FIRST DIVISION

In the civil suit subsequently instituted by the parents in behalf of

their minor daughter against Alfonso Monfort, Maria Teresa
Monforts father, the defendant was ordered to pay P1,703.00 as
actual damages; P20,000.00 as moral damages; and P2,000.00 as
attorneys fees, plus the costs of the suit.

[G.R. No. L-24101. September 30, 1970.]

MARIA TERESA Y. CUADRA, minor represented by her father
ULISES P. CUADRA, ET AL.,Plaintiffs-Appellees, v. ALFONSO
MONFORT, Defendant-Appellant.

The legal issue posed in this appeal is the liability of a parent for an
act of his minor child which causes damage to another under the
specific facts related above and the applicable provisions of the
Civil Code, particularly Articles 2176 and 2180 thereof, which
read:jgc:chanrobles.com.ph

Rodolfo J. Herman for Plaintiffs-Appellees.

Luis G. Torres & Abraham E. Tionko for defendant appellant.

"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."cralaw virtua1aw
library

DECISION
MAKALINTAL, J.:

"ART. 2180. The obligation imposed by Article 2176 is demandable

not only for ones own acts or omissions, but also for those of
persons for whom one is responsible.

This is an action for damages based on quasi-delict, decided by the

Court of First Instance of Negros Occidental favorably to the
plaintiffs and appealed by the defendant to the Court of Appeals,
which certified the same to us since the facts are not in issue.

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.

Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were
classmates in Grade Six at the Mabini Elementary School in Bacolod
City. On July 9, 1962 their teacher assigned them, together with
three other classmates, to weed the grass in the school premises.
While thus engaged Maria Teresa Monfort found a plastic headband,
an ornamental object commonly worn by young girls over their hair.
Jokingly she said aloud that she had found an earthworm and,
evidently to frighten the Cuadra girl, tossed the object at her. At
that precise moment the latter turned around to face her friend,
and the object hit her right eye. Smarting from the pain, she
rubbed the injured part and treated it with some powder. The next
day, July 10, the eye became swollen and it was then that the girl
related the incident to her parents, who thereupon took her to a
doctor for treatment. She underwent surgical operation twice, first
on July 20 and again on August 4, 1962, and stayed in the hospital
for a total of twenty-three days, for all of which the parents spent
the sum of P1,703.75. Despite the medical efforts, however, Maria
Teresa Cuadra completely lost the sight of her right eye.

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."cralaw
virtua1aw library
The underlying basis of the liability imposed by Article 2176 is the
fault or negligence accompanying the act or the omission, there
being no willfulness or intent to cause damage thereby. When the
act or omission is that of one person for whom another is
responsible, the latter then becomes himself liable under Article
2180, in the different cases enumerated therein, such as that of the
father or the mother under the circumstances above quoted. The
basis of this vicarious, although primary, liability is, as in Article
2176, fault or negligence, which is presumed from that which

accompanied the causative act or omission. The presumption is

merely prima facie and may therefore be rebutted. This is the clear
and logical inference that may be drawn from the last paragraph of
Article 2180, which states "that 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."cralaw virtua1aw library

Reyes, J.B.L., Actg. C.J., Dizon, Zaldivar, Castro, Teehankee, Villamor

and Makasiar, JJ., concur.
Concepcion, C.J., is on leave.
Fernando, J., did not take part.
Barredo, J., dissents in a separate opinion.

Since the fact thus required to be proven is a matter of defense,

the burden of proof necessarily rests on the defendant. But what is
the exact degree of diligence contemplated, and how does a parent
prove it in connection with a particular act or omission of a minor
child, especially when it takes place in his absence or outside his
immediate company? Obviously there can be no meticulously
calibrated measure applicable; and when the law simply refers to
"all the diligence of a good father of the family to prevent damage,"
it implies a consideration of the attendant circumstances in every
individual case, to determine whether or not by the exercise of such
diligence the damage could have been prevented.

Separate Opinions
BARREDO, J., dissenting:chanrob1es virtual 1aw library
I am afraid I cannot go along with my esteemed colleagues in
holding that the act of appellants daughter does not constitute
fault within the contemplation of our law on torts. She was 13 years
and should have known that by jokingly saying "aloud that she had
found an earthworm and, evidently to frighten the Cuadra girl,
tossed the object at her," it was likely that something would
happen to her friend, as in fact, she was hurt.

In the present case there is nothing from which it may be inferred

that the defendant could have prevented the damage by the
observance of due care, or that he was in any way remiss in the
exercise of his parental authority in failing to foresee such damage,
or the act which caused it. On the contrary, his child was at school,
where it was his duty to send her and where she was, as he had the
right to expect her to be, under the care and supervision of the
teacher. And as far as the act which caused the injury was
concerned, it was an innocent prank not unusual among children at
play and which no parent, however careful, would have any special
reason to anticipate much less guard against. Nor did it reveal any
mischievous propensity, or indeed any trait in the childs character
which would reflect unfavorably on her upbringing and for which
the blame could be attributed to her parents.

As to the liability of appellant as father, I prefer to hold that there

being no evidence that he had properly advised his daughter to
behave properly and not to play dangerous jokes on her classmate
and playmates, he can be liable under Article 2180 of the Civil
Code. There is nothing in the record to show that he had done
anything at all to even try to minimize the damage caused upon
plaintiff child.

FIRST DIVISION
G.R. No. 141538

The victim, no doubt, deserves no little commiseration and

sympathy for the tragedy that befell her. But if the defendant is at
all obligated to compensate her suffering, the obligation has no
legal sanction enforceable in court, but only the moral compulsion
of good conscience.

March 23, 2004

HERMANA R. CEREZO, petitioner,

vs.
DAVID TUAZON, respondent.

The decision appealed from is reversed, and the complaint is

dismissed, without pronouncement as to costs.

DECISION

physical injuries to plaintiff thus making him unable to walk

and becoming disabled, with his thumb and middle finger on
the left hand being cut[.]4
On 1 October 1993, Tuazon filed a motion to litigate as a pauper.
Subsequently, the trial court issued summons against Atty. Cerezo
and Mrs. Cerezo ("the Cerezo spouses") at the Makati address
stated in the complaint. However, the summons was returned
unserved on 10 November 1993 as the Cerezo spouses no longer
held office nor resided in Makati. On 18 April 1994, the trial court
issued alias summons against the Cerezo spouses at their address
in Barangay Sta. Maria, Camiling, Tarlac. The alias summons and a
copy of the complaint were finally served on 20 April 1994 at the
office of Atty. Cerezo, who was then working as Tarlac Provincial
Prosecutor. Atty. Cerezo reacted angrily on learning of the service of
summons upon his person. Atty. Cerezo allegedly told Sheriff
William Canlas: "Punyeta, ano ang gusto mong mangyari? Gusto
mong hindi ka makalabas ng buhay dito? Teritoryo ko ito. Wala ka
sa teritoryo mo."5

CARPIO, J.:
The Case
This is a petition for review on certiorari1 to annul the
Resolution2 dated 21 October 1999 of the Court of Appeals in CAG.R. SP No. 53572, as well as its Resolution dated 20 January 2000
denying the motion for reconsideration. The Court of Appeals
denied the petition for annulment of the Decision3 dated 30 May
1995 rendered by the Regional Trial Court of Angeles City, Branch
56 ("trial court"), in Civil Case No. 7415. The trial court ordered
petitioner Hermana R. Cerezo ("Mrs. Cerezo") to pay respondent
David Tuazon ("Tuazon") actual damages, loss of earnings, moral
damages, and costs of suit.

The records show that the Cerezo spouses participated in the

proceedings before the trial court. The Cerezo spouses filed a
comment with motion for bill of particulars dated 29 April 1994 and
a reply to opposition to comment with motion dated 13 June
1994.6 On 1 August 1994, the trial court issued an order directing
the Cerezo spouses to file a comment to the opposition to the bill of
particulars. Atty. Elpidio B. Valera ("Atty. Valera") of Valera and
Valera Law Offices appeared on behalf of the Cerezo spouses. On
29 August 1994, Atty. Valera filed an urgent ex-parte motion
praying for the resolution of Tuazons motion to litigate as a pauper
and for the issuance of new summons on the Cerezo spouses to
satisfy proper service in accordance with the Rules of Court. 7

Antecedent Facts
Around noontime of 26 June 1993, a Country Bus Lines passenger
bus with plate number NYA 241 collided with a tricycle bearing
plate number TC RV 126 along Captain M. Palo Street, Sta. Ines,
Mabalacat, Pampanga. On 1 October 1993, tricycle driver Tuazon
filed a complaint for damages against Mrs. Cerezo, as owner of the
bus line, her husband Attorney Juan Cerezo ("Atty. Cerezo"), and
bus driver Danilo A. Foronda ("Foronda"). The complaint alleged
that:
7. At the time of the incident, plaintiff [Tuazon] was in his
proper lane when the second-named defendant [Foronda],
being then the driver and person in charge of the Country
Bus with plate number NYA 241, did then and there willfully,
unlawfully, and feloniously operate the said motor vehicle in
a negligent, careless, and imprudent manner without due
regard to traffic rules and regulations, there being a "Slow
Down" sign near the scene of the incident, and without
taking the necessary precaution to prevent loss of lives or
injuries, his negligence, carelessness and imprudence
resulted to severe damage to the tricycle and serious

On 30 August 1994, the trial court issued an order resolving

Tuazons motion to litigate as a pauper and the Cerezo spouses
urgent ex-parte motion. The order reads:
At the hearing on August 30, 1994, the plaintiff [Tuazon]
testified that he is presently jobless; that at the time of the
filing of this case, his son who is working in Malaysia helps
him and sends him once in a while P300.00 a month, and
that he does not have any real property. Attached to the
Motion to Litigate as Pauper are his Affidavit that he is

unemployed; a Certification by the Barangay Captain of his

poblacion that his income is not enough for his familys
subsistence; and a Certification by the Office of the
Municipal Assessor that he has no landholding in the
Municipality of Mabalacat, Province of Pampanga.

Cerezos employee, pursuant to Article 2180 of the Civil Code. The

dispositive portion of the trial courts decision reads:
WHEREFORE, judgment is hereby rendered ordering the
defendant Hermana Cerezo to pay the plaintiff:

The Court is satisfied from the unrebutted testimony of the

plaintiff that he is entitled to prosecute his complaint in this
case as a pauper under existing rules.

a) For Actual Damages

On the other hand, the Court denies the prayer in the

Appearance and Urgent Ex-Parte Motion requiring new
summons to be served to the defendants. The Court is of
the opinion that any infirmity in the service of the summons
to the defendant before plaintiff was allowed to prosecute
his complaint in this case as a pauper has been cured by
this Order.

P69,485.3

b) For loss of earnings

39,921.00

c) For moral damages

43,300.00

d) And to pay the cost of the suit.

20,000.00

1) Expenses for operation and medical

Treatment

2) Cost of repair of the tricycle

If within 15 days from receipt of this Order, the defendants

do not question on appeal this Order of this Court, the Court
shall proceed to resolve the Motion for Bill of Particulars.8
On 27 September 1994, the Cerezo spouses filed an urgent exparte motion for reconsideration. The trial court denied the motion
for reconsideration.
On 14 November 1994, the trial court issued an order directing the
Cerezo spouses to file their answer within fifteen days from receipt
of the order. The Cerezo spouses did not file an answer. On 27
January 1995, Tuazon filed a motion to declare the Cerezo spouses
in default. On 6 February 1995, the trial court issued an order
declaring the Cerezo spouses in default and authorizing Tuazon to
present his evidence. 9

The docket fees and other expenses in the filing of this suit
shall be lien on whatever judgment may be rendered in
favor of the plaintiff.

On 30 May 1995, after considering Tuazons testimonial and

documentary evidence, the trial court ruled in Tuazons favor. The
trial court made no pronouncement on Forondas liability because
there was no service of summons on him. The trial court did not
hold Atty. Cerezo liable as Tuazon failed to show that Mrs. Cerezos
business benefited the family, pursuant to Article 121(3) of the
Family Code. The trial court held Mrs. Cerezo solely liable for the
damages sustained by Tuazon arising from the negligence of Mrs.

SO ORDERED.10
Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10
July 1995, Mrs. Cerezo filed before the trial court a petition for relief
from judgment on the grounds of "fraud, mistake or excusable
negligence." Testifying before the trial court, both Mrs. Cerezo and
Atty. Valera denied receipt of notices of hearings and of orders of
the court. Atty. Valera added that he received no notice before or

during the 8 May 1995 elections, "when he was a senatorial

candidate for the KBL Party, and very busy, using his office and
residence as Party National Headquarters." Atty. Valera claimed
that he was able to read the decision of the trial court only after
Mrs. Cerezo sent him a copy.11
Tuazon did not testify but presented documentary evidence to
prove the participation of the Cerezo spouses in the case. Tuazon
presented the following exhibits:

Exhibit 1

- Sheriffs return and summons;

Exhibit 1-A

- Alias summons dated April 20, 1994;

Exhibit 6-A

- Postal certification dated January 13, 1995;

Exhibit 7

- Order dated February [illegible];

Exhibit 7-A

- Courts return slip addressed to Atty. Elpidio Valera;

Exhibit 7-B

- Courts return slip addressed to Spouses Juan and H

Cerezo;

Exhibit 8

- Decision dated May [30], 1995

Exhibit 2

- Comment with Motion;

Exhibit 8-A

- Courts return slip addressed to defendant Hermana

Exhibit 3

- Minutes of the hearing held on August 1, 1994;

Exhibit 8-B

- Courts return slip addressed to defendants counse

Valera;

Exhibit 3-A

- Signature of defendants counsel;

Exhibit 9

- Order dated September 21, 1995;

Exhibit 9-A

- Second Page of Exhibit 9;

Exhibit 9-B

- Third page of Exhibit 9;

Exhibit 9-C

- Fourth page of Exhibit 9;

Exhibit 9-D

- Courts return slip addressed to Atty. Elpidio Valera;

Exhibit 4

Exhibit 4-A

Exhibit 5

Exhibit 6

- Minutes of the hearing held on August 30, 1994;

- Signature of the defendants counsel;

- Appearance and Urgent Ex-Parte Motion;

- Order dated November 14, 1994;

and

Exhibit 9-E

The Cerezo spouses filed before this Court a petition for review
on certiorari under Rule 45. Atty. Cerezo himself signed the petition,
docketed as G.R. No. 137593. On 13 April 1999, this Court rendered
a resolution denying the petition for review on certiorari for failure
to attach an affidavit of service of copies of the petition to the
Court of Appeals and to the adverse parties. Even if the petition
complied with this requirement, the Court would still have denied
the petition as the Cerezo spouses failed to show that the Court of
Appeals committed a reversible error. The Courts resolution was
- Courts return slip addressed to plaintiffs counsel, Atty.
Norman
entered
in the Book of Entries and Judgments when it became final
Dick de Guzman.12
and executory on 28 June 1999.16
Undaunted, the Cerezo spouses filed before the Court of Appeals on
6 July 1999 a petition for annulment of judgment under Rule 47
with prayer for restraining order. Atty. Valera and Atty. Dionisio S.
Daga ("Atty. Daga") represented Mrs. Cerezo in the petition,
docketed as CA-G.R. SP No. 53572.17 The petition prayed for the
annulment of the 30 May 1995 decision of the trial court and for
the issuance of a writ of preliminary injunction enjoining execution
of the trial courts decision pending resolution of the petition.

13

On 4 March 1998, the trial court issued an order denying the

petition for relief from judgment. The trial court stated that having
received the decision on 25 June 1995, the Cerezo spouses should
have filed a notice of appeal instead of resorting to a petition for
relief from judgment. The trial court refused to grant relief from
judgment because the Cerezo spouses could have availed of the
remedy of appeal. Moreover, the Cerezo spouses not only failed to
prove fraud, accident, mistake or excusable negligence by
conclusive evidence, they also failed to prove that they had a good
and substantial defense. The trial court noted that the Cerezo
spouses failed to appeal because they relied on an expected
settlement of the case.

The Court of Appeals denied the petition for annulment of judgment

in a resolution dated 21 October 1999. The resolution reads in part:
In this case, records show that the petitioner previously filed
with the lower court a Petition for Relief from Judgment on
the ground that they were wrongfully declared in default
while waiting for an amicable settlement of the complaint
for damages. The court a quo correctly ruled that such
petition is without merit. The defendant spouses admit that
during the initial hearing they appeared before the court
and even mentioned the need for an amicable settlement.
Thus, the lower court acquired jurisdiction over the
defendant spouses.

The Cerezo spouses subsequently filed before the Court of Appeals

a petition for certiorari under Section 1 of Rule 65. The petition was
docketed as CA-G.R. SP No. 48132.14 The petition questioned
whether the trial court acquired jurisdiction over the case
considering there was no service of summons on Foronda, whom
the Cerezo spouses claimed was an indispensable party. In a
resolution15 dated 21 January 1999, the Court of Appeals denied the
petition for certiorari and affirmed the trial courts order denying
the petition for relief from judgment. The Court of Appeals declared
that the Cerezo spouses failure to file an answer was due to their
own negligence, considering that they continued to participate in
the proceedings without filing an answer. There was also nothing in
the records to show that the Cerezo spouses actually offered a
reasonable settlement to Tuazon. The Court of Appeals also denied
Cerezo spouses motion for reconsideration for lack of merit.

Therefore, petitioner having availed of a petition for relief,

the remedy of an annulment of judgment is no longer
available. The proper action for the petitioner is to appeal
the order of the lower court denying the petition for relief.
Wherefore, the instant petition could not be given due
course and should accordingly be dismissed.

SO ORDERED.18

Assuming arguendo that private respondent failed to

reserve his right to institute a separate action for damages
in the criminal action, the petitioner cannot now raise such
issue and question the lower courts jurisdiction because
petitioner and her husband have waived such right by
voluntarily appearing in the civil case for damages.
Therefore, the findings and the decision of the lower court
may bind them.

On 20 January 2000, the Court of Appeals denied the Cerezo

spouses motion for reconsideration.19 The Court of Appeals stated:
A distinction should be made between a courts jurisdiction
over a person and its jurisdiction over the subject matter of
a case. The former is acquired by the proper service of
summons or by the parties voluntary appearance; while the
latter is conferred by law.

Records show that the petitioner previously filed with the

lower court a Petition for Relief from Judgment on the
ground that they were wrongfully declared in default while
waiting for an amicable settlement of the complaint for
damages. The court a quo correctly ruled that such petition
is without merit, jurisdiction having been acquired by the
voluntary appearance of defendant spouses.

Resolving the matter of jurisdiction over the subject matter,

Section 19(1) of B[atas] P[ambansa] 129 provides that
Regional Trial Courts shall exercise exclusive original
jurisdiction in all civil actions in which the subject of the
litigation is incapable of pecuniary estimation. Thus it was
proper for the lower court to decide the instant case for
damages.

Once again, it bears stressing that having availed of a

petition for relief, the remedy of annulment of judgment is
no longer available.

Unlike jurisdiction over the subject matter of a case which is

absolute and conferred by law; any defects [sic] in the
acquisition of jurisdiction over a person (i.e., improper filing
of civil complaint or improper service of summons) may be
waived by the voluntary appearance of parties.

Based on the foregoing, the motion for reconsideration could

not be given due course and is hereby DENIED.
SO ORDERED.20

The lower court admits the fact that no summons was

served on defendant Foronda. Thus, jurisdiction over the
person of defendant Foronda was not acquired, for which
reason he was not held liable in this case. However, it has
been proven that jurisdiction over the other defendants was
validly acquired by the court a quo.

The Issues
On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone
representing her, filed the present petition for review
on certiorari before this Court. Mrs. Cerezo claims that:

The defendant spouses admit to having appeared in the

initial hearings and in the hearing for plaintiffs motion to
litigate as a pauper. They even mentioned conferences
where attempts were made to reach an amicable settlement
with plaintiff. However, the possibility of amicable
settlement is not a good and substantial defense which will
warrant the granting of said petition.

1. In dismissing the Petition for Annulment of Judgment, the

Court of Appeals assumes that the issues raised in the
petition for annulment is based on extrinsic fraud related to
the denied petition for relief notwithstanding that the
grounds relied upon involves questions of lack of
jurisdiction.

xxx

2. In dismissing the Petition for Annulment, the Court of

Appeals disregarded the allegation that the lower court[s]
findings of negligence against defendant-driver Danilo

Foronda [whom] the lower court did not summon is null and
void for want of due process and consequently, such
findings of negligence which is [sic] null and void cannot
become the basis of the lower court to adjudge petitioneremployer liable for civil damages.

Rule 38, alleging "fraud, mistake, or excusable negligence" as

grounds. On 4 March 1998, the trial court denied Mrs. Cerezos
petition for relief from judgment. The trial court stated that Mrs.
Cerezo could have availed of appeal as a remedy and that she
failed to prove that the judgment was entered through fraud,
accident, mistake, or excusable negligence. Mrs. Cerezo then filed
before the Court of Appeals a petition for certiorari under Section 1
of Rule 65 assailing the denial of the petition for relief from
judgment. On 21 January 1999, the Court of Appeals dismissed Mrs.
Cerezos petition. On 24 February 1999, the appellate court denied
Mrs. Cerezos motion for reconsideration. On 11 March 1999, Mrs.
Cerezo filed before this Court a petition for review
on certiorari under Rule 45, questioning the denial of the petition
for relief from judgment. We denied the petition and our resolution
became final and executory on 28 June 1999.

3. In dismissing the Petition for Annulment, the Court of

Appeals ignored the allegation that defendant-driver Danilo
A. Foronda whose negligence is the main issue is an
indispensable party whose presence is compulsory but
[whom] the lower court did not summon.
4. In dismissing the Petition for Annulment, the Court of
Appeals ruled that assuming arguendo that private
respondent failed to reserve his right to institute a separate
action for damages in the criminal action, the petitioner
cannot now raise such issue and question the lower courts
jurisdiction because petitioner [has] waived such right by
voluntarily appearing in the civil case for damages
notwithstanding that lack of jurisdiction cannot be waived. 21

On 6 July 1999, a mere eight days after our resolution became final
and executory, Mrs. Cerezo filed before the Court of Appeals a
petition for annulment of the judgment of the trial court under Rule
47. Meanwhile, on 25 August 1999, the trial court issued over the
objection of Mrs. Cerezo an order of execution of the judgment in
Civil Case No. 7415. On 21 October 1999, the Court of Appeals
dismissed the petition for annulment of judgment. On 20 January
2000, the Court of Appeals denied Mrs. Cerezos motion for
reconsideration. On 7 February 2000, Mrs. Cerezo filed the present
petition for review on certiorari under Rule 45 challenging the
dismissal of her petition for annulment of judgment.

The Courts Ruling

The petition has no merit. As the issues are interrelated, we shall
discuss them jointly.
Remedies Available to a Party Declared in Default

Lina v. Court of Appeals22 enumerates the remedies available to a

party declared in default:

An examination of the records of the entire proceedings shows that

three lawyers filed and signed pleadings on behalf of Mrs. Cerezo,
namely, Atty. Daga, Atty. Valera, and Atty. Cerezo. Despite their
number, Mrs. Cerezos counsels failed to avail of the proper
remedies. It is either by sheer ignorance or by malicious
manipulation of legal technicalities that they have managed to
delay the disposition of the present case, to the detriment of
pauper litigant Tuazon.

a) The defendant in default may, at any time after discovery

thereof and before judgment, file a motion under oath to
set aside the order of default on the ground that his
failure to answer was due to fraud, accident, mistake or
excusable negligence, and that he has a meritorious
defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);

Mrs. Cerezo claims she did not receive any copy of the order
declaring the Cerezo spouses in default. Mrs. Cerezo asserts that
she only came to know of the default order on 25 June 1995, when
she received a copy of the decision. On 10 July 1995, Mrs. Cerezo
filed before the trial court a petition for relief from judgment under

b) If the judgment has already been rendered when the

defendant discovered the default, but before the same has
become final and executory, he may file a motion for new
trial under Section 1 (a) of Rule 37;

c) If the defendant discovered the default after the

judgment has become final and executory, he may file
apetition for relief under Section 2 [now Section 1] of Rule
38; and

Clearly, Mrs. Cerezo had every opportunity to avail of these

remedies within the reglementary periods provided under the Rules
of Court. However, Mrs. Cerezo opted to file a petition for relief
from judgment, which is availableonly in exceptional cases. A
petition for relief from judgment should be filed within the
reglementary period of 60 days from knowledge of judgment and
six months from entry of judgment, pursuant to

d) He may also appeal from the judgment rendered against

him as contrary to the evidence or to the law, even if no
petition to set aside the order of default has been presented
by him (Sec. 2, Rule 41). (Emphasis added)

Rule 38 of the Rules of Civil Procedure.30 Tuason v. Court of

Appeals31 explained the nature of a petition for relief from
judgment:

Moreover, a petition for certiorari to declare the nullity of a

judgment by default is also available if the trial court improperly
declared a party in default, or even if the trial court properly
declared a party in default, if grave abuse of discretion attended
such declaration.23

When a party has another remedy available to him, which

may either be a motion for new trial or appeal from an
adverse decision of the trial court, and he was not
prevented by fraud, accident, mistake or excusable
negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition. Indeed, relief will not be
granted to a party who seeks avoidance from the effects of
the judgment when the loss of the remedy at law was due to
his own negligence; otherwise the petition for relief can be
used to revive the right to appeal which has been lost thru
inexcusable negligence.

Mrs. Cerezo admitted that she received a copy of the trial courts
decision on 25 June 1995. Based on this admission, Mrs. Cerezo had
at least three remedies at her disposal: an appeal, a motion for new
trial, or a petition for certiorari.
Mrs. Cerezo could have appealed under Rule 4124 from the default
judgment within 15 days from notice of the judgment. She could
have availed of the power of the Court of Appeals to try cases and
conduct hearings, receive evidence, and perform all acts necessary
to resolve factual issues raised in cases falling within its appellate
jurisdiction.25

Evidently, there was no fraud, accident, mistake, or excusable

negligence that prevented Mrs. Cerezo from filing an appeal, a
motion for new trial or a petition for certiorari. It was error for her to
avail of a petition for relief from judgment.

Mrs. Cerezo also had the option to file under Rule 3726 a motion for
new trial within the period for taking an appeal. If the trial court
grants a new trial, the original judgment is vacated, and the action
will stand for trial de novo. The recorded evidence taken in the
former trial, as far as the same is material and competent to
establish the issues, shall be used at the new trial without retaking
the same.27

After our resolution denying Mrs. Cerezos petition for relief became
final and executory, Mrs. Cerezo, in her last ditch attempt to evade
liability, filed before the Court of Appeals a petition for annulment
of the judgment of the trial court. Annulment is available only on
the grounds of extrinsic fraud and lack of jurisdiction. If based on
extrinsic fraud, a party must file the petition within four years from
its discovery, and if based on lack of jurisdiction, before laches or
estoppel bars the petition. Extrinsic fraud is not a valid ground if
such fraud was used as a ground, or could have been used as a
ground, in a motion for new trial or petition for relief from
judgment.32

Mrs. Cerezo also had the alternative of filing under Rule 65 28 a

petition for certiorari assailing the order of default within 60 days
from notice of the judgment. An order of default is interlocutory,
and an aggrieved party may file an appropriate special civil action
under Rule 65.29 In a petition for certiorari, the appellate court may
declare void both the order of default and the judgment of default.

Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was
her ground for filing the petition for annulment of judgment.

However, a party may avail of the remedy of annulment of

judgment under Rule 47 only if the ordinary remedies of new trial,
appeal, petition for relief from judgment, or other appropriate
remedies are no longer available through no fault of the
party.33 Mrs. Cerezo could have availed of a new trial or appeal but
through her own fault she erroneously availed of the remedy of a
petition for relief, which was denied with finality. Thus, Mrs. Cerezo
may no longer avail of the remedy of annulment.

and not of civil law, while the basis of the present action of Tuazon
is quasi-delict under the Civil Code, not delict under the Revised
Penal Code.
The same negligent act may produce civil liability arising from a
delict under Article 103 of the Revised Penal Code, or may give rise
to an action for a quasi-delict under Article 2180 of the Civil Code.
An aggrieved party may choose between the two remedies. An
action based on a quasi-delict may proceed independently from the
criminal action.36 There is, however, a distinction between civil
liability arising from a delict and civil liability arising from a quasidelict. The choice of remedy, whether to sue for a delict or a quasidelict, affects the procedural and jurisdictional issues of the
action.37

In any event, the trial court clearly acquired jurisdiction over Mrs.
Cerezos person. Mrs. Cerezo actively participated in the
proceedings before the trial court, submitting herself to the
jurisdiction of the trial court. The defense of lack of jurisdiction fails
in light of her active participation in the trial court proceedings.
Estoppel or laches may also bar lack of jurisdiction as a ground for
nullity especially if raised for the first time on appeal by a party
who participated in the proceedings before the trial court, as what
happened in this case.34

Tuazon chose to file an action for damages based on a quasi-delict.

In his complaint, Tuazon alleged that Mrs. Cerezo, "without
exercising due care and diligence in the supervision and
management of her employees and buses," hired Foronda as her
driver. Tuazon became disabled because of Forondas
"recklessness, gross negligence and imprudence," aggravated by
Mrs. Cerezos "lack of due care and diligence in the selection and
supervision of her employees, particularly Foronda."38

For these reasons, the present petition should be dismissed for

utter lack of merit. The extraordinary action to annul a final
judgment is restricted to the grounds specified in the rules. The
reason for the restriction is to prevent this extraordinary action
from being used by a losing party to make a complete farce of a
duly promulgated decision that has long become final and
executory. There would be no end to litigation if parties who have
unsuccessfully availed of any of the appropriate remedies or lost
them through their fault could still bring an action for annulment of
judgment.35 Nevertheless, we shall discuss the issues raised in the
present petition to clear any doubt about the correctness of the
decision of the trial court.

The trial court thus found Mrs. Cerezo liable under Article 2180 of
the Civil Code. Article 2180 states in part:
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.

Mrs. Cerezos Liability and the Trial Courts Acquisition of

Jurisdiction

Contrary to Mrs. Cerezos assertion, Foronda is not an indispensable

party to the case. An indispensable party is one whose interest is
affected by the courts action in the litigation, and without whom no
final resolution of the case is possible.39 However, Mrs. Cerezos
liability as an employer in an action for a quasi-delict is not only
solidary, it is also primary and direct. Foronda is not an
indispensable party to the final resolution of Tuazons action for
damages against Mrs. Cerezo.

Mrs. Cerezo contends that the basis of the present petition for
annulment is lack of jurisdiction. Mrs. Cerezo asserts that the trial
court could not validly render judgment since it failed to acquire
jurisdiction over Foronda. Mrs. Cerezo points out that there was no
service of summons on Foronda. Moreover, Tuazon failed to reserve
his right to institute a separate civil action for damages in the
criminal action. Such contention betrays a faulty foundation. Mrs.
Cerezos contention proceeds from the point of view of criminal law

10

The responsibility of two or more persons who are liable for a quasidelict is solidary.40 Where there is a solidary obligation on the part
of debtors, as in this case, each debtor is liable for the entire
obligation. Hence, each debtor is liable to pay for the entire
obligation in full. There is no merger or renunciation of rights, but
only mutual representation.41 Where the obligation of the parties is
solidary, either of the parties is indispensable, and the other is not
even a necessary party because complete relief is available from
either.42 Therefore, jurisdiction over Foronda is not even necessary
as Tuazon may collect damages from Mrs. Cerezo alone.

In contrast, an action based on a delict seeks to enforce the

subsidiary liability of the employer for the criminal negligence of
the employee as provided in Article 103 of the Revised Penal Code.
To hold the employer liable in a subsidiary capacity under a delict,
the aggrieved party must initiate a criminal action where the
employees delict and corresponding primary liability are
established.47 If the present action proceeds from a delict, then the
trial courts jurisdiction over Foronda is necessary. However, the
present action is clearly for the quasi-delict of Mrs. Cerezo and not
for the delict of Foronda.

Moreover, an employers liability based on a quasi-delict is primary

and direct, while the employers liability based on a delict is merely
subsidiary.43 The words "primary and direct," as contrasted with
"subsidiary," refer to the remedy provided by law for enforcing the
obligation rather than to the character and limits of the
obligation.44Although liability under Article 2180 originates from the
negligent act of the employee, the aggrieved party may sue the
employer directly. When an employee causes damage, the law
presumes that the employer has himself committed an act of
negligence in not preventing or avoiding the damage. This is the
fault that the law condemns. While the employer is civilly liable in a
subsidiary capacity for the employees criminal negligence, the
employer is also civilly liable directly and separately for his own
civil negligence in failing to exercise due diligence in selecting and
supervising his employee. The idea that the employers liability is
solely subsidiary is wrong.45

The Cerezo spouses contention that summons be served anew on

them is untenable in light of their participation in the trial court
proceedings. To uphold the Cerezo spouses contention would make
a fetish of a technicality.48Moreover, any irregularity in the service
of summons that might have vitiated the trial courts jurisdiction
over the persons of the Cerezo spouses was deemed waived when
the Cerezo spouses filed a petition for relief from judgment. 49
We hold that the trial court had jurisdiction and was competent to
decide the case in favor of Tuazon and against Mrs. Cerezo even in
the absence of Foronda. Contrary to Mrs. Cerezos contention,
Foronda is not an indispensable party to the present case. It is not
even necessary for Tuazon to reserve the filing of a separate civil
action because he opted to file a civil action for damages against
Mrs. Cerezo who is primarily and directly liable for her own civil
negligence. The words of Justice Jorge Bocobo in Barredo v.
Garcia still hold true today as much as it did in 1942:

The action can be brought directly against the person

responsible (for another), without including the author of the
act. The action against the principal is accessory in the
sense that it implies the existence of a prejudicial act
committed by the employee, but it is not subsidiary in the
sense that it can not be instituted till after the judgment
against the author of the act or at least, that it is subsidiary
to the principal action; the action for responsibility (of the
employer) is in itself a principal action.46

x x x [T]o hold that there is only one way to make

defendants liability effective, and that is, to sue the driver
and exhaust his (the latters) property first, would be
tantamount to compelling the plaintiff to follow a devious
and cumbersome method of obtaining relief. True, there is
such a remedy under our laws, but there is also a more
expeditious way, which is based on the primary and direct
responsibility of the defendant under article [2180] of the
Civil Code. Our view of the law is more likely to facilitate
remedy for civil wrongs, because the procedure indicated by
the defendant is wasteful and productive of delay, it being a
matter of common knowledge that professional drivers of
taxis and other similar public conveyances do not have
sufficient means with which to pay damages. Why, then,

Thus, there is no need in this case for the trial court to acquire
jurisdiction over Foronda. The trial courts acquisition of jurisdiction
over Mrs. Cerezo is sufficient to dispose of the present case on the
merits.

11

should the plaintiff be required in all cases to go through this

roundabout, unnecessary, and probably useless procedure?
In construing the laws, courts have endeavored to shorten
and facilitate the pathways of right and justice.50

The pivotal issue in this petition is whether an employer may be

held vicariously liable for the death resulting from the negligent
operation by a managerial employee of a company-issued
vehicle.chanroblesvirtualawlibrary
The antecedents, as succinctly summarized by the Court of
Appeals, are as follows:chanrob1es virtual 1aw library

Interest at the rate of 6% per annum is due on the amount of

damages adjudged by the trial court.51 The 6% per annum interest
shall commence from 30 May 1995, the date of the decision of the
trial court. Upon finality of this decision, interest at 12% per annum,
in lieu of 6% per annum, is due on the amount of damages
adjudged by the trial court until full payment.

On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo

So Vasquez, was driving a Honda motorcycle around Fuente
Osmea Rotunda. He was traveling counter-clockwise, (the normal
flow of traffic in a rotunda) but without any protective helmet or
goggles. He was also only carrying a Students Permit to Drive at
the time. Upon the other hand, Benjamin Abad [was a] manager of
Appellant Castilex Industrial Corporation, registered owner [of] a
Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same date
and time, Abad drove the said company car out of a parking lot but
instead of going around the Osmea rotunda he made a short cut
against [the] flow of the traffic in proceeding to his route to General
Maxilom St. or to Belvic St.

WHEREFORE, we DENY the instant petition for review. The

Resolution dated 21 October 1999 of the Court of Appeals in CAG.R. SP No. 53572, as well as its Resolution dated 20 January 2000
denying the motion for reconsideration, is AFFIRMED with
the MODIFICATION that the amount due shall earn legal interest
at 6% per annum computed from 30 May 1995, the date of the trial
courts decision. Upon finality of this decision, the amount due shall
earn interest at 12% per annum, in lieu of 6% per annum, until full
payment.

In the process, the motorcycle of Vasquez and the pick-up of Abad

collided with each other causing severe injuries to the former. Abad
stopped his vehicle and brought Vasquez to the Southern Islands
Hospital and later to the Cebu Doctors Hospital.

SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Azcuna,
JJ., concur.
Panganiban, J., on official leave.

On September 5, 1988, Vasquez died at the Cebu Doctors Hospital.

It was there that Abad signed an acknowledgment of Responsible
Party (Exhibit K) wherein he agreed to pay whatever hospital bills,
professional fees and other incidental charges Vasquez may
incur.chanrobles virtual lawlibrary

FIRST DIVISION
[G.R. No. 132266. December 21, 1999.]

After the police authorities had conducted the investigation of the

accident, a Criminal Case was filed against Abad but which was
subsequently dismissed for failure to prosecute. So, the present
action for damages was commenced by Vicente Vasquez, Jr. and
Luisa So Vasquez, parents of the deceased Romeo So Vasquez,
against Jose Benjamin Abad and Castilex Industrial Corporation. In
the same action, Cebu Doctors Hospital intervened to collect
unpaid balance for the medical expense given to Romeo So
Vasquez. 1

CASTILEX INDUSTRIAL CORPORATION, Petitioner, v. VICENTE

VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU DOCTORS
HOSPITAL, INC., Respondents.
DECISION
DAVIDE, JR., C.J.:

The trial court ruled in favor of private respondents Vicente and

Luisa Vasquez and ordered Jose Benjamin Abad (hereafter ABAD)

12

and petitioner Castilex Industrial Corporation (hereafter CASTILEX)

to pay jointly and solidarily (1) Spouses Vasquez, the amounts of
P8,000.00 for burial expenses; P50,000.00 as moral damages;
P10,000.00 as attorneys fees; and P778,752.00 for loss of earning
capacity; and (2) Cebu Doctors Hospital, the sum of P50,927.83 for
unpaid medical and hospital bills at 3% monthly interest from 27
July 1989 until fully paid, plus the costs of litigation. 2

son on the basis of the fifth paragraph of Article 2180. Even if the
fourth paragraph of Article 2180 were applied, petitioner cannot
escape liability therefor. They moreover argue that the Court of
Appeals erred in reducing the amount of compensatory damages
when the award made by the trial court was borne both by
evidence adduced during the trial regarding deceaseds wages and
by jurisprudence on life expectancy. Moreover, they point out that
the petition is procedurally not acceptable on the following
grounds: (1) lack of an explanation for serving the petition upon the
Court of Appeals by registered mail, as required under Section 11,
Rule 13 of the Rules of Civil Procedure; and (2) lack of a statement
of the dates of the expiration of the original reglementary period
and of the filing of the motion for extension of time to file a petition
for review.

CASTILEX and ABAD separately appealed the decision.

In its decision 3 of 21 May 1997, the Court of Appeals affirmed the
ruling of the trial court holding ABAD and CASTILEX liable but held
that the liability of the latter is "only vicarious and not solidary"
with the former. It reduced the award of damages representing loss
of earning capacity from P778,752.00 to P214,156.80; and the
interest on the hospital and medical bills, from 3% per month to
12% per annum from 5 September 1988 until fully paid.

For its part, respondent Cebu Doctors Hospital maintains that

petitioner CASTILEX is indeed vicariously liable for the injuries and
subsequent death of Romeo Vasquez caused by ABAD, who was on
his way home from taking snacks after doing overtime work for
petitioner. Although the incident occurred when ABAD was not
working anymore "the inescapable fact remains that said employee
would not have been situated at such time and place had he not
been required by petitioner to do overtime work." Moreover, since
petitioner adopted the evidence adduced by ABAD, it cannot, as
the latters employer, inveigle itself from the ambit of liability, and
is thus estopped by the records of the case, which it failed to
refute.

Upon CASTILEXs motion for reconsideration, the Court of Appeals

modified its decision by (1) reducing the award of moral damages
from P50,000 to P30,000 in view of the deceaseds contributory
negligence; (b) deleting the award of attorneys fees for lack of
evidence; and (c) reducing the interest on hospital and medical bills
to 6% per annum from 5 September 1988 until fully paid. 4
Hence, CASTILEX filed the instant petition contending that the
Court of Appeals erred in (1) applying to the case the fifth
paragraph of Article 2180 of the Civil Code, instead of the fourth
paragraph thereof; (2) that as a managerial employee, ABAD was
deemed to have been always acting within the scope of his
assigned task even outside office hours because he was using a
vehicle issued to him by petitioner; and (3) ruling that petitioner
had the burden to prove that the employee was not acting within
the scope of his assigned task.chanrobles law library

We shall first address the issue raised by the private respondents

regarding some alleged procedural lapses in the petition.
Private respondents contention of petitioners violation of Section
11 of Rule 13 and Section 4 of Rule 45 of the 1997 Rules of Civil
Procedure holds no water.chanrobles virtual lawlibrary

Jose Benjamin ABAD merely adopted the statement of facts of

petitioner which holds fast on the theory of negligence on the part
of the deceased.

Section 11 of Rule 13 provides:chanrob1es virtual 1aw library

SECTION 11. Priorities in modes of service and filing. Whenever
practicable, the service and filing of pleadings and other papers
shall be done personally. Except with respect to papers emanating
from the court, a resort to other modes must be accompanied by a
written explanation why the service or filing was not done
personally. A violation of this Rule may be cause to consider the
paper as not filed.

On the other hand, respondents Spouses Vasquez argue that their

sons death was caused by the negligence of petitioners employee
who was driving a vehicle issued by petitioner and who was on his
way home from overtime work for petitioner; and that petitioner is
thus liable for the resulting injury and subsequent death of their

13

or enterprise; and the fifth paragraph, to employers in general,

whether or not engaged in any business or industry. The fourth
paragraph covers negligent acts of employees committed either in
the service of the branches or on the occasion of their functions,
while the fifth paragraph encompasses negligent acts of employees
acting within the scope of their assigned task. The latter is an
expansion of the former in both employer coverage and acts
included. Negligent acts of employees, whether or not the
employer is engaged in a business or industry, are covered so long
as they were acting within the scope of their assigned task, even
though committed neither in the service of the branches nor on the
occasion of their functions. For, admittedly, employees oftentimes
wear different hats. They perform functions which are beyond their
office, title or designation but which, nevertheless, are still within
the call of duty.

The explanation why service of a copy of the petition upon the

Court of Appeals was done by registered mail is found on Page 28
of the petition. Thus, there has been compliance with the
aforequoted provision.
As regards the allegation of violation of the material data rule
under Section 4 of Rule 45, the same is unfounded. The material
dates required to be stated in the petition are the following: (1) the
date of receipt of the judgment or final order or resolution subject
of the petition; (2) the date of filing of a motion for new trial or
reconsideration, if any; and (3) the date of receipt of the notice of
the denial of the motion. Contrary to private respondents claim,
the petition need not indicate the dates of the expiration of the
original reglementary period and the filing of a motion for extension
of time to file the petition. At any rate, aside from the material
dates required under Section 4 of Rule 45, petitioner CASTILEX also
stated in the first page of the petition the date it filed the motion
for extension of time to file the petition.

This court has applied the fifth paragraph to cases where the
employer was engaged in a business or industry such as truck
operators 6 and banks. 7 The Court of Appeals cannot, therefore,
be faulted in applying the said paragraph of Article 2180 of the Civil
Code to this case.

Now on the merits of the case.

The negligence of ABAD is not an issue at this instance. Petitioner
CASTILEX presumes said negligence but claims that it is not
vicariously liable for the injuries and subsequent death caused by
ABAD.

Under the fifth paragraph of Article 2180, whether or not engaged

in any business or industry, an employer is liable for the torts
committed by employees within the scope of his assigned tasks.
But it is necessary to establish the employer-employee relationship;
once this is done, the plaintiff must show, to hold the employer
liable, that the employee was acting within the scope of his
assigned task when the tort complained of was committed. It is
only then that the employer may find it necessary to interpose the
defense of due diligence in the selection and supervision of the
employee. 8

Petitioner contends that the fifth paragraph of Article 2180 of the

Civil Code should only apply to instances where the employer is not
engaged in business or industry. Since it is engaged in the business
of manufacturing and selling furniture it is therefore not covered by
said provision. Instead, the fourth paragraph should
apply.chanroblesvirtuallawlibrary

It is undisputed that ABAD was a Production Manager of petitioner

CASTILEX at the time of the tort occurrence. As to whether he was
acting within the scope of his assigned task is a question of fact,
which the court a quo and the Court of Appeals resolved in the
affirmative.

Petitioners interpretation of the fifth paragraph is not accurate. The

phrase "even though the former are not engaged in any business or
industry" found in the fifth paragraph should be interpreted to
mean that it is not necessary for the employer to be engaged in
any business or industry to be liable for the negligence of his
employee who is acting within the scope of his assigned task. 5

Well-entrenched in our jurisprudence is the rule that the factual

findings of the Court of Appeals are entitled to great respect, and
even finality at times. This rule is, however, subject to exceptions
such as when the conclusion is grounded on speculations, surmises,
or conjectures. 9 Such exception obtain in the present case to

A distinction must be made between the two provisions to

determine what is applicable. Both provisions apply to employers:
the fourth paragraph, to owners and managers of an establishment

14

warrant review by this Court of the finding of the Court of Appeals

that since ABAD was driving petitioners vehicle he was acting
within the scope of his duties as a manager.

The court a quo and the Court of Appeals were one in holding that
the driving by a manager of a company-issued vehicle is within the
scope of his assigned tasks regardless of the time and
circumstances.

Before we pass upon the issue of whether ABAD was performing

acts within the range of his employment, we shall first take up the
other reason invoked by the Court of Appeals in holding petitioner
CASTILEX vicariously liable for ABADs negligence, i.e., that the
petitioner did not present evidence that ABAD was not acting within
the scope of his assigned tasks at the time of the motor vehicle
mishap. Contrary to the ruling of the Court of Appeals, it was not
incumbent upon the petitioner to prove the same. It was enough for
petitioner CASTILEX to deny that ABAD was acting within the scope
of his duties; petitioner was not under obligation to prove this
negative averment. Ei incumbit probatio qui dicit, non qui negat
(He who asserts, not he who denies, must prove). The Court has
consistently applied the ancient rule that if the plaintiff, upon whom
rests the burden of proving his cause of action, fails to show in a
satisfactory manner facts which he bases his claim, the defendant
is under no obligation to prove his exception or defense. 10

We do not agree. The mere fact that ABAD was using a service
vehicle at the time of the injurious incident is not of itself sufficient
to charge petitioner with liability for the negligent operation of said
vehicle unless it appears that he was operating the vehicle within
the course or scope of his employment.
The following are principles in American Jurisprudence on the
employers liability for the injuries inflicted by the negligence of an
employee in the use of an employers motor vehicle:chanrob1es
virtual 1aw library
I. Operation of Employers Motor Vehicle in Going to or from Meals
It has been held that an employee who uses his employers vehicle
in going from his work to a place where he intends to eat or in
returning to work from a meal is not ordinarily acting within the
scope of his employment in the absence of evidence of some
special business benefit to the employer. Evidence that by using
the employers vehicle to go to and from meals, an employee is
enabled to reduce his time-off and so devote more time to the
performance of his duties supports the findings that an employee is
acting within the scope of his employment while so driving the
vehicle. 13

Now on the issue of whether the private respondents have

sufficiently established that ABAD was acting within the scope of
his assigned tasks.chanrobles lawlibrary : rednad
ABAD, who was presented as a hostile witness, testified that at the
time of the incident, he was driving a company-issued vehicle,
registered under the name of petitioner. He was then leaving the
restaurant where he had some snacks and had a chat with his
friends after having done overtime work for the petitioner.

II. Operation of Employers Vehicle in Going to or from Work

No absolutely hard and fast rule can be stated which will furnish the
complete answer to the problem of whether at a given moment, an
employee is engaged in his employers business in the operation of
a motor vehicle, so as to fix liability upon the employer because of
the employees action or inaction; but rather, the result varies with
each state of facts. 11

In the same vein, traveling to and from the place of work is

ordinarily a personal problem or concern of the employee, and not
a part of his services to his employer. Hence, in the absence of
some special benefit to the employer other than the mere
performance of the services available at the place where he is
needed, the employee is not acting within the scope of his
employment even though he uses his employers motor vehicle.
14chanroblesvirtuallawlibrary:red

In Filamer Christian Institute v. Intermediate Appellate Court, 12

this Court had the occasion to hold that acts done within the scope
of the employees assigned tasks includes "any act done by an
employee in furtherance of the interests of the employer or for the
account of the employer at the time of the infliction of the injury or
damages."cralaw virtua1aw library

The employer may, however, be liable where he derives some

special benefit from having the employee drive home in the
employers vehicle as when the employer benefits from having the

15

employee at work earlier and, presumably, spending more time at

his actual duties. Where the employees duties require him to
circulate in a general area with no fixed place or hours of work, or
to go to and from his home to various outside places of work, and
his employer furnishes him with a vehicle to use in his work, the
courts have frequently applied what has been called the "special
errand" or "roving commission" rule, under which it can be found
that the employee continues in the service of his employer until he
actually reaches home. However, even if the employee be deemed
to be acting within the scope of his employment in going to or from
work in his employers vehicle, the employer is not liable for his
negligence where at the time of the accident, the employee has left
the direct route to his work or back home and is pursuing a
personal errand of his own.

petitioners place of business. 17 A witness for the private

respondents, a sidewalk vendor, testified that Fuente Osmea is a
"lively place" even at dawn because Goldies Restaurant and Back
Street were still open and people were drinking thereat. Moreover,
prostitutes, pimps, and drug addicts littered the place. 18
At the Goldies Restaurant, ABAD took some snacks and had a chat
with friends. It was when ABAD was leaving the restaurant that the
incident in question occurred. That same witness for the private
respondents testified that at the time of the vehicular accident,
ABAD was with a woman in his car, who then shouted: "Daddy,
Daddy!" 19 This woman could not have been ABADs daughter, for
ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or
was carrying out a personal purpose not in line with his duties at
the time he figured in a vehicular accident. It was then about 2:00
a.m. of 28 August 1988, way beyond the normal working hours.
ABADs working day had ended; his overtime work had already
been completed. His being at a place which, as petitioner put it,
was known as a "haven for prostitutes, pimps, and drug pushers
and addicts," had no connection to petitioners business; neither
had it any relation to his duties as a manager. Rather, using his
service vehicle even for personal purposes was a form of a fringe
benefit or one of the perks attached to his
position.chanroblesvirtual|awlibrary

III. Use of Employers Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the
latters personal use outside of regular working hours is generally
not liable for the employees negligent operation of the vehicle
during the period of permissive use, even where the employer
contemplates that a regularly assigned motor vehicle will be used
by the employee for personal as well as business purposes and
there is some incidental benefit to the employer. Even where the
employees personal purpose in using the vehicle has been
accomplished and he has started the return trip to his house where
the vehicle is normally kept, it has been held that he has not
resumed his employment, and the employer is not liable for the
employees negligent operation of the vehicle during the return
trip. 15

Since there is paucity of evidence that ABAD was acting within the
scope of the functions entrusted to him, petitioner CASTILEX had no
duty to show that it exercised the diligence of a good father of a
family in providing ABAD with a service vehicle. Thus, justice and
equity require that petitioner be relieved of vicarious liability for the
consequences of the negligence of ABAD in driving its vehicle. 20

The foregoing principles and jurisprudence are applicable in our

jurisdiction albeit based on the doctrine of respondeat superior, not
on the principle of bonus pater familias as in ours. Whether the
fault or negligence of the employee is conclusive on his employer
as in American law or jurisprudence, or merely gives rise to the
presumption juris tantum of negligence on the part of the employer
as in ours, it is indispensable that the employee was acting in his
employers business or within the scope of his assigned task. 16

WHEREFORE, the petition is GRANTED, and the appealed decision

and resolution of the Court of Appeals is AFFIRMED with the
modification that petitioner Castilex Industrial Corporation be
absolved of any liability for the damages caused by its employee,
Jose Benjamin Abad.

In the case at bar, it is undisputed that ABAD did some overtime

work at the petitioners office, which was located in Cabangcalan,
Mandaue City. Thereafter, he went to Goldies Restaurant in Fuente
Osmea, Cebu City, which is about seven kilometers away from

SO ORDERED.
Puno, Kapunan, Pardo and Ynares-Santiago, JJ., concur.

16

SECOND DIVISION

was attended to by a certain Margaret Mager (Mager). According to

Spouses Viloria, Fernando agreed to buy the said tickets after
Mager informed them that there were no available seats at Amtrak,
an intercity passenger train service provider in the United States.
Per the tickets, Spouses Viloria were scheduled to leave for Newark
on August 13, 1997 and return to San Diego on August 21, 1997.

[G.R. No. 188288 : January 16, 2012]

SPOUSES FERNANDO AND LOURDES VILORIA, PETITIONERS,
VS. CONTINENTAL AIRLINES, INC., RESPONDENT.
DECISION

Subsequently, Fernando requested Mager to reschedule their flight

to Newark to an earlier date or August 6, 1997. Mager informed him
that flights to Newark via Continental Airlines were already fully
booked and offered the alternative of a round trip flight via Frontier
Air. Since flying with Frontier Air called for a higher fare of
US$526.00 per passenger and would mean traveling by night,
Fernando opted to request for a refund. Mager, however, denied his
request as the subject tickets are non-refundable and the only
option that Continental Airlines can offer is the re-issuance of new
tickets within one (1) year from the date the subject tickets were
issued. Fernando decided to reserve two (2) seats with Frontier Air.

REYES, J.:
This is a petition for review under Rule 45 of the Rules of Court from
the January 30, 2009 Decision[1]of the Special Thirteenth Division of
the Court of Appeals (CA) in CA-G.R. CV No. 88586
entitledSpouses Fernando and Lourdes Viloria v. Continental
Airlines, Inc., the dispositive portion of which states:cralaw
WHEREFORE, the Decision of the Regional Trial Court, Branch 74,
dated 03 April 2006, awarding US$800.00 or its peso equivalent at
the time of payment, plus legal rate of interest from 21 July 1997
until fully paid, [P]100,000.00 as moral damages, [P]50,000.00 as
exemplary damages, [P]40,000.00 as attorneys fees and costs of
suit to plaintiffs-appellees is hereby REVERSED and SET ASIDE.

As he was having second thoughts on traveling via Frontier Air,

Fernando went to the Greyhound Station where he saw an Amtrak
station nearby. Fernando made inquiries and was told that there are
seats available and he can travel on Amtrak anytime and any day
he pleased. Fernando then purchased two (2) tickets for
Washington, D.C.

Defendant-appellants counterclaim is DENIED.

From Amtrak, Fernando went to Holiday Travel and confronted

Mager with the Amtrak tickets, telling her that she had misled them
into buying the Continental Airlines tickets by misrepresenting that
Amtrak was already fully booked. Fernando reiterated his demand
for a refund but Mager was firm in her position that the subject
tickets are non-refundable.

Costs against plaintiffs-appellees.

SO ORDERED.[2]
On April 3, 2006, the Regional Trial Court of Antipolo City, Branch
74 (RTC) rendered a Decision, giving due course to the complaint
for sum of money and damages filed by petitioners Fernando Viloria
(Fernando) and Lourdes Viloria (Lourdes), collectively called
Spouses Viloria, against respondent Continental Airlines, Inc. (CAI).
As culled from the records, below are the facts giving rise to such
complaint.

Upon returning to the Philippines, Fernando sent a letter to CAI on

February 11, 1998, demanding a refund and alleging that Mager
had deluded them into purchasing the subject tickets.[3]
In a letter dated February 24, 1998, Continental Micronesia
informed Fernando that his complaint had been referred to the
Customer Refund Services of Continental Airlines at Houston, Texas.

On or about July 21, 1997 and while in the United States, Fernando
purchased for himself and his wife, Lourdes, two (2) round trip
airline tickets from San Diego, California to Newark, New Jersey on
board Continental Airlines. Fernando purchased the tickets at
US$400.00 each from a travel agency called Holiday Travel and

[4]

In a letter dated March 24, 1998, Continental Micronesia denied

Fernandos request for a refund and advised him that he may take

17

the subject tickets to any Continental ticketing location for the reissuance of new tickets within two (2) years from the date they
were issued. Continental Micronesia informed Fernando that the
subject tickets may be used as a form of payment for the purchase
of another Continental ticket, albeit with a re-issuance fee. [5]

are available on application at the offices of carrier), except in

transportation between a place in the United States or Canada and
any place outside thereof to which tariffs in force in those countries
apply.[8]
According to CAI, one of the conditions attached to their contract of
carriage is the non-transferability and non-refundability of the
subject tickets.

On June 17, 1999, Fernando went to Continentals ticketing office at

Ayala Avenue, Makati City to have the subject tickets replaced by a
single round trip ticket to Los Angeles, California under his name.
Therein, Fernando was informed that Lourdes ticket was nontransferable, thus, cannot be used for the purchase of a ticket in his
favor. He was also informed that a round trip ticket to Los Angeles
was US$1,867.40 so he would have to pay what will not be covered
by the value of his San Diego to Newark round trip ticket.

The RTCs Ruling

Following a full-blown trial, the RTC rendered its April 3, 2006
Decision, holding that Spouses Viloria are entitled to a refund in
view of Magers misrepresentation in obtaining their consent in the
purchase of the subject tickets.[9] The relevant portion of the April 3,
2006 Decision states:

In a letter dated June 21, 1999, Fernando demanded for the refund
of the subject tickets as he no longer wished to have them
replaced. In addition to the dubious circumstances under which the
subject tickets were issued, Fernando claimed that CAIs act of
charging him with US$1,867.40 for a round trip ticket to Los
Angeles, which other airlines priced at US$856.00, and refusal to
allow him to use Lourdes ticket, breached its undertaking under its
March 24, 1998 letter.[6]

Continental Airlines agent Ms. Mager was in bad faith when she was
less candid and diligent in presenting to plaintiffs spouses their
booking options. Plaintiff Fernando clearly wanted to travel via
AMTRAK, but defendants agent misled him into purchasing
Continental Airlines tickets instead on the fraudulent
misrepresentation that Amtrak was fully booked. In fact, defendant
Airline did not specifically denied (sic) this allegation.

On September 8, 2000, Spouses Viloria filed a complaint against

CAI, praying that CAI be ordered to refund the money they used in
the purchase of the subject tickets with legal interest from July 21,
1997 and to pay P1,000,000.00 as moral damages, P500,000.00 as
exemplary damages and P250,000.00 as attorneys fees.[7]

Plainly, plaintiffs spouses, particularly plaintiff Fernando, were

tricked into buying Continental Airline tickets on Ms. Magers
misleading misrepresentations. Continental Airlines agent Ms.
Mager further relied on and exploited plaintiff Fernandos need and
told him that they must book a flight immediately or risk not being
able to travel at all on the couples preferred date. Unfortunately,
plaintiffs spouses fell prey to the airlines and its agents unethical
tactics for baiting trusting customers.[10]

CAI interposed the following defenses: (a) Spouses Viloria have no

right to ask for a refund as the subject tickets are non-refundable;
(b) Fernando cannot insist on using the ticket in Lourdes name for
the purchase of a round trip ticket to Los Angeles since the same is
non-transferable; (c) as Mager is not a CAI employee, CAI is not
liable for any of her acts; (d) CAI, its employees and agents did not
act in bad faith as to entitle Spouses Viloria to moral and exemplary
damages and attorneys fees. CAI also invoked the following clause
printed on the subject tickets:

Citing Articles 1868 and 1869 of the Civil Code, the RTC ruled that
Mager is CAIs agent, hence, bound by her bad faith and
misrepresentation. As far as the RTC is concerned, there is no issue
as to whether Mager was CAIs agent in view of CAIs implied
recognition of her status as such in its March 24, 1998 letter.

3. To the extent not in conflict with the foregoing carriage and other
services performed by each carrier are subject to: (i) provisions
contained in this ticket, (ii) applicable tariffs, (iii) carriers conditions
of carriage and related regulations which are made part hereof (and

The act of a travel agent or agency being involved here, the

following are the pertinent New Civil Code provisions on agency:

18

Art. 1868. By the contract of agency a person binds himself to

render some service or to do something in representation or on
behalf of another, with the consent or authority of the latter.

On appeal, the CA reversed the RTCs April 3, 2006 Decision,

holding that CAI cannot be held liable for Magers act in the
absence of any proof that a principal-agent relationship existed
between CAI and Holiday Travel. According to the CA, Spouses
Viloria, who have the burden of proof to establish the fact of
agency, failed to present evidence demonstrating that Holiday
Travel is CAIs agent. Furthermore, contrary to Spouses Vilorias
claim, the contractual relationship between Holiday Travel and CAI
is not an agency but that of a sale.

Art. 1869. Agency may be express, or implied from the acts of the
principal, from his silence or lack of action, or his failure to
repudiate the agency, knowing that another person is acting on his
behalf without authority.
Agency may be oral, unless the law requires a specific form.

Plaintiffs-appellees assert that Mager was a sub-agent of Holiday

Travel who was in turn a ticketing agent of Holiday Travel who was
in turn a ticketing agent of Continental Airlines. Proceeding from
this premise, they contend that Continental Airlines should be held
liable for the acts of Mager. The trial court held the same view.

As its very name implies, a travel agency binds itself to render

some service or to do something in representation or on behalf of
another, with the consent or authority of the latter. This court takes
judicial notice of the common services rendered by travel agencies
that represent themselves as such, specifically the reservation and
booking of local and foreign tours as well as the issuance of airline
tickets for a commission or fee.

We do not agree. By the contract of agency, a person binds

him/herself to render some service or to do something in
representation or on behalf of another, with the consent or
authority of the latter. The elements of agency are: (1) consent,
express or implied, of the parties to establish the relationship; (2)
the object is the execution of a juridical act in relation to a third
person; (3) the agent acts as a representative and not for
him/herself; and (4) the agent acts within the scope of his/her
authority. As the basis of agency is representation, there must be,
on the part of the principal, an actual intention to appoint, an
intention naturally inferable from the principals words or actions. In
the same manner, there must be an intention on the part of the
agent to accept the appointment and act upon it. Absent such
mutual intent, there is generally no agency. It is likewise a settled
rule that persons dealing with an assumed agent are bound at their
peril, if they would hold the principal liable, to ascertain not only
the fact of agency but also the nature and extent of authority, and
in case either is controverted, the burden of proof is upon them to
establish it. Agency is never presumed, neither is it created by the
mere use of the word in a trade or business name. We have
perused the evidence and documents so far presented. We find
nothing except bare allegations of plaintiffs-appellees that
Mager/Holiday Travel was acting in behalf of Continental Airlines.
From all sides of legal prism, the transaction in issue was simply a
contract of sale, wherein Holiday Travel buys airline tickets from
Continental Airlines and then, through its employees, Mager
included, sells it at a premium to clients.[13]

The services rendered by Ms. Mager of Holiday Travel agency to the

plaintiff spouses on July 21, 1997 were no different from those
offered in any other travel agency. Defendant airline impliedly if not
expressly acknowledged its principal-agent relationship with Ms.
Mager by its offer in the letter dated March 24, 1998 an obvious
attempt to assuage plaintiffs spouses hurt feelings.[11]
Furthermore, the RTC ruled that CAI acted in bad faith in reneging
on its undertaking to replace the subject tickets within two (2)
years from their date of issue when it charged Fernando with the
amount of US$1,867.40 for a round trip ticket to Los Angeles and
when it refused to allow Fernando to use Lourdes ticket.
Specifically:
Tickets may be reissued for up to two years from the original date
of issue. When defendant airline still charged plaintiffs spouses
US$1,867.40 or more than double the then going rate of US$856.00
for the unused tickets when the same were presented within two
(2) years from date of issue, defendant airline exhibited callous
treatment of passengers.[12]
The Appellate Courts Ruling

19

The Respondents Case

The CA also ruled that refund is not available to Spouses Viloria as
the word non-refundable was clearly printed on the face of the
subject tickets, which constitute their contract with CAI. Therefore,
the grant of their prayer for a refund would violate the proscription
against impairment of contracts.

In its Comment, CAI claimed that Spouses Vilorias allegation of bad

faith is negated by its willingness to issue new tickets to them and
to credit the value of the subject tickets against the value of the
new ticket Fernando requested. CAI argued that Spouses Vilorias
sole basis to claim that the price at which CAI was willing to issue
the new tickets is unconscionable is a piece of hearsay evidence
an advertisement appearing on a newspaper stating that airfares
from Manila to Los Angeles or San Francisco cost US$818.00.
[15]
Also, the advertisement pertains to airfares in September 2000
and not to airfares prevailing in June 1999, the time when Fernando
asked CAI to apply the value of the subject tickets for the purchase
of a new one.[16] CAI likewise argued that it did not undertake to
protect Spouses Viloria from any changes or fluctuations in the
prices of airline tickets and its only obligation was to apply the
value of the subject tickets to the purchase of the newly issued
tickets.cralaw

Finally, the CA held that CAI did not act in bad faith when they
charged Spouses Viloria with the higher amount of US$1,867.40 for
a round trip ticket to Los Angeles. According to the CA, there is no
compulsion for CAI to charge the lower amount of US$856.00,
which Spouses Viloria claim to be the fee charged by other airlines.
The matter of fixing the prices for its services is CAIs prerogative,
which Spouses Viloria cannot intervene. In particular:
It is within the respective rights of persons owning and/or operating
business entities to peg the premium of the services and items
which they provide at a price which they deem fit, no matter how
expensive or exhorbitant said price may seem vis--vis those of the
competing companies. The Spouses Viloria may not intervene with
the business judgment of Continental Airlines.[14]

With respect to Spouses Vilorias claim that they are not aware of
CAIs restrictions on the subject tickets and that the terms and
conditions that are printed on them are ambiguous, CAI denies any
ambiguity and alleged that its representative informed Fernando
that the subject tickets are non-transferable when he applied for
the issuance of a new ticket. On the other hand, the word nonrefundable clearly appears on the face of the subject tickets.

The Petitioners Case

In this Petition, this Court is being asked to review the findings and
conclusions of the CA, as the latters reversal of the RTCs April 3,
2006 Decision allegedly lacks factual and legal bases. Spouses
Viloria claim that CAI acted in bad faith when it required them to
pay a higher amount for a round trip ticket to Los Angeles
considering CAIs undertaking to re-issue new tickets to them within
the period stated in their March 24, 1998 letter. CAI likewise acted
in bad faith when it disallowed Fernando to use Lourdes ticket to
purchase a round trip to Los Angeles given that there is nothing in
Lourdes ticket indicating that it is non-transferable. As a common
carrier, it is CAIs duty to inform its passengers of the terms and
conditions of their contract and passengers cannot be bound by
such terms and conditions which they are not made aware of. Also,
the subject contract of carriage is a contract of adhesion; therefore,
any ambiguities should be construed against CAI. Notably, the
petitioners are no longer questioning the validity of the subject
contracts and limited its claim for a refund on CAIs alleged breach
of its undertaking in its March 24, 1998 letter.

CAI also denies that it is bound by the acts of Holiday Travel and
Mager and that no principal-agency relationship exists between
them. As an independent contractor, Holiday Travel was without
capacity to bind CAI.
Issues
To determine the propriety of disturbing the CAs January 30, 2009
Decision and whether Spouses Viloria have the right to the reliefs
they prayed for, this Court deems it necessary to resolve the
following issues:
a. Does a principal-agent relationship exist between CAI
and Holiday Travel?

20

b. Assuming that an agency relationship exists between

CAI and Holiday Travel, is CAI bound by the acts of
Holiday Travels agents and employees such as
Mager?

whose shoulders such burden rests, presented evidence that fell

short of indubitably demonstrating the existence of such agency.
We disagree. The CA failed to consider undisputed facts,
discrediting CAIs denial that Holiday Travel is one of its agents.
Furthermore, in erroneously characterizing the contractual
relationship between CAI and Holiday Travel as a contract of sale,
the CA failed to apply the fundamental civil law principles
governing agency and differentiating it from sale.

c. Assuming that CAI is bound by the acts of Holiday

Travels agents and employees, can the
representation of Mager as to unavailability of seats
at Amtrak be considered fraudulent as to vitiate the
consent of Spouse Viloria in the purchase of the
subject tickets?

In Rallos v. Felix Go Chan & Sons Realty Corporation,[18] this Court

explained the nature of an agency and spelled out the essential
elements thereof:

d. Is CAI justified in insisting that the subject tickets are

non-transferable and non-refundable?

Out of the above given principles, sprung the creation and

acceptance of the relationship of agency whereby one party, called
the principal (mandante), authorizes another, called the agent
(mandatario), to act for and in his behalf in transactions with third
persons. The essential elements of agency are: (1) there is consent,
express or implied of the parties to establish the relationship; (2)
the object is the execution of a juridical act in relation to a third
person; (3) the agent acts as a representative and not for himself,
and (4) the agent acts within the scope of his authority.

e. Is CAI justified in pegging a different price for the

round trip ticket to Los Angeles requested by
Fernando?
f.

Alternatively, did CAI act in bad faith or renege its

obligation to Spouses Viloria to apply the value of the
subject tickets in the purchase of new ones when it
refused to allow Fernando to use Lourdes ticket and
in charging a higher price for a round trip ticket to
Los Angeles?

Agency is basically personal, representative, and derivative in

nature. The authority of the agent to act emanates from the powers
granted to him by his principal; his act is the act of the principal if
done within the scope of the authority. Qui facit per alium facit se.
"He who acts through another acts himself." [19]

This Courts Ruling

I. A principal-agent relationship exists
between CAI and Holiday Travel.

Contrary to the findings of the CA, all the elements of an agency

exist in this case. The first and second elements are present as CAI
does not deny that it concluded an agreement with Holiday Travel,
whereby Holiday Travel would enter into contracts of carriage with
third persons on CAIs behalf. The third element is also present as it
is undisputed that Holiday Travel merely acted in a representative
capacity and it is CAI and not Holiday Travel who is bound by the
contracts of carriage entered into by Holiday Travel on its behalf.
The fourth element is also present considering that CAI has not
made any allegation that Holiday Travel exceeded the authority
that was granted to it. In fact, CAI consistently maintains the
validity of the contracts of carriage that Holiday Travel executed
with Spouses Viloria and that Mager was not guilty of any

With respect to the first issue, which is a question of fact that would
require this Court to review and re-examine the evidence presented
by the parties below, this Court takes exception to the general rule
that the CAs findings of fact are conclusive upon Us and our
jurisdiction is limited to the review of questions of law. It is wellsettled to the point of being axiomatic that this Court is authorized
to resolve questions of fact if confronted with contrasting factual
findings of the trial court and appellate court and if the findings of
the CA are contradicted by the evidence on record. [17]
According to the CA, agency is never presumed and that he who
alleges that it exists has the burden of proof. Spouses Viloria, on

21

fraudulent misrepresentation. That CAI admits the authority of

Holiday Travel to enter into contracts of carriage on its behalf is
easily discernible from its February 24, 1998 and March 24, 1998
letters, where it impliedly recognized the validity of the contracts
entered into by Holiday Travel with Spouses Viloria. When Fernando
informed CAI that it was Holiday Travel who issued to them the
subject tickets, CAI did not deny that Holiday Travel is its authorized
agent.

agency, the principal retains ownership and control over the

property and the agent merely acts on the principals behalf and
under his instructions in furtherance of the objectives for which the
agency was established. On the other hand, the contract is clearly
a sale if the parties intended that the delivery of the property will
effect a relinquishment of title, control and ownership in such a way
that the recipient may do with the property as he pleases.
Since the company retained ownership of the goods, even as it
delivered possession unto the dealer for resale to customers, the
price and terms of which were subject to the company's control, the
relationship between the company and the dealer is one of agency,
tested under the following criterion:

Prior to Spouses Vilorias filing of a complaint against it, CAI never

refuted that it gave Holiday Travel the power and authority to
conclude contracts of carriage on its behalf. As clearly extant from
the records, CAI recognized the validity of the contracts of carriage
that Holiday Travel entered into with Spouses Viloria and
considered itself bound with Spouses Viloria by the terms and
conditions thereof; and this constitutes an unequivocal testament
to Holiday Travels authority to act as its agent. This Court cannot
therefore allow CAI to take an altogether different position and
deny that Holiday Travel is its agent without condoning or giving
imprimatur to whatever damage or prejudice that may result from
such denial or retraction to Spouses Viloria, who relied on good
faith on CAIs acts in recognition of Holiday Travels authority.
Estoppel is primarily based on the doctrine of good faith and the
avoidance of harm that will befall an innocent party due to its
injurious reliance, the failure to apply it in this case would result in
gross travesty of justice.[20] Estoppel bars CAI from making such
denial.

The difficulty in distinguishing between contracts of sale and the

creation of an agency to sell has led to the establishment of rules
by the application of which this difficulty may be solved. The
decisions say the transfer of title or agreement to transfer it for a
price paid or promised is the essence of sale. If such transfer puts
the transferee in the attitude or position of an owner and makes
him liable to the transferor as a debtor for the agreed price, and not
merely as an agent who must account for the proceeds of a resale,
the transaction is a sale; while the essence of an agency to sell is
the delivery to an agent, not as his property, but as the property of
the principal, who remains the owner and has the right to control
sales, fix the price, and terms, demand and receive the proceeds
less the agent's commission upon sales made. 1 Mechem on Sales,
Sec. 43; 1 Mechem on Agency, Sec. 48; Williston on Sales, 1;
Tiedeman on Sales, 1. (Salisbury v. Brooks, 94 SE 117, 118-119) [22]

As categorically provided under Article 1869 of the Civil Code,

[a]gency may be express, or implied from the acts of the principal,
from his silence or lack of action, or his failure to repudiate the
agency, knowing that another person is acting on his behalf without
authority.

As to how the CA have arrived at the conclusion that the contract

between CAI and Holiday Travel is a sale is certainly confounding,
considering that CAI is the one bound by the contracts of carriage
embodied by the tickets being sold by Holiday Travel on its behalf.
It is undisputed that CAI and not Holiday Travel who is the party to
the contracts of carriage executed by Holiday Travel with third
persons who desire to travel via Continental Airlines, and this
conclusively indicates the existence of a principal-agent
relationship. That the principal is bound by all the obligations
contracted by the agent within the scope of the authority granted
to him is clearly provided under Article 1910 of the Civil Code and
this constitutes the very notion of agency.

Considering that the fundamental hallmarks of an agency are

present, this Court finds it rather peculiar that the CA had branded
the contractual relationship between CAI and Holiday Travel as one
of sale. The distinctions between a sale and an agency are not
difficult to discern and this Court, as early as 1970, had already
formulated the guidelines that would aid in differentiating the two
(2) contracts. In Commissioner of Internal Revenue v. Constantino,
[21]
this Court extrapolated that the primordial differentiating
consideration between the two (2) contracts is the transfer of
ownership or title over the property subject of the contract. In an

22

II. In actions based on quasidelict, a principal can only be

held liable for the tort
committed by its agents
employees if it has been
established by
preponderance of evidence
that the principal was also at
fault or negligent or that the
principal exercise control and
supervision over them.

or culpa contractual, it is not necessary that there be evidence of

the airline companys fault or negligence. As this Court previously
stated in China Air Lines and reiterated in Air France vs. Gillego,
[24]
in an action based on a breach of contract of carriage, the
aggrieved party does not have to prove that the common carrier
was at fault or was negligent. All that he has to prove is the
existence of the contract and the fact of its non-performance by the
carrier.
Spouses Vilorias cause of action on the basis of Magers alleged
fraudulent misrepresentation is clearly one of tort or quasi-delict,
there being no pre-existing contractual relationship between them.
Therefore, it was incumbent upon Spouses Viloria to prove that CAI
was equally at fault.

Considering that Holiday Travel is CAIs agent, does it necessarily

follow that CAI is liable for the fault or negligence of Holiday
Travels employees? Citing China Air Lines, Ltd. v. Court of Appeals,
et al.,[23]CAI argues that it cannot be held liable for the actions of
the employee of its ticketing agent in the absence of an employeremployee relationship.

However, the records are devoid of any evidence by which CAIs

alleged liability can be substantiated. Apart from their claim that
CAI must be held liable for Magers supposed fraud because
Holiday Travel is CAIs agent, Spouses Viloria did not present
evidence that CAI was a party or had contributed to Magers
complained act either by instructing or authorizing Holiday Travel
and Mager to issue the said misrepresentation.

An examination of this Courts pronouncements in China Air

Lines will reveal that an airline company is not completely
exonerated from any liability for the tort committed by its agents
employees. A prior determination of the nature of the passengers
cause of action is necessary. If the passengers cause of action
against the airline company is premised on culpa aquiliana or
quasi-delict for a tort committed by the employee of the airline
companys agent, there must be an independent showing that the
airline company was at fault or negligent or has contributed to the
negligence or tortuous conduct committed by the employee of its
agent. The mere fact that the employee of the airline companys
agent has committed a tort is not sufficient to hold the airline
company liable. There is novinculum juris between the airline
company and its agents employees and the contractual
relationship between the airline company and its agent does not
operate to create a juridical tie between the airline company and its
agents employees. Article 2180 of the Civil Code does not make
the principal vicariously liable for the tort committed by its agents
employees and the principal-agency relationshipper se does not
make the principal a party to such tort; hence, the need to prove
the principals own fault or negligence.

It may seem unjust at first glance that CAI would consider Spouses
Viloria bound by the terms and conditions of the subject contracts,
which Mager entered into with them on CAIs behalf, in order to
deny Spouses Vilorias request for a refund or Fernandos use of
Lourdes ticket for the re-issuance of a new one, and
simultaneously claim that they are not bound by Magers supposed
misrepresentation for purposes of avoiding Spouses Vilorias claim
for damages and maintaining the validity of the subject contracts.
It may likewise be argued that CAI cannot deny liability as it
benefited from Magers acts, which were performed in compliance
with Holiday Travels obligations as CAIs agent.
However, a persons vicarious liability is anchored on his possession
of control, whether absolute or limited, on the tortfeasor. Without
such control, there is nothing which could justify extending the
liability to a person other than the one who committed the tort. As
this Court explained in Cangco v. Manila Railroad Co.:[25]
With respect to extra-contractual obligation arising from
negligence, whether of act or omission, it is competent for the
legislature to elect and our Legislature has so elected to limit

On the other hand, if the passengers cause of action for damages

against the airline company is based on contractual breach

23

such liability to cases in which the person upon whom such an

obligation is imposed is morally culpable or, on the contrary, for
reasons of public policy, to extend that liability, without
regard to the lack of moral culpability, so as to
include responsibility for the negligence of those persons
whose acts or omissions are imputable, by a legal fiction, to
others who are in a position to exercise an absolute or
limited control over them. The legislature which adopted our
Civil Code has elected to limit extra-contractual liability with
certain well-defined exceptions to cases in which moral
culpability can be directly imputed to the persons to be charged.
This moral responsibility may consist in having failed to exercise
due care in one's own acts, or in having failed to exercise due care
in the selection and control of one's agent or servants, or in the
control of persons who, by reasons of their status, occupy a
position of dependency with respect to the person made liable for
their conduct.[26] (emphasis supplied)

that CAI may be held liable

for the acts of Mager, still,
Spouses Viloria are not
entitled to a refund. Magers
statement cannot be
considered a causal fraud
that would justify the
annulment of the subject
contracts that would oblige
CAI to indemnify Spouses
Viloria and return the money
they paid for the subject
tickets.
Article 1390, in relation to Article 1391 of the Civil Code, provides
that if the consent of the contracting parties was obtained through
fraud, the contract is considered voidable and may be annulled
within four (4) years from the time of the discovery of the fraud.
Once a contract is annulled, the parties are obliged under Article
1398 of the same Code to restore to each other the things subject
matter of the contract, including their fruits and interest.

It is incumbent upon Spouses Viloria to prove that CAI exercised

control or supervision over Mager by preponderant evidence. The
existence of control or supervision cannot be presumed and CAI is
under no obligation to prove its denial or nugatory assertion.
Citing Belen v. Belen,[27] this Court ruled inJayme v. Apostol,[28] that:

On the basis of the foregoing and given the allegation of Spouses

Viloria that Fernandos consent to the subject contracts was
supposedly secured by Mager through fraudulent means, it is
plainly apparent that their demand for a refund is tantamount to
seeking for an annulment of the subject contracts on the ground of
vitiated consent.

In Belen v. Belen, this Court ruled that it was enough for defendant
to deny an alleged employment relationship. The defendant is
under no obligation to prove the negative averment. This Court
said:
It is an old and well-settled rule of the courts that the burden of
proving the action is upon the plaintiff, and that if he fails
satisfactorily to show the facts upon which he bases his claim, the
defendant is under no obligation to prove his exceptions. This [rule]
is in harmony with the provisions of Section 297 of the Code of Civil
Procedure holding that each party must prove his own affirmative
allegations, etc.[29] (citations omitted)

Whether the subject contracts are annullable, this Court is required

to determine whether Magers alleged misrepresentation
constitutes causal fraud. Similar to the dispute on the existence of
an agency, whether fraud attended the execution of a contract is
factual in nature and this Court, as discussed above, may scrutinize
the records if the findings of the CA are contrary to those of the
RTC.

Therefore, without a modicum of evidence that CAI exercised

control over Holiday Travels employees or that CAI was equally at
fault, no liability can be imposed on CAI for Magers supposed
misrepresentation.

Under Article 1338 of the Civil Code, there is fraud when, through
insidious words or machinations of one of the contracting parties,
the other is induced to enter into a contract which, without them,
he would not have agreed to. In order that fraud may vitiate
consent, it must be the causal (dolo causante), not merely the
incidental (dolo incidente), inducement to the making of the

III. Even on the assumption

24

contract.[30] InSamson v. Court of Appeals,[31] causal fraud was

defined as a deception employed by one party prior to or
simultaneous to the contract in order to secure the consent of the
other.[32]

perennial availability of seats at Amtrak, to be wanting. As CAI

correctly pointed out and as Fernando admitted, it was possible
that during the intervening period of three (3) weeks from the time
Fernando purchased the subject tickets to the time he talked to
said Amtrak employee, other passengers may have cancelled their
bookings and reservations with Amtrak, making it possible for
Amtrak to accommodate them. Indeed, the existence of fraud
cannot be proved by mere speculations and conjectures. Fraud is
never lightly inferred; it is good faith that is. Under the Rules of
Court, it is presumed that "a person is innocent of crime or wrong"
and that "private transactions have been fair and
regular."[35] Spouses Viloria failed to overcome this presumption.

Also, fraud must be serious and its existence must be established

by clear and convincing evidence. As ruled by this Court in Sierra v.
Hon. Court of Appeals, et al.,[33] mere preponderance of evidence is
not adequate:
Fraud must also be discounted, for according to the Civil Code:
Art. 1338. There is fraud when, through insidious words or
machinations of one of the contracting parties, the other is induced
to enter into a contract which without them, he would not have
agreed to.

IV. Assuming the contrary,

Spouses Viloria are
nevertheless deemed to have
ratified the subject contracts.

Art. 1344. In order that fraud may make a contract voidable, it

should be serious and should not have been employed by both
contracting parties.

Even assuming that Magers representation is causal fraud, the

subject contracts have been impliedly ratified when Spouses Viloria
decided to exercise their right to use the subject tickets for the
purchase of new ones. Under Article 1392 of the Civil Code,
ratification extinguishes the action to annul a voidable contract.

To quote Tolentino again, the misrepresentation constituting the

fraud must be established by full, clear, and convincing evidence,
and not merely by a preponderance thereof. The deceit must be
serious. The fraud is serious when it is sufficient to impress, or to
lead an ordinarily prudent person into error; that which cannot
deceive a prudent person cannot be a ground for nullity. The
circumstances of each case should be considered, taking into
account the personal conditions of the victim.[34]

Ratification of a voidable contract is defined under Article 1393 of

the Civil Code as follows:
Art. 1393. Ratification may be effected expressly or tacitly. It is
understood that there is a tacit ratification if, with knowledge of the
reason which renders the contract voidable and such reason having
ceased, the person who has a right to invoke it should execute an
act which necessarily implies an intention to waive his right.

After meticulously poring over the records, this Court finds that the
fraud alleged by Spouses Viloria has not been satisfactorily
established as causal in nature to warrant the annulment of the
subject contracts. In fact, Spouses Viloria failed to prove by clear
and convincing evidence that Magers statement was fraudulent.
Specifically, Spouses Viloria failed to prove that (a) there were
indeed available seats at Amtrak for a trip to New Jersey on August
13, 1997 at the time they spoke with Mager on July 21, 1997; (b)
Mager knew about this; and (c) that she purposely informed them
otherwise.

Implied ratification may take diverse forms, such as by silence or

acquiescence; by acts showing approval or adoption of the
contract; or by acceptance and retention of benefits flowing
therefrom.[36]
Simultaneous with their demand for a refund on the ground of
Fernandos vitiated consent, Spouses Viloria likewise asked for a
refund based on CAIs supposed bad faith in reneging on its
undertaking to replace the subject tickets with a round trip ticket

This Court finds the only proof of Magers alleged fraud, which is
Fernandos testimony that an Amtrak had assured him of the

25

from Manila to Los Angeles.

The injured party may choose between the fulfilment and the
rescission of the obligation, with the payment of damages in either
case. He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.

In doing so, Spouses Viloria are actually asking for a rescission of

the subject contracts based on contractual breach. Resolution, the
action referred to in Article 1191, is based on the defendants
breach of faith, a violation of the reciprocity between the
parties[37] and in Solar Harvest, Inc. v. Davao Corrugated Carton
Corporation,[38] this Court ruled that a claim for a reimbursement in
view of the other partys failure to comply with his obligations
under the contract is one for rescission or resolution.

The court shall decree the rescission claimed, unless there be just
cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third
persons who have acquired the thing, in accordance with articles
1385 and 1388 and the Mortgage Law.

However, annulment under Article 1390 of the Civil Code and

rescission under Article 1191 are two (2) inconsistent remedies. In
resolution, all the elements to make the contract valid are present;
in annulment, one of the essential elements to a formation of a
contract, which is consent, is absent. In resolution, the defect is in
the consummation stage of the contract when the parties are in the
process of performing their respective obligations; in annulment,
the defect is already present at the time of the negotiation and
perfection stages of the contract. Accordingly, by pursuing the
remedy of rescission under Article 1191, the Vilorias had impliedly
admitted the validity of the subject contracts, forfeiting their right
to demand their annulment. A party cannot rely on the contract
and claim rights or obligations under it and at the same time
impugn its existence or validity. Indeed, litigants are enjoined from
taking inconsistent positions.[39]

According to Spouses Viloria, CAI acted in bad faith and breached

the subject contracts when it refused to apply the value of Lourdes
ticket for Fernandos purchase of a round trip ticket to Los Angeles
and in requiring him to pay an amount higher than the price fixed
by other airline companies.
In its March 24, 1998 letter, CAI stated that non-refundable tickets
may be used as a form of payment toward the purchase of another
Continental ticket for $75.00, per ticket, reissue fee ($50.00, per
ticket, for tickets purchased prior to October 30, 1997).
Clearly, there is nothing in the above-quoted section of CAIs letter
from which the restriction on the non-transferability of the subject
tickets can be inferred. In fact, the words used by CAI in its letter
supports the position of Spouses Viloria, that each of them can use
the ticket under their name for the purchase of new tickets whether
for themselves or for some other person.

V. Contracts cannot be rescinded

for a slight or casual breach.
CAI cannot insist on the non-transferability
of the subject tickets.

Moreover, as CAI admitted, it was only when Fernando had

expressed his interest to use the subject tickets for the purchase of
a round trip ticket between Manila and Los Angeles that he was
informed that he cannot use the ticket in Lourdes name as
payment.

Considering that the subject contracts are not annullable on the

ground of vitiated consent, the next question is: Do Spouses
Viloria have the right to rescind the contract on the ground of CAIs
supposed breach of its undertaking to issue new tickets upon
surrender of the subject tickets?

Contrary to CAIs claim, that the subject tickets are nontransferable cannot be implied from a plain reading of the provision
printed on the subject tickets stating that [t]o the extent not in
conflict with the foregoing carriage and other services performed
by each carrier are subject to: (a) provisions contained in this
ticket, x x x (iii) carriers conditions of carriage and related

Article 1191, as presently worded, states:

The power to rescind obligations is implied in reciprocal ones, in
case one of the obligors should not comply with what is incumbent
upon him.

26

regulations which are made part hereof (and are available on

application at the offices of carrier) x x x. As a common carrier
whose business is imbued with public interest, the exercise of
extraordinary diligence requires CAI to inform Spouses Viloria, or all
of its passengers for that matter, of all the terms and conditions
governing their contract of carriage. CAI is proscribed from taking
advantage of any ambiguity in the contract of carriage to impute
knowledge on its passengers of and demand compliance with a
certain condition or undertaking that is not clearly stipulated. Since
the prohibition on transferability is not written on the face of the
subject tickets and CAI failed to inform Spouses Viloria thereof, CAI
cannot refuse to apply the value of Lourdes ticket as payment for
Fernandos purchase of a new ticket.

Moreover, Spouses Vilorias demand for rescission cannot prosper

as CAI cannot be solely faulted for the fact that their agreement
failed to consummate and no new ticket was issued to Fernando.
Spouses Viloria have no right to insist that a single round trip ticket
between Manila and Los Angeles should be priced at around
$856.00 and refuse to pay the difference between the price of the
subject tickets and the amount fixed by CAI. The petitioners failed
to allege, much less prove, that CAI had obliged itself to issue to
them tickets for any flight anywhere in the world upon their
surrender of the subject tickets. In its March 24, 1998 letter, it was
clearly stated that [n]on-refundable tickets may be used as a form
of payment toward the purchase of another Continental
ticket[42] and there is nothing in it suggesting that CAI had obliged
itself to protect Spouses Viloria from any fluctuation in the prices of
tickets or that the surrender of the subject tickets will be
considered as full payment for any ticket that the petitioners intend
to buy regardless of actual price and destination. The CA was
correct in holding that it is CAIs right and exclusive prerogative to
fix the prices for its services and it may not be compelled to
observe and maintain the prices of other airline companies. [43]

CAIs refusal to accept Lourdes ticket for the

purchase of a new ticket for Fernando is only a
casual breach.
Nonetheless, the right to rescind a contract for non-performance of
its stipulations is not absolute. The general rule is that rescission of
a contract will not be permitted for a slight or casual breach, but
only for such substantial and fundamental violations as would
defeat the very object of the parties in making the agreement.
[40]
Whether a breach is substantial is largely determined by the
attendant circumstances.[41]

The conflict as to the endorsability of the subject tickets is an

altogether different matter, which does not preclude CAI from fixing
the price of a round trip ticket between Manila and Los Angeles in
an amount it deems proper and which does not provide Spouses
Viloria an excuse not to pay such price, albeit subject to a reduction
coming from the value of the subject tickets. It cannot be denied
that Spouses Viloria had the concomitant obligation to pay
whatever is not covered by the value of the subject tickets whether
or not the subject tickets are transferable or not.

While CAIs refusal to allow Fernando to use the value of Lourdes

ticket as payment for the purchase of a new ticket is unjustified as
the non-transferability of the subject tickets was not clearly
stipulated, it cannot, however be considered substantial. The
endorsability of the subject tickets is not an essential part of the
underlying contracts and CAIs failure to comply is not essential to
its fulfillment of its undertaking to issue new tickets upon Spouses
Vilorias surrender of the subject tickets. This Court takes note of
CAIs willingness to perform its principal obligation and this is to
apply the price of the ticket in Fernandos name to the price of the
round trip ticket between Manila and Los Angeles. CAI was likewise
willing to accept the ticket in Lourdes name as full or partial
payment as the case may be for the purchase of any ticket, albeit
under her name and for her exclusive use. In other words, CAIs
willingness to comply with its undertaking under its March 24, 1998
cannot be doubted, albeit tainted with its erroneous insistence that
Lourdes ticket is non-transferable.

There is also no showing that Spouses Viloria were discriminated

against in bad faith by being charged with a higher rate. The only
evidence the petitioners presented to prove that the price of a
round trip ticket between Manila and Los Angeles at that time was
only $856.00 is a newspaper advertisement for another airline
company, which is inadmissible for being hearsay evidence, twice
removed. Newspaper clippings are hearsay if they were offered for
the purpose of proving the truth of the matter alleged. As ruled
in Feria v. Court of Appeals,:[44]
[N]ewspaper articles amount to hearsay evidence, twice removed
and are therefore not only inadmissible but without any probative
value at all whether objected to or not,unless offered for a purpose

27

other than proving the truth of the matter asserted. In this case,
the news article is admissible only as evidence that such
publication does exist with the tenor of the news therein stated.
[45]
(citations omitted)

Tolentino for damages, in the form of penalties and surcharges, for

not paying his overdue P17,000.00 debt. x x x.[47] cralaw
Another consideration that militates against the propriety of
holding CAI liable for moral damages is the absence of a showing
that the latter acted fraudulently and in bad faith. Article 2220 of
the Civil Code requires evidence of bad faith and fraud and moral
damages are generally not recoverable inculpa contractual except
when bad faith had been proven.[48] The award of exemplary
damages is likewise not warranted. Apart from the requirement that
the defendant acted in a wanton, oppressive and malevolent
manner, the claimant must prove his entitlement to moral
damages.[49]

The records of this case demonstrate that both parties were equally
in default; hence, none of them can seek judicial redress for the
cancellation or resolution of the subject contracts and they are
therefore bound to their respective obligations thereunder. As the
1st sentence of Article 1192 provides:
Art. 1192. In case both parties have committed a breach of
the obligation, the liability of the first infractor shall be
equitably tempered by the courts. If it cannot be determined
which of the parties first violated the contract, the same shall be
deemed extinguished, and each shall bear his own damages.
(emphasis supplied)

WHEREFORE, premises considered, the instant Petition is DENIED.

SO ORDERED.
Carpio, (Chairperson), Perez, Sereno, Reyes, and Bernabe,
JJ.,* concur.

Therefore, CAIs liability for damages for its refusal to accept

Lourdes ticket for the purchase of Fernandos round trip ticket is
offset by Spouses Vilorias liability for their refusal to pay the
amount, which is not covered by the subject tickets. Moreover, the
contract between them remains, hence, CAI is duty bound to issue
new tickets for a destination chosen by Spouses Viloria upon their
surrender of the subject tickets and Spouses Viloria are obliged to
pay whatever amount is not covered by the value of the subject
tickets.

SECOND DIVISION
[G.R. No. L-25142. March 25, 1975.]
PHILIPPINE RABBIT BUS LINES, INC. and FELIX
PANGALANGAN, Plaintiffs-Appellants, v. PHIL-AMERICAN
FORWARDERS, INC., ARCHIMEDES J. BALINGIT and
FERNANDO PINEDA,Defendants-Appellees.

This Court made a similar ruling in Central Bank of the Philippines

v. Court of Appeals.[46] Thus:

Angel A. Sison, for Plaintiffs-Appellants.

Since both parties were in default in the performance of their

respective reciprocal obligations, that is, Island Savings Bank failed
to comply with its obligation to furnish the entire loan and Sulpicio
M. Tolentino failed to comply with his obligation to pay his
P17,000.00 debt within 3 years as stipulated, they are both liable
for damages.

Fidel Zosimo U. Canilao for Defendants-Appellees.

SYNOPSIS
As a result of a vehicular accident, complaint for damages based on
culpa-aquitiana was filed against the Phil-American Forwarders,
Inc., Fernando Pineda, and Balingit as manager of the company. The
trial court dismissed the complaint against Balingit on the ground
that he is not the manager of an establishment contemplated in
Article 2180 of the Civil Code making owners and managers of an

Article 1192 of the Civil Code provides that in case both parties
have committed a breach of their reciprocal obligations, the liability
of the first infractor shall be equitably tempered by the courts. WE
rule that the liability of Island Savings Bank for damages in not
furnishing the entire loan is offset by the liability of Sulpicio M.

28

establishment responsible for damages caused by their employees,

since Balingit himself may be regarded as an employee of the PhilAmerican Forwarders, Inc. On appeal, plaintiffs urged that the veil
of corporate fiction should be pierced, the Phil-American Forwarders
Inc. being merely a business conduit of Balingit, since he and his
wife are the controlling stockholders. The Supreme Court held that
this issue cannot be entertained on appeal, because it was not
raised in the lower court.

DECISION
AQUINO, J.:
Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on
pure questions of law from the order of the Court of First Instance of
Tarlac, dismissing their complaint against Archimedes J. Balingit.

Order of dismissal affirmed.

SYLLABUS

The dismissal was based on the ground that Balingit as the

manager of Phil-American Forwarders, Inc., which together with
Fernando Pineda and Balingit, was sued for damages in an action
based on quasi-delict or culpa aquiliana is not the manager of an
establishment contemplated in article 2180 of the Civil Code (Civil
Case No. 3865).

1. QUASI-DELICT; EMPLOYER AND EMPLOYEES; "EMPLOYER" AND

"OWNER AND MANAGER OF ESTABLISHMENT OF ENTERPRISE" DO
NOT INCLUDE MANAGER OF CORPORATION. The terms
"employer" and "owner and manager of establishment or
enterprise" as used in Article 2180 of the Civil Code do not include
the manager of a corporation owning a truck the reckless operation
of which allegedly resulted in the vehicular accident from which the
damage arose.

In the complaint for damages filed by the bus company and

Pangalangan against Phil-American Forwarders, Inc., Balingit and
Pineda, it was alleged that on November 24, 1962, Pineda drove
recklessly a freight truck, owned by Phil-American Forwarders, Inc.,
along the national highway at Sto. Tomas, Pampanga. The truck
bumped the bus driven by Pangalangan, which was owned by
Philippine Rabbit Bus Lines, Inc. As a result of the bumping,
Pangalangan suffered injuries and the bus was damaged and could
not be used for seventy-nine days, thus depriving the company of
earnings amounting to P8,665.51. Balingit was the manager of PhilAmerican Forwarders, Inc.

2. WORDS AND PHRASES; "MANAGER" UNDER SEC. 2180 OF CIVIL

CODE USED IN THE SENSE OF "EMPLOYER." Under Article 2180
the term "manager" is used in the sense of "employer" and does
not embrace a "manager" who may himself be regarded as an
employee or dependiente of his employer.
3. APPEAL; ISSUES NOT RAISED IN THE LOWER COURT CANNOT BE
ENTERTAINED ON APPEAL. A new factual issue injected in the
brief which was not alleged in the complaint or raised in the trial
court cannot be entertained on appeal. An appeal has to be
decided on the basis of the pleadings filed in the trial court, and
appellants can ventilate on appeal only those legal issues raised in
the lower court and those within the issues framed by the parties.

Among the defenses interposed by the defendants in their answer

was that Balingit was not Pinedas employer.
Balingit moved that the complaint against him be dismissed on the
ground that the bus company and the bus driver had no cause of
action against him. As already stated, the lower court dismissed the
action as to Balingit. The bus company and its driver appealed.

4. ID.; ID.; CHANGE OF THEORY; PARTY-LITIGANT CANNOT BE

ALLOWED TO CHANGE THEORY OF CASE ON APPEAL. When a
party deliberately adopts a certain theory and the case is decided
upon that theory in the court below, he will not be permitted to
change his theory on appeal because that would be unfair to the
adverse party.

The Civil Code provides:jgc:chanrobles.com.ph

"ART. 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage

29

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.

American Forwarders, Inc., in connection with the vehicular

accident already mentioned because he himself may be regarded
as an employee or dependiente of his employer, Phil-American
Forwarders, Inc.

"ART. 2180. The obligation imposed by article 2176 is demandable

not only for ones own acts or omissions, but also for those of
persons for whom one is responsible.
x

Thus, it was held "que es dependiente, a los efectos de la

responsabilidad subsidiaria establecida en el num. 3.x del (art.)
1903, el director de un periodico explotado por una sociedad,
porque cualquiera que sea su jerarqu!a, y aunque lleve la direccin
de determinadas convicciones politicas, no por eso deja de estar
subordinado a la superior autoridad de la Empresa" (Decision of
Spanish Supreme Court dated December 6, 1912 cited in 12
Manresa, Codigo Civil Espaol, 5th Ed. 662; 1913 Enciclopedia
Juridica Espaola 992).

"The owners and managers of an establishment or enterprise are

likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.

The bus company and its driver, in their appellants brief, injected a
new factual issue which was not alleged in their complaint. They
argue that Phil-American Forwarders, Inc. is merely a business
conduit of Balingit because out of its capital stock with a par value
of P41,200, Balingit and his wife had subscribed P40,000 and they
paid P10,000 on their subscription, while the other incorporators,
namely, Rodolfo Limjuco, Ponciano Caparas and Rafael Suntay paid
P250.25 and P25, respectively.

"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

"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. (1903a)"

That argument implies that the veil of corporate fiction should be

pierced and that Phil-American Forwarders, Inc. and Balingit and his
wife should be treated as one and the same civil personality.

The novel and unprecedented legal issue in this appeal is whether

the terms "employers" and "owners and managers of an
establishment or enterprise" (dueos o directores de un
establicimiento o empresa) used in article 2180 of the Civil Code,
formerly article 1903 of the old Code, embrace the manager of a
corporation owning a truck, the reckless operation of which
allegedly resulted in the vehicular accident from which the damage
arose.

We cannot countenance that argument in this appeal. It was not

raised in the lower court. The case has to be decided on the basis
of the pleadings filed in the trial court where it was assumed that
Phil-American Forwarders, Inc. has a personality separate and
distinct from that of the Balingit spouses.
The legal issue, which the plaintiffs-appellants can ventilate in this
appeal, is one which was raised in the lower court and which is
within the issues framed by the parties (Sec. 18, Rule 46, Rules of
Court).

We are of the opinion that those terms do not include the manager
of a corporation. It may be gathered from the context of article
2180 that the term "manager" ("director" in the Spanish version) is
used in the sense of "employer."

When a party deliberately adopts a certain theory and the case is

decided upon that theory in the court below, he will not be
permitted to change his theory on appeal because, to permit him to
do so, would be unfair to the adverse party (2 Morans Comments
on the Rules of Court, 1970 Ed. p. 505).

Hence, under the allegations of the complaint, no tortious or quasidelictual liability can be fastened on Balingit as manager of Phil-

30

as to take the necessary precautions to protect the students in their

custody from dangers and hazards that would reasonably be
anticipated, including injuries that some students themselves may
inflict willfully or through negligence on their fellow students.

WHEREFORE, the lower courts order of dismissal is affirmed. Costs

against the plaintiffs-appellants.
SO ORDERED.

2. ID.; ID.; ID.; PRESUMPTION OF NEGLIGENCE; BASIS. The basis

of the presumption of negligence of Art. 1903 (now 2180)is some
culpa in vigilando that the parents, teachers, etc., are supposed to
have incurred in the exercise of their authority and where the
parent places the child under the effective authority of the teacher,
the latter, and not the parent, should be the one answerable for the
torts committed while under his custody, for the reason that the
parent is not supposed to interfere with the discipline of the school
nor with the authority and supervision of the teacher while the child
is under instruction. The school itself, likewise, has to respond for
the fault or negligence of its school head and teachers under the
same cited article.

Fernando (Chairman), Barredo, Antonio and Fernandez, JJ., concur.

EN BANC
[G.R. No. L-29025. October 4, 1971.]
Spouses MOISES P. PALISOC and BRIGIDA P.
PALISOC, Plaintiffs-Appellants, v. ANTONIO C, BRILLANTES
and TEODOSIO V. VALENTON, owner and President,
respectively, of a school of arts and trades, known under
the name and style of "Manila Technical Institute" (M.I.T.),
VIRGILIO L. DAFFON and SANTIAGO M.
QUIBULUE, Defendants-Appellees.

3. ID.; ID.; ID.; PHRASE "SO LONG AS STUDENTS REMAIN IN THEIR

CUSTODY," CONSTRUED. The lower court therefore erred in law
in absolving defendants-school officials on the ground that they
could be held liable under Article 2180, Civil Code, only if the
student who inflicted the fatal fistblows on his classmate and victim
"lived and boarded with his teacher or the other defendants
officials of the school." As stated above, the phrase used in the
cited article "so long as (the students) remain in their custody"
means the protective and supervisory custody that the school and
its head and teachers exercise over the pupils and students for as
long as they are at attendance in the school, including recess time.
There is nothing in the law that requires that for such liability to
attach, the pupil or student who commits the tortious act must live
an board in the school, as erroneously held by the lower court, and
the dicta in Mercado (as well as in Exconde) on which it relied, must
now be deemed to have been set aside by the present decision.

Leovollo C . Agustin, for Plaintiffs-Appellants.

Honorato S. Reyes for appellee Brillantes, Et Al., Villareal,
Almacen, Navarra, and Amares for appellee Daffon.
SYLLABUS
1. CIVIL LAW; QUASI-DELICT; LIABILITY OF SCHOOL HEADS AND
TEACHERS FOR TORTIOUS ACTS OF STUDENTS; RATIONALE. The
rationale of such liability of school heads and teachers for the
tortious acts of their pupils and students, so long as they remain in
their custody, is that they stand, to a certain extent, as to their
pupils and students, in loco parentis and are called upon to
"exercise reasonable supervision over the conduct of the child" This
is expressly provided for in Articles 349, 350 and 352 of the Civil
Code. In the law of torts, the governing principle is that the
protective custody of the school heads and teachers is mandatorily
substituted for that of the parents, and hence, it becomes their
obligation as well as that of the school itself to provide proper
supervision of the students activities during the whole time that
they are at attendance in the school, including recess time, as well

4. ID.; ID.; ID.; OBSERVANCE OF DILIGENCE OF A GOOD FATHER OF

A FAMILY, VALID DEFENSE. The unfortunate death resulting from
the fight between the protagonists-students could have been
avoided, had said defendants but complied with their duty of
providing adequate supervision over the activities of the students
in the school premises to protect their students from harm, whether
at the hands of fellow students or other parties. At any rate, the law
holds them liable unless they relieve themselves of such liability, in
compliance with the last paragraph of Article 2180, Civil Code, by"

31

(proving) that they observed all the diligence of a good father of a

family to prevent damage." In the light of the factual findings of the
lower courts decision said defendants failed to prove such
exemption from liability.

course, the teachers control is not a plenary as when the student is

a minor; but that circumstance can only affect the degree of the
responsibility but cannot negate the existence thereof. It is only a
factor to be appreciated in determining whether or not the
defendant has exercised due diligence in endeavoring to prevent
the injury, as prescribed in the last paragraph of Article 2180.

5. ID.; DAMAGES, COMPENSATORY DAMAGES FOR DEATH CAUSED

BY CRIME OR QUASI DELICT, P12,000.00 AS SET BY PEOPLE VS.
PANTOJA. Plaintiffs-appellees contention that the award of
P6,000.00 as indemnity for the death of their son should be
increased to P12,000.00 as set by the Court in People v. Pantoja (25
SCRA 468), and observed in all death indemnity cases thereafter is
well taken. The Court, in Pantoja, after noting the decline in the
purchasing power of the Philippine peso, had expressed its
"considered opinion that the amount of award of compensatory
damages for death caused by a crime or quasi-delict should now be
P12,000.00." The Court thereby adjusted the minimum amount of
"compensatory damages for death caused by a crime or quasidelict" as per Article 2206, Civil Code, from the old stated minimum
of P3,000.00 to P12,000.00, which amount is to be awarded "even
though there may have been mitigating circumstances" pursuant to
the express provisions of said codal article.

MAKALINTAL, J., dissenting:chanrob1es virtual 1aw library

1. CIVIL LAW; QUASI-DELICT; TEACHERS ARE LIABLE FOR TORTIOUS
ACTS OF STUDENTS LIVING AND BOARDING WITH THEM. I see no
reason to depart from the doctrine laid down by this Court in
Mercado v. Court of Appeals, 108 Phil. 414, where the clause, "so
long as they remain in their custody" used in Article 2180 of the
Civil Code was construed as referring to a" situation where the pupil
lives and boards with the teacher, such that the (latters) control,
direction and influence on the pupil supersedes those of the
parents." I think it is highly unrealistic and conducive to unjust
results, considering the size of the enrollment in many of our
educational institutions, academic and non-academic, as well as
the temper, attitudes and often destructive activism of the
students, to hold their teachers and/or the administrative heads of
the schools directly liable for torts committed by them.

6. ID.; ID.; EXEMPLARY DAMAGES; NOT GRANTED IN ABSENCE OF

GROSS NEGLIGENCE. Decisive here is the touchstone provision
of Article 2231, Civil Code, that "In quasi-delicts, exemplary
damages may be granted if the defendant acted with gross
negligence." No gross negligence on the part of defendants was
found by the trial court to warrant the imposition of exemplary
damages, as well as of interest and increased attorneys fees, and
the Court has not been shown in this appeal any compelling reason
to disturb such finding.

2. ID.; ID.; TORTIOUS ACTS OF CHILDREN; PARENTS LIABLE

THEREFOR ONLY AS TO MINORS LIVING IN THEIR COMPANY. For
parental responsibility to arise the children must be minors who live
in their company. If, as stated also in the opinion of the majority,
"the rationale of (the) liability of school heads and teachers for the
tortious acts of their pupils and students, so long as they remain in
their custody, is that they stand, to a certain extent, as to their
pupils and students, in loco parentis and are called upon to exercise
reasonable supervision over the conduct of the child," then it
stands to reason that (1) the clause "so long as they remain in their
custody" as used in reference to teachers and school heads should
be equated with the phrase "who live in their company" as used in
reference to parents; and (2) that just as parents are not
responsible for damages caused by their children who are no longer
minors, so should teachers and school heads be exempt from
liability for the tortious acts of their students in the same age
category. I find no justification, either in the law itself or in justice
and equity, to make a substitute parent liable where the real parent
would be free from liability.

REYES, J.B.L., J., concurring:chanrob1es virtual 1aw library

CIVIL LAW; QUASI-DELICT; CUSTODIAL SUPERVISION OF SCHOOLS
OVER PUPILS; AUTHORITY EXISTS REGARDLESS OF STUDENTS AGE.
While in the case of parents and guardians, their authority and
supervision over the children and wards end by law upon the latter
reaching majority age, the authority and custodial supervision over
pupils exist regardless of the age of the latter. A student over
twenty-one, by enrolling and attending a school, places himself
under the custodial supervision and disciplinary authority of the
school authorities, which is the basis of the latters correlative
responsibility for his torts, committed while under such authority. Of

32

Palisoc stumbled on an engine block which caused him to fall face

downward. Palisoc became pale and fainted. First aid was
administered to him but he was not revived, so he was immediately
taken to a hospital. He never regained consciousness; finally he
died. The foregoing is the substance of the testimony of Desiderio
Cruz, the lone witness to the incident."cralaw virtua1aw library

DECISION
TEEHANKEE, J.:

The trial court expressly gave credence to this version of the

incident, as testified to by the lone eyewitness, Desiderio Cruz, a
classmate of the protagonists, as that of a disinterested witness
who "has no motive or reason to testify one way or another in favor
of any party" and rejected the self-exculpatory version of defendant
Daffon denying that he had inflicted any fist blows on the
deceased.

An appeal in forma pauperis on pure questions of law from a

decision of the Court of First Instance of Manila.
Plaintiffs-appellants as parents of their sixteen-year old son,
Dominador Palisoc, and a student in automotive mechanics at the
Manila Technical Institute, Quezon Boulevard, Manila, had filed on
May 19, 1966, the action below for damages arising from the death
on March 10, 1966 of their son at the hands of a fellow student,
defendant Virgilio L. Daffon, at the laboratory room of the said
Institute.

With the postmortem findings of Dr. Angelo Singian of the Manila

Police Department who performed the autopsy re "Cause of death:
shock due to traumatic fracture of the ribs (6th and 7th, left,
contusion of the pancreas and stomach with intra-gastric
hemorrhage and slight subarachnoid hemorrhage on the brain,"
and his testimony that these internal injuries of the deceased were
caused "probably by strong fist blows," 2 the trial court found
defendant Daffon liable for the quasi delict under Article 2176 of
the Civil Code. 3 It held that" (T)he act, therefore, of the accused
Daffon in giving the deceased strong fistblows in the stomach
which ruptured his internal organs and caused his death falls within
the purview of this article of the Code." 4

Defendants, per the trial courts decisions are:" (T)he defendant

Antonio C. Brillantes, at the time when the incident which gave rise
to his action occurred was a member of the Board of Directors of
the institute; 1 the defendant Teodosio Valenton, the president
thereof; the defendant Santiago M. Quibulue, instructor of the class
to which the deceased belonged; and the defendant Virgilio L.
Daffon, a fellow student of the deceased. At the beginning the
Manila Technical Institute was a single proprietorship, but lately on
August 2, 1962, it was duly incorporated."cralaw virtua1aw library

The trial court, however, absolved from liability the three other
defendants-officials of the Manila Technical Institute, in this
wise:jgc:chanrobles.com.ph

The facts that led to the tragic death of plaintiffs son were thus
narrated by the trial court:" (T)he deceased Dominador Palisoc and
the defendant Virgilio L. Daffon were classmates, and on the
afternoon of March 10, 1966, between two and three oclock, they,
together with another classmate Desiderio Cruz were in the
laboratory room located on the ground floor. At that time the
classes were in recess. Desiderio Cruz and Virgilio L. Daffon were
working on a machine while Dominador Palisoc was merely looking
on at them. Daffon made a remark to the effect that Palisoc was
acting like a foreman. Because of this remark Palisoc slapped
slightly Daffon on the face. Daffon, in retaliation, gave Palisoc a
strong flat blow on the face, which was followed by other fist blows
on the stomach. Palisoc retreated apparently to avoid the fist
blows, but Daffon followed him and both exchanged blows until

". . . Their liabilities are based on the provisions of Article 2180 of

the New Civil Code which reads:chanrob1es virtual 1aw library
Art. 2180. . . .
Lastly, teachers or heads of establishments of arts and trades shall
be liable for damages caused by their pupils and students and
apprentices, so long as they remain in their custody.
"In the opinion of the Court, this article of the Code is not applicable
to the case at bar, since this contemplates the situation where the
control or influence of the teachers and heads of school

33

establishments over the conduct and actions by the pupil

supersedes those of the parents.

1. The lower court absolved defendants-school officials on the

ground that the provisions of Article 2180, Civil Code, which
expressly hold "teachers or heads of establishments of arts and
trades . . . liable for damages caused by their pupils and students
and . liable for damages caused by their pupils and students and
apprentices, so long as they remain in their custody," are not
applicable to the case at bar, since "there is no evidence that the
accused Daffon [who inflicted the fatal fistblows] 6 lived and
boarded with his teacher or the other defendants-officials of the
school. These defendants cannot therefore be made responsible for
the tort of the defendant Daffon."cralaw virtua1aw library

CIVIL LAW: DAMAGES ART 2180. NEW CIVIL CODE CONSTRUED:

The clause so long as they remain in their custody contained in
Article 2180 of the new civil code contemplated a situation where
the pupil lives and boards with the teacher, such that the control or
influence on the pupil supersedes those of the parents. In those
circumstances the control or influence over the conduct and actions
of the pupil as well as the responsibilities for their sort would pass
from the father and mother to the teachers. (Ciriaco L. Mercado,
Petitioner, v. the Court of Appeals, Manuel Quisumbing, Jr., Et
Al., Respondents, G.R. No. L-14862, May 30, 1960). 5

The lower court based its legal conclusion expressly on the Courts
dictum in Mercado v. Court of Appeals, 7 that" (I) t would seem that
the clause so long as they remain in their custody, contemplates a
situation where the pupil lives and boards with the teacher, such
that the control, direction and influence on the pupil supersedes
those of the parents. In these circumstances the control or
influence over the conduct and actions of the pupil would pass from
the father and mother to the teacher; and so would the
responsibility for the torts of the pupil. Such a situation does not
appear in the case at bar; the pupils appear to go to school during
school hours and go back to their homes with their parents after
school is over." This dictum had been made in rejecting therein
petitioner-fathers contention that his minor sons school, Lourdes
Catholic School at Kanlaon, Quezon City [which was not a party to
the case] should be held responsible, rather than him as father, for
the moral damages of P2,000.00 adjudged against him for the
physical injury inflicted by his son on a classmate. [A cut on the
right cheek with a piece of razor which cost only P50.00 by way of
medical expenses to treat and cure, since the wound left no scar.]
The moral damages award was after all set aside by the Court on
the ground that none of the specific cases provided in Article 2219,
Civil Code, for awarding moral damages had been established,
petitioners son being only nine years old and not having been
shown to have "acted with discernment" in inflicting the injuries on
his classmate.

"There is no evidence that the accused Daffon lived and boarded

with his teacher or the other defendant officials of the school.
These defendants cannot therefore be made responsible for the tort
of the defendant Daffon."cralaw virtua1aw library
Judgment was therefore rendered by the trial court as
follows:jgc:chanrobles.com.ph
"1. Sentencing the defendant Virgilio L. Daffon to pay the plaintiffs
as heirs of the deceased Dominador Palisoc (a) P6,000.00 for the
death of Dominador Palisoc; (b) P3,375.00 for actual and
compensatory expenses; (c) P5,000.00 for moral damages; (d)
P10,000.00 for loss of earning power, considering that the
deceased was only between sixteen and seventeen years, and in
good health when he died, and (e) P2,000.00 for attorneys fee,
plus the costs of this action.
"2. Absolving the other defendants.
"3. Dismissing the defendants counterclaim for lack of
merit."cralaw virtua1aw library
Plaintiffs appeal raises the principal legal question that under the
factual findings of the trial court, which are now beyond review, the
trial court erred in absolving the defendants-school officials instead
of holding them jointly and severally liable as tortfeasors, with
defendant Daffon, for the damages awarded them as a result of
their sons death. The Court finds the appeal, in the main, to be
meritorious.

The dictum in Mercado was based in turn on another dictum in the

earlier case of Exconde v. Capuno, 8 where the only issue involved
as expressly stated in the decision, was whether the therein
defendant-father could be held civilly liable for damages resulting
from a death caused in a motor vehicle accident driven
unauthorizedly and negligently by his minor son, (which issue was

34

resolved adversely against the father). Nevertheless, the dictum in

such earlier case that "It is true that under the law above-quoted,
teachers or directors of arts and trades are liable for any damage
caused by their pupils or apprentices while they are under their
custody, but this provision only all applies to an institution of arts
and trades and not to any academic educational institution" was
expressly cited and quoted in Mercado.

protective custody of the school heads and teachers is mandatorily

substituted for that of the parents, and hence, it becomes their
obligation as well as that of the school itself to provide proper
supervision of the students activities during the whole time that
they are at attendance in the school, including recess time, as well
as to take the necessary precautions to protect the students in their
custody from dangers and hazards that would reasonably be
anticipated, including injuries that some student themselves may
inflict willfully or through negligence on their fellow students.

2. The case at bar was instituted directly against the school officials
and squarely raises the issue of liability of teachers and heads of
schools under Article 2180, Civil Code, for damages caused by their
pupils and students against fellow students on the school premises.
Here, the parents of the student at fault, defendant Daffon, are not
involved, since Daffon was already of age at the time of the tragic
incident. There is no question, either, that the school involved is a
non-academic school, 9 the Manila Technical Institute being
admittedly a technical vocational and industrial school.

4. As tersely summarized by Mr. Justice J.B.L. Reyes in his

dissenting opinion in Exconde, "the basis of the presumption of
negligence of Art. 1903 [now 2180] is some culpa in vigilando that
the parents, teachers, etc. are supposed to have incurred in the
exercise of their authority" 13 and "where the parent places the
child under the effective authority of the teacher, the latter, and
not the parent, should be the one answerable for the torts
committed while under his custody, for the very reason that the
parent is not supposed to interfere with the discipline of the school
nor with the authority and supervision of the teacher while the child
is under instruction" The school itself, likewise, has to respond for
the fault or negligence of its school head and teachers under the
same cited article. 14

The Court holds that under the cited codal article, defendants head
and teacher of the Manila Technical Institute (defendants Valenton
and Quibulue, respectively) are liable jointly and severally for
damages to plaintiffs-parents for the death of the latters minor son
at the hands of defendant Daffon at the schools laboratory room.
No liability attaches to defendant Brillantes as a mere member of
the schools board of directors. The school itself cannot be held
similarly liable, since it has not been properly impleaded as party
defendant. While plaintiffs sought to so implead it, by impleading
improperly defendant Brillantes, its former single proprietor, the
lower court found that it had been incorporated since August 2,
1962, and therefore the school itself, as thus incorporated, should
have been brought in as party defendant. Plaintiffs failed to do so,
notwithstanding that Brillantes and his co-defendants in their reply
to plaintiffs request for admission had expressly manifested and
made of record that "defendant Antonio C. Brillantes is not the
registered owner/head of the Manila Technical Institute which is
now a corporation and is not owned by any individual person." 10

5. The lower court therefore erred in law in absolving defendantsschool officials on the ground that they could be held liable under
Article 2180, Civil Code, only if the student who inflicted the fatal
fistblows on his classmate and victim "lived and boarded with his
teacher or the other defendants officials of the school." As stated
above, the phrase used in the cited article "so long as (the
students) remain in their custody" means the protective and
supervisory custody that the school and its heads and teachers
exercise over the pupils and students for as long as they are at
attendance in the school, including recess time. There is nothing in
the law that requires that for such liability to attach, the pupil or
student who commits the tortious act must live and board in the
school, as erroneously held by the lower court, and the dicta in
Mercado (as well as in Exconde) on which it relied, must now be
deemed to have been set aside by the present decision.

3. The rationale of such liability of school heads and teachers for

the tortious acts of their pupils and students, so long as they
remain in their custody, is that they stand, to a certain extent, as to
their pupils and students, in loco parentis and are called upon to
"exercise reasonable supervision over the conduct of the child." 11
This is expressly provided for in Articles 349, 350 and 352 of the
Civil Code. 12 In the law of torts, the governing principle is that the

6. Defendants Valenton and Quibulue as president and teacher-incharge of the school must therefore be held jointly and severally
liable for the quasi-delict of their co-defendant Daffon in the latters
having caused the death of his classmate, the deceased Dominador

35

Palisoc. The unfortunate death resulting from the fight between the
protagonists-students could have been avoided, had said
defendants but complied with their duty of providing adequate
supervision over the activities of the students in the school
premises to protect their students from harm, whether at the hands
of fellow students or other parties. At any rate, the law holds them
liable unless they relieve themselves of such liability, in compliance
with the last paragraph of Article 2180, Civil Code, by" (proving)
that they observed all the diligence of a good father of a family to
prevent damage." In the light of the factual findings of the lower
courts decision, said defendants failed to prove such exemption
from liability.

1. Sentencing the defendants Virgilio L. Daffon, Teodosio V.

Valenton and Santiago M. Quibulue jointly and severally to pay
plaintiffs as heirs of the deceased Dominador Palisoc (a) P12,000.00
for the death of Dominador Palisoc; (b) P3,375.00 for actual and
compensatory expenses; (c) P5,000.00 for moral damages; (d)
P10,000.00 for less of earning power and (e) P2,000 00 for
attorneys fee, plus the costs of this action in both instances; 2.
absolving defendant Antonio C. Brillantes from the complaint; and
3. dismissing defendants counterclaims.
Concepcion, C.J., Villamor and Makasiar, JJ., concur.

7. Plaintiffs-appellees contention that the award of P6,000.00 as

indemnity for the death of their son should be increased to
P12,000.00 as set by the Court in People v. Pantoja, 15 and
observed in all death indemnity cases thereafter is well taken. The
Court, in Pantoja, after noting the decline in the purchasing power
of the Philippine peso, had expressed its "considered opinion that
the amount of award of compensatory damages for death caused
by a crime or quasi-delict should now be P12,000.00." The Court
thereby adjusted the minimum amount of "compensatory damages
for death caused by a crime or quasi-delict" as per Article 2206,
Civil Code, from the old stated minimum of P3,000.00 to
P12,000.00, which amount is to be awarded "even though there
may have been mitigating circumstances" pursuant to the express
provisions of said codal article.

Dizon, J., took no part.

8. Plaintiffs-appellees other claims on appeal that the lower court

should have awarded exemplary damages and imposed legal
interest on the total damages awarded, besides increasing the
award of attorneys fees all concern matters that are left by law to
the discretion of the trial court and the Court has not been shown
any error or abuse in the exercise of such discretion on the part of
the trial court 16 Decisive here is the touchstone provision of
Article 2231, Civil Code, that "In quasi-delicts, exemplary damages
may be granted if the defendant acted with gross negligence." No
gross negligence on the part of defendants was found by the trial
court to warrant the imposition of exemplary damages, as well as of
interest and increased attorneys fees, and the Court has not been
shown in this appeal any compelling reason to disturb such finding.

"The obligation imposed by article 2176 is demandable not only for

ones own acts or omissions, but also for those of persons for whom
one is responsible.

Separate Opinions
REYES, J.B.L., J., concurring:chanrob1es virtual 1aw library
I concur with the opinion of Mr. Justice Teehankee but would like to
clarify that the judgment of the dissenting opinion to the effect that
the responsibility of teachers and school officers under Article 2180
should be limited to pupils who are minors (below the age of
majority) is not in accord with the plain text of the law. Article 2180
of the Civil Code of the Philippines is to the following
effect:jgc:chanrobles.com.ph

"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.
"Guardians are liable for damages caused by the minors or
incapacitated persons who are under their authority and live in
their company.
"The owners and managers of an establishment or enterprise are
likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.

ACCORDINGLY, the judgment appealed from is modified so as to

provide as follows:chanrob1es virtual 1aw library

36

interpretar la le, es infalible cuanto se refiere una misma

disposicion relativa varios casos. Y tal es el art. 1.153. Lo que haya
establecido importa poco si, elev ndones los principios de razon,
puede dudarse de la oportunidad de semajante diferencia; porque
la voluntad cierta del legislador prevalece in iure condito cualquier
otra consideracion. Por otra parte, si bien se considera, no puede
parecer extrao o absurdo el suponer que un discipulo y un
aprendiz, aunque mayores de edad, acepten voluntariamente la
entera vigilancia de su preceptor mientras dura la educacion. Ni
parece dudoso desde el momento que los artesanos y los
preceptores deben, al par de los padres, responder civilmente de
los daos comitidos por sus discipulos, aun cuando estos estn faltos
de discernimiento."cralaw virtua1aw library

"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.
"The State is responsible in like manner when it acts through a
special agent; but not when the damage has been caused by the
official to whom the task done properly pertains, in which case
what is provided in article 2176 shall be applicable.
"Last, teachers or heads of establishments of arts and trades shall
be liable for damages caused by their pupils and students or
apprentices, so long as they remain in their custody.

Similarly, Planiol-Ripert, in their "Droit Civil Pratique," Volume VI,

No. 635 (Spanish version), say that

"The responsibility treated of in this article shall cease when the

persons herein mentioned prove that they observe all the diligence
of a good father of a family to prevent damages.

"635. Personas de quin responde. Si bien la responsibilidad del

maestro es originalmente una estensi "n de la de los padres (1), el
art. 1384 no especifica que los alumnos y aprendices han de ser
menores de edad, por lo que la presuncion de culpa funcionar aun
cuando sean mayores (2); pero, la vigilancia no tendra que ser
ejercida en iguales terminos. Aun respecto a los menores variar
segun la edad, extremo que tendr que tenerse en cuenta a los fines
de apreciar si el maestro ha podido impedir el acto nocivo o no.

Examination of the article shows that where the responsibility

prescribed therein is limited to illegal acts during minority, the
article expressly so provides, as in the case of the parents and of
the guardians. It is natural to expect that if the law had intended to
similarly restrict the civil responsibility of the other categories of
persons enumerated in the article, it would have expressly so
stated. The fact that it has not done so indicates an intent that the
liability be not restricted to the case of persons under age. Further,
it is not without significance that the teachers and heads of
scholarly establishments are not grouped with parents and
guardians but ranged with owners and managers of enterprises,
employers and the state, as to whom no reason is discernible to
imply that they should answer only for minors.

I submit, finally, that while in the case of parents and guardians,

their authority and supervision over the children and wards end by
law upon the latter reaching majority age, the authority and
custodial supervision over pupils exist regardless of the age of the
latter. A student over twenty-one, by enrolling and attending a
school, places himself under the custodial supervision and
disciplinary authority of the school authorities, which is the basis of
the latters correlative responsibility for his torts, committed while
under such authority. Of course, the teachers control is not as
plenary as when the student is a minor; but that circumstance can
only affect the degree of the responsibility but cannot negate the
existence thereof. It is only a factor to be appreciated in
determining whether or not the defendant has exercised due
diligence in endeavoring to prevent the injury, as prescribed in the
last paragraph of Article 2180.

Giorgi, in his well-known "Teoria de las Obligaciones en el Derecho

Moderno", Volume 5, page 404, No. 272 (Sp. Ed.), after noting the
split among commentators on the point at issue, observes with
considerable cogency that
"272. Ante esta variedad de opiniones, ninguna de las cuales se
funda en argumentos merecedores de seria ponderacion, no es f cil
tomar un partido. Esto no obstante, debiendo manifestar nuestra
opinion, nos acercamos la de los que no estiman necesaria la
menor edad del discipulo o del aprendiz; porque si el aforismo ubi
voluit dixit, ubi noluit tacuity, no es siempre argumento seguro para

MAKALINTAL, J., dissenting:chanrob1es virtual 1aw library

37

I vote to affirm the decision appealed from. I see no reason to

depart from the doctrine laid down by this Court in Mercado v.
Court of Appeals, 108 Phil. 414, where the clause "so long as they
remain in their custody" used in Article 2180 of the Civil Code was
construed as referring to a "situation where the pupil lives and
boards with the teacher, such that the (latters) control, direction
and influence on the pupil supersedes those of the parents." I think
it is highly unrealistic and conducive to unjust results, considering
the size of the enrollment in many of our educational institutions,
academic and non-academic, as well as the temper, attitudes and
often destructive activism of the students, to hold their teachers
and/or the administrative heads of the schools directly liable for
torts committed by them. When even the school authorities find
themselves besieged, beleaguered and attacked, and unable to
impose the traditional disciplinary measures formerly recognized as
available to them, such as suspension or outright expulsion of the
offending students, it flies in the face of logic and reality to
consider such students, merely from the fact of enrollment and
class attendance, as "in the custody" of the teachers or school
heads within the meaning of the statute, and to hold the latter
liable unless they can prove that they have exercised "all the
diligence of a good father of the family to prevent damage." Article
2180, if applied as appellants construe it, would be bad law. It
would demand responsibility without commensurate authority,
rendering teachers and school heads open to damage suits for
causes beyond their power to control. Present conditions being
what they are, I believe the restrictive interpretation of the
aforesaid provision enunciated in Mercado should be maintained.

stands to reason that (1) the clause "so long as they remain in their
custody" as used in reference to teachers and school heads should
be equated with the phrase "who live in their company" as used in
reference to parents; and (2) that just as parents are not
responsible for damages caused by their children who are no longer
minors, so should teachers and school heads be exempt from
liability for the tortious acts of their students in the same age
category. I find no justification, either in the law itself or in justice
and equity, to make a substitute parent liable where the real parent
would be free from liability.

With particular reference to the case at bar, one other factor

constrains me to dissent. The opinion of the majority states: "Here,
the parents of the student at fault, defendant Daffon, are not
involved, since Daffon was already of age at the time of the tragic
incident." This statement is of course in accordance with Article
2180, which says that "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." Note that for
parental responsibility to arise the children must be minors who live
in their company. If, as stated also in the opinion of the majority,
"the rationale of (the) liability of school heads and teachers for the
tortious acts of their pupils and students, so long as they remain in
their custody, is that they stand, to a certain extent, as to their
pupils and students, in loco parentis and are called upon to exercise
reasonable supervision over the conduct of the child," then it

1. STATUTORY CONSTRUCTION; SPECIFIC PROVISIONS OF CIVIL

CODE, THOUGH A GENERAL LAW, PREVAIL OVER MANILA CHARTER,
SPECIAL LAW. Insofar as its territorial application is concerned,
Republic Act 409 is a special law and the Civil Code is a general
legislation; but as regards the subject-matter of the provisions of
sec. 4, Rep. Act 409 and Article 2189 of the Civil Code, the former
establishes a general rule regulating the liability of the City of
Manila for damages or injury to persons or property arising from the
failure of city officers to enforce the provisions of said Act; while
article 2189 of the Civil Code constitutes a particular prescription
making provinces, cities and municipalities liable for damages for
the death or injury suffered by any person by reason of the
defective condition of roads, streets and other public works under
the control or supervision of said municipal governments. In other
words, sec. 4 of Rep. Act 409 refers to liability arising from

Zaldivar, Castro and Fernando, JJ., concur.

EN BANC
[G.R. No. L-23052. January 29, 1968.]
CITY OF MANILA, Petitioner, v. GENERO M. TEOTICO and THE
COURT OF APPEALS,Respondents.
City Fiscal Manuel T. Reyes for Petitioner.
Sevilla, Daza & Associates for Respondents.
SYLLABUS

38

negligence in general regardless of the object thereof, whereas

Article 2189 of the Civil Code, governs liability due to defective
streets in particular. The Civil Code is decisive herein because the
present action is based on the alleged defective condition of a road.

of the manhole. One of them brought Teotico to the Philippine

General Hospital, where his injuries were treated, after which he
was taken home. In addition to the lacerated wound in his left
upper eyelid, Teotico suffered contusions on the left thigh, the left
upper arm, the right leg and the upper lip, apart from an abrasion
on the right infra-patella region. These injuries and the allergic
eruptions caused by anti-tetanus injections administered to him in
the hospital, required further medical treatment by a private
practitioner who charged therefor P1,400.00.

2. PLEADINGS; ANSWER; ALLEGATIONS NOT SET FORTH IN

ANSWER, CANNOT BE RAISED FOR FIRST TIME ON APPEAL. The
assertion that P. Burgos Avenue is a national highway for which the
City of Manila is not liable, was made for the first time in the
petitioners motion for reconsideration of the decision of the Court
of Appeals. It was not alleged in the answer. Such assertion raised a
question of fact which had not been put in issue in the trial court
and cannot, therefore, be raised for the first time on appeal much
less after the rendition of the decision of the appellate court.

As a consequence of the foregoing occurrence, Teotico filed, with

the Court of First Instance of Manila, a complaint which was,
subsequently, amended for damages against the City of Manila,
its mayor, city engineer, city health officer, city treasurer and chief
of police. As stated in the decision of the trial court, and quoted
with approval by the Court of Appeals,

3. ID.; FINDINGS OF FACT OF COURT OF APPEALS, CONCLUSIVE.

The determination of whether or not P. Burgos Avenue is under the
control or supervision of the City of Manila and whether the latter is
guilty of negligence in connection with the maintenance of said
road is a question of fact a question already decided by the
Court of Appeals and the factual findings of said Court are not
subject to a review by the Supreme Court.

"At the time of the incident, plaintiff was a practicing public

accountant, a businessman and a professor at the University of the
East. He held responsible positions in various business firms like the
Philippine Merchandising Co., the A. U. Valencia and Co., the Silver
Swan Manufacturing Company and the Sincere Packing
Corporation. He was also associated with several civic
organizations such as the Wack Wack Golf Club, the Chamber of
Commerce of the Philippines, Ys Men Club of Manila and the
Knights of Rizal. As a result of the incident, plaintiff was prevented
from engaging in his customary occupation for twenty days.
Plaintiff has lost a daily income of about P50.00 during his
incapacity to work. Because of the incident, he was subjected to
humiliation and ridicule by his business associates and friends.
During the period of his treatment, plaintiff was under constant fear
and anxiety for the welfare of his minor children since he was their
only support. Due to the filing of this case, plaintiff has obligated
himself to pay his counsel the sum of P2,000.00.

DECISION
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at
the corner of the Old Luneta and P. Burgos Avenue, Manila, within a
"loading and unloading" zone, waiting for a jeepney to take him
down town. After waiting for about five minutes, he managed to
hail a jeepney that came along to a stop. As he stepped down from
the curb to board the jeepney, and took a few steps, he fell inside
an uncovered and unlighted catchbasin or manhole on P. Burgos
Avenue. Due to the fall, his head hit the rim of the manhole
breaking his eyeglasses and causing broken pieces thereof to
pierce his left eyelid. As blood flowed therefrom, impairing his
vision, several persons came to his assistance and pulled him out

"On the other hand, the defense presented evidence, oral and
documentary, to prove that the Storm Drain Section, Office of the
City Engineer of Manila, received a report of the uncovered
condition of a catchbasin at the corner of P. Burgos and Old Luneta
Streets, Manila, on January 24, 1958, but the same was covered on
the same day (Exhibit 4); that again the iron cover of the same
catchbasin was reported missing on January 30, 1958, but the said
cover was replaced the next day (Exhibit 5); that the Office of the
City Engineer never received any report to the effect that the

39

catchbasin in question was not covered between January 25 and

29, 1958; that it has always been a policy of the said office, which
is charged with the duty of installation, repair and care of storm
drains in the City of Manila, that whenever a report is received from
whatever source of the loss of a catchbasin cover, the matter is
immediately attended to, either by immediately replacing the
missing cover or covering the catchbasin with steel matting; that
because of the lucrative scrap iron business then prevailing,
stealing of iron catchbasin covers was rampant; that the Office of
the City Engineer has filed complaints in court resulting from theft
of said iron covers; that in order to prevent such thefts, the city
government has changed the position and layout of catch basins in
the City by constructing them under the sidewalk with concrete
cement covers and openings on the sides of the gutter; and that
these changes had been undertaken by the city from time to time
whenever funds were available."cralaw virtua1aw library

virtua1aw library
Manila maintains that the former provision should prevail over the
latter, because Republic Act 409 is a special law, intended
exclusively for the City of Manila, whereas the Civil Code is a
general law, applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and, we
think, correctly. It is true that, insofar as its territorial application is
concerned, Republic Act No. 409 is a special law and the Civil Code
a general legislation; but, as regards the subject- matter of the
provisions above quoted, Section 4 of Republic Act 409 establishes
a general rule regulating the liability of the City of Manila for
"damages or injury to persons or property arising from the failure
of" city officers "to enforce the provisions of" said Act "or any other
law or ordinance, or from negligence" of the city "Mayor, Municipal
Board, or other officers while enforcing or attempting to enforce
said provisions." Upon the other hand, Article 2189 of the Civil Code
constitutes a particular prescription making "provinces, cities and
municipalities . . . liable for damages for the death of, or injury
suffered by, any person by reason" specifically "of the
defective condition of roads, streets, bridges, public buildings, and
other public works under their control or supervision." In other
words, said section 4 refers to liability arising from negligence, in
general, regardless of the object thereof, whereas Article 2189
governs liability due to "defective streets, "in particular. Since the
present action is based upon the alleged defective condition of a
road, said Article 2189 is decisive thereon.

After appropriate proceedings the Court of First Instance of Manila

rendered the aforementioned decision sustaining the theory of the
defendants and dismissing the amended complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the Court
of Appeals, except insofar as the City of Manila is concerned, which
was sentenced to pay damages in the aggregate sum of P6,750.00.
1 Hence, this appeal by the City of Manila.
The first issue raised by the latter is whether the present case is
governed by Section 4 of Republic Act No. 409 (Charter of the City
of Manila) reading:jgc:chanrobles.com.ph

It is urged that the City of Manila cannot be held liable to Teotico for
damages: 1) because the accident involving him took place in a
national highway; and 2) because the City of Manila has not been
negligent in connection therewith.

"The city shall not be liable or held for damages or injuries to

persons or property arising from the failure of the Mayor, the
Municipal Board, or any other city officer, to enforce the provisions
of this chapter, or any other law or ordinance, or from negligence of
said Mayor, Municipal Board, or other officers while enforcing or
attempting to enforce said provisions."cralaw virtua1aw library

As regards the first issue, we note that it is based upon an

allegation of fact not made in the answer of the City. Moreover,
Teotico alleged in his complaint, as well as in his amended
complaint, that his injuries were due to the defective condition of a
street which is "under the supervision and control" of the City. In its
answer to the amended complaint, the City, in turn, alleged that
"the streets aforementioned were and have been constantly kept in
good condition and regularly inspected and the storm drains and
manholes thereof covered, by the defendant City and its officers
concerned" who "have been ever vigilant and zealous in the

or by Article 2189 of the Civil Code of the Philippines, which

provides:jgc:chanrobles.com.ph
"Provinces, cities and municipalities shall be liable for damages for
the death of, or injuries suffered by, any person by reason of the
defective condition of roads, streets, bridges, public buildings, and
other public works under their control or supervision."cralaw

40

performance of their respective functions and duties as imposed

upon them by law." Thus, the City had, in effect, admitted that P.
Burgos Avenue was and is under its control and supervision.

playing, kiteflying, hoop rolling, and other amusements which may

annoy persons using the streets and public places, or frighten
horses or other animals; to regulate the speed of horses and other
animals, motor and other vehicles, cars, and locomotives within the
limits of the city; to regulate the lights used on all such vehicles,
cars, and locomotives; . . . to provide for and change the location,
grade, and crossing of railroads, and compel any such railroad to
raise or lower its tracks to conform to such provisions or changes;
and to require railroad companies to fence their property, or any
part thereof, to provide suitable protection against injury to persons
or property, and to construct and repair ditches, drains, sewers,
and culverts along and under their tracts, so that the natural
drainage of the streets and adjacent property shall not be
obstructed."cralaw virtua1aw library

Moreover, the assertion to the effect that said avenue is a national

highway was made, for the first time, in its motion for
reconsideration of the decision of the Court of Appeals. Such
assertion raised, therefore, a question of fact, which had not been
put in issue in the trial court, and can not be set up, for the first
time, on appeal, much less after the rendition of the decision of the
appellate court, in a motion for the reconsideration thereof.
At any rate, under Article 2189 of the Civil Code, it is not necessary
for the liability therein established to attach that the defective
roads or streets belong to the province, city or municipality from
which responsibility is exacted. What said article requires is that
the province, city or municipality have either "control or
supervision" over said street or road. Even if P. Burgos avenue
were, therefore, a national highway, this circumstance would not
necessarily detract from its "control or supervision" by the City of
Manila, under Republic Act 409. In fact Section 18(x) thereof
provides:jgc:chanrobles.com.ph

This authority has been neither withdrawn nor restricted by

Republic Act No. 917 and Executive Order No. 113, dated May 2,
1955, upon which the City relies. Said Act governs the disposition
or appropriation of the highway funds and the giving of aid to
provinces, chartered cities and municipalities in the construction of
roads and streets within their respective boundaries, and Executive
Order No. 113 merely implements the provisions of said Republic
Act No. 917, concerning the disposition and appropriation of the
highway funds. Moreover, it provides that "the construction,
maintenance and improvement of national primary, national
secondary and national aid provincial and city roads shall be
accomplished by the Highway District Engineers and Highway City
Engineers under the supervision of the Commissioner of Public
Highways and shall be financed from such appropriations as may
be authorized by the Republic of the Philippines in annual or special
appropriation Acts."cralaw virtua1aw library

"SEC. 18. Legislative powers. The Municipal Board shall have the
following legislative powers:chanrob1es virtual 1aw library
x

"(x) Subject to the provisions of existing law to provide for the

laying out, construction and improvement, and to regulate the use
of streets, avenues, alleys, sidewalks, wharves, piers, parks,
cemeteries, and other public places; to provide for lighting,
cleaning, and sprinkling of streets and public places; . . . to provide
for the inspection of, fix the license fees for and regulate the
openings in the same for the laying of gas, water, sewer and other
pipes, the building and repair of tunnels, sewers, and drains, and all
structures in and under the same and the erecting of poles and the
stringing of wires therein; to provide for and regulate cross-walks,
curbs, and gutters therein; . . . to regulate traffic and sales upon
the streets and other public places; to provide for the abatement of
nuisances in the same and punish the authors or owners thereof; to
provide for the construction and maintenance, and regulate the
use, of bridges, viaducts, and culverts; to prohibit and regulate ball

Then, again, the determination of whether or not P. Burgos Avenue

is under the control or supervision of the City of Manila and
whether the latter is guilty of negligence, in connection with the
maintenance of said road, which were decided by the Court of
Appeals in the affirmative, is one of fact, and the findings of said
Court, thereon are not subject to our review.
WHEREFORE, the decision appealed from should be as it is hereby
affirmed, with costs against the City of Manila. It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
Ruiz Castro, Angeles and Fernando,JJ., concur.

41

liable for any damages it may cause, even if such animal should
escape from him or stray away.

EN BANC

"This liability shall cease only in case the damage should arise from
force majeure or from the fault of the person who may have
suffered it."cralaw virtua1aw library

[G.R. No. L-2075. November 29, 1949.]

MARGARITA AFIALDA, Plaintiff-Appellant, v. BASILIO HISOLE
and FRANCISCO HISOLE,Defendants-Appellees.

The question presented is whether the owner of the animal is liable

when the damage is caused to its caretaker.

Nicolas P. Nonato for Appellant.

The lower court took the view that under the above-quoted
provision of the Civil Code, the owner of an animal is answerable
only for damages caused to a stranger, and that for damage
caused to the caretaker of the animal the owner would be liable
only if he had been negligent or at fault under article 1902 of the
same code. Claiming that the lower court was in error, counsel for
plaintiff contends that article 1905 does not distinguish between
damage caused to a stranger and damage caused to the caretaker
and makes the owner liable whether or not he has been negligent
or at fault. For authority counsel cites the following opinion which
Manresa quotes from a decision of the Spanish Supreme
Court:jgc:chanrobles.com.ph

Gellada, Mirasol & Ravena for Appellees.

SYLLABUS
1. DAMAGES; LIABILITY OF OWNER OF ANIMAL FOR DAMAGE
CAUSED TO ITS CARETAKER. Under article 1905 of the Civil Code,
the owner of an animal is not liable for injury caused by it to its
caretaker.
DECISION

"El articulo 1905 del Codigo Civil no consiente otra interpretacion

que la que, clara y evidentemente, se deriva de sus terminos
literales, bastando, segun el mismo, que un animal cause perjuicio
para que nazca la responsibilidad del dueo, aun no imputandose a
este ninguna clase de culpa o negligencia, habida, sin duda, cuenta
por el legislador de que tal concepto de dueo es suficiente para
que arrastre las consecuencias favorables o adversas de esta clase
de propiedad, salvo la excepcion en el mismo contenida." (12
Manresa, Commentaries on the Spanish Civil Code, 573.)

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

Plaintiff seeks to hold defendants liable under article 1905 of the

Civil Code, which reads:jgc:chanrobles.com.ph

This opinion, however, appears to have been rendered in a case

where an animal caused injury to a stranger or third person. It is
therefore no authority for a case like the present where the person
injured was the caretaker of the animal. The distinction is
important. For the statute names the possessor or user of the
animal as the person liable for "any damages it may cause," and
this for the obvious reason that the possessor or user has the
custody and control of the animal and is therefore the one in a
position to prevent it from causing damage.

"The possessor of an animal, or the one who uses the same, is

In the present case, the animal was in the custody and under the

Before filing their answer, defendants moved for the dismissal of

the complaint for lack of a cause of action, and the motion having
been granted by the lower court, plaintiff has taken this appeal.

42

control of the caretaker, who was paid for his work as such.
Obviously, it was the caretakers business to try to prevent the
animal from causing injury or damage to anyone, including himself.
And being injured by the animal under those circumstances, was
one of the risks of the occupation which he had voluntarily
assumed and for which he must take the consequences.

As already stated, defendants liability is made to rest on article

1905 of the Civil Code. But action under that article is not tenable
for the reasons already stated. On the other hand, if action is to be
based on article 1902 of the Civil Code, it is essential that there be
fault or negligence on the part of the defendants as owners of the
animal that caused the damage. But the complaint contains no
allegation on those points.

In a decision of the Spanish Supreme Court, cited by Manresa in his

Commentaries (Vol. 12, p. 578), the death of an employee who was
bitten by a feline which his master had asked him to take to his
establishment was by said tribunal declared to be "a veritable
accident of labor" which should come under the labor laws rather
than under article 1905 of the Civil Code. The present action,
however, is not brought under the Workmens Compensation Act,
there being no allegation that, among other things, defendants
business, whatever that might be, had a gross income of P20,000.

There being no reversible error in the order appealed from, the

same is hereby affirmed, but without costs in view of the financial
situation of the Appellant.
Moran, C.J., Ozaeta, Paras, Bengzon, Padilla, Tuason, Montemayor
and Torres, JJ., concur.

43