law, and in that case it comes within the purview of article 1092 of the
Civil Code, which provides:
Civil obligations arising from crimes or misdemeanors shall be governed by the
provisions of the Penal Code.
Under the facts set forth in the complaint, if there was any faulty or negligence on
the part of the defendant, it must necessarily be a fault punishable by law (arts. 568, 590
and 604 of the Penal Code), for through said fault he caused the death of the plaintiff's
son. Homicide through reckless imprudence is punished as a crime, and therefore the
provisions applicable would be those of the Penal Code and the Law of Criminal Procedure
above cited.
For all of the foregoing the judgment appealed from must be, as is hereby, affirmed
with costs against the appellant. So ordered.

G.R. No. L-2075

November 29, 1949

MARGARITA
AFIALDA, plaintiff-appellant,
vs.
BASILIO HISOLE and FRANCISCO HISOLE, defendants-appellees.
Nicolas
P.
Nonato
Gellada, Mirasol and Ravena for appellees.

for

appellant.

REYES, J.:
This is an action for damages arising from injury caused by an animal. The complaint
alleges that the now deceased, Loreto Afialda, was employed by the defendant spouses as
caretaker of their carabaos at a fixed compensation; that while tending the animals he
was, on March 21, 1947, gored by one of them and later died as a consequence of his
injuries; that the mishap was due neither to his own fault nor to force majeure; and that
plaintiff is his elder sister and heir depending upon him for support.

TORTS | Aug 5| 25
Before filing their answer, defendants moved for the dismissal of the complaint for
In a decision of the Spanish Supreme Court, cited by Manresa in his Commentaries
lack of a cause of action, and the motion having been granted by the lower court, plaintiff (Vol. 12, p. 578), the death of an employee who was bitten by a feline which his master
has taken this appeal.
had asked him to take to his establishment was by said tribunal declared to be "a veritable
accident of labor" which should come under the labor laws rather than under article 1905
Plaintiff seeks to hold defendants liable under article 1905 of the Civil Code, which of the Civil Code. The present action, however, is not brought under the Workmen's
Compensation Act, there being no allegation that, among other things, defendant's
reads:
business, whatever that might be, had a gross income of P20,000. As already stated,
defendant's liability is made to rest on article 1905 of the Civil Code. but action under that
The possessor of an animal, or the one who uses the same, is liable for any damages article is not tenable for the reasons already stated. On the other hand, if action is to be
it may cause, even if such animal should escape from him or stray away.
based on article 1902 of the Civil Code, it is essential that there be fault or negligence on
the part of the defendants as owners of the animal that caused the damage. But the
This liability shall cease only in case, the damage should arise from force majeure or complaint contains no allegation on those points.
from the fault of the person who may have suffered it.
There being no reversible error in the order appealed from, the same is hereby
The question presented is whether the owner of the animal is liable when damage is affirmed, but without costs in view of the financial situation of the appellant.
caused to its caretaker.
The lower court took the view that under the above-quoted provision of the Civil
Code, the owner of an animal is answerable only for damages caused to a stranger, and
that for damage caused to the caretaker of the animal the owner would be liable only if he
had been negligent or at fault under article 1902 of the same code. Claiming that the
lower court was in error, counsel for plaintiff contends that the article 1905 does not
distinguish between damage caused to the caretaker and makes the owner liable whether
or not he has been negligent or at fault. For authority counsel cites the following opinion
which Manresa quotes from a decision of the Spanish Supreme Court:
El articulo 1905 del codigo Civil no consienta otra interpretacion que la que, clara y
evidentemente, se deriva de sus terminos literales, bastando, segun el mismo, que un
animal cause perjuicio para que nasca la responsibilidad del dueno, aun no imputandose a
este ninguna clase de culpa o negligencia, habida,sin duda, cuenta por el lgislador de que
tal concepto de dueno es suficiente para que arrastre las consecuencias favorables o
adversas de esta clase de propiedad, salvo la exception en el mismo contenida. (12
Manresa, Commentaries on the Spanish CivilCode, 573.)
This opinion, however, appears to have been rendered in a case where an animal
G.R. Nos. 103442-45 May 21, 1993
caused injury to a stranger or third person. It is therefore no authority for a case like the
present where the person injured was the caretaker of the animal. The distinction is
NATIONAL
POWER
CORPORATION,
ET
AL., petitioners,
important. For the statute names the possessor or user of the animal as the person liable vs.
for "any damages it may cause," and this for the obvious reason that the possessor or THE COURT OF APPEALS, GAUDENCIO C. RAYO, ET AL., respondents.
user has the custody and control of the animal and is therefore the one in a position to
prevent it from causing damage.
The Solicitor General for plaintiff-appellee.
In the present case, the animal was in custody and under the control of the
caretaker, who was paid for his work as such. Obviously, it was the caretaker's business to
try to prevent the animal from causing injury or damage to anyone, including himself. And
being injured by the animal under those circumstances, was one of the risks of the
occupation which he had voluntarily assumed and for which he must take the
consequences.

Ponciano G. Hernandez for private respondents.

TORTS | Aug 5| 26
DAVIDE, JR., J.:

Being closely interrelated, the cases were consolidated and trial thereafter ensued.

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
The lower court rendered its decision on 30 April 1990 dismissing the complaints "for
urging this Court to set aside the 19 August 1991 consolidated Decision of the Court of lack of sufficient and credible evidence." 6 Consequently, the private respondents
Appeals in CA.-G.R. CV Nos. 27290-93 1 which reversed the Decision of Branch 5 of the seasonably appealed therefrom to the respondent Court which then docketed the cases as
then Court of First Instance (now Regional Trial Court) of Bulacan, and held petitioners CA-G.R. CV Nos. 27290-93.
National Power Corporation (NPC) and Benjamin Chavez jointly and severally liable to the
private respondents for actual and moral damages, litigation expenses and attorney's fees.
In its joint decision promulgated on 19 August 1991, the Court of Appeals reversed
the appealed decision and awarded damages in favor of the private respondents. The
This present controversy traces its beginnings to four (4) separate complaints 2 for dispositive portion of the decision reads:
damages filed against the NPC and Benjamin Chavez before the trial court. The plaintiffs
therein, now private respondents, sought to recover actual and other damages for the loss
CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby
of lives and the destruction to property caused by the inundation of the town of REVERSED and SET ASIDE, and a new one is hereby rendered:
Norzagaray, Bulacan on 26-27 October 1978. The flooding was purportedly caused by the
negligent release by the defendants of water through the spillways of the Angat Dam
1. In Civil Case No. SM-950, ordering defendants-appellees to pay, jointly and
(Hydroelectric Plant). In said complaints, the plaintiffs alleged, inter alia, that: 1)
severally,
plaintiffs-appellants, with legal interest from the date when this decision shall
defendant NPC operated and maintained a multi-purpose hydroelectric plant in the Angat
River at Hilltop, Norzagaray, Bulacan; 2) defendant Benjamin Chavez was the plant become final and executory, the following:
supervisor at the time of the incident in question; 3) despite the defendants' knowledge,
as early as 24 October 1978, of the impending entry of typhoon "Kading," they failed to
A. Actual damages, to wit:
exercise due diligence in monitoring the water level at the dam; 4) when the said water
level went beyond the maximum allowable limit at the height of the typhoon, the
1) Gaudencio C. Rayo, Two Hundred Thirty One Thousand Two Hundred Sixty Pesos
defendants suddenly, negligently and recklessly opened three (3) of the dam's spillways, (P231,260.00);
thereby releasing a large amount of water which inundated the banks of the Angat River;
and 5) as a consequence, members of the household of the plaintiffs, together with their
2) Bienvenido P. Pascual, Two Hundred Four Thousand Five Hundred Pesos
animals, drowned, and their properties were washed away in the evening of 26 October
(P204.500.00);
3
and the early hours of 27 October 1978.
3) Tomas Manuel, One Hundred Fifty Five Thousand Pesos (P155,000.00);
In their Answers, the defendants, now petitioners, alleged that: 1) the NPC exercised
due care, diligence and prudence in the operation and maintenance of the hydroelectric
plant; 2) the NPC exercised the diligence of a good father in the selection of its
4) Pedro C. Bartolome, One Hundred Forty Seven Thousand Pesos (P147,000.00);.
employees; 3) written notices were sent to the different municipalities of Bulacan warning
the residents therein about the impending release of a large volume of water with the
5) Bernardino Cruz, One Hundred Forty Three Thousand Five Hundred Fifty Two Pesos
onset of typhoon "Kading" and advise them to take the necessary precautions; 4) the and Fifty Centavos (P143,552.50);
water released during the typhoon was needed to prevent the collapse of the dam and
avoid greater damage to people and property; 5) in spite of the precautions undertaken
6) Jose Palad, Fifty Seven Thousand Five Hundred Pesos (P57,500.00);
and the diligence exercised, they could still not contain or control the flood that resulted
and; 6) the damages incurred by the private respondents were caused by a fortuitous
event or force majeure and are in the nature and character of damnum absque injuria. By
7) Mariano S. Cruz, Forty Thousand Pesos (P40,000.00);
way of special affirmative defense, the defendants averred that the NPC cannot be sued
because it performs a purely governmental function. 4
8) Lucio Fajardo, Twenty nine Thousand Eighty Pesos (P29,080.00); and
Upon motion of the defendants, a preliminary hearing on the special defense was
B. Litigation expenses of Ten Thousand Pesos (P10,000.00);
conducted. As a result thereof, the trial court dismissed the complaints as against the NPC
on the ground that the provision of its charter allowing it to sue and be sued does not
2. In Civil case No. SM-951, ordering defendants-appellees to pay jointly and
contemplate actions based on tort. The parties do not, however, dispute the fact that this
Court overruled the trial court and ordered the reinstatement of the complaints as against severally, plaintiff-appellant, with legal interest from the date when this decision shall have
become final and executory, the following :
the NPC. 5

TORTS | Aug 5| 27
A. Actual damages of Five Hundred Twenty Thousand Pesos (P520,000.00);.

1) Actual damages of One Hundred forty Thousand Pesos (P140,000.00);

B. Moral damages of five hundred Thousand Pesos (P500,000.00); and.

2) Moral damages of Fifty Thousand Pesos (P50,000.00);

C. Litigation expenses of Ten Thousand Pesos (P10,000.00);.

C. Plaintiff-appellant Virginia Guzman :

3. In Civil Case No. SM-953, ordering defendants-appellees to pay, jointly and

severally, with legal interest from the date when this decision shall have become final and
executory;

1) Actual damages of Two Hundred Five Hundred Twenty Pesos (205,520.00); and
D. Plaintiffs-appellants litigation expenses of Ten Thousand Pesos (10,000.00).

A. Plaintiff-appellant Angel C. Torres:

In addition, in all the four (4) instant cases, ordering defendants-appellees to pay,
jointly and severally, plaintiffs-appellants attorney fees in an amount equivalent to 15% of
1) Actual damages of One Hundred Ninety Nine Thousand One Hundred Twenty Pesos the total amount awarded.
(P199,120.00);
No pronouncement as to costs. 7
2) Moral Damages of One Hundred Fifty Thousand Pesos (P150,000.00);
B. Plaintiff-appellant Norberto Torres:
1) Actual damages of Fifty Thousand Pesos (P50,000.00);
2) Moral damages of Fifty Thousand Pesos (P50,000.00);
C. Plaintiff-appellant Rodelio Joaquin:
1) Actual damages of One Hundred Thousand Pesos (P100,000.00);
2) Moral damages of One Hundred Thousand Pesos (P100,000.00); and

The foregoing judgment is based on the public respondent's conclusion that the
petitioners were guilty of:
. . . a patent gross and evident lack of foresight, imprudence and negligence . . . in
the management and operation of Angat Dam. The unholiness of the hour, the extent of
the opening of the spillways, And the magnitude of the water released, are all but products
of defendants-appellees' headlessness, slovenliness, and carelessness. The resulting flash
flood and inundation of even areas (sic) one (1) kilometer away from the Angat River bank
would have been avoided had defendants-appellees prepared the Angat Dam by
maintaining in the first place, a water elevation which would allow room for the expected
torrential rains. 8
This conclusion, in turn, is anchored on its findings of fact, to wit:

D. Plaintifsf-appellants litigation expenses of Ten Thousand Pesos (P10,000.00);

As early as October 21, 1978, defendants-appellees knew of the impending onslaught

of and imminent danger posed by typhoon "Kading". For as alleged by defendants4. In Civil case No. SM-1247, ordering defendants-appellees to pay, jointly and appellees themselves, the coming of said super typhoon was bannered by Bulletin Today,
severally, with legal interest from the date when this decision shall have become final and a newspaper of national circulation, on October 25, 1978, as "Super Howler to hit R.P."
The next day, October 26, 1978, said typhoon once again merited a headline in said
executory :
newspaper as "Kading's Big Blow expected this afternoon" (Appellee's Brief, p. 6). Apart
from the newspapers, defendants-appellees learned of typhoon "Kading' through radio
A. Plaintiffs-appellants Presentacion Lorenzo and Clodualdo Lorenzo:
announcements (Civil Case No. SM-950, TSN, Benjamin Chavez, December 4, 1984, pp. 79).
1) Actual damages of Two Hundred Fifty Six Thousand Six Hundred Pesos
(P256,600.00);
Defendants-appellees doubly knew that the Angat Dam can safely hold a normal
2) Moral damages of Fifty Thousand Pesos (P50,000.00);
B. Plaintiff-appellant Consolacion Guzman :

maximum headwater elevation of 217 meters (Appellee's brief, p. 12; Civil Case No. SM951, Exhibit "I-6"; Civil Case No. SM-953, Exhibit "J-6"; Civil Case No. SM-1247, Exhibit
"G-6").

TORTS | Aug 5| 28
Yet, despite such knowledge, defendants-appellees maintained a reservoir water
BENJAMIN
elevation even beyond its maximum and safe level, thereby giving no sufficient allowance Power Plant Superintendent 10
for the reservoir to contain the rain water that will inevitably be brought by the coming
typhoon.
because:
On October 24, 1978, before typhoon "Kading" entered the Philippine area of
responsibility, water elevation ranged from 217.61 to 217.53, with very little opening of
the spillways, ranging from 1/2 to 1 meter. On October 25, 1978, when typhoon "Kading"
entered the Philippine area of responsibility, and public storm signal number one was
hoisted over Bulacan at 10:45 a.m., later raised to number two at 4:45 p.m., and then to
number three at 10:45 p.m., water elevation ranged from 217.47 to 217.57, with very
little opening of the spillways, ranging from 1/2 to 1 meter. On October 26, 1978, when
public storm signal number three remained hoisted over Bulacan, the water elevation still
remained at its maximum level of 217.00 to 218.00 with very little opening of the
spillways ranging from 1/2 to 2 meters, until at or about midnight, the spillways were
suddenly opened at 5 meters, then increasing swiftly to 8, 10, 12, 12.5, 13, 13.5, 14, 14.5
in the early morning hours of October 27, 1978, releasing water at the rate of 4,500 cubic
meters per second, more or less. On October 27, 1978, water elevation remained at a
range of 218.30 to 217.05 (Civil Case No. SM-950, Exhibits "D" and series, "L", "M", "N",
and "O" and Exhibits "3" and "4"; Civil Case No. SM-951, Exhibits "H" and "H-1"; Civil
Case No. SM-953, Exhibits "I" and "I-1"; Civil Case No. SM 1247, Exhibits "F" and "F-1").

L.

CHAVEZ

Said notice was delivered to the "towns of Bulacan" on October 26, 1978 by
defendants-appellees driver, Leonardo Nepomuceno (Civil Case No. SM-950, TSN,
Benjamin Chavez, December 4, 1984, pp. 7-11 and TSN, Leonardo Nepomuceno, March 7,
1985, pp. 10-12).
Said notice is ineffectual, insufficient and inadequate for purposes of the opening of
the spillway gates at midnight of October 26, 1978 and on October 27, 1978. It did not
prepare or warn the persons so served, for the volume of water to be released, which
turned out to be of such magnitude, that residents near or along the Angat River, even
those one (1) kilometer away, should have been advised to evacuate. Said notice,
addressed "TO ALL CONCERN (sic)," was delivered to a policeman (Civil Case No. SM-950,
pp. 10-12 and Exhibit "2-A") for the municipality of Norzagaray. Said notice was not thus
addressed and delivered to the proper and responsible officials who could have
disseminated the warning to the residents directly affected. As for the municipality of Sta.
Maria, where plaintiffs-appellants in Civil Case No. SM-1246 reside, said notice does not
appear to have been served. 11

xxx xxx xxx

Relying on Juan F. Nakpil & Sons vs. Court of Appeals, 12 public respondent rejected
the petitioners' plea that the incident in question was caused by force majeure and that
From the mass of evidence extant in the record, We are convinced, and so hold that they are, therefore, not liable to the private respondents for any kind of damage such
the flash flood on October 27, 1978, was caused not by rain waters (sic), but by stored damage being in the nature of damnum absque injuria.
waters (sic) suddenly and simultaneously released from the Angat Dam by defendantsappellees, particularly from midnight of October 26, 1978 up to the morning hours of
The motion for reconsideration filed by the petitioners, as well as the motion to
October
27,
modify
judgment filed by the public respondents, 13 were denied by the public respondent
9
1978.
in its Resolution of 27 December 1991. 14
The appellate court rejected the petitioners' defense that they had sent "early
warning written notices" to the towns of Norzagaray, Angat, Bustos, Plaridel, Baliwag and
Calumpit dated 24 October 1978 which read:
TO ALL CONCERN (sic):
Please be informed that at present our reservoir (dam) is full and that we have been
releasing water intermittently for the past several days.
With the coming of typhoon "Rita" (Kading) we expect to release greater ( sic) volume
of water, if it pass (sic) over our place.
In view of this kindly advise people residing along Angat River to keep alert and stay
in safe places.

Petitioners thus filed the instant petition on 21 February 1992.

After the Comment to the petition was filed by the private respondents and the Reply
thereto was filed by the petitioners, We gave due course to the petition on 17 June 1992
and directed the parties to submit their respective Memoranda, 15 which they subsequently
complied with.
The petitioners raised the following errors allegedly committed by the respondent
Court :
I. THE COURT OF APPEALS ERRED IN APPLYING THE RULING OF NAKPIL & SONS V.
COURT OF APPEALS AND HOLDING THAT PETITIONERS WERE GUILTY OF NEGLIGENCE.
II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE WRITTEN NOTICES OF
WARNING ISSUED BY PETITIONERS WERE INSUFFICIENT.

TORTS | Aug 5| 29
III. THE COURT OF APPEALS ERRED IN HOLDING THAT THE DAMAGE SUFFERED BY excluded from creating or entering into the cause of the mischief. When the effect, the
PRIVATE RESPONDENTS WAS NOT DAMNUM ABSQUE INJURIA.
cause of which is to be considered, is found to be in part the result of the participation of
man, whether it be from active intervention or neglect, or failure to act, the whole
IV. THE COURT OF APPEALS ERRED IN NOT AWARDING THE COUNTERCLAIM OF occurrence is thereby humanized, as it were, and removed from the rules applicable to the
acts of God. (1 Corpus Juris, pp. 1174-1175).
PETITIONERS FOR ATTORNEY'S FEES AND EXPENSES OF LITIGATION. 16
These same errors were raised by herein petitioners in G.R. No. 96410,
entitled National Power Corporation, et al., vs. Court of Appeals, et al., 17 which this Court
decided on 3 July 1992. The said case involved the very same incident subject of the
instant petition. In no uncertain terms, We declared therein that the proximate cause of
the loss and damage sustained by the plaintiffs therein who were similarly situated as
the private respondents herein was the negligence of the petitioners, and that the 24
October 1978 "early warning notice" supposedly sent to the affected municipalities, the
same notice involved in the case at bar, was insufficient. We thus cannot now rule
otherwise not only because such a decision binds this Court with respect to the cause of
the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978 which resulted
in the loss of lives and the destruction to property in both cases, but also because of the
fact that on the basis of its meticulous analysis and evaluation of the evidence adduced by
the parties in the cases subject of CA-G.R. CV Nos. 27290-93, public respondent found as
conclusively established that indeed, the petitioners were guilty of "patent gross and
evident lack of foresight, imprudence and negligence in the management and operation of
Angat Dam," and that "the extent of the opening of the spillways, and the magnitude of
the water released, are all but products of defendants-appellees' headlessness,
slovenliness, and carelessness." 18 Its findings and conclusions are biding upon Us, there
being no showing of the existence of any of the exceptions to the general rule that findings
of fact of the Court of Appeals are conclusive upon this Court. 19 Elsewise stated, the
challenged decision can stand on its own merits independently of Our decision in G.R. No.
96410. In any event, We reiterate here in Our pronouncement in the latter case that Juan
F. Nakpil & Sons vs. Court of Appeals 20 is still good law as far as the concurrent liability of
an obligor in the case of force majeure is concerned. In the Nakpil case, We held:
To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach
of an obligation due to an "act of God," the following must concur: (a) the cause of the
breach of the obligation must be independent of the will of the debtor; (b) the event must
be either unforseeable or unavoidable; (c) the event must be such as to render it
impossible for the debtor to fulfill his obligation in a moral manner; and (d) the debtor
must be free from any participation in, or aggravation of the injury to the creditor.
(Vasquez v. Court of Appeals, 138 SCRA 553; Estrada v. Consolacion, 71 SCRA 423;
Austria v. Court of Appeals, 39 SCRA 527; Republic of the Phil. v. Luzon Stevedoring Corp.,
21 SCRA 279; Lasam v. Smith, 45 Phil. 657).
Thus, if upon the happening of a fortuitous event or an act of God, there concurs a
corresponding fraud, negligence, delay or violation or contravention in any manner of the
tenor of the obligation as provided for in Article 1170 of the Civil Code, which results in
loss or damage, the obligor cannot escape liability.
The principle embodied in the act of God doctrine strictly requires that the act must
be one occasioned exclusively by the violence of nature and all human agencies are to be

Thus it has been held that when the negligence of a person concurs with an act of
God in producing a loss, such person is not exempt from liability by showing that the
immediate cause of the damage was the act of God. To be exempt from liability for loss
because of an act of God, he must be free from any previous negligence or misconduct by
which that loss or damage may have been occasioned. (Fish & Elective Co. v. Phil. Motors,
55 Phil. 129; Tucker v. Milan, 49 O.G. 4379; Limpangco & Sons v. Yangco Steamship Co.,
34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657). 21
Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to
escape liability for the loss or damage sustained by private respondents since they, the
petitioners, were guilty of negligence. The event then was not occasioned exclusively by
an act of God or force majeure; a human factor negligence or imprudence had
intervened. The effect then of the force majeure in question may be deemed to have, even
if only partly, resulted from the participation of man. Thus, the whole occurrence was
thereby humanized, as it were, and removed from the laws applicable to acts of God.
WHEREFORE, for want of merit, the instant petition is hereby DISMISSED and the
Consolidated Decision of the Court of Appeals in CA-G.R. CV Nos. 27290-93 is AFFIRMED,
with costs against the petitioners.
SO ORDERED.

TORTS | Aug 5| 30
weight of the 60,000 board feet of lumber piled thereon, after such slight impact by the
steamer against the dock, might have caused said piles to lean toward that side.
We are of opinion that this finding is supported by the evidence. In this connection, it
is to be noted that the witness, Dionisio Pascua (for the plaintiff) testified that the 60,000
board feet occupied one-fourth of the wharf. In other words, by the testimony of the
plaintiff's witnesses it has been proved that the plaintiff company piled up on the wharf a
WALTER
A.
SMITH
&
CO.,
INC., plaintiff-appellant, quantity of timber which exceeded its capacity of resistance, because if the whole wharf
vs.
had a capacity of 100,000 board feet of timber, one-fourth of it could sustain one-fourth of
CADWALLADER GIBSON LUMBER COMPANY, defendant-appellee.
that amount, or, about 25,000 board feet of timber. But it appears that the plaintiff
company loaded 60,000 board feet, weighing over 100 tons, within a space capable of
Jose
Erquiaga
for
appellant. supporting only 25,000 board feet. This must have helped to bring about the collapse of
DeWitt, Perkins and Brady for appellee.
the wharf on the eastern side and the consequent sliding down of the timber piled up on
one side.
G.R. No. L-32640

December 29, 1930

VILLAMOR, J.:
On August 30, 1926, the steamer Helen C, belonging to the defendant, the
Cadwallader Gibson Lumber Co., under the command of Captain Miguel Lasal, in the
course of its maneuvers to moor at the plaintiff's wharf in the port of Olutanga,
Zamboanga, struck said wharf, partially demolishing it and throwing the timber piled
thereon into the water. Whereupon the plaintiff brought the instant action to recover of the
defendant the sum of P9,705.83 as damages for the partial demolition of the wharf and for
the loss of the timber piled thereon.
The defendant denied the plaintiff's causes of action, and in defense alleged that the
demolition of the wharf was due to the excessive weight of thousands of board feet of
timber piled upon it by the plaintiff to be loaded and shipped on the steamer Helen C and
to the bad condition of the piles supporting said wharf.

The court below did not make any definite finding as to the negligence of the captain,
but the plaintiff apparently infers that there was negligence on his part, considering the
testimony of its witness Venancio Ignacio to the effect that the impact of the ship with the
wharf was due to the excessive force with which the captain, ordered the winches to work.
This was denied by the captain, testifying for the defendant. If, to this denial, we add the
facts found by the trial court that said captain dropped two anchors from the prow and the
kedge-anchor from the poop, and besides, fastened two lines of cables to the piles
ordinarily used by vessels in docking at that wharf, as preliminary to drawing the vessel
alongside the wharf, it will be seen that said winches must have been carefully operated,
and if any force was employed in working them, it was doubtless due to the fact that the
vessel had already dropped anchor and could not move rapidly and the drawing of the
vessel up to the wharf was against the stream which flowed from east to west. We do not
believe that the mere statement of the witness Ignacio who has not been shown to
possess technical knowledge of the maneuvers for docking vessels, is sufficient to justify a
holding that the force employed by the winches on that occasion was excessive under the
circumstances of the case, especially so if the captain's testimony is to be considered, that
the winches were carefully operated.

In view of the evidence adduced by both parties, the trial court held that the
defendant was not liable for the partial collapse of the plaintiff's wharf, and for the loss of
The witnesses for the plaintiff state that the steamer Helen C struck the wharf twice,
the timber piled thereon, dismissing the complaint with costs against the plaintiff.
but the trial court, after examining the evidence, found said testimony to be exaggerated.
The judge who took cognizance of this cause held:

As has been stated, the plaintiff seeks to recover against the owner of the
steamer Helen C, with whom it had not contractual relations basing its action on the acts
of Captain Lasa who was in command of the vessel when docking at the plaintiff's wharf in
Olutanga, Zamboanga. In support of its contention, the plaintiff cites the doctrine laid
down in the case of Ohta Development Co. vs. Steamship Pompey (49 Phil., 117), wherein
it was held that the defendant company, as ship-owner, was liable for the indemnities
arising from the lack of skill or from negligence of the captain.

The evidence shows that said wharf was built in 1921 and repaired in 1925. The
repairs, according to the deposition of Wilson C. Smith, a witness for the plaintiff,
consisted in replacing 6 bents of piles leaving more than 9 old bents of piles without being
replaced. Therefore, the wharf of the plaintiff was old. The court is inclined to believe that
the steamer Helen C slightly struck the dock but not with force, for it was difficult for her
to strike it with force, as hereinbefore stated, and due to the bad condition of the dock the
slight impact was sufficient to destroy it. The bent of the piles toward the east side of the
In the case cited, the steamship Pompey, under the command of Captain Alfredo
dock, as may be seen from the pictures Exhibits E and F, after its destruction, does not Galvez, was carrying cargo consisting principally of flour and rice for the plaintiff. The ship
necessarily mean that the destruction of the wharf was caused by a strong impact, as the docked with her bow facing the land and fastened her cables to the posts on the pier. The
evidence shows that heretofore other ships docking alongside said pier had the bow facing

TORTS | Aug 5| 31
the land and fastened a cable to a tree situated farther west on the beach, a precaution
taken to avoid the ship getting too close to the pier. When the Pompey docked, at the time
in question, she did not fasten the cable to the tree on the shore, nor drop her kedgeanchors from the prow. After being docked, they proceeded to unload the flour and rice
which were first deposited on the pier and later transported to the plaintiff's warehouse on
land, where it was officially receipted for. The work of discharging and hauling the cargo to
the plaintiff's warehouse was accomplished without any intervention on the part of the
plaintiff and exclusively by laborers and the crew of the ship. The unloading of the cargo
on to the pier was hastily done and there being but fifteen or twenty laborers engaged in
hauling it to the plaintiff's warehouse, a large amount of cargo accumulated on the dock.
At 11:10 that morning, the pier sank with all the merchandise.
As may be noted, the facts in that case were different from those in the case in
question. In the former a contract of marine transportation existed between the plaintiff
and the defendant, whereas in the latter no previous contractual relation existed between
the parties. For this reason, the case of Ohta Development Co. was decided upon articles
587 and 618 of the Code of Commerce. But the instant case, dealing, as it does, with an
obligation arising from culpa aquiliana or negligence, must be decided in accordance with
articles 1902 and 1903 of the Civil Code.
Article 1902 of the Civil Code prescribes:

Finally, teachers or directors of arts and trades are liable for any damages caused by
their pupils or apprentices while they are under their custody.
The liability imposed by this article shall cease in case the persons subject thereto
prove that they exercised all the diligence of a good father of a family to prevent the
damaged.
In the case of Maryland Casualty Co. vs. Matson Nav. Co. (177 Cal., 610, 612), in an
action similar to the present, the court held:
. . . the plaintiff could only recover, if at all, upon a sufficient showing of negligence
on the part of the defendants in the handling of their ship, as a result of which the injury
complained of arose; and if the finding of the trial court, to the effect that there was no
negligence in respect to the matter complained of on the part of the defendants, is
sustained by sufficient evidence, there is an end to the plaintiff's case.
The same doctrine was upheld by the Supreme Court of Spain in its judgment of June
23, 1900, in deciding a case similar to the one at bar, where the plaintiff was a third
person without any contractual relation with the defendant before the acts were
committed which gave rise to the complaint. In that judgment, the court said:

. . . the action for damages caused by an act or omission arising from fault or
Any person who by an act or omission causes damage to another by his fault or
negligence,
requires an allegation of one or the other of said causes, which is the basis of
negligence shall be liable for the damage so done.
said action, according to articles 1089, 1093, 1902, and 1903 of the Civil Code; and such
proof must be made by the plaintiff in accordance with the general principle of evidence
And article 1903 of the said Code states:
regarding obligations as laid down in article 1214; and it is not sufficient merely to suggest
what at any rate cannot be admitted that from the mere existence of damage,
The obligation imposed by the next preceding article is enforcible, not only for liability must be presumed and that the defendant must rebut such a presumption.
personal acts and omissions, but also for those of persons for whom another is
responsible.
And Manresa, committing on article 1902 of the Civil Code, among other things, says
the following:
The father, or in case of his death, or incapacity, the mother, is liable for any
damages caused by the minor children who live with them.

Among the questions most frequently raised and upon which the majority of cases
have been decided with respect to the application of this liability, are those referring to the
Guardians are liable for damages done by minors or incapacitated persons subject to determination of the damage or prejudice, and to the fault or negligence of the person
their authority and living with them.
responsible therefor.
Owners or directors of any establishment or business are, in the same way, liable for
These are the two indispensable factors in the obligations under discussion, for
any damages caused by their employees while engaged in the branch of the service in without damage or prejudice there can be no liability, and although this element is present
which employed, or on occasion of the performance of their duties.
no indemnity ca be awarded unless arising from some person's fault or negligence.
The State is subject to the same liability when it acts through a special agent, but not
With respect to the determination of damages, it must be definite and the injury
if the damage shall have been caused by the official upon whom properly devolved the must not be occasioned by the performance of an obligation or by acts or omissions of the
duty of doing the act performed, in which case the provisions of the next preceding article injured party himself; and for the proof of the fault or negligence, mere suggestions or
shall be applicable.
inadmissible presumptions will not suffice, but such evidence must be adduced as to
exclude all doubt regarding their existence and relation to the injury, for, in order to give

TORTS | Aug 5| 32
rise to an obligation, there must be between the fault or negligence and the evil resulting
This distinction was clearly stated by this court in Bahia vs. Litonjua and Leynes (930
therefrom a casual relations. (12 Manresa, 601,602.).
Phil., 624), wherein the action was based on the defendant's extra-contractual liability for
damages occasioned by the carelessness of an employee of his, in the performance of his
In Cangco vs. Manila Railroad Co. (38 Phil., 768), this court held that article 1903 of duty as such. This court, after citing the last paragraph of article 1903 of the Civil Code,
the Civil Code is not applicable to obligations arising from contracts, but only to obligations held:
arising without any agreement; or, to employ technical language, that article refers only
to culpa aquiliana and not to culpa contractual.
Manresa (vol. VIII, page 67) in his commentaries on articles 1103 and 1104 of the
Civil Code clearly sets forth this distinction, which was also recognized by this court in the
case of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359). In commenting upon article
1093 (Vol. VIII, page 30) Manresa points out the difference between "culpa
substantive and independent, which, by itself, gives rise to an obligation between persons
not formerly bound by any other obligation" and culpa considered as an "incident in the
performance of an obligation which already existed. . . .

From this article two things are apparent: (1) That when an injury is caused by the
negligence of a servant or employee there instantly arises a presumption of law that there
was negligence on the part of the master or employer either in the selection of the servant
or employee, or in supervision over him after the selection, or both; and (2) that the
presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. it
follows necessarily that if the employer shows to the satisfaction of the court that in
selection and supervision he has exercised the care and diligence of a good father of a
family, the presumption is overcome and he is relieved from liability.lawphi1>net

This theory bases the responsibility of the master ultimately on his own negligence
and
not
on that of his servant. This is the notable peculiarity of the Spanish law of
In the Rakes case (supra), this court based its decision expressly on the principle
negligence. It is, of course, in striking contrast to the American doctrine that, in relations
that article 1903 of the Civil Code is not applicable to a culpa not arising from a contract.
with strangers, the negligence of the servant is conclusively the negligence of the master.
On this point the court said:
The acts to which these articles (1902 and 1903 of the Civil Code) are applicable are
understood to be those not growing out or preexisting duties of the parties to one another.
But where relations already formed give rise to duties, whether springing from contract or
quasi contract, then breaches of those duties are subject to articles 1101, 1103, and 1104
of the same Code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil., 359, 365.).
It is not true that proof of due diligence and care in the selection of and instructions
to a servant relieves the master of liability for the former's acts; on the contrary, such
proof shows that the liability never existed. As Manresa (vol. VIII, page 68) says, the
liability arising from an extra-contractual wrong is always based upon avoluntary act or
omission, which, while free from any wrongful intent, and due to mere negligence or
carelessness, causes damaged to another. A master who takes all possible precaution in
selecting his servants or employees, bearing in mind the qualifications necessary for the
performance of the duties to be entrusted to them, and instructs them with equal care,
complies with his duty to all third parties to whom he is not bound under contract, and
incurs no liability if, by reason of the negligence of such servants though it be during the
performance of their duties as such, third parties should suffer damages. It is true that
under article 1903 of the Civil Code, the law presumes that the master, if regarded as an
establishment, has been negligent in the selection of, or instruction to, its servants, but
that is a mere juris tantum presumption and is destroyed by the evidence of due care and
diligence in this respect.
The Supreme court of Porto Rico, construing identical provisions in the Civil Code of
Porto Rico, held that these articles are applicable only to cases of extra-contractual wrong.
(Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)

The opinion of this court is thus expressed, to the effect that in case of extracontractual wrong, some fault personally imputable to the defendant must exist, and that
the last paragraph of article 1903 only establishes a rebuttable presumption and is on all
fours with Manresa's authoritative opinion (Vol. XII, page 611), that the liability created by
article 1903 is enforced by reason of non-performance of duties inherent in the special
relations of authority or superiority existing between the person liable for the damage
done and the person who by his act or omission has caused it.
The defendant contends in its answer that the captain and all the officers of the
steamer Helen C were duly licensed and authorized to hold their respective positions at the
time when the wharf in question collapsed, and that said captain, officers, and all the
members of the crew of the steamer had been chosen for their reputed skill in directing
and navigating the steamer Helen C, safely, carefully, and efficiently. The evidence shows
that Captain Lasa at the time the plaintiff's wharf collapse was a duly licensed captain,
authorized to navigate and direct a vessel of any tonnage, and that the appellee
contracted his services because of his reputation as a captain, according to F. C.
Cadwallader. This being so, we are of opinion that the presumption of liability against the
defendant has been overcome by the exercise of the care and diligence of a good father of
a family in selecting Captain Lasa, in accordance with the doctrines laid down by this court
in the cases cited above, and the defendant is therefore absolved from all
liability.lawphi1>net
By virtue of the foregoing, the judgment appealed from must be as it is hereby,
affirmed, with costs against the appellant. So ordered.

TORTS | Aug 5| 33
aircraft who desires to stay in the neighborhood of the port of call for not more than 72
hours.
During their interview, the Japanese immigration official noted that Michael appeared
shorter than his height as indicated in his passport. Because of this inconsistency,
respondents were denied shore pass entries and were brought instead to the Narita Airport
Rest House where they were billeted overnight.
The immigration official also handed Mrs. Higuchi a Notice 5 where it was stated that
respondents were to be "watched so as not to escape".
Mr. Atsushi Takemoto of the International Service Center (ISC), the agency tasked by
Japans Immigration Department to handle passengers who were denied shore pass
entries, brought respondents to the Narita Airport Rest House where they stayed overnight
until their departure the following day for Los Angeles. Respondents were charged
US$400.00 each for their accommodation, security service and meals.
On December 12, 1992, respondents filed a complaint for damages 6 claiming that JAL
did not fully apprise them of their travel requirements and that they were rudely and
forcibly detained at Narita Airport.
JAL denied the allegations of respondents. It maintained that the refusal of the
Japanese immigration authorities to issue shore passes to respondents is an act of state
which JAL cannot interfere with or prevail upon. Consequently, it cannot impose upon the
immigration authorities that respondents be billeted at Hotel Nikko instead of the airport
resthouse.7
G.R. No. 161730

January 28, 2005

JAPAN
vs.
MICHAEL ASUNCION and JEANETTE ASUNCION, respondents.

On June 10, 1997, the trial court rendered its decision, the dispositive portion of
which
reads:
AIRLINES, petitioner,
WHEREFORE PREMISES CONSIDERED, judgment is hereby rendered in favor of
plaintiffs ordering defendant JAL to pay plaintiffs as follows:

DECISION
YNARES-SANTIAGO, J.:
This petition for review seeks to reverse and set aside the October 9, 2002
decision1 of the Court of Appeals and its January 12, 2004 resolution, 2 which affirmed
in toto the June 10, 1997 decision of the Regional Trial Court of Makati City, Branch 61 in
Civil Case No. 92-3635.3

1. the sum of US$800.00 representing the expenses incurred at the Narita Airport
with interest at 12% per annum from March 27, 1992 until the sum is fully paid;
2. the sum of P200,000.00 for each plaintiff as moral damages;
3. the amount of P100,000.00 for each plaintiff as exemplary damages;
4. the amount of P100,000.00 as attorneys fees; and

On March 27, 1992, respondents Michael and Jeanette Asuncion left Manila on board
Japan Airlines (JAL) Flight 742 bound for Los Angeles. Their itinerary included a stop-over
in Narita and an overnight stay at Hotel Nikko Narita. Upon arrival at Narita, Mrs. Noriko
Etou-Higuchi of JAL endorsed their applications for shore pass and directed them to the
Japanese immigration official.4 A shore pass is required of a foreigner aboard a vessel or

5. costs of suit.
SO ORDERED.8

TORTS | Aug 5| 34
The trial court dismissed JALs counterclaim for litigation expenses, exemplary
damages and attorneys fees.

Q Did you tell this provision to Mrs. Asuncion?

A Yes, Sir. I did.

On October 9, 2002, the Court of Appeals affirmed in toto the decision of the trial
court. Its motion for reconsideration having been denied, 9 JAL now files the instant
petition.
The basic issue for resolution is whether JAL is guilty of breach of contract.

Q Are you sure?

A Yes, Sir.

Q Did you give a copy?

Under Article 1755 of the Civil Code, a common carrier such as JAL is bound to carry
its passengers safely as far as human care and foresight can provide, using the utmost
A No, Sir, I did not give a copy but verbally I explained to her the procedure they
diligence of very cautious persons, with due regard for all the circumstances. When an
airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a have to undergo when they get to narita airport.
contract of carriage arises. The passenger has every right to expect that he be transported
on that flight and on that date and it becomes the carriers obligation to carry him and his
.
luggage safely to the agreed destination.10 If the passenger is not so transported or if in
the process of transporting he dies or is injured, the carrier may be held liable for a breach
Q And you read the contents of this [TIM]?
of contract of carriage.11
A No, Sir, I did not read it to her but I explained to her the procedure that each
We find that JAL did not breach its contract of carriage with respondents. It may be passenger has to go through before when they get to narita airport before they line up in
true that JAL has the duty to inspect whether its passengers have the necessary travel the immigration counter.
documents, however, such duty does not extend to checking the veracity of every entry in
these documents. JAL could not vouch for the authenticity of a passport and the
Q In other words, you told Mrs. Asuncion the responsibility of securing shore passes
correctness of the entries therein. The power to admit or not an alien into the country is a
sovereign act which cannot be interfered with even by JAL. This is not within the ambit of bears solely on the passengers only?
the contract of carriage entered into by JAL and herein respondents. As such, JAL should
not be faulted for the denial of respondents shore pass applications.
A Yes, Sir.
Prior to their departure, respondents were aware that upon arrival in Narita, they
Q That the airline has no responsibility whatsoever with regards (sic) to the
must secure shore pass entries for their overnight stay. Respondents mother, Mrs. Imelda application for shore passes?
Asuncion, insisted though that Ms. Linda Villavicencio of JAL assured her that her children
would be granted the passes. 12 This assertion was satisfactorily refuted by Ms.
A Yes, Sir.13
Villavicencios testimony during the cross examination, to wit:
Next, respondents claimed that petitioner breached its contract of carriage when it
failed to explain to the immigration authorities that they had overnight vouchers at the
Hotel Nikko Narita. They imputed that JAL did not exhaust all means to prevent the denial
Q I will show to you Exh. 9 which is the TIM and on page 184 hereof, particularly of their shore pass entry applications.
number 10, and I quote, "Those holding tickets with confirmed seats and other documents
for their onward journey and continuing their journey to a third country provided that they
To reiterate, JAL or any of its representatives have no authority to interfere with or
obtain an indorsement with an application of shore pass or transit pass from the airline influence the immigration authorities. The most that could be expected of JAL is to
ground personnel before clearing the immigration formality?"
endorse respondents applications, which Mrs. Higuchi did immediately upon their arrival in
ATTY. GONZAGA:

Narita.
WITNESS:
As Mrs. Higuchi stated during her deposition:
A Yes, Sir.
ATTY. QUIMBO

TORTS | Aug 5| 35
Q: Madam Witness, what assistance did you give, if any, to the plaintiffs during this
Moral damages may be recovered in cases where one willfully causes injury to
interview?
property, or in cases of breach of contract where the other party acts fraudulently or in
bad faith. Exemplary damages are imposed by way of example or correction for the public
good, when the party to a contract acts in wanton, fraudulent, oppressive or malevolent
A: No, I was not present during their interview. I cannot assist.
manner. Attorneys fees are allowed when exemplary damages are awarded and when the
party to a suit is compelled to incur expenses to protect his interest. 17 There being no
Q: Why not?
breach of contract nor proof that JAL acted in wanton, fraudulent or malevolent manner,
there is no basis for the award of any form of damages.
A: It is forbidden for a civilian personnel to interfere with the Immigration agents
duties.14
Neither should JAL be held liable to reimburse respondents the amount of
.

US$800.00. It has been sufficiently proven that the amount pertained to ISC, an agency
separate and distinct from JAL, in payment for the accommodations provided to
respondents. The payments did not in any manner accrue to the benefit of JAL.

Q: During the time that you were in that room and you were given this notice for you
to sign, did you tell the immigration agent that Michael and Jeanette Asuncion should be
However, we find that the Court of Appeals correctly dismissed JALs counterclaim for
allowed to stay at the Hotel Nikko Narita because, as passengers of JAL, and according to litigation expenses, exemplary damages and attorneys fees. The action was filed by
the plaintiff, they had vouchers to stay in that hotel that night?
respondents in utmost good faith and not manifestly frivolous. Respondents honestly
believed that JAL breached its contract. A persons right to litigate should not be penalized
by holding him liable for damages. This is especially true when the filing of the case is to
A: No, I couldnt do so.
enforce what he believes to be his rightful claim against another although found to be
erroneous.18
Q: Why not?
WHEREFORE, in view of the foregoing, the instant petition is PARTLY GRANTED. The
October 9, 2002 decision of the Court of Appeals and its January 12, 2004 resolution in
CA-G.R. CV No. 57440, are REVERSED and SET ASIDE insofar as the finding of breach on
the part of petitioner and the award of damages, attorneys fees and costs of the suit in
favor of respondents is concerned. Accordingly, there being no breach of contract on the
part of petitioner, the award of actual, moral and exemplary damages, as well as
Mrs. Higuchi did all she could to assist the respondents. Upon being notified of the attorneys fees and costs of the suit in favor of respondents Michael and Jeanette
denial of respondents applications, Mrs. Higuchi immediately made reservations for Asuncion, is DELETED for lack of basis. However, the dismissal for lack of merit of
respondents at the Narita Airport Rest House which is really more a hotel than a detention petitioners counterclaim for litigation expenses, exemplary damages and attorneys fees,
house as claimed by respondents.16
is SUSTAINED. No pronouncement as to costs.
A: This notice is evidence which shows the decision of immigration authorities. It
shows there that the immigration inspector also designated Room 304 of the Narita Airport
Resthouse as the place where the passengers were going to wait for their outbound
flight.1awphi1.nt I cannot interfere with that decision.15

More importantly, nowhere in respondent Michaels testimony did he state

categorically that Mrs. Higuchi or any other employee of JAL treated them rudely or
exhibited improper behavior throughout their stay. We therefore find JAL not remiss in its
obligations as a common carrier.1awphi1.nt

SO ORDERED.