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E.

CIVIL LIABILITY
G.R. No. L-24803 May 26, 1977
PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito Elcano,
deceased,plaintiffs-appellants,
vs.
REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of said
minor, defendants-appellees.

BARREDO, J .:
Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in Civil
Case No. Q-8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to dismiss of
defendants, the complaint of plaintiffs for recovery of damages from defendant Reginald Hill, a
minor, married at the time of the occurrence, and his father, the defendant Marvin Hill, with whom he
was living and getting subsistence, for the killing by Reginald of the son of the plaintiffs, named
Agapito Elcano, of which, when criminally prosecuted, the said accused was acquitted on the ground
that his act was not criminal, because of "lack of intent to kill, coupled with mistake."
Actually, the motion to dismiss based on the following grounds:
1. The present action is not only against but a violation of section 1, Rule 107, which
is now Rule III, of the Revised Rules of Court;
2. The action is barred by a prior judgment which is now final and or in res-
adjudicata;
3. The complaint had no cause of action against defendant Marvin Hill, because he
was relieved as guardian of the other defendant through emancipation by marriage.
(P. 23, Record [p. 4, Record on Appeal.])
was first denied by the trial court. It was only upon motion for reconsideration of the defendants of
such denial, reiterating the above grounds that the following order was issued:
Considering the motion for reconsideration filed by the defendants on January 14,
1965 and after thoroughly examining the arguments therein contained, the Court
finds the same to be meritorious and well-founded.
WHEREFORE, the Order of this Court on December 8, 1964 is hereby reconsidered
by ordering the dismissal of the above entitled case.
SO ORDERED.
Quezon City, Philippines, January 29, 1965. (p. 40, Record [p. 21, Record on
Appeal.)
Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our resolution
the following assignment of errors:
THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDING THE
CLAIM OF DEFENDANTS THAT -
I
THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATION OF
SECTION 1, RULE 107, NOW RULE 111, OF THE REVISED RULES OF COURT,
AND THAT SECTION 3(c) OF RULE 111, RULES OF COURT IS APPLICABLE;
II
THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINAL OR
RES-ADJUDICTA;
III
THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THE CIVIL
CODE, ARE INAPPLICABLE IN THE INSTANT CASE; and
IV
THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST DEFENDANT
MARVIN HILL BECAUSE HE WAS RELIEVED AS GUARDIAN OF THE OTHER
DEFENDANT THROUGH EMANCIPATION BY MARRIAGE. (page 4, Record.)
It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant- appellee
Reginald Hill was prosecuted criminally in Criminal Case No. 5102 of the Court of First Instance of
Quezon City. After due trial, he was acquitted on the ground that his act was not criminal because of
"lack of intent to kill, coupled with mistake." Parenthetically, none of the parties has favored Us with a
copy of the decision of acquittal, presumably because appellants do not dispute that such indeed
was the basis stated in the court's decision. And so, when appellants filed their complaint against
appellees Reginald and his father, Atty. Marvin Hill, on account of the death of their son, the
appellees filed the motion to dismiss above-referred to.
As We view the foregoing background of this case, the two decisive issues presented for Our
resolution are:
1. Is the present civil action for damages barred by the acquittal of Reginald in the criminal case
wherein the action for civil liability, was not reversed?
2. May Article 2180 (2nd and last paragraphs) of the Civil Code he applied against Atty. Hill,
notwithstanding the undisputed fact that at the time of the occurrence complained of. Reginald,
though a minor, living with and getting subsistenee from his father, was already legally married?
The first issue presents no more problem than the need for a reiteration and further clarification of
the dual character, criminal and civil, of fault or negligence as a source of obligation which was firmly
established in this jurisdiction in Barredo vs. Garcia, 73 Phil. 607. In that case, this Court postulated,
on the basis of a scholarly dissertation by Justice Bocobo on the nature of culpa aquiliana in relation
to culpa criminal or delito and mereculpa or fault, with pertinent citation of decisions of the Supreme
Court of Spain, the works of recognized civilians, and earlier jurisprudence of our own, that the same
given act can result in civil liability not only under the Penal Code but also under the Civil Code.
Thus, the opinion holds:
The, above case is pertinent because it shows that the same act machinist. come
under both the Penal Code and the Civil Code. In that case, the action of the agent
killeth unjustified and fraudulent and therefore could have been the subject of a
criminal action. And yet, it was held to be also a proper subject of a civil action under
article 1902 of the Civil Code. It is also to be noted that it was the employer and not
the employee who was being sued. (pp. 615-616, 73 Phil.).
1

It will be noticed that the defendant in the above case could have been prosecuted in
a criminal case because his negligence causing the death of the child was
punishable by the Penal Code. Here is therefore a clear instance of the same act of
negligence being a proper subject matter either of a criminal action with its
consequent civil liability arising from a crime or of an entirely separate and
independent civil action for fault or negligence under article 1902 of the Civil Code.
Thus, in this jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana,
under the Civil Code has been fully and clearly recognized, even with regard to a
negligent act for which the wrongdoer could have been prosecuted and convicted in
a criminal case and for which, after such a conviction, he could have been sued for
this civil liability arising from his crime. (p. 617, 73 Phil.)
2

It is most significant that in the case just cited, this Court specifically applied article 1902
of the Civil Code. It is thus that although J. V. House could have been criminally
prosecuted for reckless or simple negligence and not only punished but also made civilly
liable because of his criminal negligence, nevertheless this Court awarded damages in
an independent civil action for fault or negligence under article 1902 of the Civil Code. (p.
618, 73 Phil.)
3

The legal provisions, authors, and cases already invoked should ordinarily be
sufficient to dispose of this case. But inasmuch as we are announcing doctrines that
have been little understood, in the past, it might not he inappropriate to indicate their
foundations.
Firstly, the Revised Penal Code in articles 365 punishes not only reckless but also
simple negligence. If we were to hold that articles 1902 to 1910 of the Civil Code
refer only to fault or negligence not punished by law, accordingly to the literal import
of article 1093 of the Civil Code, the legal institution of culpa aquiliana would have
very little scope and application in actual life. Death or injury to persons and damage
to property- through any degree of negligence - even the slightest - would have to be
Idemnified only through the principle of civil liability arising from a crime. In such a
state of affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We are
loath to impute to the lawmaker any intention to bring about a situation so absurd and
anomalous. Nor are we, in the interpretation of the laws, disposed to uphold the letter
that killeth rather than the spirit that giveth life. We will not use the literal meaning of
the law to smother and render almost lifeless a principle of such ancient origin and
such full-grown development as culpa aquiliana or cuasi-delito, which is conserved
and made enduring in articles 1902 to 1910 of the Spanish Civil Code.
Secondary, to find the accused guilty in a criminal case, proof of guilt beyond
reasonable doubt is required, while in a civil case, preponderance of evidence is
sufficient to make the defendant pay in damages. There are numerous cases of
criminal negligence which can not be shown beyond reasonable doubt, but can be
proved by a preponderance of evidence. In such cases, the defendant can and
should be made responsible in a civil action under articles 1902 to 1910 of the Civil
Code. Otherwise. there would be many instances of unvindicated civil wrongs. "Ubi
jus Idemnified remedium." (p. 620,73 Phil.)
Fourthly, because of the broad sweep of the provisions of both the Penal Code and
the Civil Code on this subject, which has given rise to the overlapping or concurrence
of spheres already discussed, and for lack of understanding of the character and
efficacy of the action for culpa aquiliana, there has grown up a common practice to
seek damages only by virtue of the civil responsibility arising from a crime, forgetting
that there is another remedy, which is by invoking articles 1902-1910 of the Civil
Code. Although this habitual method is allowed by, our laws, it has nevertheless
rendered practically useless and nugatory the more expeditious and effective remedy
based on culpa aquiliana or culpa extra-contractual. In the present case, we are
asked to help perpetuate this usual course. But we believe it is high time we pointed
out to the harms done by such practice and to restore the principle of responsibility
for fault or negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is
high time we caused the stream of quasi-delict or culpa aquiliana to flow on its own
natural channel, so that its waters may no longer be diverted into that of a crime
under the Penal Code. This will, it is believed, make for the better safeguarding or
private rights because it realtor, an ancient and additional remedy, and for the further
reason that an independent civil action, not depending on the issues, limitations and
results of a criminal prosecution, and entirely directed by the party wronged or his
counsel, is more likely to secure adequate and efficacious redress. (p. 621, 73 Phil.)
Contrary to an immediate impression one might get upon a reading of the foregoing excerpts from
the opinion in Garcia that the concurrence of the Penal Code and the Civil Code therein referred to
contemplate only acts of negligence and not intentional voluntary acts - deeper reflection would
reveal that the thrust of the pronouncements therein is not so limited, but that in fact it actually
extends to fault or culpa. This can be seen in the reference made therein to the Sentence of the
Supreme Court of Spain of February 14, 1919, supra, which involved a case of fraud or estafa, not a
negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force here at the time of Garcia,
provided textually that obligations "which are derived from acts or omissions in which fault or
negligence, not punishable by law, intervene shall be the subject of Chapter II, Title XV of this book
(which refers to quasi-delicts.)" And it is precisely the underline qualification, "not punishable by law",
that Justice Bocobo emphasized could lead to an ultimo construction or interpretation of the letter of
the law that "killeth, rather than the spirit that giveth lift- hence, the ruling that "(W)e will not use the
literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and
such full-grown development as culpa aquiliana orquasi-delito, which is conserved and made
enduring in articles 1902 to 1910 of the Spanish Civil Code." And so, because Justice Bacobo was
Chairman of the Code Commission that drafted the original text of the new Civil Code, it is to be
noted that the said Code, which was enacted after the Garcia doctrine, no longer uses the term, 11
not punishable by law," thereby making it clear that the concept of culpa aquiliana includes acts
which are criminal in character or in violation of the penal law, whether voluntary or matter. Thus, the
corresponding provisions to said Article 1093 in the new code, which is Article 1162, simply says,
"Obligations derived from quasi-delicto shall be governed by the provisions of Chapter 2, Title XVII of
this Book, (on quasi-delicts) and by special laws." More precisely, a new provision, Article 2177 of
the new code provides:
ART. 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence under the
Penal Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant.
According to the Code Commission: "The foregoing provision (Article 2177) through at first sight
startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil
negligence. The former is a violation of the criminal law, while the latter is a "culpa aquiliana" or
quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from
criminal negligence. Such distinction between criminal negligence and "culpa extracontractual" or
"cuasi-delito" has been sustained by decision of the Supreme Court of Spain and maintained as
clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the
proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable
doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal
negligence, but for damages due to a quasi-delict or 'culpa aquiliana'. But said article forestalls a
double recovery.", (Report of the Code) Commission, p. 162.)
Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same
argument of Justice Bacobo about construction that upholds "the spirit that giveth lift- rather than that
which is literal that killeth the intent of the lawmaker should be observed in applying the same. And
considering that the preliminary chapter on human relations of the new Civil Code definitely
establishes the separability and independence of liability in a civil action for acts criminal in character
(under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100 of the
Revised Penal Code, and, in a sense, the Rules of Court, under Sections 2 and 3 (c), Rule 111,
contemplate also the same separability, it is "more congruent with the spirit of law, equity and justice,
and more in harmony with modern progress"- to borrow the felicitous relevant language in Rakes vs.
Atlantic. Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where it refers to
"fault or negligencia covers not only acts "not punishable by law" but also acts criminal in character,
whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the
offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted,
provided that the offended party is not allowed, if he is actually charged also criminally, to recover
damages on both scores, and would be entitled in such eventuality only to the bigger award of the
two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability
referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100
of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-
delict only and not as a crime is not estinguished even by a declaration in the criminal case that the
criminal act charged has not happened or has not been committed by the accused. Briefly stated,
We here hold, in reiteration of Garcia, thatculpa aquiliana includes voluntary and negligent acts
which may be punishable by law.
4

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

G.R. No. 74761 November 6, 1990
NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (First Civil Cases Division) and MISSIONARIES OF OUR
LADY OF LA SALETTE, INC., respondents.

FERNAN, C.J .:
The pivotal issue in this petition for certiorari, prohibition and mandamus is whether a corporation,
which has built through its agents, waterpaths, water conductors and contrivances within its land,
thereby causing inundation and damage to an adjacent land, can be held civilly liable for damages
under Articles 2176 and 2177 of the Civil Code on quasi-delicts such that the resulting civil case can
proceed independently of the criminal case.
The antecedent facts are as follows:
Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in
Biga (Biluso) Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady
of La Salette, Inc., a religious corporation.
Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake,
were constructed, which allegedly inundated and eroded petitioners' land, caused a young man to
drown, damaged petitioners' crops and plants, washed away costly fences, endangered the lives of
petitioners and their laborers during rainy and stormy seasons, and exposed plants and other
improvements to destruction.
In July 1982, petitioners instituted a criminal action, docketed as Criminal Case No. TG-907-82,
before the Regional Trial Court of Cavite, Branch 4 (Tagaytay City), against Efren Musngi, Orlando
Sapuay and Rutillo Mallillin, officers and directors of herein respondent corporation, for destruction
by means of inundation under Article 324 of the Revised Penal Code.
Subsequently, on February 22, 1983, petitioners filed another action against respondent corporation,
this time a civil case, docketed as Civil Case No. TG-748, for damages with prayer for the issuance
of a writ of preliminary injunction before the same court.
1

On March 11, 1983, respondent corporation filed its answer to the complaint and opposition to the
issuance of a writ of preliminary injunction. Hearings were conducted including ocular inspections on
the land. However, on April 26, 1984, the trial court, acting on respondent corporation's motion to
dismiss or suspend the civil action, issued an order suspending further hearings in Civil Case No,
TG-748 until after judgment in the related Criminal Case No. TG-907-82.
Resolving respondent corporation's motion to dismiss filed on June 22, 1984, the trial court issued
on August 27, 1984 the disputed order dismissing Civil Case No. TG-748 for lack of jurisdiction, as
the criminal case which was instituted ahead of the civil case was still unresolved. Said order was
anchored on the provision of Section 3 (a), Rule III of the Rules of Court which provides that
"criminal and civil actions arising from the same offense may be instituted separately, but after the
criminal action has been commenced the civil action cannot be instituted until final judgment has
been rendered in the criminal action."
2

Petitioners appealed from that order to the Intermediate Appellate Court.
3

On February 17, 1986, respondent Appellate Court, First Civil Cases Division, promulgated a
decision
4
affirming the questioned order of the trial court.
5
A motion for reconsideration filed by
petitioners was denied by the Appellate Court in its resolution dated May 19, 1986.
6

Directly at issue is the propriety of the dismissal of Civil Case No. TG-748 in accordance with
Section 3 (a) of Rule 111 of the Rules of Court. Petitioners contend that the trial court and the
Appellate Court erred in dismissing Civil Case No. TG-748 since it is predicated on a quasi-delict.
Petitioners have raised a valid point.
It is axiomatic that the nature of an action filed in court is determined by the facts alleged in the
complaint as constituting the cause of action.
7
The purpose of an action or suit and the law to govern it,
including the period of prescription, is to be determined not by the claim of the party filing the action,
made in his argument or brief, but rather by the complaint itself, its allegations and prayer for relief.
8
The
nature of an action is not necessarily determined or controlled by its title or heading but the body of the
pleading or complaint itself. To avoid possible denial of substantial justice due to legal technicalities,
pleadings as well as remedial laws should be liberally construed so that the litigants may have ample
opportunity to prove their respective claims.
9

Quoted hereunder are the pertinent portions of petitioners' complaint in Civil Case No. TG-748:
4) That within defendant's land, likewise located at Biga (Biluso), Silang, Cavite,
adjacent on the right side of the aforesaid land of plaintiffs, defendant constructed
waterpaths starting from the middle-right portion thereof leading to a big hole or
opening, also constructed by defendant, thru the lower portion of its concrete hollow-
blocks fence situated on the right side of its cemented gate fronting the provincial
highway, and connected by defendant to a man height inter-connected cement
culverts which were also constructed and lain by defendant cross-wise beneath the
tip of the said cemented gate, the left-end of the said inter-connected culverts again
connected by defendant to a big hole or opening thru the lower portion of the same
concrete hollowblocks fence on the left side of the said cemented gate, which hole or
opening is likewise connected by defendant to the cemented mouth of a big canal,
also constructed by defendant, which runs northward towards a big hole or opening
which was also built by defendant thru the lower portion of its concrete hollow-blocks
fence which separates the land of plaintiffs from that of defendant (and which serves
as the exit-point of the floodwater coming from the land of defendant, and at the
same time, the entrance-point of the same floodwater to the land of plaintiffs, year
after year, during rainy or stormy seasons.
5) That moreover, on the middle-left portion of its land just beside the land of
plaintiffs, defendant also constructed an artificial lake, the base of which is soil, which
utilizes the water being channeled thereto from its water system thru inter-connected
galvanized iron pipes (No. 2) and complimented by rain water during rainy or stormy
seasons, so much so that the water below it seeps into, and the excess water above
it inundates, portions of the adjoining land of plaintiffs.
6) That as a result of the inundation brought about by defendant's aforementioned
water conductors, contrivances and manipulators, a young man was drowned to
death, while herein plaintiffs suffered and will continue to suffer, as follows:
a) Portions of the land of plaintiffs were eroded and converted to
deep, wide and long canals, such that the same can no longer be
planted to any crop or plant.
b) Costly fences constructed by plaintiffs were, on several occasions,
washed away.
c) During rainy and stormy seasons the lives of plaintiffs and their
laborers are always in danger.
d) Plants and other improvements on other portions of the land of
plaintiffs are exposed to destruction. ...
10

A careful examination of the aforequoted complaint shows that the civil action is one under Articles
2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to
wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other
person for whose acts he must respond; and (c) the connection of cause and effect between the
fault or negligence of the defendant and the damages incurred by the plaintiff.
11

Clearly, from petitioner's complaint, the waterpaths and contrivances built by respondent corporation
are alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal
connection between the act of building these waterpaths and the damage sustained by petitioners.
Such action if proven constitutes fault or negligence which may be the basis for the recovery of
damages.
In the case of Samson vs. Dionisio,
12
the Court applied Article 1902, now Article 2176 of the Civil Code
and held that "any person who without due authority constructs a bank or dike, stopping the flow or
communication between a creek or a lake and a river, thereby causing loss and damages to a third party
who, like the rest of the residents, is entitled to the use and enjoyment of the stream or lake, shall be
liable to the payment of an indemnity for loss and damages to the injured party.
While the property involved in the cited case belonged to the public domain and the property subject
of the instant case is privately owned, the fact remains that petitioners' complaint sufficiently alleges
that petitioners have sustained and will continue to sustain damage due to the waterpaths and
contrivances built by respondent corporation. Indeed, the recitals of the complaint, the alleged
presence of damage to the petitioners, the act or omission of respondent corporation supposedly
constituting fault or negligence, and the causal connection between the act and the damage, with no
pre-existing contractual obligation between the parties make a clear case of a quasi delict or culpa
aquiliana.
It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil
Code provides that "the owner of a thing cannot make use thereof in such a manner as to injure the
rights of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining
landowners have mutual and reciprocal duties which require that each must use his own land in a
reasonable manner so as not to infringe upon the rights and interests of others. Although we
recognize the right of an owner to build structures on his land, such structures must be so
constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining
landowners and can withstand the usual and expected forces of nature. If the structures cause injury
or damage to an adjoining landowner or a third person, the latter can claim indemnification for the
injury or damage suffered.
Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or
omission constituting fault or negligence, thus:
Article 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or negligence,
if there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this chapter.
Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by law"
but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a
separate civil action lies against the offender in a criminal act, whether or not he is criminally
prosecuted and found guilty or acquitted, provided that the offended party is not allowed, (if the
tortfeasor is actually charged also criminally), to recover damages on both scores, and would be
entitled in such eventuality only to the bigger award of the two, assuming the awards made in the
two cases vary.
13

The distinctness of quasi-delicta is shown in Article 2177 of the Civil Code, which states:
Article 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence under the
Penal Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant.
According to the Report of the Code Commission "the foregoing provision though at first sight
startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil
negligence. The former is a violation of the criminal law, while the latter is a distinct and independent
negligence, which is a "culpa aquiliana" or quasi-delict, of ancient origin, having always had its own
foundation and individuality, separate from criminal negligence. Such distinction between criminal
negligence and "culpa extra-contractual" or "cuasi-delito" has been sustained by decisions of the
Supreme Court of Spain ...
14

In the case of Castillo vs. Court of Appeals,
15
this Court held that a quasi-delict or culpa aquiliana is a
separate legal institution under the Civil Code with a substantivity all its own, and individuality that is
entirely apart and independent from a delict or crime a distinction exists between the civil liability
arising from a crime and the responsibility for quasi-delicts or culpa extra-contractual. The same
negligence causing damages may produce civil liability arising from a crime under the Penal Code, or
create an action for quasi-delicts or culpa extra-contractual under the Civil Code. Therefore, the acquittal
or conviction in the criminal case is entirely irrelevant in the civil case, unless, of course, in the event of an
acquittal where the court has declared that the fact from which the civil action arose did not exist, in which
case the extinction of the criminal liability would carry with it the extinction of the civil liability.
In Azucena vs. Potenciano,
16
the Court declared that in quasi-delicts, "(t)he civil action is entirely
independent of the criminal case according to Articles 33 and 2177 of the Civil Code. There can be no
logical conclusion than this, for to subordinate the civil action contemplated in the said articles to the
result of the criminal prosecution whether it be conviction or acquittal would render meaningless the
independent character of the civil action and the clear injunction in Article 31, that his action may proceed
independently of the criminal proceedings and regardless of the result of the latter."
WHEREFORE, the assailed decision dated February 17, 1986 of the then Intermediate Appellate
Court affirming the order of dismissal of the Regional Trial Court of Cavite, Branch 18 (Tagaytay
City) dated August 17, 1984 is hereby REVERSED and SET ASIDE. The trial court is ordered to
reinstate Civil Case No. TG-748 entitled "Natividad V. Andamo and Emmanuel R. Andamo vs.
Missionaries of Our Lady of La Salette Inc." and to proceed with the hearing of the case with
dispatch. This decision is immediately executory. Costs against respondent corporation.
SO ORDERED.
G.R. No. 108395 March 7, 1997
HEIRS OF THE LATE TEODORO GUARING, JR., petitioners,
vs.
COURT OF APPEALS, PHILIPPINE RABBIT BUS LINES, INC., and ANGELES
CUEVAS, respondents.
This is a petition for review of the decision of the Court of Appeals, reversing the decision of the
Regional Trial Court of Manila, Branch 20, which ordered respondent Philippine Rabbit Bus Lines,
Inc. and its driver, Angeles Cuevas, to pay various amounts in damages to petitioners, the heirs of
the late Teodoro Guaring, Jr.
This case arose from an unfortunate vehicular accident which happened on November 7, 1987,
along the North Expressway in San Rafael, Mexico, Pampanga. Involved in the accident were a
Mitsubishi Lancer car driven by Teodoro Guaring, Jr., who died as a result of the mishap, Philippine
Rabbit Bus No. 415, driven by Angeles Cuevas, and a Toyota Cressida car, driven by Eligio
Enriquez. The Mitsubishi Lancer was heading north, at the speed of 80 to 90 kilometers per hour.
Following it was the Philippine Rabbit Bus No. 415, with Plate No. CVD-584. On the other hand, the
Toyota Cressida was cruising on the opposite lane, bound for Manila.
Petitioners, heirs of Teodoro Guaring, Jr., brought this action for damages, based on quasi delict, in
the Regional Trial Court of Manila. Their evidence tended to show that the Rabbit bus tried to
overtake Guaring's car by passing on the right shoulder of the road and that in so doing it hit the right
rear portion of Guaring's Mitsubishi Lancer. The impact caused the Lancer to swerve to the south-
bound lane, as a result of which it collided with the Toyota Cressida car coming from the opposite
direction.
With Teodoro Guaring, Jr. in the Lancer, seated beside him in front, was Bonifacio Clemente. Riding
in the Toyota Cressida driven by Sgt. Eligio Enriquez was his mother, Dolores Enriquez, who was
seated beside him. Seated at the back were his daughter Katherine (who was directly behind him),
his wife Lilian, and his nephew Felix Candelaria.
Killed in the collision were Teodoro Guaring, Jr., who was driving the Lancer, and Dolores Enriquez,
who was riding in the Cressida, while injured were Bonifacio Clemente and the occupants of the
Toyota Cressida.
Private respondents, on the other hand, presented evidence tending to show that the accident was
due to the negligence of the deceased Guaring. They claimed that it was Guaring who tried to
overtake the vehicle ahead of him on the highway and that in doing so he encroached on the south-
bound lane and collided with the oncoming Cressida of U.S. Air Force Sgt. Enriquez. Private
respondents claim that as a result of the collision the Lancer was thrown back to its lane where it
crashed into the Rabbit bus.
On May 16, 1990, the Regional Trial Court rendered judgment finding Philippine Rabbit Bus Lines,
Inc. and its driver, Angeles Cuevas, at fault, and holding them solidarily liable for damages to
petitioners. The dispositive portion of its decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendants, ordering the latter to pay the former, jointly and severally, the sum of:
1. P500,000.00 for loss of earning capacity of the deceased Teodoro Guaring, Jr.;
2. P1,000,000.00 as moral damages;
3. P50,000.00 as and for attorney's fees; and
4. Costs of suit.
From this judgment, private respondent Philippine Rabbit Bus Lines, Inc. appealed,
contending:
1. The lower court erred in not finding that the proximate cause of the collision was
Guaring's negligence in attempting to overtake the car in front of him.
2. The lower court erred in not holding that PRBL exercised due diligence in the
supervision of its employees.
3. The lower court erred in awarding the amount of P500,000.00 in favor of plaintiffs-
appellees representing Guaring's loss of earning capacity.
4. The lower court erred in awarding moral damages in favor of plaintiffs-appellees.
5. The lower court erred in awarding attorney's fees in favor of plaintiffs-appellees.
On December 16, 1992, the Court of Appeals rendered a decision, setting aside the decision of the
Regional Trial Court of Manila in the civil action for damages and dismissing the complaint against
private respondents Philippine Rabbit Bus Lines, Inc. and Cuevas, on the strength of a decision
rendered by the Regional Trial Court at San Fernando, Pampanga, in the criminal case, acquitting
the bus driver Angeles Cuevas of reckless imprudence resulting in damage to property and double
homicide. The appellate court held that since the basis of petitioners' action was the alleged
negligence of the bus driver, the latter's acquittal in the criminal case rendered the civil case based
on quasi delict untenable.
Hence, this petition. Petitioners contend that
[1] EVIDENCE IN ONE CASE IS INADMISSIBLE IN ANOTHER CASE AGAINST A
PERSON NOT A PARTY IN THE FIRST CASE AND TO HOLD OTHERWISE IS
VIOLATIVE OF PROCEDURAL DUE PROCESS.
[2] THE DECISION OF THE COURT OF APPEALS WAS WITHOUT FACTUAL
FINDINGS AND DID NOT RESOLVE SQUARELY THE ASSIGNED ERRORS AND
IS THEREFORE A VOID JUDGMENT.
[3] ACQUITTAL OF THE ACCUSED IN THE CRIMINAL CASE, WHETHER ON
REASONABLE DOUBT OR NOT, IS NO BAR TO THE PROSECUTION FOR
DAMAGES BASED ON QUASI-DELICT.
The question is whether the judgment in the criminal case extinguished the liability of private
respondent Philippine Rabbit Bus Lines, Inc. and its driver, Angeles Cuevas, for damages for the
death of Teodoro Guaring, Jr. In absolving private respondents from liability, the Court of Appeals
reasoned:
1

Since the appellee's civil action is predicated upon the negligence of the accused
which does not exist as found by the trial court in the said criminal case, it
necessarily follows that the acquittal of the accused in the criminal case carries with it
the extinction of the civil responsibility arising therefrom. Otherwise stated, the fact
from which the civil action might arise, that is, the negligence of the accused, did not
exist.
The finding in the criminal case that accused Cuevas was not negligent and the
proximate cause of the accident was the act of deceased Guaring in overtaking
another vehicle ahead of him likewise exonerates PRB from any civil liability.
Although it did not say so expressly, the appellate court appears to have based its ruling on Rule
111, 2(b) of the Rules of Criminal Procedure, which provides:
(b) Extinction of the penal action does not carry with it extinction of the civil, unless
the extinction proceeds from a declaration in a final judgment that the fact from which
the civil might arise did not exist.
This provision contemplates, however, a civil action arising from crime, whereas the present action
was instituted pursuant to Art. 2176 of the Civil Code, which provides:
Art. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.
It is now settled that acquittal of the accused, even if based on a finding that he is not guilty, does
not carry with it the extinction of the civil liability based on quasi delict. Thus, in Tayag
v. Alcantara,
2
it was held:
. . . a separate civil action lies against the offender in a criminal act, whether or not
he is criminally prosecuted and found guilty or acquitted, provided that the offended
party is not allowed, if he is actually charged also criminally, to recover damages on
both scores, and would be entitled in such eventuality only to the bigger award of the
two, assuming the awards made in the two cases vary. In other words, the extinction
of civil liability referred to in Par. (c), Section 3, Rule 111 [now Rule 111, 2(b)],
refers exclusively to civil liability founded on Article 100 of the Revised Penal Code,
whereas the civil liability for the same act considered as a quasi-delict only and not
as a crime is not extinguished even by a declaration in the criminal case that the
criminal act charged has not happened or has not been committed by the accused. .
. .
It is noteworthy that the accident in that case also involved a Philippine Rabbit bus and that, as in
this case, the acquittal of the bus driver was based on reasonable doubt. We held that the civil case
for damages was not barred since the cause of action of the heirs was based on quasi delict.
Again, in Gula v. Dianala it was held:
3

Since the cause of action of plaintiffs-appellants is based on culpa aquiliana and
not culpa criminal, thus precluding the application of the exception in Sec. 3(c) of
Rule 111 [now Rule 111, 2(b)], and the fact that it can be inferred from the criminal
case that defendant-accused, Pedro Dianala, was acquitted on reasonable doubt
because of dearth of evidence and lack of veracity of the two principal witnesses, the
doctrine in Mendoza vs. Arrieta, 91 SCRA 113, will not find application. In that case,
the acquittal was not based on reasonable doubt and the cause of action was based
on culpa criminal, for which reason we held the suit for damages barred.
Even if damages are sought on the basis of crime and not quasi delict, the acquittal of the bus driver
will not bar recovery of damages because the acquittal was based not on a finding that he was not
guilty but only on reasonable doubt. Thus, it has been held:
4

The judgment of acquittal extinguishes the liability of the accused for damages only
when it includes a declaration that the facts from which the civil might arise did not
exist. Thus, the civil liability is not extinguished by acquittal where the acquittal is
based on reasonable doubt (PNB v. Catipon, 98 Phil. 286) as only preponderance of
evidence is required in civil cases; where the court expressly declares that the
liability of the accused is not criminal but only civil in nature (De Guzman v. Alvia, 96
Phil. 558; People v. Pantig, supra) as, for instance, in the felonies of estafa, theft,
and malicious mischief committed by certain relatives who thereby incur only civil
liability (See Art. 332, Revised Penal Code); and, where the civil liability does not
arise from or is not based upon the criminal act of which the accused was acquitted
(Castro v. Collector of Internal Revenue, 4 SCRA 1093; See Regalado, Remedial
Law Compendium, 1983 ed., p. 623).
In the present case, the dispositive portion of the decision of the RTC in the criminal case
reads:
WHEREFORE, the Court, entertaining reasonable doubt as to his guilt, the accused
is hereby acquitted, of the offense of reckless imprudence resulting to double
homicide and damage to property as charged in the Information, without
pronouncement as to costs.
SO ORDERED.
5

It was thus error for the appellate court to skip the review of the evidence in this case and instead
base its decision on the findings of the trial court in the criminal case. In so doing, the appellate court
disregarded the fact that this case had been instituted independently of the criminal case and that
petitioners herein took no part in the criminal prosecution. In fact this action was filed below before
the prosecution presented evidence in the criminal action. The attention of the Court of Appeals was
called to the decision in the criminal case, which was decided on September 7, 1990, only when the
decision of the trial court in this case was already pending review before it (the Court of Appeals).
The appellate court did not even have before it the evidence in the criminal case. What it did was
simply to cite findings contained in the decision of the criminal court. Worse, what the criminal court
considered was reasonable doubt concerning the liability of the bus driver the appellate court
regarded as a categorical finding that the driver was not negligent and, on that basis, declared in this
case that "the proximate cause of the accident was the act of deceased Guaring in overtaking
another vehicle ahead of him." The notion that an action for quasi delict is separate and distinct from
the criminal action was thus set aside.
This case must be decided on the basis of the evidence in the civil case. This is important because
the criminal court appears to have based its decision, acquitting the bus driver on the ground of
reasonable doubt, solely on what it perceived to be the relative capacity for observation of the
prosecution and defense witnesses.
6
The prosecution did not call Bonifacio Clemente to testify despite
the fact that shortly after the accident he gave a statement to the police, pinning the blame for the
accident on the Philippine Rabbit bus driver. Indeed, the civil case involved a different set of witnesses.
Petitioners presented Eligio Enriquez who was driving the Cressida, and Bonifacio Clemente, who was a
passenger in Guaring's car. Thus, both had full view of the accident
It is unfair to bind petitioners to the result of the criminal action when the fact is that they did not take
part therein. That the witnesses presented on behalf of the petitioners are different from those
presented by the prosecution should have brought home to the appellate court the fundamental
unfairness of considering the decision in the criminal case conclusive of the civil case.
Because the Court of Appeals did not consider the evidence in the civil case, this case should be
remanded to it so that it may render another decision in accordance with the law and the evidence.
The issues raised by the petitioners are essentially factual and require the evaluation of evidence,
which is the function of the Court of Appeals in the exercise of its exclusive appellate jurisdiction.
They cannot be decided in this Court.
WHEREFORE, the decision of the Court of Appeals is REVERSED and this case is REMANDED to
the Court of Appeals with instruction to render judgment with reasonable dispatch in accordance with
law and the evidence presented in Civil Case No. 88-43860.
SO ORDERED.

G.R. No. 113433 March 17, 2000
LUISITO P. BASILIO, petitioner,
vs.
THE COURT OF APPEALS, HON. JESUS G. BERSAMIRA, and FE ADVINCULA, respondents.
This is a petition for review
1
under Rule 45 of the Revised Rules of Court which seeks to annul and
set aside the Decision
2
and Resolution
3
of the Court of Appeals dated October 27, 1992 and
January 5, 1994, respectively. The decision sustained the Order dated April 7, 1992 of the Regional
Trial Court of Pasig City, Branch 166, denying due course to petitioner's appeal from the Judgment
in Criminal Case No. 70278 and allowing execution against the petitioner of the subsidiary indemnity
arising from the offense committed by his truck driver.
The relevant facts as gleaned from the records are as follows:
On July 23, 1987, Simplicio Pronebo was charged by the Provincial Fiscal of Rizal with the crime of
reckless imprudence resulting in damage to property with double homicide and double physical
injuries.
4
The case was docketed as Criminal Case No. 70278.
The information against him reads:
The undersigned Assistant Fiscal accused Simplicio Pronebo y Cruz of the crime of
Reckless Imprudence Resulting in Damage to Property with Double Homicide and Double
Physical Injuries, committed as follows:
That on or about the 15th day of July, 1987 in the municipality of Marikina, Metro Manila,
Philippines and within the jurisdiction of this Honorable Court, the said accused, being then
the driver and person in charge of a dump truck with plate no. NMW-609 owned and
registered in the name of Luisito Basilio, without due regard to traffic laws, rules and
regulations and without taking the necessary care and precaution to prevent damage to
property and avoid injuries to persons, did then and there willfully, unlawfully and feloniously
drive, manage and operate said dump truck in a careless, reckless, negligent and imprudent
manner as a result of which said dump truck being then driven by him hit/bumped and
sideswiped the following vehicles, to wit: a) a motorized tricycle with plate no. NF-2457
driven by Benedicto Abuel thereby causing damage in the amount of P1,100.00; b) an
automobile Toyota Corona with plate no. NAL 138 driven by Virgilio Hipolito thereby
causing damage in the amount of P2,190.50 c) a motorized tricycle with plate no. NW-9018
driven by Ricardo Sese y Julian thereby causing damage of an undetermined amount d) an
automobile Mitsubishi Lancer with plate no. PHE-283 driven by Angelito Carranto thereby
causing damage of an undetermined amount and 3) a Ford Econo Van with plate no. NFR-
898 driven by Ernesto Aseron thereby causing damage of an undetermined amount; that due
to the strong impact caused by the collision, the driver Ricardo Sese y Julian and his 3
passengers including Danilo Advincula y Poblete were hit/bumped which directly caused
their death; while the other 2 passengers, namely; Cirilo Bangot sustained serious physical
injuries which required medical attendance for a period of more than 30 days which
incapacitated him from performing his customary labor for the same period of time and
Dominador Legaspi Jr. sustained physical injuries which required medical attendance for a
period of less than nine days and incapacitated him from performing his customary labor for
the same period of time.
Contrary to law.
After arraignment and trial, the court rendered its judgment dated February 4, 1991, which reads:
WHEREFORE, the court finds accused Simplicio Pronebo y Cruz guilty beyond reasonable
doubt of Reckless Imprudence resulting in the death of Danilo Advincula and is hereby
sentenced to suffer the indeterminate penalty of two (2) years and four (4) months, as
minimum to six (6) years of prision correccional, as maximum, and to indemnify the heirs of
Danilo Advincula P30,000.00 for the latter's death, P31,614.00, as actual and compensatory
damages. P2,000,000.00 for the loss of his earning capacity. P150,000.00, as moral
damages, and P30,000.00 as attorney's fees, plus the costs of suit.
5

Thereafter, the accused filed an application for probation, so that the above judgment became final
and executory.
Pertinently, the trial court also found that at the time of the vehicular accident accused Simplicio
Pronebo was employed as the driver of the dump truck owned by petitioner Luisito Basilio.
On March 27, 1991, petitioner Luisito Basilio filed with the trial court a "Special Appearance and
Motion for Reconsideration"
6
praying that the judgment dated February 4, 1991, be reconsidered
and set aside insofar as it affected him and subjected him to a subsidiary liability for the civil aspect
of the criminal case. The motion was denied for lack of merit on September 16, 1991 .
7
Petitioner
filed a Notice of Appeal
8
on September 25, 1991.
On September 23, 1991, private respondent filed a Motion for Execution of the subsidiary civil
liability
9
of petitioner Basilio.
On April 7, 1992, the trial court issued two separate Orders. One denied due course and dismissed
Basilio's appeal for having been filed beyond the reglementary period.
10
The other directed the
issuance of a writ of execution against him for the enforcement and satisfaction of the award of civil
indemnity decreed in judgment on February 4, 1991.
11

Aggrieved, petitioner filed a petition for certiorari
12
under Rule 65 of the Revised Rules of Court with
the Court of Appeals, alleging that respondent judge acted without jurisdiction or with grave abuse of
discretion in issuing: (1) the Order dated September 16, 1991, denying the petitioner's motion for
reconsideration of the judgment dated February 4, 1991 insofar as the subsidiary liability of the
petitioner was concerned, and (2) the Order dated April 7, 1992, directing the issuance of a writ of
execution against the petitioner. Before the appellate court, petitioner claimed he was not afforded
due process when he was found subsidiary liable for the civil liability of the accused Pronebo in the
criminal case.
The Court of Appeals dismissed the petition in its Decision dated October 27, 1992, disposing as
follows:
ACCORDINGLY, in view of the foregoing disquisitions, the instant petition for certiorari and
prohibition with preliminary injunction is DENIED DUE COURSE and should be, as it is
hereby, DISMISSED for lack of persuasive force and effect.
13

A motion for reconsideration
14
was filed by the petitioner on November 24, 1992. This was denied in
a Resolution
15
dated January 5, 1994. Hence this petition for review.
Now, petitioner, in his assignment of errors, avers that respondent Court of Appeals erred:
I. . . . IN SUSTAINING THE RULING OF THE TRIAL COURT THAT THE JUDGMENT OF 4
FEBRUARY 1991 HAD BECOME FINAL AND EXECUTORY AS REGARDS BOTH THE
CIVIL AND CRIMINAL ASPECTS WHEN THE ACCUSED APPLIED FOR PROBATION AT
THE PROMULGATION.
II. . . . IN HOLDING THAT AS PETITIONER IS NEITHER AN ACCUSED OR A PARTY IN
CRIMINAL CASE NO. 70278, HE IS NOT ENTITLED TO FILE A MOTION FOR
RECONSIDERATION OF THE JUDGMENT OF SUBSIDIARY CIVIL LIABILITY AGAINST
HIM.
III. . . . IN HOLDING THAT PETITIONER WAS NOT DEPRIVED OF HIS DAY IN COURT IN
VIOLATION OF PROCEDURAL DUE PROCESS.
IV. . . . IN HOLDING THAT PETITIONER WAS NOT ENTITLED TO THE AUXILIARY
RELIEF OF PRELIMINARY INJUNCTION BECAUSE THE JUDGEMENT OF CONVICTION
"IS CONCLUSIVE UPON THE EMPLOYER".
V. . . . IN RULING THAT THE RESPONDENT JUDGE DID NOT ACT IN ABUSE OF
AND/OR EXCESS OF JURISDICTION.
16

The issue before us is whether respondent Court of Appeals erred and committed grave abuse of
discretion in denying the special civil action under Rule 65 filed by petitioner against the trial court.
To resolve it, we must, however, also pass upon the following:
(1) Had the judgment of February 4, 1991 of the trial court become final and executor when
accused applied for probation at the promulgation?
(2) May the petitioner as employer file a Motion for Reconsideration concerning civil liability
decreed in the judgment if he is not a party to the criminal case?
(3) May petitioner, as employer, be granted relief by way of a writ of preliminary injunction?
Petitioner asserts that he was not given the opportunity to be heard by the trial court to prove the
absence of an employer-employee relationship between him and accused. Nor that, alternatively,
the accused was not lawfully discharging duties as an employee at the time of the incident. While
these assertions are not moved, we shall give them due consideration.
The statutory basis for an employer's subsidiary liability is found in Article 103 of the Revised Penal
Code.
17
This liability is enforceable in the same criminal proceeding where the award is
made.
18
However, before execution against an employer ensues, there must be a determination, in
a hearing set for the purpose of 1) the existence of an employer-employee relationship; 2) that the
employer is engaged in some kind of industry; 3) that the employee is adjudged guilty of the
wrongful act and found to have committed the offense in the discharge of his duties (not necessarily
any offense he commits "while" in the discharge of such duties; and 4) that said employee is
insolvent.
19

In Vda. De Paman vs. Seeris, 115 SCRA 709, 714 (1982), the Court observed that the drawback in
the enforcement of the subsidiary liability in the same criminal proceeding is that the alleged
employer is not afforded due process. Not being a party to the case, he is not heard as to whether
he is indeed the employer. Hence, we held:
To remedy the situation and thereby afford due process to the alleged employer, this Court
directed the court a quo in Pajarito vs. Seeris (supra) to hear and decide in the same
proceeding the subsidiary liability of the alleged owner and operator of the passenger bus. It
was explained therein that the proceeding for the enforcement of the subsidiary liability may
be considered as part of the proceeding for the execution of the judgment. A case in which
an execution has been issued is regarded as still pending so that all proceedings on the
execution are proceedings in the suit.
20

There are two instances when the existence of an employer-employee relationship of an accused
driver and the alleged vehicle owner may be determined. One, during the criminal proceeding, and
the other, during the proceeding for the execution of the judgment. In both instances, petitioner
should be given the opportunity to be heard, which is the essence of due process.
21

Petitioner knew of the criminal case that was filed against accused because it was his truck that was
involved in the incident.
22
Further, it was the insurance company, with which his truck was insured,
that provided the counsel for the accused, pursuant to the stipulations in their contract.
23
Petitioner
did not intervene in the criminal proceedings, despite knowledge, through counsel, that the
prosecution adduced evidence to show employer-employee relationship.
24
With the convict's
application for probation, the trial court's judgment became final and executory. All told, it is our view
that the lower court did not err when it found that petitioner was not denied due process. He had all
his chances to intervene in the criminal proceedings, and prove that he was not the employer of the
accused, but he chooses not to intervene at the appropriate time.
Petitioner was also given the opportunity during the proceedings for the enforcement of
judgment.1wphi1 Even assuming that he was not properly notified of the hearing on the motion for
execution of subsidiary liability, he was asked by the trial court to make an opposition thereto, which
he did on October 17, 1991, where he properly alleged that there was no employer-employee
relationship between him and accused and that the latter was not discharging any function in relation
to his work at the time of the incident.
25
In addition, counsel for private respondent filed and duly
served on December 3, 1991, and December 9, 1991, respectively, a manifestation praying for the
grant of the motion for execution.
26
This was set for hearing on December 13, 1991. However,
counsel for petitioner did not appear. Consequently, the court ordered in open court that the matter
be submitted for resolution. It was only on January 6, 1992, that the petitioner's counsel filed a
counter-manifestation
27
that belatedly attempted to contest the move of the private prosecutor for
the execution of the civil liability. Thus, on April 7, 1992, the trial court issued the Order granting the
motion for execution of the subsidiary liability. Given the foregoing circumstances, we cannot agree
with petitioner that the trial court denied him due process of law. Neither can we fault respondent
appellate court for sustaining the judgment and orders of the trial court.
Accordingly, the instant petition is DENIED for lack of merit. The Decision of the Court of Appeals
dated October 27, 1992, in CA-G.R. SP No. 27850 is AFFIRMED. Costs against petitioner.1wphi1.nt
SO ORDERED.

G.R. No. 127934 August 23, 2000
ACE HAULERS CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS AND EDERLINDA ABIVA, respondents.
PARDO, J .:
The case is an appeal via certiorari seeking to set aside the decision of the Court of
Appeals
1
affirming that of the Regional Trial Court, Quezon City, Branch 106, except for the award of
thirty thousand pesos (P30,000.00) as exemplary damages, which was deleted. The dispositive
portion of the trial court's decision reads as follows:
"WHEREFORE, judgment is hereby rendered ordering the defendant to pay plaintiff:
"1. the amount of Two Hundred Thousand (P200,000.00) as actual damages;
"2. the amount of Fifty Thousand (P50,000.00) as moral damages;
"3. the amount of Thirty Thousand (P30,000.00) as exemplary damages;
"4. the amount of Thirty Thousand (P30,000.00) as attorneys fees;
"5. Costs of suit.
"SO ORDERED."
2

The facts, culled from the findings of the Court of Appeals, are as follows:
"The case was an action for damages arising from a vehicular mishap which took place on June 1,
1984, involving a truck owned by petitioner Ace Haulers Corporation and driven by its employee,
Jesus dela Cruz, and a jeepney owned by Isabelito Rivera, driven by Rodolfo Parma. A third vehicle,
a motorcycle, was bumped and dragged by the jeepney, and its rider, Fidel Abiva, was run over by
the truck owned by petitioner Ace Haulers Corporation, causing his death. Upon his untimely
demise, Fidel Abiva left behind a wife, respondent Erderlinda Abiva and their three (3) children.
"On July 27, 1984, a criminal information for reckless imprudence resulting in homicide was filed
against the two drivers, Dela Cruz and Parma, docketed as Criminal Case No. Q-37248 before the
RTC of Quezon City, Branch 103.
"While the criminal action was pending, on March 11, 1985, respondent Ederlinda Abiva filed with
the Regional Trial Court, Quezon City, Branch 93, a separate civil action for damages against the
two accused in the criminal case, as well as against Isabelito Rivera and petitioner Ace Haulers
Corp., the owners of the vehicles involved in the accident and employers of the accused.
"In her complaint, respondent Abiva prayed that:
"1. A Writ of Preliminary Attachment be immediately issued against the properties of the defendants
as security for the satisfaction of any judgment that may be recovered;
"2. Defendants in solidum, to pay plaintiff the amount of P200,000.00 as actual damage;
"3. Defendants, in solidum, to pay plaintiff the sum of P50,000.00 as attorneys fees;
"4. Defendants, in solidum, to pay plaintiff the amount of moral and exemplary damages which this
Court may reasonably assess."
"On January 31, 1986, petitioner Ace Haulers Corp. and Jesus dela Cruz filed a motion to dismiss
bringing to the trial courts attention the fact that a criminal action was pending before another
branch of the same court, and that under the 1985 Rules on Criminal Procedure, the filing of an
independent civil action arising from a quasi-delict is no longer allowed. Furthermore, said
defendants alleged that respondents private counsel actively participated in the criminal
proceedings, showing that the respondent was in fact pursuing the civil aspect automatically
instituted with the criminal case.
"On February 21, 1986, respondent filed an opposition to the motion arguing that she was not
pursuing the civil aspect in the criminal case as she, in fact, manifested in open court in the criminal
proceedings that she was filing a separate and independent civil action for damages against the
accused and their employers, as allowed under Articles 2177 and 2180 of the Civil Code.
"On February 28, 1986, the trial court dismissed the action for damages on the ground that "no civil
action shall proceed independently of the criminal prosecution in a case for reckless imprudence
resulting in homicide". Respondent Abivas motion for reconsideration of the order of dismissal was
also denied by the trial court. She then elevated the case before the Intermediate Appellate Court
(IAC) by way of a petition for certiorari, docketed as Civil Case No. 09644. The appellate court
reversed the dismissal order of the trial court. It was then petitioner Ace Haulers Corporation and
Jesus dela Cruzs turn to appeal the judgment of the IAC before the Supreme Court. On August 3,
1988, the Supreme Court issued a resolution denying the petition for review of Ace Haulers Corp.
and Jesus dela Cruz for failure "to sufficiently show that the Court of Appeals had committed any
reversible error in the questioned error". The case was remanded to the trial court for further
proceedings.
"In the meantime that the petition for review was pending before the Supreme Court, fire razed the
portion of the Quezon City Hall building which housed the trial courts and the records of the case
were among those that the fire reduced to ashes. It was not until March 26, 1992 that the records of
the case was reconstituted by the trial court.
"While the pre-trial proceedings in the civil action for damages was still being set and reset upon
motion of the opposing parties, on July 6, 1992, the RTC, Quezon City, Branch 83 rendered
judgment in the criminal case, finding as follows:
"WHEREFORE, the prosecution having established beyond reasonable doubt the guilt of both
accused Rodolfo Parma and Jesus dela Cruz for the offense of Reckless Imprudence Resulting in
Homicide, this Court finds them guilty of said offense charged and hereby sentences each of them to
suffer and undergo imprisonment of ONE (1) YEAR AND ONE (1) DAY of prision correccional as
minimum to FOUR (4) YEARS, NINE (9) MONTHS and TEN (10) DAYS also of prision
correccional as maximum, and to pay the costs.
"Accused Rodolfo Parma and Jesus dela Cruz are hereby ordered to pay the heirs of the deceased
Fidel O. Abiva, jointly or pro rata, the amount of FIFTY THOUSAND PESOS (P50,000.00) as
indemnification for his death and the amount of FOUR THOUSAND PESOS (P4,000.00) by way of
actual damages.
"SO ORDERED."
"On March 9, 1993, the pre-trial conference of the civil case was finally set on April 6, 1993, and
notices thereof were sent to the parties and their respective counsel. On the appointed date,
however, no representative nor counsel for petitioner Ace Haulers Corporation appeared.
Consequently, upon motion of respondent Abiva, the petitioner was declared as in default.
Furthermore, defendants Jesus dela Cruz, Isabelito Rivera and Rodolfo Parma were discharged as
defendants, and the case against them dismissed.
"On June 30, 1993, the trial court rendered a decision, ruling against petitioner Ace Haulers
Corporation. The trial court summarized its findings thus:
"Hence, Mrs. Ederlinda Abiva as part of plaintiffs evidence, testified that she is 43 years old, a
widow and housekeeper, residing at Cefels Subdivision, Deparo, Novaliches, Quezon City. She told
the Court that she is the widow of Fidel Abiva, who died on June 1, 1984 after he was ran over by
Isuzu Cargo Truck Plate No. NWY-T Phil 93 owned and operated by the defendant Ace Haulers
Corporation, then driven by Jesus dela Cruz and that because of the death of her husband, she
suffered damages, among which, moral, exemplary and actual damages for her expenses and
attorneys fees. She claimed that she is lawfully married to the late Fidel Abiva as evidenced by their
Marriage Contract (Exhibits A and A-1). Out of their wedlock, (sic) they begot three (3) children,
namely: Noel, Gina and Argentina with ages 25, 21 and 15, respectively. Her husband died on June
1, 1984 at around 11:45 p.m. (Exhibits B, B-1 and B-2), because of the vehicular accident which
involved the wheeler truck of Ace Haulers Corporation driven by Jesus dela Cruz, a jeepney owned
by Isabelito Rivera, then driven by Rodolfo Parma and a motorcycle driven by her husband. Her
husband, after his death, was autopsied, as reflected in an Autopsy Report (Exhibit C) and by the
Postmortem Finding (Exhibit C-1). This was also covered by a police report (Exhibit D) which
shows that Jesus dela Cruz is the driver of the defendant (Exhibit D-1). This fact is reiterated in a
sworn statement which she executed relative to this vehicular accident (Exhibit E) wherein the said
driver mentioned and confirmed the name of his employer (Exhibit E-1). A criminal case was lodged
against the drivers of the two vehicles and a Decision was rendered thereon in Criminal Case No. Q-
37248 entitled People of the Philippines versus Jesus dela Cruz and Rodolfo Parma finding both of
them guilty beyond reasonable doubt of the crime charged. (Exhibits F, F-1, F-2, F-3, F-4 and
F-5). This decision has now acquired finality as no appeal was taken by the accused. It is
established, however, that prior to the filing of the instant case, Mrs. Abiva pleaded to Ace Haulers to
compensate her for the death of her husband. But her plea went (sic) to deaf ears. She was thus
constrained to file this case for damages.
"Further testimony of Mrs. Abiva revealed that before the death of her husband, he was employed
with Philippine Airlines (PAL) earning P4,600.00.00 a month, as evidenced by the Pay Statement
covering the period of 4-15-84 in the amount of P2,065.00 (Exhibits G, G-1, G-2 and G-3); that
when he died, he was only 40 years old and healthy, and that based on the life history and pedigree
of his family where some of its members lived up to 100 years, she expects her husband to live for
no less than 15 years more and could have earned no less than P828,000.00 for the family. But this,
her family was deprived, because his life was snatched away by this accident while her husband
was riding in a motorcycle which he bought for P11,850.00 (Exhibits H and H-1) which was also
totally wrecked.
"Resulting from her husbands death, Mrs. Abiva told the Court that she incurred expenses for his
burial and funeral in the total amount of no less than P30,000.00 and for his wake of six days, in the
amount of about P40,600.00 (Exhibits J, J-1, J-2, J-3, J-4, J-5, and J-6). She also spent
around P80,000.00 as litigation expenses, in her quest for justice since she has to engage the
services of four (4) counsels from the time of the filing of this case before the Hon. Miriam Defensor-
Santiago, then Presiding Judge of this Court who once dismissed this case, and which led eventually
to an appeal by certiorari which was later elevated up to the Supreme Court. (Exhibits K, K-1, K-
2, K-3, K-4, K-5 and K-6). Blaming the defendant, Mrs. Abiva claimed that had Ace Haulers
exercised diligence, care and prudence in the selection and supervision of its employees, her
husband would have been spared from this accident. Hence, her prayer for the award of
P200,000.00 for the death of her husband, who by now, could have risen in the promotional ladder
to a senior Executive of PAL and could be earning about P30,000.00 salary per month by now. She
further prays for award of moral damages in the amount of P200,000.00 exemplary damages of
P100,000.00, attorneys fees of P50,000.00 and litigation expenses of P50,000.00.
"After the testimony of Mrs. Abiva as the lone witness for the plaintiff, counsel formally offered his
exhibits and rested his case.
"Gathered from the evidence presented, testimonial and documentary, the Court finds enough legal
and factual basis to grant the claim for damages by the plaintiff. The insinuations of negligence on
the part of defendants driver is amply shown as one, who drove his vehicle fast, impervious to the
safety of life and property of others, his utter lack of care and caution and his unmitigated
imprudence, rolled into one, all these predicated the occurrence of this accident which took away a
precious human life.
"Whoever by act or omission causes damages to another, there being fault or negligence, is obliged
to pay for the damages done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict x x x (Article 2176, New Civil Code).
"Corollary to this, is the civil law concept that:
"The obligations imposed by Article 2176 is demandable not only for ones own acts or omissions,
but also for those persons for whom one is responsible (Art. 2180, 1st paragraph, New Civil Code)
x x x x x x
"Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, x x x (Article 2180 paragraph 5, New Civil Code).
"Taken in their appropriate context, and predicated on the evidence adduced which has not been
evidentiarily traversed by the defendant, this Court is left to (sic) no other recourse but to grant the
remedies and reliefs which in her complaint plaintiff prays for, all of them having been by her
adduced evidence, preponderantly shown and established and out of which, she has shown herself
to be completely deserving."
3

On September 13, 1993, petitioner appealed to the Court of Appeals.
4

On January 17, 1997, the Court of Appeals promulgated its decision, the dispositive portion of which
reads as follows:
"WHEREFORE, except for the award of thirty thousand (P30,000.00) as exemplary damages, which
is hereby set aside, the Decision appealed from is hereby AFFIRMED in all other respect.
"SO ORDERED."
Hence, this appeal.
5

The issues raised are whether or not in an action for damages arising from a vehicular accident
plaintiff may recover damages against the employer of the accused driver both in the criminal case
(delict) and the civil case for damages based on quasi delict, but not recover twice for the same act;
(2) whether the Court of Appeals erred in not lifting the order declaring petitioner as in default for
failure to appear at the pre-trial conference; and (3) whether the damages awarded in the civil case
were excessive, much more than the previous award in the criminal case.
In Padua v. Robles,
5
we held that "Civil liability coexists with criminal responsibility. In negligence
cases, the offended party (or his heirs) has the option between an action for enforcement of civil
liability based on culpacriminal under Article 100 of the Revised Penal Code and an action for
recovery of damages based on culpa aquiliana under Article 2176 of the Civil Code. x x x Article
2177 of the Civil Code, however, precludes recovery of damages twice for the same negligent act or
omission."
6

Consequently, a separate civil action for damages lies against the offender in a criminal act, whether
or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is
not allowed, if he is actually charged also criminally, to recover damages on both scores, and would
be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the
two cases vary.
7

Hence, in this case, respondent Abiva shall have the choice which of the awards to take, naturally
expecting that she would opt to recover the greater amount. It has not been shown that she has
recovered on the award in the criminal case, consequently, she can unquestionably recover from
petitioner in the civil case.
As to the second issue raised, we find that petitioner was rightly declared as in default for its failure
to appear during the pre-trial conference despite due notice. This is a factual question resolved by
the Court of Appeals which we cannot review.
8

As to the third issue regarding the award of damages to respondent Abiva, we find the award of
actual damages to be supported by preponderant evidence. "Basic is the rule that to recover actual
damages, the amount of loss must not only be capable of proof but must actually be proven with
reasonable degree of certainty, premised upon competent proof or best evidence obtainable of the
actual amount thereof."
9
However, there is no basis for the award of moral damages, which is hereby
deleted. The person claiming moral damages must prove the existence of bad faith by clear and
convincing evidence for the law always presumes good faith. It is not enough that one merely
suffered sleepless nights, mental anguish, serious anxiety as the result of the actuations of the other
party. Invariably such action must be shown to have been willfully done in bad faith or with ill
motive.
10

The attorney's fees awarded is reduced to P20,000.00 which is ten (10%) percent of the amount of
actual damages.1wphi1
WHEREFORE, the Court DENIES the petition for review on certiorari and AFFIRMS the decision of
the Court of Appeals,
11
with modification. The Court deletes the award of fifty thousand pesos
(P50,000.00) as moral damages, and reduces the attorney fees to twenty thousand pesos
(P20,000.00).
No costs.

G.R. No. 131280 October 18, 2000
PEPE CATACUTAN and AURELIANA CATACUTAN, petitioners,
vs.
HEIRS OF NORMAN KADUSALE, HEIRS OF LITO AMANCIO and GIL B. IZON, respondents.
The issue raised in this petition for review on certiorari is whether or not a subsidiary writ of
execution may issue against the employers of an accused, against whom a judgment of conviction
had been entered, even when said employers never took part in the criminal proceedings where the
accused was charged, tried and convicted.
Assailed in the instant petition is the August 12, 1997 Decision
1
of the Court of Appeals in CA-G.R.
SP No. 43617, directing the issuance of a subsidiary writ of execution against petitioners, as well as
its October 9, 1997 Resolution,
2
denying petitioners' Motion for Reconsideration.
The antecedent facts relevant to the issue before us may be summarized, as follows -
Petitioner Aureliana Catacutan is the registered owner and operator of a jeepney, driven by the
accused Porferio Vendiola, which bumped a tricycle on April 11, 1991, in Banilad, Bacong, Negros
Oriental, thereby causing the death of its driver, Norman Kadusale, and its passenger, Lito Amancio,
and serious physical injuries to another passenger, respondent Gil B. Izon.
Respondents thus filed a criminal case against Porferio Vendiola, for Reckless Imprudence
Resulting in Double Homicide with Physical Injuries and Damages to Property on July 26, 1991,
before the Regional Trial Court of Negros Oriental.
On December 1, 1995, the trial court rendered judgment,
3
the dispositive portion of which reads as
follows:
Wherefore, foregoing considered, this court is convinced beyond doubt that accused is guilty of
negligence and imprudence under Article 365 of the Revised Penal Code in the collision which
occurred in Banilad, Bacong, Negros Oriental on April 11, 1991 which claimed the lives of Norman
Kadusale, the driver of the motortricycle, and Lito Amancio, a passenger of the motortricycle, and
caused injury to Gil B. Izon.
He is therefore sentenced to suffer the penalty of prision correccional medium and maximum
periods. Applying the Indeterminate Sentence Law, the accused is sentenced to one year eight
months and one day of prision correccional as minimum to two years, four months and one day of
prision correccional as maximum for each death to be served successively, and for the physical
injuries suffered by Gil B. Izon, accused is ordered to suffer the penalty of thirty days of arresto
mayor straight. He is likewise ordered to indemnify the heirs of Norman Kadusale and Lito Amancio
in the amount of Fifty Thousand Pesos each victim; and to pay actual damages to:
1. Norman Kadusale or his heirs the amount of P170,543.24;
2. Lito Amancio or his heirs the amount of P38,394.35; and
3. Gil B. Izon, the amount of P23,454.00.
SO ORDERED.
4

Accused Vendiola did not appeal the judgment of conviction. Instead, he applied for probation.
Meanwhile, when the judgment became final and executory, respondents moved for the issuance of
a writ of execution and the corresponding writ was issued by the trial court on April 24, 1996.
However, per the Sheriff's Return of Service,
5
dated July 3, 1996, the writ was unsatisfied as the
accused had "nothing to pay off the damages in the decision."
On August 28, 1996, respondents filed a Motion for Subsidiary Writ of Execution
6
before the trial
court, praying that such writ be issued against petitioner Aureliana Catacutan as registered owner
and operator of the jeepney driven by the accused when the collision occurred. Petitioner Aureliana
Catacutan filed her Opposition
7
thereto, arguing that she was never a party to the case and that to
proceed against her would be in violation of the due process clause of the Constitution. Petitioner
also argued that the subsidiary liability of the employer is not determined in the criminal case against
the employee.
On October 3, 1996, the trial court issued an Order
8
denying the said Motion for lack of merit.
According to the trial court, it never acquired jurisdiction over petitioner Aureliana Catacutan since
she was never impleaded as party to the case, and respondents' remedy was to file a separate case
for damages. Respondents' Motion for Reconsideration was also denied on December 3, 1996.
9

Undaunted, respondents went on certiorari to the Court of Appeals. On August 12, 1997, the Court
of Appeals rendered the assailed Decision.
The issue raised in the instant petition is not new. It has been passed upon in the case of Yusay v.
Adil,
10
where this Court held -
Petitioners contend that they were not informed of Criminal Case No. 11828 nor heard therein, in the
matter of their alleged subsidiary liability and that they were thus denied their day in court, and that
the court did not acquire jurisdiction over them.
We hold otherwise. Petitioners were given ample opportunity to present their side. The respondent
judge admitted their "Urgent Ex Parte Motion for Time to File Necessary Pleadings." The respondent
judge also issued an order suspending the execution of the writ dated 24 October 1980 and granting
petitioners until 5 November 1980 within which to file their comment and/or opposition to the Motion
for Issuance of the Writ of Subsidiary Execution. On 4 November 1980, petitioners filed their Motion
for Reconsideration of the order of 24 October 1980 and To Set Aside Subsidiary Writ of Execution.
This was opposed by private respondent. On 21 November 1980, an order of denial of the Motion
dated 4 November 1980 was issued. A second motion for reconsideration was filed by petitioners
which was again opposed by private respondent. Petitioners filed their reply thereto. Acting on the
pleadings, respondent judge issued a resolution denying petitioners' second motion for
reconsideration.
As stated in Martinez v. Barredo:
"The employer cannot be said to have been deprived of his day in court, because the situation
before us is not one wherein the employer is sued for a primary liability under article 1903 of the Civil
Code, but one in which enforcement is sought of a subsidiary civil liability incident to and dependent
upon his driver's criminal negligence which is a proper issue to be tried and decided only in a
criminal action. In other words, the employer becomes ipso facto subsidiarily liable upon his driver's
conviction and upon proof of the latter's insolvency, in the same way that acquittal wipes out not only
the employee's primary liability but also his employer's subsidiary liability for such criminal
negligence (81 Phil. 1, 3, G.R. No. L-49308, May 13, 1948, citing Almeida et al., vs. Abaroa, 8 Phil.,
178, affirmed in 218 U.S. 476; 54 Law ed., 1116; Wise & Co. vs. Larion, 45 Phil. 314, 320; Francisco
vs. Onrubia, 46 Phil. 327; Province of Ilocos Sur vs. Tolentino, G.R. No. 34186, 56 Phil., 829; Moran,
Comments on the Rules of Court, Vol. II, p. 403)."
The employer is, in substance and in effect, a party to the criminal case against his employee,
considering the subsidiary liability imposed upon him by law. Thus:
"It is true that an employer, strictly speaking, is not a party to the criminal case instituted against his
employee but in substance and in effect he is considering the subsidiary liability imposed upon him
by law. It is his concern, as well as his employee, to see to it that his interest be protected in the
criminal case by taking virtual participation in the defense of his employee. He cannot leave him to
his own fate because his failure is also his. And if because of his indifference or inaction the
employee is convicted and damages are awarded against him, he cannot later be heard to complain,
if brought to court for the enforcement of his subsidiary liability, that he was not given his day in
court. It was not without purpose that this Court sounded the following stern warning:
"It is high time that the employer exercised the greatest care in selecting his employees, taking real
and deep interest in their welfare; intervening in any criminal action brought against them by reason
or as a result of the performance of their duties, if only in the way of giving them benefit of counsel;
and consequently doing away with the practice of leaving them to their fates. If these be done, the
American rule requiring notice on the part of the employer shall have been satisfied (Miranda vs.
Malate Garage and Taxicab, Inc., 99 Phil. 670, 675, citing Martinez vs. Barredo, supra)."
More recently, in the case of Basilio v. Court of Appeals,
11
the issuance of a subsidiary writ of
execution against the employer of the accused therein was once more upheld, notwithstanding the
non-participation of such employer in the criminal case against the accused. Instructive as it is on
the issue at hand, we are reproducing hereunder this Court's pronouncement in said case, to wit -
The statutory basis for an employer's subsidiary liability is found in Article 103 of the Revised Penal
Code. This liability is enforceable in the same criminal proceeding where the award is made. (Rules
of Court, Rule 111, Sec. 1) However, before execution against an employer ensues, there must be a
determination, in a hearing set for the purpose of 1) the existence of an employer-employee
relationship; 2) that the employer is engaged in some kind of industry; 3) that the employee is
adjudged guilty of the wrongful act and found to have committed the offense in the discharge of his
duties (not necessarily any offense he commits "while" in the discharge of such duties); and 4) that
said employee is insolvent. (Yonaha vs. CA, 255 SCRA 397, 402 [1996].)
In Vda. De Paman vs. Seeris, 115 SCRA 709, 714 (1982), the Court observed that the drawback in
the enforcement of the subsidiary liability in the same criminal proceeding is that the alleged
employer is not afforded due process. Not being a party to the case, he is not heard as to whether
he is indeed the employer. Hence, we held:
To remedy the situation and thereby afford due process to the alleged employer, this Court directed
the court a quo in Pajarito vs. Seeris (supra) to hear and decide in the same proceeding the
subsidiary liability of the alleged owner and operator of the passenger bus. It was explained therein
that the proceeding for the enforcement of the subsidiary liability may be considered as part of the
proceeding for the execution of the judgment. A case in which an execution has been issued is
regarded as still pending so that all proceedings on the execution are proceedings in the suit. (Vda.
De Paman vs. Seeris, 115 SCRA 709, 714 [1982].)
There are two instances when the existence of an employer-employee relationship of an accused
driver and the alleged vehicle owner may be determined. One during the criminal proceeding, and
the other, during the proceeding for the execution of the judgment. In both instances, petitioner
should be given the opportunity to be heard, which is the essence of due process. (National
Federation of Labor vs. National Labor Relations Commissions, 283 SCRA 275, 284 [1997].)
Petitioner knew of the criminal case that was filed against accused because it was his truck that was
involved in the incident. Further, it was the insurance company, with which his truck was insured,
that provided the counsel for the accused, pursuant to the stipulations in their contract. Petitioner did
not intervene in the criminal proceedings, despite knowledge, through counsel, that the prosecution
adduced evidence to show employer-employee relationship. With the convict's application for
probation, the trial court's judgment became final and executory. All told, it is our view that the lower
court did not err when it found that petitioner was not denied due process. He had all his chances to
intervene in the criminal proceedings, and prove that he was not the employer of the accused, but he
chooses not to intervene at the appropriate time.
Petitioner was also given the opportunity during the proceedings for the enforcement of judgment.
Even assuming that he was not properly notified of the hearing on the motion for execution of
subsidiary liability, he was asked by the trial court to make an opposition thereto, which he did on
October 17, 1991, where he properly alleged that there was no employer-employee relationship
between him and accused and that the latter was not discharging any function in relation to his work
at the time of the incident. In addition, counsel for private respondent filed and duly served on
December 3, 1991, and December 9, 1991, respectively, a manifestation praying for the grant of the
motion for execution. This was set for hearing on December 13, 1991. However, counsel for
petitioner did not appear. Consequently, the court ordered in open court that the matter be submitted
for resolution. It was only on January 6, 1992, that the petitioner's counsel filed a counter-
manifestation that belatedly attempted to contest the move of the private prosecutor for the
execution of the civil liability. Thus, on April 7, 1992, the trial court issued the Order granting the
motion for execution of the subsidiary liability. Given the foregoing circumstances, we cannot agree
with petitioner that the trial court denied him due process of law. Neither can we fault respondent
appellant court for sustaining the judgment and orders of the trial court.
In the instant case, we find no reason why the subsidiary writ of execution issued against petitioner
Aurelianana Catacutan should be set aside. To begin with, as in Yusay and Basilio, supra,
petitioners cannot complain of having been deprived of their day in court. They were duly furnished a
copy of respondents' Motion for Subsidiary Writ of Execution to which they filed their Opposition.
So, too, we find no good ground to order a separate hearing to determine the subsidiary liability of
petitioner Aureliana Catacutan, as was ordered in the case of Pajarito v. Seeris, supra. To do so
would entail a waste of both time and resources of the trial court as the requisites for the attachment
of the subsidiary liability of the employer have already been established, to wit: First, the existence of
an employer-employee relationship.
12
Second, the employer is engaged in some kind of industry,
land transportation industry in this case as the jeep driven by accused was admittedly a passenger
jeep.
13
Third, the employee has already been adjudged guilty of the wrongful act and found to have
committed the offense in the discharge of his duties.
14
Finally, said employee is insolvent.
15

WHEREFORE, based on the foregoing, the petition is DENIED. No pronouncement as to costs.
SO ORDERED.

G.R. No. 158995 September 26, 2006
L.G. FOODS CORPORATION and VICTORINO GABOR, Vice-President and General
Manager, petitioners,
vs.
HON. PHILADELFA B. PAGAPONG-AGRAVIADOR, in her capacity as Presiding Judge of
Regional Trial Court, Branch 43, Bacolod City, and SPS. FLORENTINO and THERESA
VALLEJERA, respondents.
Assailed and sought to be set aside in this petition for review on certiorari is the Decision
1
dated April
25, 2003 of the Court of Appeals (CA), as reiterated in its Resolution of July 10, 2003,
2
in CA-G.R.
SP No. 67600, affirming an earlier Order of the Regional Trial Court (RTC) of Bacolod City, Branch
43, which denied the petitioners' motion to dismiss in Civil Case No. 99-10845, an action for
damages arising from a vehicular accident thereat instituted by the herein private respondents - the
spouses Florentino Vallejera and Theresa Vallejera - against the petitioners.
The antecedent facts may be briefly stated as follows:
On February 26, 1996, Charles Vallereja, a 7-year old son of the spouses Florentino Vallejera and
Theresa Vallejera, was hit by a Ford Fiera van owned by the petitioners and driven at the time by
their employee, Vincent Norman Yeneza y Ferrer. Charles died as a result of the accident.
In time, an Information for Reckless Imprudence Resulting to Homicide was filed against the driver
before the Municipal Trial Court in Cities (MTCC), Bacolod City, docketed as Criminal Case No.
67787, entitled People of the Philippines v. Vincent Norman Yeneza.
Unfortunately, before the trial could be concluded, the accused driver committed suicide, evidently
bothered by conscience and remorse. On account thereof, the MTCC, in its order of September 30,
1998, dismissed the criminal case.
On June 23, 1999, in the RTC of Bacolod City, the spouses Vallejera filed a complaint
3
for damages
against the petitioners as employers of the deceased driver, basically alleging that as such
employers, they failed to exercise due diligence in the selection and supervision of their employees.
Thereat docketed as Civil Case No. 99-10845, the complaint was raffled to Branch 43 of the court.
In their Answer with Compulsory Counterclaim,
4
the petitioners as defendants denied liability for the
death of the Vallejeras' 7-year old son, claiming that they had exercised the required due diligence in
the selection and supervision of their employees, including the deceased driver. They thus prayed in
their Answer for the dismissal of the complaint for lack of cause of action on the part of the Vallejera
couple.
During pre-trial, the defendant petitioners insisted that their dismissal prayer be resolved. Hence, the
trial court required them to file within ten days a memorandum of authorities supportive of their
position.
Instead, however, of the required memorandum of authorities, the defendant petitioners filed
a Motion to Dismiss, principally arguing that the complaint is basically a "claim for subsidiary liability
against an employer" under the provision of Article 103
5
of the Revised Penal Code. Prescinding
therefrom, they contend that there must first be a judgment of conviction against their driver as a
condition sine qua non to hold them liable. Ergo, since the driver died during the pendency of the
criminal action, the sine qua non condition for their subsidiary liability was not fulfilled, hence the of
lack of cause of action on the part of the plaintiffs. They further argue that since the plaintiffs did not
make a reservation to institute a separate action for damages when the criminal case was filed, the
damage suit in question is thereby deemed instituted with the criminal action. which was already
dismissed.
In an Order dated September 4, 2001,
6
the trial court denied the motion to dismiss for lack of merit
and set the case for pre-trial. With their motion for reconsideration having been denied by the same
court in its subsequent order
7
of September 26, 2001, the petitioners then went on certiorari to
the CA in CA-G.R. SP No. 67600, imputing grave abuse of discretion on the part of the trial judge in
refusing to dismiss the basic complaint for damages in Civil Case No. 99-10845.
In the herein assailed decision
8
dated April 25, 2003, the CA denied the petition and upheld the trial
court. Partly says the CA in its challenged issuance:
xxx xxx xxx
It is clear that the complaint neither represents nor implies that the responsibility charged
was the petitioner's subsidiary liability under Art. 103, Revised Penal Code. As pointed out
[by the trial court] in the Order of September 4, 2001, the complaint does not even allege the
basic elements for such a liability, like the conviction of the accused employee and his
insolvency. Truly enough, a civil action to enforce subsidiary liability separate and distinct
from the criminal action is even unnecessary.
xxx xxx xxx
Specifically, Civil Case No. 99-10845 exacts responsibility for fault or negligence under Art.
2176, Civil Code, which is entirely separate and distinct from the civil liability arising from
negligence under the Revised Penal Code. Verily, therefore, the liability under Art. 2180,
Civil Code, is direct and immediate, and not conditioned upon prior recourse against the
negligent employee or prior showing of the latter's insolvency. (Underscoring in the original.)
In time, the petitioners moved for a reconsideration but their motion was denied by the CA in its
resolution
9
of July 10, 2003. Hence, the petitioners' present recourse on their submission that the
appellate court committed reversible error in upholding the trial court's denial of their motion to
dismiss.
We DENY.
As the Court sees it, the sole issue for resolution is whether the spouses Vallejeras' cause of action
in Civil Case No. 99-10845 is founded on Article 103 of the Revised Penal Code, as maintained by
the petitioners, or derived from Article 2180
10
of the Civil Code, as ruled by the two courts below.
It thus behooves us to examine the allegations of the complaint for damages in Civil Case No. 99-
10845. That complaint alleged, inter alia, as follows:
xxx xxx xxx
3. That defendant [LG Food Corporation] is the registered owner of a Ford Fiera Van with
Plate No. NMS 881 and employer sometime February of 1996 of one Vincent Norman
Yeneza y Ferrer, a salesman of said corporation;
4. That sometime February 26, 1996 at around 2:00 P.M. at Rosario St., Bacolod City, the
minor son of said plaintiffs [now respondents], Charles Vallejera, 7 years old, was hit and
bumped by above-described vehicle then driven by said employee, Vincent Norman Yeneza
y Ferrer;
5. That the mishap was due to the gross fault and negligence of defendant's employee, who
drove said vehicle, recklessly, negligently and at a high speed without regard to traffic
condition and safety of other road users and likewise to the fault and negligence of the owner
employer, herein defendants LG Food Corporation who failed to exercise due diligence in the
selection and supervision of his employee, Vincent Norman Yeneza y Ferrer;
6. That as a result of said incident, plaintiffs' son suffered multiple body injuries which led to
his untimely demise on that very day;
7. That a criminal case was filed against the defendant's employee, docketed as Criminal
Case No. 67787, (earlier filed as Crim. Case No. 96-17570 before RTC) before MTC-Branch
III, entitled "People v. Yeneza" for "Reckless Imprudence resulting to Homicide," but the
same was dismissed because pending litigation, then remorse-stricken [accused] committed
suicide;
xxx xxx xxx
8. That the injuries and complications as well as the resultant death suffered by the late
minor Charles Vallejera were due to the negligence and imprudence of defendant's
employee;
9. That defendant LG Foods Corporation is civilly liable for the negligence/imprudence
of its employee since it failed to exercise the necessary diligence required of a good
father of the family in the selection and supervision of his employee, Vincent Norman
Yeneza y Ferrer which diligence if exercised, would have prevented said
incident. (Bracketed words and emphasis ours.)
Nothing in the foregoing allegations suggests, even remotely, that the herein petitioners are being
made to account for their subsidiary liability under Article 103 of the Revised Penal Code. As
correctly pointed out by the trial court in its order of September 4, 2001 denying the
petitioners' Motion to Dismiss, the complaint did not even aver the basic elements for the subsidiary
liability of an employer under Article 103 of the Revised Penal Code, such as the prior conviction of
the driver in the criminal case filed against him nor his insolvency.
Admittedly, the complaint did not explicitly state that plaintiff Vallejeras were suing the defendant
petitioners for damages based on quasi-delict. Clear it is, however, from the allegations of the
complaint that quasi-delict was their choice of remedy against the petitioners. To stress, the plaintiff
spouses alleged in their complaint gross fault and negligence on the part of the driver and the failure
of the petitioners, as employers, to exercise due diligence in the selection and supervision of their
employees. The spouses further alleged that the petitioners are civilly liable for the
negligence/imprudence of their driver since they failed to exercise the necessary diligence required
of a good father of the family in the selection and supervision of their employees, which diligence, if
exercised, could have prevented the vehicular accident that resulted to the death of their 7-year old
son.
Section 2, Rule 2, of the 1997 Rules of Civil Procedure defines cause of action as the "act or
omission by which a party violates the right of another." Such act or omission gives rise to an
obligation which may come from law, contracts, quasi contracts, delicts or quasi-delicts.
11

Corollarily, an act or omission causing damage to another may give rise to two separate civil
liabilities on the part of the offender, i.e., 1) civil liability ex delicto;
12
and 2) independent civil
liabilities, such as those (a) not arising from an act or omission complained of as felony (e.g., culpa
contractual or obligations arising from law;
13
the intentional torts;
14
and culpa aquiliana
15
); or (b)
where the injured party is granted a right to file an action independent and distinct from the criminal
action.
16
Either of these two possible liabilities may be enforced against the offender.
17

Stated otherwise, victims of negligence or their heirs have a choice between an action to enforce the
civil liability arising from culpa criminal under Article 100 of the Revised Penal Code, and an action
for quasi-delict (culpa aquiliana) under Articles 2176 to 2194 of the Civil Code. If, as here, the action
chosen is for quasi-delict, the plaintiff may hold the employer liable for the negligent act of its
employee, subject to the employer's defense of exercise of the diligence of a good father of the
family. On the other hand, if the action chosen is for culpa criminal, the plaintiff can hold the
employer subsidiarily liable only upon proof of prior conviction of its employee.
18

Article 1161
19
of the Civil Code provides that civil obligation arising from criminal offenses shall be
governed by penal laws subject to the provision of Article 2177
20
and of the pertinent provision of
Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of this Book, regulating damages.
Plainly, Article 2177 provides for the alternative remedies the plaintiff may choose from in case the
obligation has the possibility of arising indirectly from the delict/crime or directly from quasi-delict/tort.
The choice is with the plaintiff who makes known his cause of action in his initiatory pleading or
complaint,
21
and not with the defendant who can not ask for the dismissal of the plaintiff's cause of
action or lack of it based on the defendant's perception that the plaintiff should have opted to file a
claim under Article 103 of the Revised Penal Code.
Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is not
conditioned upon prior recourse against the negligent employee and a prior showing of insolvency of
such employee.
22

Here, the complaint sufficiently alleged that the death of the couple's minor son was caused by the
negligent act of the petitioners' driver; and that the petitioners themselves were civilly liable for the
negligence of their driver for failing "to exercise the necessary diligence required of a good father of
the family in the selection and supervision of [their] employee, the driver, which diligence, if
exercised, would have prevented said accident."
Had the respondent spouses elected to sue the petitioners based on Article 103 of the Revised
Penal Code, they would have alleged that the guilt of the driver had been proven beyond reasonable
doubt; that such accused driver is insolvent; that it is the subsidiary liability of the defendant
petitioners as employers to pay for the damage done by their employee (driver) based on the
principle that every person criminally liable is also civilly liable.
23
Since there was no conviction in the
criminal case against the driver, precisely because death intervened prior to the termination of the
criminal proceedings, the spouses' recourse was, therefore, to sue the petitioners for their direct and
primary liability based on quasi-delict.
Besides, it is worthy to note that the petitioners, in their Answer with Compulsory Counter-
Claim,
24
repeatedly made mention of Article 2180 of the Civil Code and anchored their defense on
their allegation that "they had exercised due diligence in the selection and supervision of [their]
employees." The Court views this defense as an admission that indeed the petitioners
acknowledged the private respondents' cause of action as one for quasi-delict under Article 2180 of
the Civil Code.
All told, Civil Case No. 99-10845 is a negligence suit brought under Article 2176 - Civil Code to
recover damages primarily from the petitioners as employers responsible for their negligent driver
pursuant to Article 2180 of the Civil Code. The obligation imposed by Article 2176 is demandable not
only for one's own acts or omissions, but also for those of persons for whom one is responsible.
Thus, the employer is liable for damages caused by his employees and household helpers acting
within the scope of their assigned tasks, even though the former is not engaged in any business or
industry.
Citing Maniago v. CA,
25
petitioner would argue that Civil Case No. 99-10845 should have been
dismissed for failure of the respondent spouses to make a reservation to institute a separate civil
action for damages when the criminal case against the driver was filed.
The argument is specious.
To start with, the petitioners' reliance on Maniago is obviously misplaced. There, the civil case was
filed while the criminal case against the employee was still pending. Here, the criminal case against
the employee driver was prematurely terminated due to his death. Precisely, Civil Case No. 99-
10845 was filed by the respondent spouses because no remedy can be obtained by them against
the petitioners with the dismissal of the criminal case against their driver during the pendency
thereof.
The circumstance that no reservation to institute a separate civil action for damages was made when
the criminal case was filed is of no moment for the simple reason that the criminal case was
dismissed without any pronouncement having been made therein. In reality, therefor, it is as if there
was no criminal case to speak of in the first place. And for the petitioners to insist for the conviction
of their driver as a condition sine qua non to hold them liable for damages is to ask for the
impossible.
IN VIEW WHEREOF, the instant petition is DENIED for lack of merit.
Costs against the petitioners.
SO ORDERED.





G.R. No. 165732 December 14, 2006
SAFEGUARD SECURITY AGENCY, INC., and ADMER PAJARILLO, petitioners,
vs.
LAURO TANGCO, VAL TANGCO, VERN LARRY TANGCO, VAN LAURO TANGCO, VON
LARRIE TANGCO, VIEN LARI TANGCO and VIVIEN LAURIZ TANGCO, respondent.

AUSTRIA-MARTINEZ, J .:
Before us is a petition for review on certiorari filed by Safeguard Security Agency, Inc. (Safeguard)
and Admer Pajarillo (Pajarillo) assailing the Decision
1
dated July 16, 2004 and the Resolution
2
dated
October 20, 2004 issued by the Court of Appeals (CA) in CA-G.R. CV No. 77462.
On November 3, 1997, at about 2:50 p.m., Evangeline Tangco (Evangeline) went to Ecology Bank,
Katipunan Branch, Quezon City, to renew her time deposit per advise of the bank's cashier as she
would sign a specimen card. Evangeline, a duly licensed firearm holder with corresponding permit to
carry the same outside her residence, approached security guard Pajarillo, who was stationed
outside the bank, and pulled out her firearm from her bag to deposit the same for safekeeping.
Suddenly, Pajarillo shot Evangeline with his service shotgun hitting her in the abdomen instantly
causing her death.
Lauro Tangco, Evangeline's husband, together with his six minor children (respondents) filed with
the Regional Trial Court (RTC) of Quezon City, a criminal case of Homicide against Pajarillo,
docketed as Criminal Case No. 0-97-73806 and assigned to Branch 78. Respondents reserved their
right to file a separate civil action in the said criminal case. The RTC of Quezon City subsequently
convicted Pajarillo of Homicide in its Decision dated January 19, 2000.
3
On appeal to the CA, the
RTC decision was affirmed with modification as to the penalty in a Decision
4
dated July 31, 2000.
Entry of Judgment was made on August 25, 2001.
Meanwhile, on January 14, 1998, respondents filed with RTC, Branch 273, Marikina City, a
complaint
5
for damages against Pajarillo for negligently shooting Evangeline and against Safeguard
for failing to observe the diligence of a good father of a family to prevent the damage committed by
its security guard. Respondents prayed for actual, moral and exemplary damages and attorney's
fees.
In their Answer,
6
petitioners denied the material allegations in the complaint and alleged that
Safeguard exercised the diligence of a good father of a family in the selection and supervision of
Pajarillo; that Evangeline's death was not due to Pajarillo's negligence as the latter acted only in self-
defense. Petitioners set up a compulsory counterclaim for moral damages and attorney's fees.
Trial thereafter ensued. On January 10, 2003, the RTC rendered its Decision,
7
the dispositive portion
of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs, the heirs of Evangeline
Tangco, and against defendants Admer Pajarillo and Safeguard Security Agency, Inc.
ordering said defendants to pay the plaintiffs, jointly and severally, the following:
1. ONE HUNDRED FIFTY SEVEN THOUSAND FOUR HUNDRED THIRTY PESOS
(P157,430.00), as actual damages
2. FIFTY THOUSAND PESOS (P50,000.00) as death indemnity;
3. ONE MILLION PESOS (P1,000,000.00), as moral damages;
4. THREE HUNDRED THOUSAND PESOS (P300,000.00), as exemplary damages;
5. THIRTY THOUSAND PESOS (P30,000.00), as attorney's fees; and
6. costs of suit.
For lack of merit, defendants' counterclaim is hereby DISMISSED.
SO ORDERED.
8

The RTC found respondents to be entitled to damages. It rejected Pajarillo's claim that he merely
acted in self-defense. It gave no credence to Pajarillo's bare claim that Evangeline was seen
roaming around the area prior to the shooting incident since Pajarillo had not made such report to
the head office and the police authorities. The RTC further ruled that being the guard on duty, the
situation demanded that he should have exercised proper prudence and necessary care by asking
Evangeline for him to ascertain the matter instead of shooting her instantly; that Pajarillo had already
been convicted of Homicide in Criminal Case No. 0-97-73806; and that he also failed to proffer proof
negating liability in the instant case.
The RTC also found Safeguard as employer of Pajarillo to be jointly and severally liable with
Pajarillo. It ruled that while it may be conceded that Safeguard had perhaps exercised care in the
selection of its employees, particularly of Pajarillo, there was no sufficient evidence to show that
Safeguard exercised the diligence of a good father of a family in the supervision of its employee; that
Safeguard's evidence simply showed that it required its guards to attend trainings and seminars
which is not the supervision contemplated under the law; that supervision includes not only the
issuance of regulations and instructions designed for the protection of persons and property, for the
guidance of their servants and employees, but also the duty to see to it that such regulations and
instructions are faithfully complied with.
Petitioners appealed the RTC decision to the CA. On July 16, 2004, the CA issued its assailed
Decision, the dispositive portion of which reads:
IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby AFFIRMED, with the
modification that Safeguard Security Agency, Inc.'s civil liability in this case is only subsidiary
under Art. 103 of the Revised Penal Code. No pronouncement as to costs.
9

In finding that Safeguard is only subsidiarily liable, the CA held that the applicable provisions are not
Article 2180 in relation to Article 2176 of the Civil Code, on quasi-delicts, but the provisions on civil
liability arising from felonies under the Revised Penal Code; that since Pajarillo had been found
guilty of Homicide in a final and executory judgment and is said to be serving sentence in
Muntinlupa, he must be adjudged civilly liable under the provisions of Article 100 of the Revised
Penal Code since the civil liability recoverable in the criminal action is one solely dependent upon
conviction, because said liability arises from the offense charged and no other; that this is also the
civil liability that is deemed extinguished with the extinction of the penal liability with a
pronouncement that the fact from which the civil action might proceed does not exist; that unlike in
civil liability arising from quasi-delict, the defense of diligence of a good father of a family in the
employment and supervision of employees is inapplicable and irrelevant in civil liabilities based on
crimes or ex-delicto; that Article 103 of the Revised Penal Code provides that the liability of an
employer for the civil liability of their employees is only subsidiary, not joint or solidary.
Petitioners filed their Motion for Reconsideration which the CA denied in a Resolution dated October
20, 2004.
Hence, the instant Petition for Review on Certiorari with the following assignment of errors, to wit:
The Honorable Court of Appeals gravely erred in finding petitioner Pajarillo liable to
respondents for the payment of damages and other money claims.
The Honorable Court of Appeals gravely erred when it applied Article 103 of the Revised
Penal Code in holding petitioner Safeguard solidarily [sic] liable with petitioner Pajarillo for
the payment of damages and other money claims.
The Honorable Court of Appeals gravely erred in failing to find that petitioner Safeguard
Security Agency, Inc. exercised due diligence in the selection and supervision of its
employees, hence, should be excused from any liability.
10

The issues for resolution are whether (1) Pajarillo is guilty of negligence in shooting Evangeline; and
(2) Safeguard should be held solidarily liable for the damages awarded to respondents.
Safeguard insists that the claim for damages by respondents is based on culpa aquiliana under
Article 2176
11
of the Civil Code, in which case, its liability is jointly and severally with Pajarillo.
However, since it has established that it had exercised due diligence in the selection and supervision
of Pajarillo, it should be exonerated from civil liability.
We will first resolve whether the CA correctly held that respondents, in filing a separate civil action
against petitioners are limited to the recovery of damages arising from a crime or delict, in which
case the liability of Safeguard as employer under Articles 102 and 103 of the Revised Penal
Code
12
is subsidiary and the defense of due diligence in the selection and supervision of employee is
not available to it.
The CA erred in ruling that the liability of Safeguard is only subsidiary.
The law at the time the complaint for damages was filed is Rule 111 of the 1985 Rules on Criminal
Procedure, as amended, to wit:
SECTION 1. Institution of criminal and civil actions. - When a criminal action is instituted, the
civil action for the recovery of civil liability is impliedly instituted with the criminal action,
unless the offended party waives the civil action, reserves his right to institute it separately,
or institutes the civil action prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised Penal Code, and
damages under Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising from
the same act or omission of the accused.
Respondents reserved the right to file a separate civil action and in fact filed the same on January
14, 1998.
The CA found that the source of damages in the instant case must be the crime of homicide, for
which he had already been found guilty of and serving sentence thereof, thus must be governed by
the Revised Penal Code.
We do not agree.
An act or omission causing damage to another may give rise to two separate civil liabilities on the
part of the offender, i.e., (1) civil liability ex delicto, under Article 100 of the Revised Penal Code; and
(2) independent civil liabilities, such as those (a) not arising from an act or omission complained of
as a felony, e.g., culpa contractual or obligations arising from law under Article 31 of the Civil Code,
intentional torts under Articles 32 and 34, andculpa aquiliana under Article 2176 of the Civil
Code; or (b) where the injured party is granted a right to file an action independent and distinct from
the criminal action under Article 33 of the Civil Code. Either of these liabilities may be enforced
against the offender subject to the caveat under Article 2177 of the Civil Code that the offended
party cannot recover damages twice for the same act or omission or under both causes.
13

It is important to determine the nature of respondents' cause of action. The nature of a cause of
action is determined by the facts alleged in the complaint as constituting the cause of action.
14
The
purpose of an action or suit and the law to govern it is to be determined not by the claim of the party
filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and
prayer for relief.
15

The pertinent portions of the complaint read:
7. That Defendant Admer A. Pajarillo was the guard assigned and posted in the Ecology
Bank Katipunan Branch, Quezon City, who was employed and under employment of
Safeguard Security Agency, Inc. hence there is employer-employee relationship between co-
defendants.
The Safeguard Security Agency, Inc. failed to observe the diligence of a good father of a
family to prevent damage to herein plaintiffs.
8. That defendant Admer Pajarillo upon seeing Evangeline Tangco, who brought her firearm
out of her bag, suddenly without exercising necessary caution/care, and in idiotic manner,
with the use of his shotgun, fired and burst bullets upon Evangeline M. Tangco, killing her
instantly. x x x
x x x x
16. That defendants, being employer and the employee are jointly and severally liable for the
death of Evangeline M. Tangco.
16

Thus, a reading of respondents' complaint shows that the latter are invoking their right to recover
damages against Safeguard for their vicarious responsibility for the injury caused by Pajarillo's act of
shooting and killing Evangeline under Article 2176, Civil Code which provides:
ARTICLE 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties is called a quasi-delict and is governed
by the provisions of this Chapter.
The scope of Article 2176 is not limited to acts or omissions resulting from negligence. In Dulay v.
Court of Appeals,
17
we held:
x x x Well-entrenched is the doctrine that Article 2176 covers not only acts committed with
negligence, but also acts which are voluntary and intentional. As far back as the definitive
case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that:
"x x x Article 2176, where it refers to "fault or negligence," covers not only acts "not
punishable by law" but also acts criminal in character, whether intentional and
voluntary or negligent.Consequently, a separate civil action lies against the offender in a
criminal act, whether or not he is criminally prosecuted and found guilty or acquitted,
provided that the offended party is not allowed, if he is actually charged also criminally, to
recover damages on both scores, and would be entitled in such eventuality only to the bigger
award of the two, assuming the awards made in the two cases vary. In other words, the
extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to
civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for
the same act considered as quasi-delict only and not as a crime is not extinguished even by
a declaration in the criminal case that the criminal act charged has not happened or has not
been committed by the accused. Briefly stated, We here hold, in reiteration of Garcia, that
culpa aquiliana includes voluntary and negligent acts which may be punishable by law."
(Emphasis supplied)
The civil action filed by respondents was not derived from the criminal liability of Pajarillo in the
criminal case but one based on culpa aquiliana or quasi-delict which is separate and distinct from
the civil liability arising from crime.
18
The source of the obligation sought to be enforced in the civil
case is a quasi-delict not an act or omission punishable by law.
In Bermudez v. Melencio-Herrera,
19
where the issue involved was whether the civil action filed by
plaintiff-appellants is founded on crime or on quasi-delict, we held:
x x x The trial court treated the case as an action based on a crime in view of the reservation
made by the offended party in the criminal case (Criminal Case No. 92944), also pending
before the court, to file a separate civil action. Said the trial court:
It would appear that plaintiffs instituted this action on the assumption that defendant
Pontino's negligence in the accident of May 10, 1969 constituted a quasi-delict. The Court
cannot accept the validity of that assumption. In Criminal Case No. 92944 of this Court,
plaintiffs had already appeared as complainants. While that case was pending, the offended
parties reserved the right to institute a separate civil action. If, in a criminal case, the right to
file a separate civil action for damages is reserved, such civil action is to be based on crime
and not on tort. That was the ruling in Joaquin vs. Aniceto, L-18719, Oct. 31, 1964.
We do not agree. The doctrine in the case cited by the trial court is inapplicable to the instant
case x x x.
x x x x
In cases of negligence, the injured party or his heirs has the choice between an action to
enforce the civil liability arising from crime under Article 100 of the Revised Penal Code and
an action for quasi-delict under Article 2176-2194 of the Civil Code. If a party chooses the
latter, he may hold the employer solidarily liable for the negligent act of his employee, subject
to the employer's defense of exercise of the diligence of a good father of the family.
In the case at bar, the action filed by appellant was an action for damages based on quasi-
delict. The fact that appellants reserved their right in the criminal case to file an
independent civil action did not preclude them from choosing to file a civil action
for quasi-delict.
20
(Emphasis supplied)
Although the judgment in the criminal case finding Pajarillo guilty of Homicide is already final and
executory, such judgment has no relevance or importance to this case.
21
It would have been entirely
different if respondents' cause of action was for damages arising from a delict, in which case the CA
is correct in finding Safeguard to be only subsidiary liable pursuant to Article 103 of the Revised
Penal Code.
22

As clearly shown by the allegations in the complaint, respondents' cause of action is based on quasi-
delict. Under Article 2180 of the Civil Code, when the injury is caused by the negligence of the
employee, there instantly arises a presumption of law that there was negligence on the part of the
master or the employer either in the selection of the servant or employee, or in the supervision over
him after selection or both. The liability of the employer under Article 2180 is direct and immediate.
Therefore, it is incumbent upon petitioners to prove that they exercised the diligence of a good father
of a family in the selection and supervision of their employee.
We must first resolve the issue of whether Pajarillo was negligent in shooting Evangeline.
The issue of negligence is factual in nature. Whether a person is negligent or not is a question of
fact, which, as a general rule, we cannot pass upon in a petition for review on certiorari, as our
jurisdiction is limited to reviewing errors of law.
23
Generally, factual findings of the trial court, affirmed
by the CA, are final and conclusive and may not be reviewed on appeal. The established exceptions
are: (1) when the inference made is manifestly mistaken, absurd or impossible; (2) when there is
grave abuse of discretion; (3) when the findings are grounded entirely on speculations, surmises or
conjectures; (4) when the judgment of the CA is based on misapprehension of facts; (5) when the
findings of fact are conflicting; (6) when the CA, in making its findings, went beyond the issues of the
case and the same is contrary to the admissions of both appellant and appellee; (7) when the
findings of fact are conclusions without citation of specific evidence on which they are based; (8)
when the CA manifestly overlooked certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; and (9) when the findings of fact of the CA
are premised on the absence of evidence and are contradicted by the evidence on record.
[24]

A thorough review of the records of the case fails to show any cogent reason for us to deviate from
the factual finding of the trial court and affirmed by the CA that petitioner Pajarillo was guilty of
negligence in shooting Evangeline.
Respondents' evidence established that Evangeline's purpose in going to the bank was to renew her
time deposit.
25
On the other hand, Pajarillo claims that Evangeline drew a gun from her bag and
aimed the same at him, thus, acting instinctively, he shot her in self-defense.
Pajarillo testified that when Evangeline aimed the gun at him at a distance of about one meter or one
arm's length
26
he stepped backward, loaded the chamber of his gun and shot her.
27
It is however
unimaginable that petitioner Pajarillo could still make such movements if indeed the gun was already
pointed at him. Any movement could have prompted Evangeline to pull the trigger to shoot him.
Petitioner Pajarillo would like to justify his action in shooting Evangeline on his mere apprehension
that Evangeline will stage a bank robbery. However, such claim is befuddled by his own testimony.
Pajarillo testified that prior to the incident, he saw Evangeline roaming under the fly over which was
about 10 meters away from the bank
28
and saw her talking to a man thereat;
29
that she left the man
under the fly-over, crossed the street and approached the bank. However, except for the bare
testimony of Pajarillo, the records do not show that indeed Evangeline was seen roaming near the
vicinity of the bank and acting suspiciously prior to the shooting incident. In fact, there is no evidence
that Pajarillo called the attention of his head guard or the bank's branch manager regarding his
concerns or that he reported the same to the police authorities whose outpost is just about 15
meters from the bank.
Moreover, if Evangeline was already roaming the vicinity of the bank, she could have already
apprised herself that Pajarillo, who was posted outside the bank, was armed with a shotgun; that
there were two guards inside the bank
30
manning the entrance door. Thus, it is quite incredible that if
she really had a companion, she would leave him under the fly-over which is 10 meters far from the
bank and stage a bank robbery all by herself without a back-up. In fact, she would have known, after
surveying the area, that aiming her gun at Pajarillo would not ensure entrance to the bank as there
were guards manning the entrance door.
Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must be
credible in itself such as the common experience and observation of mankind can approve as
probable under the circumstances. We have no test of the truth of human testimony, except its
conformity to our knowledge, observation and experience. Whatever is repugnant to these belongs
to the miraculous and is outside judicial cognizance.
31

That Evangeline just wanted to deposit her gun before entering the bank and was actually in the act
of pulling her gun from her bag when petitioner Pajarillo recklessly shot her, finds support from the
contentions raised in petitioners' petition for review where they argued that when Evangeline
approached the bank, she was seen pulling a gun from inside her bag and petitioner Pajarillo who
was suddenly beset by fear and perceived the act as a dangerous threat, shot and killed the
deceased out of pure instinct;
32
that the act of drawing a gun is a threatening act, regardless of
whether or not the gun was intended to be used against petitioner Pajarillo;
33
that the fear that was
created in the mind of petitioner Pajarillo as he saw Evangeline Tangco drawing a gun from her
purse was suddenly very real and the former merely reacted out of pure self-preservation.
34

Considering that unlawful aggression on the part of Evangeline is absent, Pajarillo's claim of self-
defense cannot be accepted specially when such claim was uncorroborated by any separate
competent evidence other than his testimony which was even doubtful. Pajarillo's apprehension that
Evangeline will shoot him to stage a bank robbery has no basis at all. It is therefore clear that the
alleged threat of bank robbery was just a figment of Pajarillo's imagination which caused such
unfounded unlawful aggression on his part.
Petitioners argue that Evangeline was guilty of contributory negligence. Although she was a licensed
firearm holder, she had no business bringing the gun in such establishment where people would
react instinctively upon seeing the gun; that had Evangeline been prudent, she could have warned
Pajarillo before drawing the gun and did not conduct herself with suspicion by roaming outside the
vicinity of the bank; that she should not have held the gun with the nozzle pointed at Pajarillo who
mistook the act as hold up or robbery.
We are not persuaded.
As we have earlier held, Pajarillo failed to substantiate his claim that Evangeline was seen roaming
outside the vicinity of the bank and acting suspiciously prior to the shooting incident. Evangeline's
death was merely due to Pajarillo's negligence in shooting her on his imagined threat that
Evangeline will rob the bank.
Safeguard contends that it cannot be jointly held liable since it had adequately shown that it had
exercised the diligence required in the selection and supervision of its employees. It claims that it
had required the guards to undergo the necessary training and to submit the requisite qualifications
and credentials which even the RTC found to have been complied with; that the RTC erroneously
found that it did not exercise the diligence required in the supervision of its employee. Safeguard
further claims that it conducts monitoring of the activities of its personnel, wherein supervisors are
assigned to routinely check the activities of the security guards which include among others, whether
or not they are in their proper post and with proper equipment, as well as regular evaluations of the
employees' performances; that the fact that Pajarillo loaded his firearm contrary to Safeguard's
operating procedure is not sufficient basis to say that Safeguard had failed its duty of proper
supervision; that it was likewise error to say that Safeguard was negligent in seeing to it that the
procedures and policies were not properly implemented by reason of one unfortunate event.
We are not convinced.
Article 2180 of the Civil Code provides:
Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts
or omissions, but also for those of persons for whom one is responsible.
x x x x
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in
any business or industry.
x x x x
The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed all the diligence of a good father of a family to prevent damage.
As the employer of Pajarillo, Safeguard is primarily and solidarily liable for the quasi-delict committed
by the former. Safeguard is presumed to be negligent in the selection and supervision of his
employee by operation of law. This presumption may be overcome only by satisfactorily showing
that the employer exercised the care and the diligence of a good father of a family in the selection
and the supervision of its employee.
In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience, and service records.
35
On the other hand, due diligence in the supervision
of employees includes the formulation of suitable rules and regulations for the guidance of
employees and the issuance of proper instructions intended for the protection of the public and
persons with whom the employer has relations through his or its employees and the imposition of
necessary disciplinary measures upon employees in case of breach or as may be warranted to
ensure the performance of acts indispensable to the business of and beneficial to their employer. To
this, we add that actual implementation and monitoring of consistent compliance with said rules
should be the constant concern of the employer, acting through dependable supervisors who should
regularly report on their supervisory functions.
36
To establish these factors in a trial involving the
issue of vicarious liability, employers must submit concrete proof, including documentary evidence.
We agree with the RTC's finding that Safeguard had exercised the diligence in the selection of
Pajarillo since the record shows that Pajarillo underwent a psychological and neuro-psychiatric
evaluation conducted by the St. Martin de Porres Center where no psychoses ideations were noted,
submitted a certification on the Pre-licensing training course for security guards, as well as police
and NBI clearances.
The RTC did not err in ruling that Safeguard fell short of the diligence required in the supervision of
its employee, particularly Pajarillo. In this case, while Safeguard presented Capt. James Camero, its
Director for Operations, who testified on the issuance of company rules and regulations, such as the
Guidelines of Guards Who Will Be Assigned To Banks,
37
Weapons Training,
38
Safeguard Training
Center Marksmanship Training Lesson Plan,
39
Disciplinary/Corrective Sanctions,
40
it had also been
established during Camero's cross-examination that Pajarillo was not aware of such rules and
regulations.
41
Notwithstanding Camero's clarification on his re-direct examination that these company
rules and regulations are lesson plans as a basis of guidelines of the instructors during classroom
instructions and not necessary to give students copy of the same,
42
the records do not show that
Pajarillo had attended such classroom instructions.
The records also failed to show that there was adequate training and continuous evaluation of the
security guard's performance. Pajarillo had only attended an in-service training on March 1, 1997
conducted by Toyota Sta. Rosa, his first assignment as security guard of Safeguard, which was in
collaboration with Safeguard. It was established that the concept of such training was purely on
security of equipments to be guarded and protection of the life of the employees.
43

It had not been established that after Pajarillo's training in Toyota, Safeguard had ever conducted
further training of Pajarillo when he was later assigned to guard a bank which has a different nature
of business with that of Toyota. In fact, Pajarillo testified that being on duty in a bank is different from
being on duty in a factory since a bank is a very sensitive area.
44

Moreover, considering his reactions to Evangeline's act of just depositing her firearm for
safekeeping, i.e., of immediately shooting her, confirms that there was no training or seminar given
on how to handle bank clients and on human psychology.
Furthermore, while Safeguard would like to show that there were inspectors who go around the bank
two times a day to see the daily performance of the security guards assigned therein, there was no
record ever presented of such daily inspections. In fact, if there was really such inspection made, the
alleged suspicious act of Evangeline could have been taken noticed and reported.
Turning now to the award of damages, we find that the award of actual damages in the
amount P157,430.00 which were the expenses incurred by respondents in connection with the burial
of Evangeline were supported by receipts. The award of P50,000.00 as civil indemnity for the death
of Evangeline is likewise in order.
As to the award of moral damages, Article 2206 of the Civil Code provides that the spouse,
legitimate children and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased. Moral damages are awarded
to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the
moral suffering he/she has undergone, by reason of the defendant's culpable action. Its award is
aimed at restoration, as much as possible, of the spiritual status quo ante;thus it must be
proportionate to the suffering inflicted.
45
The intensity of the pain experienced by the relatives of the
victim is proportionate to the intensity of affection for him and bears no relation whatsoever with the
wealth or means of the offender.
46

In this case, respondents testified as to their moral suffering caused by Evangeline's death was so
sudden causing respondent Lauro to lose a wife and a mother to six children who were all minors at
the time of her death. InPeople v. Teehankee, Jr.,
47
we awarded one million pesos as moral
damages to the heirs of a seventeen-year-old girl who was murdered. In Metro Manila Transit
Corporation v. Court of Appeals,
48
we likewise awarded the amount of one million pesos as moral
damages to the parents of a third year high school student and who was also their youngest child
who died in a vehicular accident since the girl's death left a void in their lives. Hence, we hold that
the respondents are also entitled to the amount of one million pesos as Evangeline's death left a
void in the lives of her husband and minor children as they were deprived of her love and care by her
untimely demise.
We likewise uphold the award of exemplary damages in the amount of P300,000.00. Under Article
2229 of the Civil Code, exemplary damages are imposed by way of example or correction for the
public good, in addition to moral, temperate, liquidated or compensatory damages.
49
It is awarded as
a deterrent to socially deleterious actions. Inquasi-delict, exemplary damages may be granted if the
defendant acted with gross negligence.
50

Pursuant to Article 2208 of the Civil Code, attorney's fees may be recovered when, as in the instant
case, exemplary damages are awarded. Hence, we affirm the award of attorney's fees in the amount
of P30,000.00.
WHEREFORE, the petition for review is DENIED. The Decision dated July 16, 2004 of the Court of
Appeals isAFFIRMED with MODIFICATION that the civil liability of petitioner Safeguard Security
Agency, Inc. is SOLIDARYand PRIMARY under Article 2180 of the Civil Code.
SO ORDERED.













F.) OTHER COVERAGES
G.R. No. 86683 January 21, 1993
PHILIP S. YU, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, THE HONORABLE PRESIDING JUDGE, RTC OF
MANILA, BRANCH XXXIV (34) and UNISIA MERCHANDISING CO., INC., respondents.
ELO, J .:
Petitioner, the exclusive distributor of the House of Mayfair wallcovering products in the Philippines,
cried foul when his former dealer of the same goods, herein private respondent, purchased the
merchandise from the House of Mayfair in England through FNF Trading in West Germany and sold
said merchandise in the Philippines. Both the court of origin and the appellate court rejected
petitioner's thesis that private respondent was engaged in a sinister form of unfair competition within
the context of Article 28 of the New Civil Code (pp. 23 and 64, Rollo). Hence, the petition at bar.
There is no dispute that petitioner has had an exclusive sales agency agreement with the House of
Mayfair since 1987 to promote and procure orders for Mayfair wallcovering products from customers
in the Philippines (Annex "B", Petition; p. 30, Rollo). Even as petitioner was such exclusive
distributor, private respondent, which was then petitioner's dealer, imported the some goods via the
FNF Trading which eventually sold the merchandise in the domestic market (TSN, September 20,
1988, p. 9; p. 117, Rollo). In the suit for injunction which petitioner filed before the Regional Trial
Court of the National Capital Judicial Region stationed at Manila, petitioner pressed the idea that he
was practically by-passed and that private respondent acted in concert with the FNF Trading in
misleading Mayfair into believing that the goods ordered by the trading firm were intended for
shipment to Nigeria although they were actually shipped to and sold in the Philippines (Paragraph 5,
Complaint: p. 34, Rollo). Private respondent professed ignorance of the exclusive contract in favor of
petitioner. Even then, private respondent responded by asserting that petitioner's understanding with
Mayfair is binding only between the parties thereto (Paragraph 5, Answer; p. 50, Rollo).
In the course of hearing the arguments for and against the issuance of the requested writ of
preliminary injunction, petitioner impressed before the lower court that he is seeking to enjoin the
sale and distribution by private respondent of the same goods in the market (TSN, September 20,
1988, p. 35; p. 142, Rollo) but the Honorable Cesar V. Alejandria, Presiding Judge of Branch 34 was
unperturbed, thusly:
Resolving plaintiff's motion embodied in the complaint for the issuance of a writ of
preliminary injunction after hearing, but without prejudging the merits of the case, and
finding from the evidences adduced by the plaintiff, that the terms and conditions of
the agency agreement, Exhibit "A-inj." between the plaintiff and The House of
Mayfair of England for the exclusive distributorship by the plaintiff of the latter's
goods, apertain to them; that there is no privity of contract between the plaintiff and
the defendant; that the controversy in this case arose from a breach of contract by
the FNF Trading of Germany, for having shipped goods it had purchased from The
House of Mayfair to the Philippines: that as shown in Exh. "J-inj.", the House of
Mayfair was demanding payment of 4,500.00 from the FNF Trading for restitution of
plaintiff's alleged loss on account of the shipment of the goods in question here in the
Philippines and now in the possession of the defendant; it appears to the Court that
to restrain the defendant from selling the goods it has ordered from the FNF Trading
of Germany, would be without legal justification.
WHEREFORE, the motion for the issuance of a writ of preliminary injunction to
restrain the defendant from selling the goods it has ordered from the FNF Trading of
Germany is hereby DENIED. (p. 64,Rollo.)
The indifference of the trial court towards petitioner's supplication occasioned the filing of a petition
for review oncertiorari with the Court of Appeals but Justice Ordoez-Benitez, with whom Justices
Bellosillo and Kalalo concurred, reacted in the same nonchalant fashion. According to the appellate
court, petitioner was not able to demonstrate the unequivocal right which he sought to protect and
that private respondent is a complete strangervis-a-vis the covenant between petitioner and Mayfair.
Apart from these considerations, the reviewing authority noted that petitioner could be fully
compensated for the prejudice he suffered judging from the tenor of Mayfair's correspondence to
FNF Trading wherein Mayfair took the cudgels for petitioner in seeking compensation for the latter's
loss as a consequence of private respondent's scheme (p. 79, Rollo; pp. 23-29, Rollo).
In the petition at hand, petitioner anchors his plea for redress on his perception that private
respondent has distributed and continues to sell Mayfair covering products in contravention of
petitioner's exclusive right conferred by the covenant with the House of Mayfair.
On March 13, 1989, a temporary restraining order was issued to last until further notice from this
Court directed against private respondent (p. 188, Rollo). Notwithstanding such proscription, private
respondent persisted in the distribution and sole (p. 208; 228-229, Rollo), triggering petitioner's
motion to cite private respondent's manager in contempt of court (p. 223, Rollo). Considering that
private respondent's manager, Frank Sia, admitted the acts complained of, a fine of P500.00 was
imposed on him but he failed to pay the same within the five-day period provided in Our Resolution
of June 21, 1989
(p. 236, Rollo).
Did respondent appellate court correctly agree with the lower court in disallowing the writ solicited by
herein petitioner?
That the exclusive sales contract which links petitioner and the House of Mayfair is solely the
concern of the privies thereto and cannot thus extend its chain as to bind private respondent herein
is, We believe, beside the point. Verily, injunction is the appropriate remedy to prevent a wrongful
interference with contracts by strangers to such contracts where the legal remedy is insufficient and
the resulting injury is irreparable (Gilchrist vs. Cuddy, 29 Phil. 542 [1915]; 4-A Padilla, Civil Code
Annotated, 1988 Ed., p. 90). The liability of private respondent, if any, does not emanate from the
four corners of the contract for undoubtedly, Unisia Merchandising Co., Inc. is not a party thereto but
its accountability is "an independent act generative of civil liability" (Daywalt vs. Corporacion de PP.
Agustinos Recoletos, 39 Phil. 587 [1919]; 4 Paras, Civil Code of the Philippines Annotated, 1981
10th Ed., p. 439; 4 Tolentino, Commentaries and Jurisprudence on the Civil Code, 1986 Ed.,
p. 439). These observations, however, do not in the least convey the message that We have placed
the cart ahead of the horse, so to speak, by pronouncing private respondent's liability at this stage in
view of the pendency of the main suit for injunction below. We are simply rectifying certain
misperceptions entertained by the appellate court as regards the feasibility of requesting a
preliminary injunction to enjoin a stranger to an agreement.
To Our mind, the right to perform an exclusive distributorship agreement and to reap the profits
resulting from such performance are proprietary rights which a party may protect (30 Am. Jur.
Section 19, pp. 71-72: Jurado, Comments and Jurisprudence on Obligations and Contracts, 1983
8th Rev. Ed., p. 336) which may otherwise not be diminished, nay, rendered illusory by the
expedient act of utilizing or interposing a person or firm to obtain goods from the supplier to defeat
the very purpose for which the exclusive distributorship was conceptualized, at the expense of the
sole authorized distributor (43 C.J.S. 597).
Another circumstance which respondent court overlooked was petitioner's suggestion, which was not
disputed by herein private respondent in its comment, that the House of Mayfair in England was
duped into believing that the goods ordered through the FNF Trading were to be shipped to Nigeria
only, but the goods were actually sent to and sold in the Philippines. A ploy of this character is akin
to the scenario of a third person who induces a party to renege on or violate his undertaking under a
contract, thereby entitling the other contracting party to relief therefrom (Article 1314, New Civil
Code). The breach caused by private respondent was even aggravated by the consequent diversion
of trade from the business of petitioner to that of private respondent caused by the latter's species of
unfair competition as demonstrated no less by the sales effected inspite of this Court's restraining
order. This brings Us to the irreparable mischief which respondent court misappreciated when it
refused to grant the relief simply because of the observation that petitioner can be fully compensated
for the damage. A contrario, the injury is irreparable where it is continuous and repeated since from
its constant and frequent recurrence, no fair and reasonable redress can be had therefor by
petitioner insofar as his goodwill and business reputation as sole distributor are concerned. Withal,
to expect petitioner to file a complaint for every sale effected by private respondent will certainly
court multiplicity of suits (3 Francisco, Revised Rules of Court, 1985 Edition, p. 261).
WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals dated
January 13, 1989 in CA-G.R. SP No. 16019 and the Order dated October 16, 1988 issued by the
magistrate at the court of origin are hereby REVERSED and SET ASIDE. Let this case be remanded
to the court of origin for issuance of a writ of preliminary injunction upon petitioner's posting of a
bond in the sum of Fifty Thousand (P50,000.00) Pesos to be approved by said court, to remain
effective during the trial on the merits until final determination of the case. The manager of private
respondent. Frank Sia, is hereby ordered to pay to the Clerk of Court within five (5) days from notice
hereof the fine of P500.00, as previously imposed on him, with a warning that failure to do so will be
dealt with more severely.
Upon issuance of the writ of preliminary injunction, the restraining order issued on March 13, 1989
by this Court shall be deemed automatically lifted.
SO ORDERED.
G.R. No. L-9356 February 18, 1915
C. S. GILCHRIST, plaintiff-appellee,
vs.
E. A. CUDDY, ET AL., defendants.
JOSE FERNANDEZ ESPEJO and MARIANO ZALDARRIAGA, appellants.
TRENT, J .:
An appeal by the defendants, Jose Fernandez Espejo and Mariano Zaldarriaga, from a judgment of
the Court of First Instance of Iloilo, dismissing their cross-complaint upon the merits for damages
against the plaintiff for the alleged wrongful issuance of a mandatory and a preliminary injunction.
Upon the application of the appellee an ex parte mandatory injunction was issued on the 22d of May,
1913, directing the defendant, E. A. Cuddy, to send to the appellee a certain cinematograph film
called "Zigomar" in compliance with an alleged contract which had been entered into between these
two parties, and at the time an ex parte preliminary injunction was issued restraining the appellants
from receiving and exhibiting in their theater the Zigomar until further orders of the court. On the 26th
of that month the appellants appeared and moved the court to dissolve the preliminary injunction.
When the case was called for trial on August 6, the appellee moved for the dismissal of the
complaint "for the reason that there is no further necessity for the maintenance of the injunction."
The motion was granted without objection as to Cuddy and denied as to the appellants in order to
give them an opportunity to prove that the injunction were wrongfully issued and the amount of
damages suffered by reason thereof.
The pertinent part of the trial court's findings of fact in this case is as follows:
It appears in this case that Cuddy was the owner of the film Zigomar and that on the 24th of
April he rented it to C. S. Gilchrist for a week for P125, and it was to be delivered on the 26th
of May, the week beginning that day. A few days prior to this Cuddy sent the money back to
Gilchrist, which he had forwarded to him in Manila, saying that he had made other
arrangements with his film. The other arrangements was the rental to these defendants
Espejo and his partner for P350 for the week and the injunction was asked by Gilchrist
against these parties from showing it for the week beginning the 26th of May.
It appears from the testimony in this case, conclusively, that Cuddy willfully violated his
contract, he being the owner of the picture, with Gilchrist because the defendants had
offered him more for the same period. Mr. Espejo at the trial on the permanent injunction on
the 26th of May admitted that he knew that Cuddy was the owner of the film. He was trying to
get it through his agents Pathe Brothers in Manila. He is the agent of the same concern in
Iloilo. There is in evidence in this case on the trial today as well as on the 26th of May, letters
showing that the Pathe Brothers in Manila advised this man on two different occasions not to
contend for this film Zigomar because the rental price was prohibitive and assured him also
that he could not get the film for about six weeks. The last of these letters was written on the
26th of April, which showed conclusively that he knew they had to get this film from Cuddy
and from this letter that the agent in Manila could not get it, but he made Cuddy an offer
himself and Cuddy accepted it because he was paying about three times as much as he had
contracted with Gilchrist for. Therefore, in the opinion of this court, the defendants failed
signally to show the injunction against the defendant was wrongfully procured.
The appellants duly excepted to the order of the court denying their motion for new trial on the
ground that the evidence was insufficient to justify the decision rendered. There is lacking from the
record before us the deposition of the defendant Cuddy, which apparently throws light upon a
contract entered into between him and the plaintiff Gilchrist. The contents of this deposition are
discussed at length in the brief of the appellants and an endeavor is made to show that no such
contract was entered into. The trial court, which had this deposition before it, found that there was a
contract between Cuddy and Gilchrist. Not having the deposition in question before us, it is
impossible to say how strongly it militates against this findings of fact. By a series of decisions we
have construed section 143 and 497 (2) of the Code of Civil Procedure to require the production
of all the evidence in this court. This is the duty of the appellant and, upon his failure to perform it,
we decline to proceed with a review of the evidence. In such cases we rely entirely upon the
pleadings and the findings of fact of the trial court and examine only such assigned errors as raise
questions of law. (Ferrer vs. Neri Abejuela, 9 Phil. Rep., 324; Valle vs. Galera, 10 Phil. Rep., 619;
Salvacion vs. Salvacion, 13 Phil. Rep., 366; Breta vs. Smith, Bell & Co., 15 Phil. Rep., 446;
Arroyo vs. Yulo, 18 Phil. Rep., 236; Olsen & Co. vs. Matson, Lord & Belser Co., 19 Phil. Rep., 102;
Blum vs.Barretto, 19 Phil. Rep., 161; Cuyugan vs. Aguas, 19 Phil. Rep., 379; Mapa vs. Chaves, 20
Phil. Rep., 147; Mansvs. Garry, 20 Phil. Rep., 134.) It is true that some of the more recent of these
cases make exceptions to the general rule. Thus, in Olsen & Co. vs. Matson, Lord & Belser Co., (19
Phil. Rep., 102), that portion of the evidence before us tended to show that grave injustice might
result from a strict reliance upon the findings of fact contained in the judgment appealed from. We,
therefore, gave the appellant an opportunity to explain the omission. But we required that such
explanation must show a satisfactory reason for the omission, and that the missing portion of the
evidence must be submitted within sixty days or cause shown for failing to do so. The other cases
making exceptions to the rule are based upon peculiar circumstances which will seldom arise in
practice and need not here be set forth, for the reason that they are wholly inapplicable to the
present case. The appellants would be entitled to indulgence only under the doctrine of the Olsen
case. But from that portion of the record before us, we are not inclined to believe that the missing
deposition would be sufficient to justify us in reversing the findings of fact of the trial court that the
contract in question had been made. There is in the record not only the positive and detailed
testimony of Gilchrist to this effect, but there is also a letter of apology from Cuddy to Gilchrist in
which the former enters into a lengthy explanation of his reasons for leasing the film to another party.
The latter could only have been called forth by a broken contract with Gilchrist to lease the film to
him. We, therefore, fail to find any reason for overlooking the omission of the defendants to bring up
the missing portion of the evidence and, adhering to the general rule above referred to, proceed to
examine the questions of law raised by the appellants.
From the above-quoted findings of fact it is clear that Cuddy, a resident of Manila, was the owner of
the "Zigomar;" that Gilchrist was the owner of a cinematograph theater in Iloilo; that in accordance
with the terms of the contract entered into between Cuddy and Gilchrist the former leased to the
latter the "Zigomar" for exhibition in his (Gilchrist's) theater for the week beginning May 26, 1913;
and that Cuddy willfully violate his contract in order that he might accept the appellant's offer of P350
for the film for the same period. Did the appellants know that they were inducing Cuddy to violate his
contract with a third party when they induced him to accept the P350? Espejo admitted that he knew
that Cuddy was the owner of the film. He received a letter from his agents in Manila dated April
26, assuring him that he could not get the film for about six weeks. The arrangement between Cuddy
and the appellants for the exhibition of the film by the latter on the 26th of May were perfected after
April 26, so that the six weeks would include and extend beyond May 26. The appellants must
necessarily have known at the time they made their offer to Cuddy that the latter had booked or
contracted the film for six weeks from April 26. Therefore, the inevitable conclusion is that the
appellants knowingly induced Cuddy to violate his contract with another person. But there is no
specific finding that the appellants knew the identity of the other party. So we must assume that they
did not know that Gilchrist was the person who had contracted for the film.
The appellants take the position that if the preliminary injunction had not been issued against them
they could have exhibited the film in their theater for a number of days beginning May 26, and could
have also subleased it to other theater owners in the nearby towns and, by so doing, could have
cleared, during the life of their contract with Cuddy, the amount claimed as damages. Taking this
view of the case, it will be unnecessary for us to inquire whether the mandatory injunction against
Cuddy was properly issued or not. No question is raised with reference to the issuance of that
injunction.
The right on the part of Gilchrist to enter into a contract with Cuddy for the lease of the film must be
fully recognized and admitted by all. That Cuddy was liable in an action for damages for the breach
of that contract, there can be no doubt. Were the appellants likewise liable for interfering with the
contract between Gilchrist and Cuddy, they not knowing at the time the identity of one of the
contracting parties? The appellants claim that they had a right to do what they did. The ground upon
which the appellants base this contention is, that there was no valid and binding contract between
Cuddy and Gilchrist and that, therefore, they had a right to compete with Gilchrist for the lease of the
film, the right to compete being a justification for their acts. If there had been no contract between
Cuddy and Gilchrist this defense would be tenable, but the mere right to compete could not justify
the appellants in intentionally inducing Cuddy to take away the appellee's contractual rights.
Chief Justice Wells in Walker vs. Cronin (107 Mass., 555), said: "Everyone has a right to enjoy the
fruits and advantages of his own enterprise, industry, skill and credit. He has no right to be free from
malicious and wanton interference, disturbance or annoyance. If disturbance or loss come as a
result of competition, or the exercise of like rights by others, it is damnum absque injuria, unless
some superior right by contract or otherwise is interfered with."
In Read vs. Friendly Society of Operative Stonemasons ([1902] 2 K. B., 88), Darling, J., said: "I think
the plaintiff has a cause of action against the defendants, unless the court is satisfied that, when
they interfered with the contractual rights of plaintiff, the defendants had a sufficient justification for
their interference; . . . for it is not a justification that `they acted bona fide in the best interests of the
society of masons,' i. e., in their own interests. Nor is it enough that `they were not actuated by
improper motives.' I think their sufficient justification for interference with plaintiff's right must be an
equal or superior right in themselves, and that no one can legally excuse himself to a man, of whose
contract he has procured the breach, on the ground that he acted on a wrong understanding of his
own rights, or without malice, or bona fide, or in the best interests of himself, or even that he acted
as an altruist, seeking only good of another and careless of his own advantage." (Quoted with
approval in Beekman vs. Marsters, 195 Mass., 205.)
It is said that the ground on which the liability of a third party for interfering with a contract between
others rests, is that the interference was malicious. The contrary view, however, is taken by the
Supreme Court of the United States in the case of Angle vs. Railway Co. (151 U. S., 1). The only
motive for interference by the third party in that case was the desire to make a profit to the injury of
one of the parties of the contract. There was no malice in the case beyond the desire to make an
unlawful gain to the detriment of one of the contracting parties.
In the case at bar the only motive for the interference with the Gilchrist Cuddy contract on the part
of the appellants was a desire to make a profit by exhibiting the film in their theater. There was no
malice beyond this desire; but this fact does not relieve them of the legal liability for interfering with
that contract and causing its breach. It is, therefore, clear, under the above authorities, that they
were liable to Gilchrist for the damages caused by their acts, unless they are relieved from such
liability by reason of the fact that they did not know at the time the identity of the original lessee
(Gilchrist) of the film.
The liability of the appellants arises from unlawful acts and not from contractual obligations, as they
were under no such obligations to induce Cuddy to violate his contract with Gilchrist. So that if the
action of Gilchrist had been one for damages, it would be governed by chapter 2, title 16, book 4 of
the Civil Code. Article 1902 of that code provides that a person who, by act or omission, causes
damages to another when there is fault or negligence, shall be obliged to repair the damage do
done. There is nothing in this article which requires as a condition precedent to the liability of a tort-
feasor that he must know the identity of a person to whom he causes damages. In fact, the chapter
wherein this article is found clearly shows that no such knowledge is required in order that the
injured party may recover for the damage suffered.
But the fact that the appellants' interference with the Gilchrist contract was actionable did not of itself
entitle Gilchrist to sue out an injunction against them. The allowance of this remedy must be justified
under section 164 of the Code of Civil Procedure, which specifies the circumstance under which an
injunction may issue. Upon the general doctrine of injunction we said in Devesa vs. Arbes (13 Phil.
Rep., 273):
An injunction is a "special remedy" adopted in that code (Act No. 190) from American
practice, and originally borrowed from English legal procedure, which was there issued by
the authority and under the seal of a court of equity, and limited, as in order cases where
equitable relief is sought, to cases where there is no "plain, adequate, and complete remedy
at law," which "will not be granted while the rights between the parties are undetermined,
except in extraordinary cases where material and irreparable injury will be done,"which
cannot be compensated in damages, and where there will be no adequate remedy, and
which will not, as a rule, be granted, to take property out of the possession of one party and
put it into that of anotherwhose title has not been established by law.
We subsequently affirmed the doctrine of the Devesa case in Palafox vs. Madamba (19 Phil., Rep.,
444), and we take this occasion of again affirming it, believing, as we do, that the indiscriminate use
of injunctions should be discouraged.
Does the fact that the appellants did not know at the time the identity of the original lessee of the film
militate against Gilchrist's right to a preliminary injunction, although the appellant's incurred civil
liability for damages for such interference? In the examination of the adjudicated cases, where in
injunctions have been issued to restrain wrongful interference with contracts by strangers to such
contracts, we have been unable to find any case where this precise question was involved, as in all
of those cases which we have examined, the identity of both of the contracting parties was known to
the tort-feasors. We might say, however, that this fact does not seem to have a controlling feature in
those cases. There is nothing in section 164 of the Code of Civil Procedure which indicates, even
remotely, that before an injunction may issue restraining the wrongful interference with contrast by
strangers, the strangers must know the identity of both parties. It would seem that this is not
essential, as injunctions frequently issue against municipal corporations, public service corporations,
public officers, and others to restrain the commission of acts which would tend to injuriously affect
the rights of person whose identity the respondents could not possibly have known beforehand. This
court has held that in a proper case injunction will issue at the instance of a private citizen to
restrain ultra vires acts of public officials. (Severino vs. Governor-General, 16 Phil. Rep., 366.) So
we proceed to the determination of the main question of whether or not the preliminary injunction
ought to have been issued in this case.
As a rule, injunctions are denied to those who have an adequate remedy at law. Where the choice is
between the ordinary and the extraordinary processes of law, and the former are sufficient, the rule
will not permit the use of the latter. (In re Debs, 158 U. S., 564.) If the injury is irreparable, the
ordinary process is inadequate. In Wahle vs.Reinbach (76 Ill., 322), the supreme court of Illinois
approved a definition of the term "irreparable injury" in the following language: "By `irreparable injury'
is not meant such injury as is beyond the possibility of repair, or beyond possible compensation in
damages, nor necessarily great injury or great damage, but that species of injury, whether great or
small, that ought not to be submitted to on the one hand or inflicted on the other; and, because it is
so large on the one hand, or so small on the other, is of such constant and frequent recurrence that
no fair or reasonable redress can be had therefor in a court of law." (Quoted with approval in
Nashville R. R. Co. vs.McConnell, 82 Fed., 65.)
The case at bar is somewhat novel, as the only contract which was broken was that between Cuddy
and Gilchrist, and the profits of the appellee depended upon the patronage of the public, for which it
is conceded the appellants were at liberty to complete by all fair does not deter the application of
remarked in the case of the "ticket scalpers" (82 Fed., 65), the novelty of the facts does not deter the
application of equitable principles. This court takes judicial notice of the general character of a
cinematograph or motion-picture theater. It is a quite modern form of the play house, wherein, by
means of an apparatus known as a cinematograph or cinematograph, a series of views representing
closely successive phases of a moving object, are exhibited in rapid sequence, giving a picture
which, owing to the persistence of vision, appears to the observer to be in continuous motion. (The
Encyclopedia Britanica, vol. 6, p. 374.) The subjects which have lent themselves to the art of the
photographer in this manner have increased enormously in recent years, as well as have the places
where such exhibition are given. The attendance, and, consequently, the receipts, at one of these
cinematograph or motion-picture theaters depends in no small degree upon the excellence of the
photographs, and it is quite common for the proprietor of the theater to secure an especially
attractive exhibit as his "feature film" and advertise it as such in order to attract the public. This
feature film is depended upon to secure a larger attendance that if its place on the program were
filled by other films of mediocre quality. It is evident that the failure to exhibit the feature film will
reduce the receipts of the theater.
Hence, Gilchrist was facing the immediate prospect of diminished profits by reason of the fact that
the appellants had induced Cuddy to rent to them the film Gilchrist had counted upon as his feature
film. It is quite apparent that to estimate with any decree of accuracy the damages which Gilchrist
would likely suffer from such an event would be quite difficult if not impossible. If he allowed the
appellants to exhibit the film in Iloilo, it would be useless for him to exhibit it again, as the desire of
the public to witness the production would have been already satisfied. In this extremity, the appellee
applied for and was granted, as we have indicated, a mandatory injunction against Cuddy requiring
him to deliver the Zigomar to Gilchrist, and a preliminary injunction against the appellants restraining
them from exhibiting that film in their theater during the weeks he (Gilchrist) had a right to exhibit it.
These injunction saved the plaintiff harmless from damages due to the unwarranted interference of
the defendants, as well as the difficult task which would have been set for the court of estimating
them in case the appellants had been allowed to carry out their illegal plans. As to whether or not the
mandatory injunction should have been issued, we are not, as we have said, called upon to
determine. So far as the preliminary injunction issued against the appellants is concerned, which
prohibited them from exhibiting the Zigomar during the week which Gilchrist desired to exhibit it, we
are of the opinion that the circumstances justified the issuance of that injunction in the discretion of
the court.
We are not lacking in authority to support our conclusion that the court was justified in issuing the
preliminary injunction against the appellants. Upon the precise question as to whether injunction will
issue to restrain wrongful interference with contracts by strangers to such contracts, it may be said
that courts in the United States have usually granted such relief where the profits of the injured
person are derived from his contractual relations with a large and indefinite number of individuals,
thus reducing him to the necessity of proving in an action against the tort-feasor that the latter was
responsible in each case for the broken contract, or else obliging him to institute individual suits
against each contracting party and so exposing him to a multiplicity of suits. Sperry & Hutchinson
Co. vs. Mechanics' Clothing Co. (128 Fed., 800); Sperry & Hutchinson Co. vs. Louis Weber & Co.
(161 Fed., 219); Sperry & Hutchinson Co. vs. Pommer (199 Fed., 309); were all cases wherein the
respondents were inducing retail merchants to break their contracts with the company for the sale of
the latters' trading stamps. Injunction issued in each case restraining the respondents from
interfering with such contracts.
In the case of the Nashville R. R. Co. vs. McConnell (82 Fed., 65), the court, among other things,
said: "One who wrongfully interferes in a contract between others, and, for the purpose of gain to
himself induces one of the parties to break it, is liable to the party injured thereby; and his continued
interference may be ground for an injunction where the injuries resulting will be irreparable."
In Hamby & Toomer vs. Georgia Iron & Coal Co. (127 Ga., 792), it appears that the respondents
were interfering in a contract for prison labor, and the result would be, if they were successful, the
shutting down of the petitioner's plant for an indefinite time. The court held that although there was
no contention that the respondents were insolvent, the trial court did not abuse its discretion in
granting a preliminary injunction against the respondents.
In Beekman vs. Marsters (195 Mass., 205), the plaintiff had obtained from the Jamestown Hotel
Corporation, conducting a hotel within the grounds of the Jamestown Exposition, a contract whereby
he was made their exclusive agent for the New England States to solicit patronage for the hotel. The
defendant induced the hotel corporation to break their contract with the plaintiff in order to allow him
to act also as their agent in the New England States. The court held that an action for damages
would not have afforded the plaintiff adequate relief, and that an injunction was proper compelling
the defendant to desist from further interference with the plaintiff's exclusive contract with the hotel
company.
In Citizens' Light, Heat & Power Co. vs. Montgomery Light & Water Power Co. (171 Fed., 553), the
court, while admitting that there are some authorities to the contrary, held that the current authority in
the United States and England is that:
The violation of a legal right committed knowingly is a cause of action, and that it is a
violation of a legal right to interfere with contractual relations recognized by law, if there be
no sufficient justification for the interference. (Quinn vs. Leatham, supra, 510;
Angle vs. Chicago, etc., Ry. Co., 151 U. S., 1; 14 Sup. Ct., 240; 38 L. Ed., 55;
Martens vs. Reilly, 109 Wis., 464, 84 N. W., 840; Rice vs. Manley, 66 N. Y., 82; 23 Am. Rep.,
30; Bitterman vs. L. & N. R. R. Co., 207 U. S., 205; 28 Sup. Ct., 91; 52 L. Ed., 171;
Beekman vs.Marsters, 195 Mass., 205; 80 N. E., 817; 11 L. R. A. [N. S.] 201; 122 Am. St.
Rep., 232; South Wales Miners' Fed. vs. Glamorgan Coal Co., Appeal Cases, 1905, p. 239.)
See also Nims on Unfair Business Competition, pp. 351- 371.
In 3 Elliot on Contracts, section 2511, it is said: "Injunction is the proper remedy to prevent a
wrongful interference with contract by strangers to such contracts where the legal remedy is
insufficient and the resulting injury is irreparable. And where there is a malicious interference with
lawful and valid contracts a permanent injunction will ordinarily issue without proof of express malice.
So, an injunction may be issued where the complainant to break their contracts with him by agreeing
to indemnify who breaks his contracts of employment may be adjoined from including other
employees to break their contracts and enter into new contracts with a new employer of the servant
who first broke his contract. But the remedy by injunction cannot be used to restrain a legitimate
competition, though such competition would involve the violation of a contract. Nor will equity
ordinarily enjoin employees who have quit the service of their employer from attempting by proper
argument to persuade others from taking their places so long as they do not resort to force or
intimidations on obstruct the public thoroughfares."
Beekman vs. Marster, supra, is practically on all fours with the case at bar in that there was only one
contract in question and the profits of the injured person depended upon the patronage of the public.
Hamby & Toomer vs.Georgia Iron & Coal Co., supra, is also similar to the case at bar in that there
was only one contract, the interference of which was stopped by injunction.
For the foregoing reasons the judgment is affirmed, with costs, against the appellants.





G.R. No. 120554 September 21, 1999
SO PING BUN, petitioner,
vs.
COURT OF APPEALS, TEK HUA ENTERPRISES CORP. and MANUEL C. TIONG, respondents.
This petition for certiorari challenges the Decision
1
of the Court of Appeals dated October 10, 1994,
and the Resolution
2
dated June 5, 1995, in CA-G.R. CV No. 38784. The appellate court affirmed the
decision of the Regional Trial Court of Manila, Branch 35, except for the award of attorney's fees, as
follows:
WHEREFORE, foregoing considered, the appeal of respondent-appellant So Ping
Bun for lack of merit is DISMISSED. The appealed decision dated April 20, 1992 of
the court a quo is modified by reducing the attorney's fees awarded to plaintiff Tek
Hua Enterprising Corporation from P500,000.00 to P200,000.00.
3

The facts are as follows:
In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into lease
agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Subjects of four (4) lease contracts
were premises located at Nos. 930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila. Tek
Hua used the areas to store its textiles. The contracts each had a one-year term. They provided that
should the lessee continue to occupy the premises after the term, the lease shall be on a month-to-
month basis.
When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to
occupy the premises. In 1976, Tek Hua Trading Co. was dissolved. Later, the original members of
Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein
respondent corporation.
So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok's grandson,
petitioner So Ping Bun, occupied the warehouse for his own textile business, Trendsetter Marketing.
On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter
of the 25% increase in rent effective September 1, 1989. The rent increase was later on reduced to
20% effective January 1, 1990, upon other lessees' demand. Again on December 1, 1990, the lessor
implemented a 30% rent increase. Enclosed in these letters were new lease contracts for signing.
DCCSI warned that failure of the lessee to accomplish the contracts shall be deemed as lack of
interest on the lessee's part, and agreement to the termination of the lease. Private respondents did
not answer any of these letters. Still, the lease contracts were not rescinded.
On March 1, 1991, private respondent Tiong sent a letter to petitioner which reads as follows:
March 1, 1991
Mr. So Ping Bun
930 Soler Street
Binondo, Manila
Dear Mr. So,
Due to my closed (sic) business associate (sic) for three decades with your late
grandfather Mr. So Pek Giok and late father, Mr. So Chong Bon, I allowed you
temporarily to use the warehouse of Tek Hua Enterprising Corp. for several years to
generate your personal business.
Since I decided to go back into textile business, I need a warehouse immediately for
my stocks. Therefore, please be advised to vacate all your stocks in Tek Hua
Enterprising Corp. Warehouse. You are hereby given 14 days to vacate the premises
unless you have good reasons that you have the right to stay. Otherwise, I will be
constrained to take measure to protect my interest.
Please give this urgent matter your preferential attention to avoid inconvenience on
your part.
Very truly yours,
(Sgd) Manuel C. Tiong
MANUEL C. TIONG
President
4

Petitioner refused to vacate. On March 4, 1992, petitioner requested formal contracts of lease with
DCCSI in favor Trendsetter Marketing. So Ping Bun claimed that after the death of his grandfather,
So Pek Giok, he had been occupying the premises for his textile business and religiously paid rent.
DCCSI acceded to petitioner's request. The lease contracts in favor of Trendsetter were executed.
In the suit for injunction, private respondents pressed for the nullification of the lease contracts
between DCCSI and petitioner. They also claimed damages.
After trial, the trial court ruled:
WHEREFORE, judgment is rendered:
1. Annulling the four Contracts of Lease (Exhibits A,
A-1 to A-3, inclusive) all dated March 11, 1991,
between defendant So Ping Bun, doing business
under the name and style of "Trendsetter Marketing",
and defendant Dee C. Chuan & Sons, Inc. over the
premises located at Nos. 924-B, 924-C, 930 and 930,
Int., respectively, Soler Street, Binondo Manila;
2. Making permanent the writ of preliminary injunction
issued by this Court on June 21, 1991;
3. Ordering defendant So Ping Bun to pay the
aggrieved party, plaintiff Tek Hua Enterprising
Corporation, the sum of P500,000.00, for attorney's
fees;
4. Dismissing the complaint, insofar as plaintiff
Manuel C. Tiong is concerned, and the respective
counterclaims of the defendant;
5. Ordering defendant So Ping Bun to pay the costs of
this lawsuit;
This judgment is without prejudice to the rights of plaintiff Tek Hua Enterprising
Corporation and defendant Dee C. Chuan & Sons, Inc. to negotiate for the renewal of
their lease contracts over the premises located at Nos. 930, 930-Int., 924-B and 924-
C Soler Street, Binondo, Manila, under such terms and conditions as they agree
upon, provided they are not contrary to law, public policy, public order, and morals.
SO ORDERED.
5

Petitioner's motion for reconsideration of the above decision was denied.
On appeal by So Ping Bun, the Court of Appeals upheld the trial court. On motion for
reconsideration, the appellate court modified the decision by reducing the award of attorney's fees
from five hundred thousand (P500,000.00) pesos to two hundred thousand (P200,000.00) pesos.
Petitioner is now before the Court raising the following issues:
I. WHETHER THE APPELLATE COURT ERRED IN
AFFIRMING THE TRIAL COURT'S DECISION FINDING SO
PING BUN GUILTY OF TORTUOUS INTERFERENCE OF
CONTRACT?
II. WHETHER THE APPELLATE COURT ERRED IN
AWARDING ATTORNEY'S FEES OF P200,000.00 IN
FAVOR OF PRIVATE RESPONDENTS.
The foregoing issues involve, essentially, the correct interpretation of the applicable law on tortuous
conduct, particularly unlawful interference with contract. We have to begin, obviously, with certain
fundamental principles on torts and damages.
Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or
compensation awarded for the damage suffered.
6
One becomes liable in an action for damages for a
nontrespassory invasion of another's interest in the private use and enjoyment of asset if (a) the other has
property rights and privileges with respect to the use or enjoyment interfered with, (b) the invasion is
substantial, (c) the defendant's conduct is a legal cause of the invasion, and (d) the invasion is either
intentional and unreasonable or unintentional and actionable under general negligence rules.
7

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of
the third person of the existence of contract; and (3) interference of the third person is without legal
justification or excuse.
8

A duty which the law of torts is concerned with is respect for the property of others, and a cause of
action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment
by the other of his private
property.
9
This may pertain to a situation where a third person induces a party to renege on or violate his
undertaking under a contract. In the case before us, petitioner's Trendsetter Marketing asked DCCSI to
execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the
latter's property right. Clearly, and as correctly viewed by the appellate court, the three elements of tort
interference above-mentioned are present in the instant case.
Authorities debate on whether interference may be justified where the defendant acts for the sole
purpose of furthering his own financial or economic interest.
10
One view is that, as a general rule,
justification for interfering with the business relations of another exists where the actor's motive is to
benefit himself. Such justification does not exist where his sole motive is to cause harm to the other.
Added to this, some authorities believe that it is not necessary that the interferer's interest outweigh that
of the party whose rights are invaded, and that an individual acts under an economic interest that is
substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in
self-protection.
11
Moreover justification for protecting one's financial position should not be made to
depend on a comparison of his economic interest in the subject matter with that of others.
12
It is sufficient
if the impetus of his conduct lies in a proper business interest rather than in wrongful motives.
13

As early as Gilchrist vs. Cuddy,
14
we held that where there was no malice in the interference of a
contract, and the impulse behind one's conduct lies in a proper business interest rather than in wrongful
motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested,
and such interest motivates his conduct, it cannot be said that he is an officious or malicious
intermeddler.
15

In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the
warehouse to his enterprise at the expense of respondent corporation. Though petitioner took
interest in the property of respondent corporation and benefited from it, nothing on record imputes
deliberate wrongful motives or malice on him.
Sec. 1314 of the Civil Code categorically provides also that, "Any third person who induces another
to violate his contract shall be liable for damages to the other contracting party." Petitioner argues
that damage is an essential element of tort interference, and since the trial court and the appellate
court ruled that private respondents were not entitled to actual, moral or exemplary damages, it
follows that he ought to be absolved of any liability, including attorney's fees.
It is true that the lower courts did not award damages, but this was only because the extent of
damages was not quantifiable. We had a similar situation in Gilchrist, where it was difficult or
impossible to determine the extent of damage and there was nothing on record to serve as basis
thereof. In that case we refrained from awarding damages. We believe the same conclusion applies
in this case.
While we do not encourage tort interferers seeking their economic interest to intrude into existing
contracts at the expense of others, however, we find that the conduct herein complained of did not
transcend the limits forbidding an obligatory award for damages in the absence of any malice. The
business desire is there to make some gain to the detriment of the contracting parties. Lack of
malice, however, precludes damages. But it does not relieve petitioner of the legal liability for
entering into contracts and causing breach of existing ones. The respondent appellate court correctly
confirmed the permanent injunction and nullification of the lease contracts between DCCSI and
Trendsetter Marketing, without awarding damages. The injunction saved the respondents from
further damage or injury caused by petitioner's interference.
Lastly, the recovery of attorney's fees in the concept of actual or compensatory damages, is allowed
under the circumstances provided for in Article 2208 of the Civil Code.
16
One such occasion is when
the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur
expenses to protect his interest.
17
But we have consistently held that the award of considerable damages
should have clear factual and legal bases.
18
In connection with attorney's fees, the award should be
commensurate to the benefits that would have been derived from a favorable judgment. Settled is the rule
that fairness of the award of damages by the trial court calls for appellate review such that the award if far
too excessive can be reduced.
19
This ruling applies with equal force on the award of attorney's fees. In a
long line of cases we said, "It is not sound policy to place in penalty on the right to litigate. To compel the
defeated party to pay the fees of counsel for his successful opponent would throw wide open the door of
temptation to the opposing party and his counsel to swell the fees to undue proportions."
20

Considering that the respondent corporation's lease contract, at the time when the cause of action
accrued, ran only on a month-to-month basis whence before it was on a yearly basis, we find even
the reduced amount of attorney's fees ordered by the Court of Appeals still exorbitant in the light of
prevailing jurisprudence.
21
Consequently, the amount of two hundred thousand (P200,000.00) awarded
by respondent appellate court should be reduced to one hundred thousand (P100,000.00) pesos as the
reasonable award or attorney's fees in favor of private respondent corporation.
WHEREFORE, the petition is hereby DENIED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 38784 are hereby AFFIRMED, with MODIFICATION that the award of
attorney's fees is reduced from two hundred thousand (P200,000.00) to one hundred thousand
(P100,000.00) pesos. No pronouncement as to costs.1wphi1. nt
SO ORDERED.
G.R. No. 116332 January 25, 2000
BAYNE ADJUSTERS AND SURVEYORS, INC., petitioner,
vs.
COURT OF APPEALS and INSURANCE COMPANY OF NORTH AMERICA, respondents.
GONZAGA-REYES, J .:
This petition for review on certiorari seeks a re-examination of the conclusions reached both by the
trial court and of the appellate court from the evidence on record finding petitioner Bayne Adjusters
and Surveyors Inc., liable for damages in the amount of P811,609.53 for the alkyl benzene lost due
to spillage while the said liquid cargo was being pumped into the shore storage tanks of the
consignee Colgate Palmolive Philippines, Inc., under the supervision of herein petitioner.1wphi1.nt
In May 1987 Colgate Palmolive Philippine, Inc., imported alkyl benzene from Japan valued at
US$255,802.88. The said liquid cargo was insured with herein private respondent Insurance
Company of North America against all risk for its full value. Herein petitioner Bayne Adjusters and
Surveyors Inc., was contracted by the consignee to supervise the proper handling and discharge of
the cargo from the chemical tanker to a receiving barge until the cargo is pumped into the
consignee's shore tank. When the cargo arrived in Manila petitioner's surveyor supervised the
transfer of the cargo from the chemical tanker to the receiving barge. Pumping operation from the
barge to the consignee's shore tank commenced at 2020 hours of June 27, 1987. Pumping of the
liquid cargo from the barge to the consignee's tank was interrupted several times due to mechanical
problems with the pump. When the pump broke down once again at about 1300 hours of June 29,
1987, the petitioner's surveyor left the premises without leaving any instruction with the barge
foreman what to do in the event that the pump becomes operational again. No other surveyor was
left in the premises and the assigned surveyor did not seal the valves leading to the tank to avoid
unsupervised pumping of the cargo. Later that day, the consignee asked the petitioner to send a
surveyor to conduct tank sounding. Petitioner sent Amado Fontillas, a cargo surveyor, not a liquid
bulk surveyor, to the premises and it was agreed that pumping operation would resume the following
day at 1030 hours. Fontillas tried to inform both the barge men and the assigned surveyor of the
scheduled resumption of pumping operation but he could not find them so he left the premises.
When the barge men arrived in the early evening, they found the valves of the tank open and
resumed pumping operation in the absence of any instruction from the surveyor to the contrary. The
following morning it was found that an undetermined amount of alkyl benzene was lost due to
overflow. The consignee filed a claim with the private respondent insurance corporation for the value
of the lost liquid cargo. A conference attended by representatives of the petitioner, the consignee
and of the Claimsmen Adjustment Corporation, represented by marine surveyor, was held to
determine the amount of alkyl benzene lost in the overflow and the net amount payable by the
insurance. A compromise quantity of 67.649MT of alkyl benzene was agreed to have been lost in the
overflow and respondent insurance corporation agreed to pay the consignee the net amount of
P811,609.53. Private respondent instituted this action for collection of sum of money as subrogee of
the consignee after failure to extrajudicially settle the matter with Bayne Adjusters.
Both the trial court and the appellate court found the petitioner's failure to comply with the Standard
Operating Procedure for Handling Liquid Bulk Cargo when pumping operation is suspended as the
proximate cause of the loss. It is not denied by the petitioner's surveyor that he did not close the
valve of the tank when the pumping operations were suspended due to pump break down, as
required by standard procedure. This enabled the barge men, in the absence of any instruction to
the contrary, to resume pumping operations without supervision and consequently, caused the
overflow of the liquid cargo from the tank.
Petitioner denies the finding of negligence. It is contended that negligence in this case cannot be
presumed and no sufficient evidence was presented by the plaintiff that the loss suffered by the
consignee is due to the negligence of the petitioner. The petitioner argues that it is not bound to
guard the cargo at all times and its only duty is to supervise the transfer of the liquid cargo from the
chemical tanker to the barge and from the barge to the shore tank of the consignee. The petitioner
cites the private respondent's own witness who stated in court that the operator of the barge pump
continued pumping into the consignee's shore tank without authorization from the petitioner's
surveyor and that the overflow was caused by this unauthorized pumping operation. Petitioner also
raised in issue that both the trial and the appellate court gave undue weight to the testimony of the
private respondents supposed expert witness who admitted in court that he made a mistake in his
affidavit that the petitioner is liable under a protective survey contract when in fact the agreement
between the petitioner and the consignee is that of a superintendent survey. The petitioner argues
that following the statement of the private respondent's witness that the agreement between the
consignee and the petitioner is that of a protective survey agreement, the standard operating
procedure for handling liquid bulk cargo should not be the criterion for the evaluation of the alleged
negligence of the petitioner.
The private respondent filed comment to the petition stating that the petition is asking this Court to
review the findings of facts and findings as to the credibility of witnesses made by both the trial and
appellate court which under settled jurisprudence is conclusive upon the Supreme Court and in the
absence of a showing that any of the exceptions to this rule is applicable the petition should be
dismissed. On the merits, the private respondent prays for the affirmance in toto of the findings of
trial and appellate courts. The testimony of the expert witness presented by the private respondent is
not based on hearsay evidence but from his personal investigation of the incident and his conclusion
that the petitioner's surveyors are at fault is based on his experience as a marine cargo surveyor for
eight years. The expert witness found that the petitioner's surveyors failed to perform what is
required of them under the standard operating procedure for marine surveyors
1
when pumping
operation is suspended, i.e., to seal all cargo manhole covers including the barge and shore
manifolds. Their negligence to do so paved the way for the barge operators to resume pumping
operation without expert supervision which should have been provided by the petitioner's surveyors.
Further, petitioner's own report admits that it is bound to the consignee under a superintendent
contract of survey which includes the supervision in the discharge of cargo to prevent loss.
A Reply was filed by the petitioner stating that it is not seeking a review of the facts in evidence but a
review of the conclusions reached by the trial and the appellate court based on the facts in evidence
and adopts the arguments raised in the main petition.
Private respondent filed Rejoinder stressing that a re-examination of the factual findings of the lower
courts is not in order as none of the exceptions to the rule was shown by the petitioner to be
obtaining in this case. The supposed mistake committed by the respondent's expert witness was
sufficiently explained in court and that by itself is not sufficient to overthrow the said witness'
credibility nor the weight accorded to it by the lower courts.
We find no reversible error committed by the appellate court.
The negligence of the obligor in the performance of the obligation renders him liable for damages for
the resulting loss suffered by the obligee. Fault or negligence of the obligor consists in his failure to
exercise due care and prudence in the performance of the obligation as the nature of the obligation
so demands.
2
The factual findings and conclusions of the trial and appellate court when supported
by substantial evidence are entitled to great respect and will not be disturbed on appeal except on
very strong and cogent grounds.
3

Both parties agree that the petitioner is bound to supervise the proper discharge of the liquid cargo
from the chemical tanker to the receiving barge and from the latter to the consignee's shore rank.
Petitioner does not deny that when pumping operations were suspended due to mechanical
problems with the barge pump, that the assigned surveyor left the premises without closing the
valves and the manifold, and worse failed to instruct the barge foreman to resume discharge of the
cargo only at a specified time when the petitioner's surveyor will again be present. Thus, when the
pump became operational again and the tank was left open by the petitioner's surveyors the barge
pump operators, without instruction to the contrary, assumed that they may resume discharge of the
cargo. It was during the unsupervised discharge of the cargo that the spillage occurred.
Based on the undisputed facts, we find that the lower courts did not err in holding the petitioner liable
for the loss incurred by the consignee for its failure to exercise due diligence as required by the
circumstances which in this case is governed by the Surveyor's Standard Operating Procedure in
Handling Liquid Bulk Survey when pumping operation is suspended. We note that the existence and
binding effect of the standard procedure in marine survey of liquid cargo under Exh Q is not denied
by the petitioner. Paragraph 2.2 of the Surveyor's Standard Operating Procedure when pumping
operation is suspended states:
2.2.1 If consignee desires to temporarily suspend the pumping operation, take final reading
of the shore tanks.
2.2.2 Seal all cargo compartment manhole covers and sounding pipe covers of the barge.
2.2.3 Seal the barge manifold and shore manifold.
2.2.4 The surveyor should take sounding of the remaining quantity left on barge prior to
closing/sealing of its covers to counter check the quantity partially received by the shore
tanks.
It is clear that under the standard procedure the surveyor is required to seal all cargo compartment
manhole covers and the barge and manifold covers to avoid unsupervised discharge of the liquid
cargo and to avert loss or contamination thereof. Although the cessation of the pumping operations
in this case was not voluntarily requested by the consignee, but was due to mechanical problems
with the pump, there is greater reason to comply with the above quoted standard procedure. The
recurring pump break down should have warned the petitioner's assigned surveyor of the need to
exercise extreme caution and closer supervision to safeguard the proper discharge of the cargo as
the pump break down hindered normal pumping operations. Instead the petitioner's assigned
surveyor disregarded the standard procedure and left the pump site without leaving any instruction
or directive with the barge pump operators; this paved the way for the barge pump operator's
discharge of the cargo without expert supervision. The petitioner's failure to closely supervise the
discharge of the cargo in accordance with accepted guidelines is the proximate cause of the loss.
We find no cogent reason to overturn the legal conclusion reached by the lower courts that the
petitioner is negligent in the performance of its duty as a marine superintendent surveyor under the
Standard Operating Procedure in handling liquid cargo and held the petitioner liable for damages for
the loss of the cargo.
The petitioner relies on the erroneous statement made by the private respondent's claims adjuster in
his affidavit
4
that the parties are bound under a protective survey agreement to evade liability under
the standard operating procedure and argues that the said standard procedure is not applicable to
contracts of protective survey. We note that the adjuster's error was immediately rectified in court
during the witness' testimony herein he stated that the contract between the parties herein is for
superintendent survey and that protective survey applies only to solid cargo, a fact not disputed by
the petitioner. The petitioner is estopped from denying the existence of a superintendent survey
agreement with the consignee since the final report it submitted to the consignees is entitled
"Superintendence of discharge and Landed Weight Certificate" wherein petitioner stated that its
surveyors superintendent the discharge of the cargo from the tanker until the cargo was pumped into
the consignee's shore tank. Moreover, the applicability of the Standard Operating Procedure in
Handling Liquid Bulk Survey and the cargo subject of this litigation is liquid alkyl benzene.1wphi1.nt
The other arguments raised by the petitioner regarding the credibility of the claims adjuster
presented by the private respondent lose potency when examined under the overwhelming
pronouncements of this Court that findings of the trial court on the credibility of witnesses is
respected on appeal.
5
The testimony of the claims adjuster whether taken as expert opinion or not
was properly given weight and credence by the lower courts as it is undisputed that the claims
adjuster investigated the spillage of the liquid cargo with the consent of the petitioner, the private
respondent and the consignee.
6

Wherefore, the petition is dismissed for lack of merit.
SO ORDERED.





G.R. No. 108397 June 21, 2000
FOOD TERMINAL INCORPORATED, petitioner,
vs.
COURT OF APPEALS AND BASIC FOODS CORPORATION, respondents.
The case before the Court is an appeal via certiorari from the decision of the Court of
Appeals
1
reversing that of the trial court
2
and holding petitioner liable to pay respondent in the
amount of P161,112.00 with interest thereon at the legal rate from the date of filing of the complaint
until the obligation is fully paid, and costs.
The facts, as found by the Court of Appeals, are as follows:
It is alleged in the complaint that plaintiff Basic Foods was engaged in the business of
manufacturing food and allied products using for the production thereof Red Star
compressed yeast which required storage in a refrigerated space to avoid spoilage. On the
other hand, defendant Food Terminal, Incorporated (FTI for brevity) was engaged in the
business of storage of goods or merchandise for compensation at its refrigerated warehouse
in Taguig, Metro Manila. During the period from June 10, 1987 up to June 23, 1987, plaintiff
deposited for cold storage with the defendant 1,770 cartons of Red Star compressed yeast.
However, because of the latter's negligence in the performance of its obligations as a
warehouseman consisting of, among others, its failure to control the temperature in its
warehouse where the aforecited merchandise were stored, a total of 383.6 cartons of said
Red Star compressed yeast worth not less than P161,112.00 were spoiled. As a
consequence of this damage, plaintiff demanded from defendant FTI payment of the total
value of the spoiled compressed yeast. This demand proved to be futile. Hence, the instant
action.1wphi 1. nt
In its answer, defendant denied that plaintiff had deposited with it 1,770 cartons of Red Star
compressed yeast. It alleged that only 750 cartons of the merchandise had been stored in its
warehouse. Further, it asserted that it had exercised utmost diligence in the care and
custody of plaintiff's commodities as a reasonably careful owner of similar goods would
exercise and that if any injury was suffered by plaintiff corporation by reason of the alleged
deterioration of its goods, the same was primarily caused by its (plaintiff's) negligence and/or
circumstances beyond the reasonable control of the defendant. Before Basic Foods
deposited the cartons of the compressed yeast, FTI had already switched on the cooling and
refrigeration system in its Central Refrigeration Warehouse specifically Zone 4 for pre-
cooling measure. Defendant afterwards undertook to maintain and control the temperature
between two degrees centigrade and four degrees centigrade specification through constant
and proper monitoring by its personnel. This procedure, however, was done by allowing
plaintiff to load its stocks in the pallet towers in Zone 4 and giving it discretion as to the
stocks arrangement according to its own requirements and satisfaction. Defendant further
averred that the alleged damage of some cartons of the subject commodities could be
attributed to plaintiff's arrangement of the same taking into consideration its nature and
characteristic; that pursuant to the stipulations under the parties' cold storage contract, the
defendant would not be liable for any loss, injury or damage, whether direct or indirect, to
plaintiff's goods attributable to any cause whatsoever and in particular from causes beyond
the reasonable control of the defendant. Neither would FTI be liable for damage or injury,
resulting from variations in or wrong temperature and relative humidities, or shrinkage,
deterioration, fermentation, decay, putrefaction, or those due to any inherent defects in the
nature of the goods stored. Defendant maintained that plaintiff was already estopped from
filing the instant suit since it (plaintiff) had acknowledged receipt of the goods in good order
condition as indicated in the Bonded Warehouse Issues.
Eventually, the court a quo rendered judgment dismissing the instant action. . . .
3

In due time, respondent appealed to the Court of Appeals.
4
On December 17, 1992, the Court of
Appeals rendered a decision reversing the trial court, as set out in the opening paragraph of this
opinion.
5

Hence, this appeal.
6

The basic issue raised is whether or not the Court of Appeals erred in ruling that petitioner was
negligent in the care and custody of respondent's goods during storage.
We deny the petition.
In the first place, the issue is factual, thus, the ruling of the Court of Appeals is binding on the parties
and may not be reviewed on appeal via certiorari.
7

In the second place, petitioner practically admitted that it failed to maintain the agreed temperature
of the cold storage area at 2 to 4 degrees centigrade at all times, and this caused the deterioration of
the yeast stored therein. Nonetheless, petitioner claimed that temperature was not the sole cause for
the deterioration of respondent's goods. Since negligence has been established, petitioner's liability
for damages is inescapable.
8

WHEREFORE, the Court hereby DENIES the petition for review on certiorari and AFFIRMS in
toto the decision of the Court of Appeals.
9

No costs.
SO ORDERED.
G.R. No. 130547 October 3, 2000
LEAH ALESNA REYES, ROSE NAHDJA, JOHNNY, and minors LLOYD and KRISTINE, all
surnamed REYES, represented by their mother, LEAH ALESNA REYES, petitioners,
vs.
SISTERS OF MERCY HOSPITAL, SISTER ROSE PALACIO, DR. MARVIE BLANES, and DR.
MARLYN RICO,respondents.
ENDOZA, J .:
This is a petition for review of the decision
1
of the Court of Appeals in CA-G.R. CV No. 36551
affirming the decision of the Regional Trial Court, Branch IX, Cebu City which dismissed a complaint
for damages filed by petitioners against respondents.
The facts are as follows:
Petitioner Leah Alesna Reyes is the wife of the late Jorge Reyes. The other petitioners, namely,
Rose Nahdja, Johnny, Lloyd, and Kristine, all surnamed Reyes, were their children. Five days before
his death on January 8, 1987, Jorge had been suffering from a recurring fever with chills. After he
failed to get relief from some home medication he was taking, which consisted of analgesic,
antipyretic, and antibiotics, he decided to see the doctor.
On January 8, 1987, he was taken to the Mercy Community Clinic by his wife. He was attended to by
respondent Dr. Marlyn Rico, resident physician and admitting physician on duty, who gave Jorge a
physical examination and took his medical history. She noted that at the time of his admission, Jorge
was conscious, ambulatory, oriented, coherent, and with respiratory distress.
2
Typhoid fever was
then prevalent in the locality, as the clinic had been getting from 15 to 20 cases of typhoid per
month.
3
Suspecting that Jorge could be suffering from this disease, Dr. Rico ordered a Widal Test, a
standard test for typhoid fever, to be performed on Jorge. Blood count, routine urinalysis, stool
examination, and malarial smear were also made.
4
After about an hour, the medical technician
submitted the results of the test from which Dr. Rico concluded that Jorge was positive for typhoid
fever. As her shift was only up to 5:00 p.m., Dr. Rico indorsed Jorge to respondent Dr. Marvie
Blanes.
Dr. Marvie Blanes attended to Jorge at around six in the evening. She also took Jorges history and
gave him a physical examination. Like Dr. Rico, her impression was that Jorge had typhoid fever.
Antibiotics being the accepted treatment for typhoid fever, she ordered that a compatibility test with
the antibiotic chloromycetin be done on Jorge. Said test was administered by nurse Josephine
Pagente who also gave the patient a dose of triglobe. As she did not observe any adverse reaction
by the patient to chloromycetin, Dr. Blanes ordered the first five hundred milligrams of said antibiotic
to be administered on Jorge at around 9:00 p.m. A second dose was administered on Jorge about
three hours later just before midnight.
At around 1:00 a.m. of January 9, 1987, Dr. Blanes was called as Jorges temperature rose to 41C.
The patient also experienced chills and exhibited respiratory distress, nausea, vomiting, and
convulsions. Dr. Blanes put him under oxygen, used a suction machine, and administered
hydrocortisone, temporarily easing the patients convulsions. When he regained consciousness, the
patient was asked by Dr. Blanes whether he had a previous heart ailment or had suffered from chest
pains in the past. Jorge replied he did not.
5
After about 15 minutes, however, Jorge again started to
vomit, showed restlessness, and his convulsions returned. Dr. Blanes re-applied the emergency
measures taken before and, in addition, valium was administered. Jorge, however, did not respond
to the treatment and slipped into cyanosis, a bluish or purplish discoloration of the skin or mucous
membrane due to deficient oxygenation of the blood. At around 2:00 a.m., Jorge died. He was forty
years old. The cause of his death was "Ventricular Arrythemia Secondary to Hyperpyrexia and
typhoid fever."
On June 3, 1987, petitioners filed before the Regional Trial Court of Cebu City a complaint
6
for
damages against respondents Sisters of Mercy, Sister Rose Palacio, Dr. Marvie Blanes, Dr. Marlyn
Rico, and nurse Josephine Pagente. On September 24, 1987, petitioners amended their complaint
to implead respondent Mercy Community Clinic as additional defendant and to drop the name of
Josephine Pagente as defendant since she was no longer connected with respondent hospital. Their
principal contention was that Jorge did not die of typhoid fever.
7
Instead, his death was due to the
wrongful administration of chloromycetin. They contended that had respondent doctors exercised
due care and diligence, they would not have recommended and rushed the performance of the
Widal Test, hastily concluded that Jorge was suffering from typhoid fever, and administered
chloromycetin without first conducting sufficient tests on the patients compatibility with said drug.
They charged respondent clinic and its directress, Sister Rose Palacio, with negligence in failing to
provide adequate facilities and in hiring negligent doctors and nurses.
8

Respondents denied the charges. During the pre-trial conference, the parties agreed to limit the
issues on the following: (1) whether the death of Jorge Reyes was due to or caused by the
negligence, carelessness, imprudence, and lack of skill or foresight on the part of defendants; (2)
whether respondent Mercy Community Clinic was negligent in the hiring of its employees; and (3)
whether either party was entitled to damages. The case was then heard by the trial court during
which, in addition to the testimonies of the parties, the testimonies of doctors as expert witnesses
were presented.
Petitioners offered the testimony of Dr. Apolinar Vacalares, Chief Pathologist at the Northern
Mindanao Training Hospital, Cagayan de Oro City. On January 9, 1987, Dr. Vacalares performed an
autopsy on Jorge Reyes to determine the cause of his death. However, he did not open the skull to
examine the brain. His findings
9
showed that the gastro-intestinal tract was normal and without any
ulceration or enlargement of the nodules. Dr. Vacalares testified that Jorge did not die of typhoid
fever. He also stated that he had not seen a patient die of typhoid fever within five days from the
onset of the disease.
For their part, respondents offered the testimonies of Dr. Peter Gotiong and Dr. Ibarra Panopio. Dr.
Gotiong is a diplomate in internal medicine whose expertise is microbiology and infectious diseases.
He is also a consultant at the Cebu City Medical Center and an associate professor of medicine at
the South Western University College of Medicine in Cebu City. He had treated over a thousand
cases of typhoid patients. According to Dr. Gotiong, the patients history and positive Widal Test
results ratio of 1:320 would make him suspect that the patient had typhoid fever. As to Dr. Vacalares
observation regarding the absence of ulceration in Jorges gastro-intestinal tract, Dr. Gotiong said
that such hyperplasia in the intestines of a typhoid victim may be microscopic. He noted that since
the toxic effect of typhoid fever may lead to meningitis, Dr. Vacalares autopsy should have included
an examination of the brain.
10

The other doctor presented was Dr. Ibarra Panopio, a member of the American Board of Pathology,
examiner of the Philippine Board of Pathology from 1978 to 1991, fellow of the Philippine Society of
Pathologist, associate professor of the Cebu Institute of Medicine, and chief pathologist of the
Andres Soriano Jr. Memorial Hospital in Toledo City. Dr. Panopio stated that although he was partial
to the use of the culture test for its greater reliability in the diagnosis of typhoid fever, the Widal Test
may also be used. Like Dr. Gotiong, he agreed that the 1:320 ratio in Jorges case was already the
maximum by which a conclusion of typhoid fever may be made. No additional information may be
deduced from a higher dilution.
11
He said that Dr. Vacalares autopsy on Jorge was incomplete and
thus inconclusive.
On September 12, 1991, the trial court rendered its decision absolving respondents from the
charges of negligence and dismissing petitioners action for damages. The trial court likewise
dismissed respondents counterclaim, holding that, in seeking damages from respondents,
petitioners were impelled by the honest belief that Jorges death was due to the latters negligence.
Petitioners brought the matter to the Court of Appeals. On July 31, 1997, the Court of Appeals
affirmed the decision of the trial court.
Hence this petition.
Petitioners raise the following assignment of errors:
I. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN
IT RULED THAT THE DOCTRINE OF RES IPSA LOQUITUR IS NOT APPLICABLE IN THE
INSTANT CASE.
II. THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN
IT MADE AN UNFOUNDED ASSUMPTION THAT THE LEVEL OF MEDICAL PRACTICE IS
LOWER IN ILIGAN CITY.
III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED FOR A
LESSER STANDARD OF CARE AND DEGREE OF DILIGENCE FOR MEDICAL PRACTICE
IN ILIGAN CITY WHEN IT APPRECIATE[D] NO DOCTORS NEGLIGENCE IN THE
TREATMENT OF JORGE REYES.
Petitioners action is for medical malpractice. This is a particular form of negligence which consists in
the failure of a physician or surgeon to apply to his practice of medicine that degree of care and skill
which is ordinarily employed by the profession generally, under similar conditions, and in like
surrounding circumstances.
12
In order to successfully pursue such a claim, a patient must prove that
the physician or surgeon either failed to do something which a reasonably prudent physician or
surgeon would have done, or that he or she did something that a reasonably prudent physician or
surgeon would not have done, and that the failure or action caused injury to the patient.
13
There are
thus four elements involved in medical negligence cases, namely: duty, breach, injury, and
proximate causation.
In the present case, there is no doubt that a physician-patient relationship existed between
respondent doctors and Jorge Reyes. Respondents were thus duty-bound to use at least the same
level of care that any reasonably competent doctor would use to treat a condition under the same
circumstances. It is breach of this duty which constitutes actionable malpractice.
14
As to this aspect
of medical malpractice, the determination of the reasonable level of care and the breach thereof,
expert testimony is essential. Inasmuch as the causes of the injuries involved in malpractice actions
are determinable only in the light of scientific knowledge, it has been recognized that expert
testimony is usually necessary to support the conclusion as to causation.
15

Res Ipsa Loquitur
There is a case when expert testimony may be dispensed with, and that is under the doctrine of res
ipsa loquitur. As held in Ramos v. Court of Appeals:
16

Although generally, expert medical testimony is relied upon in malpractice suits to prove that a
physician has done a negligent act or that he has deviated from the standard medical procedure,
when the doctrine of res ipsa loquitor is availed by the plaintiff, the need for expert medical testimony
is dispensed with because the injury itself provides the proof of negligence. The reason is that the
general rule on the necessity of expert testimony applies only to such matters clearly within the
domain of medical science, and not to matters that are within the common knowledge of mankind
which may be testified to by anyone familiar with the facts. Ordinarily, only physicians and surgeons
of skill and experience are competent to testify as to whether a patient has been treated or operated
upon with a reasonable degree of skill and care. However, testimony as to the statements and acts
of physicians and surgeons, external appearances, and manifest conditions which are observable by
any one may be given by non-expert witnesses. Hence, in cases where the res ipsa loquitur is
applicable, the court is permitted to find a physician negligent upon proper proof of injury to the
patient, without the aid of expert testimony, where the court from its fund of common knowledge can
determine the proper standard of care. Where common knowledge and experience teach that a
resulting injury would not have occurred to the patient if due care had been exercised, an inference
of negligence may be drawn giving rise to an application of the doctrine of res ipsa loquitur without
medical evidence, which is ordinarily required to show not only what occurred but how and why it
occurred. When the doctrine is appropriate, all that the patient must do is prove a nexus between the
particular act or omission complained of and the injury sustained while under the custody and
management of the defendant without need to produce expert medical testimony to establish the
standard of care. Resort to res ipsa loquitor is allowed because there is no other way, under usual
and ordinary conditions, by which the patient can obtain redress for injury suffered by him.
Thus, courts of other jurisdictions have applied the doctrine in the following situations: leaving of a
foreign object in the body of the patient after an operation, injuries sustained on a healthy part of the
body which was not under, or in the area, of treatment, removal of the wrong part of the body when
another part was intended, knocking out a tooth while a patients jaw was under anesthetic for the
removal of his tonsils, and loss of an eye while the patient was under the influence of anesthetic,
during or following an operation for appendicitis, among others.
17

Petitioners asserted in the Court of Appeals that the doctrine of res ipsa loquitur applies to the
present case because Jorge Reyes was merely experiencing fever and chills for five days and was
fully conscious, coherent, and ambulant when he went to the hospital. Yet, he died after only ten
hours from the time of his admission.
This contention was rejected by the appellate court.
Petitioners now contend that all requisites for the application of res ipsa loquitur were present,
namely: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent;
(2) the instrumentality or agency which caused the injury was under the exclusive control of the
person in charge; and (3) the injury suffered must not have been due to any voluntary action or
contribution of the person injured.
18

The contention is without merit. We agree with the ruling of the Court of Appeals. In
the Ramos case, the question was whether a surgeon, an anesthesiologist, and a hospital should be
made liable for the comatose condition of a patient scheduled for cholecystectomy.
19
In that case,
the patient was given anesthesia prior to her operation. Noting that the patient was neurologically
sound at the time of her operation, the Court applied the doctrine of res ipsa loquitur as mental brain
damage does not normally occur in a gallblader operation in the absence of negligence of the
anesthesiologist. Taking judicial notice that anesthesia procedures had become so common that
even an ordinary person could tell if it was administered properly, we allowed the testimony of a
witness who was not an expert. In this case, while it is true that the patient died just a few hours after
professional medical assistance was rendered, there is really nothing unusual or extraordinary about
his death. Prior to his admission, the patient already had recurring fevers and chills for five days
unrelieved by the analgesic, antipyretic, and antibiotics given him by his wife. This shows that he had
been suffering from a serious illness and professional medical help came too late for him.
Respondents alleged failure to observe due care was not immediately apparent to a layman so as to
justify application of res ipsa loquitur. The question required expert opinion on the alleged breach by
respondents of the standard of care required by the circumstances. Furthermore, on the issue of the
correctness of her diagnosis, no presumption of negligence can be applied to Dr. Marlyn Rico.As
held in Ramos:
. . . . Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be
cautiously applied, depending upon the circumstances of each case. It is generally restricted to
situations in malpractice cases where a layman is able to say, as a matter of common knowledge
and observation, that the consequences of professional care were not as such as would ordinarily
have followed if due care had been exercised. A distinction must be made between the failure to
secure results, and the occurrence of something more unusual and not ordinarily found if the service
or treatment rendered followed the usual procedure of those skilled in that particular practice. It must
be conceded that the doctrine of res ipsa loquitur can have no application in a suit against a
physician or a surgeon which involves the merits of a diagnosis or of a scientific treatment. The
physician or surgeon is not required at his peril to explain why any particular diagnosis was not
correct, or why any particular scientific treatment did not produce the desired result.
20

Specific Acts of Negligence
We turn to the question whether petitioners have established specific acts of negligence allegedly
committed by respondent doctors.
Petitioners contend that: (1) Dr. Marlyn Rico hastily and erroneously relied upon the Widal test,
diagnosed Jorges illness as typhoid fever, and immediately prescribed the administration of the
antibiotic chloromycetin;
21
and (2) Dr. Marvie Blanes erred in ordering the administration of the
second dose of 500 milligrams of chloromycetin barely three hours after the first was
given.
22
Petitioners presented the testimony of Dr. Apolinar Vacalares, Chief Pathologist of the
Northern Mindanao Training Hospital, Cagayan de Oro City, who performed an autopsy on the body
of Jorge Reyes. Dr. Vacalares testified that, based on his findings during the autopsy, Jorge Reyes
did not die of typhoid fever but of shock undetermined, which could be due to allergic reaction or
chloromycetin overdose. We are not persuaded.
First. While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not find him to
be so as he is not a specialist on infectious diseases like typhoid fever. Furthermore, although he
may have had extensive experience in performing autopsies, he admitted that he had yet to do one
on the body of a typhoid victim at the time he conducted the postmortem on Jorge Reyes. It is also
plain from his testimony that he has treated only about three cases of typhoid fever. Thus, he
testified that:
23

ATTY. PASCUAL:
Q Why? Have you not testified earlier that you have never seen a patient who died of typhoid fever?
A In autopsy. But, that was when I was a resident physician yet.
Q But you have not performed an autopsy of a patient who died of typhoid fever?
A I have not seen one.
Q And you testified that you have never seen a patient who died of typhoid fever within five days?
A I have not seen one.
Q How many typhoid fever cases had you seen while you were in the general practice of medicine?
A In our case we had no widal test that time so we cannot consider that the typhoid fever is like this
and like that. And the widal test does not specify the time of the typhoid fever.
Q The question is: how many typhoid fever cases had you seen in your general practice regardless
of the cases now you practice?
A I had only seen three cases.
Q And that was way back in 1964?
A Way back after my training in UP.
Q Clinically?
A Way back before my training.
He is thus not qualified to prove that Dr. Marlyn Rico erred in her diagnosis. Both lower courts were
therefore correct in discarding his testimony, which is really inadmissible.
In Ramos, the defendants presented the testimony of a pulmonologist to prove that brain injury was
due to oxygen deprivation after the patient had bronchospasms
24
triggered by her allergic response
to a drug,
25
and not due to faulty intubation by the anesthesiologist. As the issue was whether the
intubation was properly performed by an anesthesiologist, we rejected the opinion of the
pulmonologist on the ground that he was not: (1) an anesthesiologist who could enlighten the court
about anesthesia practice, procedure, and their complications; nor (2) an allergologist who could
properly advance expert opinion on allergic mediated processes; nor (3) a pharmacologist who could
explain the pharmacologic and toxic effects of the drug allegedly responsible for the bronchospasms.
Second. On the other hand, the two doctors presented by respondents clearly were experts on the
subject. They vouched for the correctness of Dr. Marlyn Ricos diagnosis. Dr. Peter Gotiong, a
diplomate whose specialization is infectious diseases and microbiology and an associate professor
at the Southwestern University College of Medicine and the Gullas College of Medicine, testified that
he has already treated over a thousand cases of typhoid fever.
26
According to him, when a case of
typhoid fever is suspected, the Widal test is normally used,
27
and if the 1:320 results of the Widal test
on Jorge Reyes had been presented to him along with the patients history, his impression would
also be that the patient was suffering from typhoid fever.
28
As to the treatment of the disease, he
stated that chloromycetin was the drug of choice.
29
He also explained that despite the measures
taken by respondent doctors and the intravenous administration of two doses of chloromycetin,
complications of the disease could not be discounted. His testimony is as follows:
30

ATTY. PASCUAL:
Q If with that count with the test of positive for 1 is to 320, what treatment if any would be given?
A If those are the findings that would be presented to me, the first thing I would consider would be
typhoid fever.
Q And presently what are the treatments commonly used?
A Drug of choice of chloramphenical.
Q Doctor, if given the same patient and after you have administered chloramphenical about 3 1/2
hours later, the patient associated with chills, temperature - 41
o
C, what could possibly come to your
mind?
A Well, when it is change in the clinical finding, you have to think of complication.
Q And what will you consider on the complication of typhoid?
A One must first understand that typhoid fever is toximia. The problem is complications are caused
by toxins produced by the bacteria . . . whether you have suffered complications to think of -- heart
toxic myocardities; then you can consider a toxic meningitis and other complications and
perforations and bleeding in the ilium.
Q Even that 40-year old married patient who received medication of chloromycetin of 500 milligrams
intravenous, after the skin test, and received a second dose of chloromycetin of 500 miligrams, 3
hours later, the patient developed chills . . . rise in temperature to 41
o
C, and then about 40 minutes
later the temperature rose to 100
o
F, cardiac rate of 150 per minute who appeared to be coherent,
restless, nauseating, with seizures: what significance could you attach to these clinical changes?
A I would then think of toxemia, which was toxic meningitis and probably a toxic meningitis because
of the high cardiac rate.
Q Even if the same patient who, after having given intramuscular valium, became conscious and
coherent about 20 minutes later, have seizure and cyanosis and rolling of eyeballs and vomitting . . .
and death: what significance would you attach to this development?
A We are probably dealing with typhoid to meningitis.
Q In such case, Doctor, what finding if any could you expect on the post-mortem examination?
A No, the finding would be more on the meninges or covering of the brain.
Q And in order to see those changes would it require opening the skull?
A Yes.
As regards Dr. Vacalares finding during the autopsy that the deceaseds gastro-intestinal tract was
normal, Dr. Rico explained that, while hyperplasia
31
in the payers patches or layers of the small
intestines is present in typhoid fever, the same may not always be grossly visible and a microscope
was needed to see the texture of the cells.
32

Respondents also presented the testimony of Dr. Ibarra T. Panopio who is a member of the
Philippine and American Board of Pathology, an examiner of the Philippine Board of Pathology, and
chief pathologist at the MetroCebu Community Hospital, Perpetual Succor Hospital, and the Andres
Soriano Jr. Memorial Medical Center. He stated that, as a clinical pathologist, he recognized that the
Widal test is used for typhoid patients, although he did not encourage its use because a single test
would only give a presumption necessitating that the test be repeated, becoming more conclusive at
the second and third weeks of the disease.
33
He corroborated Dr. Gotiongs testimony that the
danger with typhoid fever is really the possible complications which could develop like perforation,
hemorrhage, as well as liver and cerebral complications.
34
As regards the 1:320 results of the Widal
test on Jorge Reyes, Dr. Panopio stated that no additional information could be obtained from a
higher ratio.
35
He also agreed with Dr. Gotiong that hyperplasia in the payers patches may be
microscopic.
36

Indeed, the standard contemplated is not what is actually the average merit among all known
practitioners from the best to the worst and from the most to the least experienced, but the
reasonable average merit among the ordinarily good physicians.
37
Here, Dr. Marlyn Rico did not
depart from the reasonable standard recommended by the experts as she in fact observed the due
care required under the circumstances. Though the Widal test is not conclusive, it remains a
standard diagnostic test for typhoid fever and, in the present case, greater accuracy through
repeated testing was rendered unobtainable by the early death of the patient. The results of the
Widal test and the patients history of fever with chills for five days, taken with the fact that typhoid
fever was then prevalent as indicated by the fact that the clinic had been getting about 15 to 20
typhoid cases a month, were sufficient to give upon any doctor of reasonable skill the impression
that Jorge Reyes had typhoid fever.
Dr. Rico was also justified in recommending the administration of the drug chloromycetin, the drug of
choice for typhoid fever. The burden of proving that Jorge Reyes was suffering from any other illness
rested with the petitioners. As they failed to present expert opinion on this, preponderant evidence to
support their contention is clearly absent.
Third. Petitioners contend that respondent Dr. Marvie Blanes, who took over from Dr. Rico, was
negligent in ordering the intravenous administration of two doses of 500 milligrams of chloromycetin
at an interval of less than three hours. Petitioners claim that Jorge Reyes died of anaphylactic
shock
38
or possibly from overdose as the second dose should have been administered five to six
hours after the first, per instruction of Dr. Marlyn Rico. As held by the Court of Appeals, however:
That chloromycetin was likewise a proper prescription is best established by medical authority.
Wilson, et. al., inHarrisons Principle of Internal Medicine, 12th ed. write that chlorampenicol (which
is the generic of chloromycetin) is the drug of choice for typhoid fever and that no drug has yet
proven better in promoting a favorable clinical response. "Chlorampenicol (Chloromycetin) is
specifically indicated for bacterial meningitis, typhoid fever, rickettsial infections, bacteriodes
infections, etc." (PIMS Annual, 1994, p. 211) The dosage likewise including the first administration of
five hundred milligrams (500 mg.) at around nine oclock in the evening and the second dose at
around 11:30 the same night was still within medically acceptable limits, since the recommended
dose of chloromycetin is one (1) gram every six (6) hours. (cf. Pediatric Drug Handbook, 1st Ed.,
Philippine Pediatric Society, Committee on Therapeutics and Toxicology, 1996). The intravenous
route is likewise correct. (Mansser, ONick, Pharmacology and Therapeutics) Even if the test was not
administered by the physician-on-duty, the evidence introduced that it was Dra. Blanes who
interpreted the results remain uncontroverted. (Decision, pp. 16-17) Once more, this Court rejects
any claim of professional negligence in this regard.
. . . .
As regards anaphylactic shock, the usual way of guarding against it prior to the administration of a
drug, is the skin test of which, however, it has been observed: "Skin testing with haptenic drugs is
generally not reliable. Certain drugs cause nonspecific histamine release, producing a weal-and-flare
reaction in normal individuals. Immunologic activation of mast cells requires a polyvalent allergen, so
a negative skin test to a univalent haptenic drug does not rule out anaphylactic sensitivity to that
drug." (Terr, "Anaphylaxis and Urticaria" in Basic and Clinical Immunology, p. 349) What all this
means legally is that even if the deceased suffered from an anaphylactic shock, this, of itself, would
not yet establish the negligence of the appellee-physicians for all that the law requires of them is that
they perform the standard tests and perform standard procedures. The law cannot require them to
predict every possible reaction to all drugs administered. The onus probandi was on the appellants
to establish, before the trial court, that the appellee-physicians ignored standard medical procedure,
prescribed and administered medication with recklessness and exhibited an absence of the
competence and skills expected of general practitioners similarly situated.
39

Fourth. Petitioners correctly observe that the medical profession is one which, like the business of a
common carrier, is affected with public interest. Moreover, they assert that since the law imposes
upon common carriers the duty of observing extraordinary diligence in the vigilance over the goods
and for the safety of the passengers,
40
physicians and surgeons should have the same duty toward
their patients.
41
They also contend that the Court of Appeals erred when it allegedly assumed that
the level of medical practice is lower in Iligan City, thereby reducing the standard of care and degree
of diligence required from physicians and surgeons in Iligan City.
The standard of extraordinary diligence is peculiar to common carriers. The Civil Code provides:
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to the circumstances of each case. . . .
The practice of medicine is a profession engaged in only by qualified individuals.1wphi 1 It is a right earned
through years of education, training, and by first obtaining a license from the state through
professional board examinations. Such license may, at any time and for cause, be revoked by the
government. In addition to state regulation, the conduct of doctors is also strictly governed by the
Hippocratic Oath, an ancient code of discipline and ethical rules which doctors have imposed upon
themselves in recognition and acceptance of their great responsibility to society. Given these
safeguards, there is no need to expressly require of doctors the observance of "extraordinary"
diligence. As it is now, the practice of medicine is already conditioned upon the highest degree of
diligence. And, as we have already noted, the standard contemplated for doctors is simply the
reasonable average merit among ordinarily good physicians. That is reasonable diligence for doctors
or, as the Court of Appeals called it, the reasonable "skill and competence . . . that a physician in the
same or similar locality . . . should apply."
WHEREFORE, the instant petition is DENIED and the decision of the Court of Appeals is
AFFIRMED.
SO ORDERED.
G.R. No. L-19441 June 30, 1964
SHELL COMPANY OF THE PHILIPPINES, LTD., petitioner,
vs.
INSULAR PETROLEUM REFINING CO., LTD., and COURT OF APPEALS, respondents.
Petitioner, Shell Co. of the Phil., Ltd. (Shell for short), is a corporation engaged in the sale of
petroleum products, including lubricating oil. The packages and containers of its goods bear its
trademark, labeled or stenciled thereon. Defendant Insular Petroleum Refining Co., Ltd. (Insular for
short), is a registered limited partnership, whose principal business is collecting used lubricating oil
which, thru a scientific process, is refined and marketed to the public at a price much lower than that
of new lubricating oil. From the used oil, respondent produces two types of lubricating oil one, a
straight mineral oil classified as second grade or low-grade oil; and another, a first grade or high-
grade oil. The essential difference between the two types lies in the fact that the high-grade oil
contains an additive element which is not found in the other type. In marketing these two types of oil,
respondent, as a practice, utilizes for the high grade oil containers, painted black on the sides and
yellow on top and on the bottom with its tradename stenciled thereon, with a special sealing device
at its opening which cannot be removed unless the oil is used. In selling its low-grade oil, respondent
use miscellaneous containers, which its general manager Donald Mead describes, "generally, we
used miscellaneous containers which we have on hand, several drums, may be all drums, with
marks, on them, we have several used drums may be belonging to the U.S. Army or other drums
may be belonging to the Caltex, or the Stanvac we have some that belonged to the Union,
miscellaneous drums of other companies, but they are used drums. ... And some of those
miscellaneous containers are the Shell containers. ... but before filling the empty drums we obliterate
the markings of the drums, whether it is army type drums or whether it is a Union brand or whether it
is a Valvoline or Caltex or Shell or Standard Vacuum drum". In one transaction, however, which was
consummated with Conrado Uichangco a dealer of petitioner's gasoline and lubricating oil, the low-
grade oil that was sold to said operator was contained in a drum with the petitioner's mark or brand
"Shell" still stenciled without having been erased. The circumstances leading to the consummation of
this isolated transaction, have been summed, up by the Court of Appeals as follows:
This single transaction between plaintiff and defendant was effected, according to Conrado
Uichangco an operator of a Shell service station at the corner of San Andres and Tuason
Privado Streets, Manila, and who has been losing during the first eight and ten months of
operation of his station, although he had money to back up his losses, when a certain F.
Pecson Lozano, in agent of the defendant, repaired at his station and "tried to convince me
that Insoil is a good oil". As a matter of fact, he tried to show me a chemical analysis of Insoil
which he claimed was very close to the analysis of Shell oil; and he also told me that he
could sell this kind of oil (Insoil) to me at a much cheaper price so that I could make a bigger
margin of profits Q. What did you reply? A. I told Mr. F. Pecson Lozano that if his intention
was to sell me Insoil for me to pass as any of the Shell oils, I was not agreeable because I
did not want to cheat my customers. ... . Q. You ordered a Shell drum from Mr. Lozano on
your own volition or on orders of the Shell management? A. Well, this is the story as to how I
happened to order that one drum of Insoil oil that was inside that Shell drum. When Mr.
Lozano was insistent that I buy Insoil package in a Shell drum I called up Mr. Crespo and I
risked him in effect why we have to kill ourselves when there is a man here who came to my
station and told me that he has oil that approximates the analysis of Shell oil which he could
sell to me at a very much cheaper price, and Mr. Crespo told me "that is not true", and then
he further added, "can you order one drum of that oil for me. Charge it against me." I told him
"Yes I will." So I ordered that one drum of Insoil from Mr. F. Pecson Lozano. Q. Do you know
whether that one drum of oil was ever sold by you or by the Shell company to the public?
A. It was never re-sold to the public. I re-sold it to the Shell Company of the Philippines. Q.
You mean you bought in your own name and you sold it to the Shell company at a profit? A. I
sold it to the Shell company because it was an order of Mr. Crespo. I did not profit anything
from it, I just charged them the invoice price. ... . Q. My question to you is: He never made
any misrepresentation to you that he was selling you any oil other than Insoil Motor oil,
straight mineral SAE No. 30? A. That is what he told me. ... . Q. And it is also a fact that you
stated in the Fiscal's Office and in the Court of First Instance during the trial there that there
was no seal whatsoever appearing in the opening of the drum; is that correct? A. There was
no seal by the Insoil or by the Shell Company.
The evidence of the above transaction was an Invoice issued by the defendant's agent, describing
the goods sold as "Insoil Motor Oil (straight mineral) SAE 30 1 drum P76.00 (seller's drum)."
The incident between petitioner's operator and respondent's agent, brought about the presentation
with the Manila CFI, a case for damages on the allegation of unfair competition and a Criminal Case
No. 42020 under the Revised Penal Code (Art. 189) against Donald Mead, Manager, Pedro
Kayanan and F. Tecson Lozano. In the criminal case, the accused therein were acquitted, the Court
having found that the element of deceit was absent.
In the civil case, petitioner herein invoked two causes of action: (1) that respondent in selling its low-
grade oil in Shell containers, without erasing the marks or brands labeled or stencilled thereon,
intended to mislead the buying public to the prejudice of petitioner and the general public; and (2)
defendant had attempted to persuade Shell dealers to purchase its low-grade oil and to pass the
same to the public as Shell oil, by reason of which petitioner bad suffered damages in the form of
decrease in sales, estimated at least P10,000.00. A prayer for double the actual damages was
made, pursuant to section 23 of Republic Act 166, P5,000.00 for attorneys fees, P1,000.00 for legal
expenses and P25,000.00 for exemplary damages. A writ of preliminary injunction was requested to
enjoin respondent herein to cease and desist from using for the sale of any of its products and more
particularly for the sale of its low-grade lubricating oil. Shell containers with Shell markings still on
them. The motion to dissolve the injunction granted, was denied by the court a quo. 1wph 1. t
Respondent Insular answering the complaint, after the usual admissions and denials, alleged that it
"has never attempted to pass off its products as that of another nor to persuade anyone to do the
same", and that the action is barred by the decision in the criminal case No. 42020. A counterclaim
for P81,000.00 for actual, moral and exemplary damages, P4,000.00 for attorney's fees and
P5,000.00 for legal expenses with interposed by respondent.
After trial, the CFI found for Shell and ordered respondent to pay P20,000.00 for actual damages,
P5,000.00 for attorney's fees, P1,000.00 for legal expenses and P10,000.00 by way of exemplary
damages and the costs.
In reversing the above judgment, the Court of Appeals, disquisitioned:
On the question of whether or not, as a matter of fact, the defendant is guilty of unfair
competition in the conduct of its trade or business in the marketing of its low-grade oil,
particularly in the single transaction between defendant's agent and plaintiff's dealer, as
hereinabove narrated, we deem it wise to preface the discussion by citing certain passages
in the decision of the Supreme Court in the case of Alhambra Cigar, etc. v. Mojica, 27 Phil.
Rep. 266, thus:
"No inflexible rule can be laid down as to what will constitute unfair competition. Each
case is, in a measure, a law unto itself. Unfair competition is dumps a question of
fact. The question to be determined in every case is whether or not, as a matter of
fact, the name or mark used by the defendant has previously come to indicate and
designate plaintiffs goods, or, to state it in another way, whether defendant, as a
matter of fact, is, by his conduct, passing off defendant's goods as plaintiffs goods or
his business as plaintiff's business. The universal test question is whether the public
is likely to be deceived. ... . Nothing less than conduct tending to pass off one man's
goods or business as that of another will constitute unfair competition. Actual or
probable deception and confusion on the part of the customers by reason of
defendant's practices must always appear."
Encompassing the facts of the case to the foregoing ruling in the Alhambra case, it clearly
appears that defendant's practices in marketing its low-grade oil did not cause actual or
probable deception and confusion on the part of the general public, because, as shown from
the established facts, with the exception of that single transaction regarding the one drum of
oil sold by the defendant's agent to the plaintiff's dealer, as aforesaid, before marketing to the
public its low-grade oil in containers the brands or marks of the different companies
stenciled on the containers are totally obliterated and erased. The defendant did not pass off
or attempt to pass off upon the public its goods as the goods of another. There is neither
express nor implied representation to that effect. The practices do not show a conduct to the
end and probable effect to which is to deceive the public, or pass off its goods as those of
another. Proof of this may be clearly deduced from the fact that, with the exception of the
sale of one drum of low-grade oil by defendant's agent to Uichangco no other companies
whose drums or containers have been used by the defendant in its business have filed any
complaint to protect against the practices of the defendant. ... .
Now we shall dwell on the transaction between defendant's agent and plaintiff's dealer,
Uichangco to determine whether or not, as a matter of fact, the defendant is guilty of unfair
competition. There is evidence showing that the use of the defendant of the drum or
container with the Shell brand stenciled thereon was with the knowledge and consent of
Uichangco. There is also the categorical testimony of Uichangco that defendant's agent did
not make any representation that said agent was selling any oil other than Insoil motor oil.
The sales invoice states that Insoil Oil was sold. True, that a drum with the brand Shell
remaining unerased was used by the defendant. But, Uichangco was apprised beforehand
that a Shell drum would be used, and in fact the instruction of Crespo to Uichangco could
mean to buy Insoil oil contained in a Shell drum. The buyer could not have been deceived
or confused that he was not buying Insoil Oil. There is reason to believe that the transaction
was consummated in pursuance of a plan of Mr. Crespo to obtain evidence for the filing of a
case. The oil was never sold to the public because the plaintiff never intended or
contemplated doing so.
The other issue discussed by the Court of Appeals, that is, whether the acquittal of the officers and
employees of the respondent in the criminal case (supra), constituted a bar to the filing of the civil
case or amounted to res judicata, is, to our mind, not necessary to resolve in the instant appeal.
However, We agree with the appellate court that there is no res judicata.
In the petition, Shell claims three (3) errors allegedly committed by the Court of Appeals, all of which
pose the singular issue of whether respondent in the isolated transaction, stated elsewhere in this
opinion, committed an act of unfair competition and should be held liable.
The complaint was predicated on section 29 of Rep. Act No. 166, defining unfair competition, to wit:
Any person who shall employ deception or any other means contrary to good faith by which
he shall pass off the goods manufactured by him or in which he deals, ... for those of the one
having established such goodwill, or who shall commit any act calculated to produce said
result, shall be guilty of unfair competition, and shall be subject to an action therefor.
From the above definition and authorities interpretative of the same, it is seen that to hold a
defendant guilty of unfair competition, no less than satisfactory and convincing evidence is essential,
showing that the defendant has passed of or attempted to pass off his own goods as those of
another and that the customer was deceived with respect to the origin of the goods. In other words,
the inherent element of unfair competition is fraud or deceit. (I Nim's The Law of Unfair Competition
and Trademarks, 4th ed. pp. 52-53, and cases cited therein; U. S. v. Kyburz, 28 Phil. 475, citing Paul
on Trademarks, sec. 209; I Callman's, The Law of Unfair Competition and Trademarks, 329; Roger's
New Directions in the Law of Unfair Competition, (1940) N. Y. L. Rev. 317, 320; Alhambra Cigar, etc.
v. Mojica, 29 Phil. 266, refer to passage quoted in the decision of C.A. supra).
As no inflexible rule can be laid down as to what will constitute unfair competition; as each case is, in
a measure, a law unto itself and as unfair competition is always a question of fact, the determination
of whether unfair competition was committed in the case at bar, must have to depend upon the fact
as found by the Court of Appeals, to the definitiveness of which We are bound (I Moran's Rules of
Court, 1957 Ed. p. 699 & cases cited therein). "... The Supreme Court can not examine the question
of whether or not the Court of Appeals was right when that tribunal concluded from the
uncontroverted evidence that there had been no deceit." (De Luna, et al. v. Linatoc, 74 Phil. 15). And
the facts of the case at bar, are, as found and exposed by the Court of Appeals in the portion of its
decision above-quoted.
Not just because a manufacturer used a container still bearing a competitor's marking in the sale of
one's products, irrespective of to whom and how the sale is made, can there be a conclusion that the
buying public has been misled or will be misled, and, therefore, unfair competition is born. The single
transaction at bar will not render defendant's act an unfair competition, much in the same way that
the appearance of one swallow does not make a season, summer.
It was found by the Court of Appeals that in all transactions of the low-grade Insoil, except the
present one, all the marks and brands on the containers used were erased or obliterated. The drum
in question did not reach the buying public. It was merely a shell dealer or an operator of a Shell
Station who purchased the drum not to be resold to the public, but to be sold to the petitioner
company, with a view of obtaining evidence against someone who might have been committing
unfair business practices, for the dealer had found that his income was dwindling in his gasoline
station. Uichangco the Shell dealer, testified that Lozano (respondent's agent) did not all make any
representation that he (Lozano) was selling any oil other than Insoil motor oil, a fact which finds
corroboration in the receipt issued for the sale of the drum. Uichangco was apprised beforehand that
Lozano would sell Insoil oil in a Shell drum. There was no evidence that defendant or its agent
attempted to persuade Uichangco or any Shell dealer, for that matter, to purchase its low-grade oil
and to pass the same to the public as Shell oil. It was shown that Shell and other oil companies,
deliver oil to oil dealers or gasoline stations in drums, these dealers transfer the contents of the
drums to retailing dispensers known as "tall boys", from which the oil is retailed to the public by liters.
This Court is not unaware of the decisions cited by petitioner to bolster its contention. We find those
cases, however, not applicable to the one at bar. Those cases were predicated on facts and
circumstances different from those of the present. In one case, the trade name of plaintiff was
stamped on the goods of defendant and they were being passed as those of the plaintiff. This
circumstance does not obtain here. From these cases, one feature common to all comes out in bold
relief and that is, the competing products involving the offending bottles, wrappers, packages or
marks reached, the hands of the ultimate consumer, so bottled, wrapped, package or marked. In
other words, it is the form in which the wares or products come to the ultimate consumer that was
significant; for, as has been well said, the law of unfair competition does not protect purchasers
against falsehood which the tradesman may tell; the falsehood must be told by the article itself in
order to make the law of unfair competition applicable.
Petitioner contends that there had been a marked decrease in the volume of sales of low-grade oil of
the company, for which reason it argues that the sale of respondent's low-grade oil in Shell
containers was the cause. We are reluctant to share the logic of the argument. We are more inclined
to believe that several factors contributed to the decrease of such sales. But let us assume, for
purposes of argument, that the presence of respondent's low-grade oil in the market contributed to
such decrease. May such eventuality make respondent liable for unfair competition? There is no
prohibition for respondent to sell its goods, even in places where the goods of petitioner had long
been sold or extensively advertised. Respondent should not be blamed if some petitioner's dealers
by Insoil oil, as long as respondent does not deceive said dealers. If petitioner's dealers pass off
Insoil oil as Shell oil, that is their responsibility. If there was any such effort to deceive the public, the
dealers to whom the defendant (respondent) sold its products and not the latter, were. legally
responsible for such deception. The passing of said oil, therefore, as product of Shell was not
performed by the respondent or its agent, but petitioner's dealers, which act respondent had no
control whatever. And this could easily be done, for, as respondents' counsel put it
The point we would like to drive home is that if a SHELL dealer wants to fool the public by
passing off INSOIL as SHELL oil he could do this by the simple expedient of placing the
INSOIL oil or any other oil for that matter in the "tall boys" and dispense it to the public as
SHELL oil. Whatever container INSOIL uses would be of no moment. ... absence of a clear
showing, that INSOIL and the SHELL dealer connived or conspired, we respectfully maintain
that the responsibility of INSOIL ceases from the moment its oil, if ever it has ever been
done, is transferred by a SHELL dealer to a SHELL "tall boy".
And the existence of connivance or conspiracy, between dealer Uichangco and Agent Lozano has
not in the least been insinuated.
Petitioner submits the adoption in the case at bar of the "service station is package theory" that
the service stations of oil companies are packages in themselves, such that all products emanating
therefrom are expected to be those of the company whose marks the station bear, that when a
motorist drives to a Shell station, he does so with the intention of buying Shell products and that he
is naturally guided by the marking of the station itself.Hence, it constitutes a deceit on the buying
public, to sell to said motorist any other kind of products without apprising them beforehand that they
are not Shell products. (Third assignment of error). In view, however, of the findings and conclusions
reached, there seem to be no need of discussing the merits and demerits of the theory, or whether
the same is applicable or not, to the present case.
CONFORMABLY WITH ALL THE FOREGOING, We find that the decision of the Court of Appeals
appealed from, is in accordance with the fact, the law and jurisprudence on the matter. The same is
affirmed, with costs against petitioner, in both instances.