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VOL.

57, MAY 24, 1974 59 commission of a tort by one against the other and the
Araneta vs. De Joya consequent recovery of damages.
No. L-25172. May 24, 1974. *

PETITION FOR REVIEW of a decision of the Court of


LUIS MA. ARANETA, petitioner, vs. ANTONIO R. DE
Appeals.
JOYA, respondent.
Civil law; Quasi-delict; Company vice-president who
The f acts are stated in the opinion of the Court.
signed payroll checks thrice for the salary of employee whose
Araneta, Mendoza & Papa for petitioner.
travel abroad is unauthorized is guilty of a quasi-delict and
liable for the expenses incurred by the company for such Jose F. Espinosa for respondent.
trip.The petitioner's assertion that he signed the
questioned payroll checks in good faith has not been CASTRO, J.:
substantiated, he in particular not having testified or offered
testimony to prove such claim. Upon the contrary, in spite of Petition for review of the decision of the Court of
his Appeals in CA-G.R. 34277-R ordering Luis Ma. Araneta
________________ (hereinafter referred to as the petitioner) to indemnify
Antonio R. de Joya hereinafter referred to as the
FIRST DIVISION.
respondent) for one-third of the sum of P5,043.20 which
*

60
60 SUPREME COURT REPORTS ANNOTATED the latter was adjudged to pay the Ace Advertising
Agency, Inc., the plaintiff in the recovery suit below.
Araneta vs. De Joya
Sometime in November 1952 the respondent, then
being a vice-president and director of the Ace
Advertising, the petitioner remained passive, throughout the
general manager of the Ace Advertising, proposed to the
period of Taylor's stay abroad, concerning the unauthorized board of directors that an employee, Ricardo Taylor, be
1

disbursements of corporate funds for the latter. This plus the sent to the United States to take up special studies in
fact that he even approved thrice payroll checks for the television. The board, however, failed to act on the
payment of Taylor's salary, demonstrate quite distinctly that proposal. Nevertheless, in September 1953 the
the petitioner neglected to perform his duties properly, to the respondent sent Taylor abroad. J. Antonio Araneta, a
damage of the f irm of which he was an off icer. company director, inquired about the trip and was
Same; Same; Contractual employee may be guilty of tort assured by the respondent that Taylor's expenses would
against the company.The fact that he was occupying a be defrayed not by the company but by other parties.
contractual position at the Ace Advertising is of no moment. This was thereafter confirmed by the respondent in a
The existence of a contract between the parties, as has been
memorandum.
repeatedly held by this Court, constitutes no bar .to the _______________
1 The board at that time was composed of J. Antonio Araneta, Ricardo Taylor. The respondent proved that Vicente
Vicente Araneta, Gregorio Araneta II, the petitioner Luis Ma. Araneta
and the respondent Antonio R. de Joya.
Araneta, as treasurer of the firm, signed a check
61 representing the company's share of the transportation
VOL. 57, MAY 24, 1974 61 expense of Taylor to the United States, and that a series
Araneta vs. De Joya of payroll checks from September 15, 1953 to December
While abroad, from September 1, 1953 to March 15, 31, 1953, inclusive, which included the salaries of
1954, Taylor continued to receive his salaries. The items Taylor, was signed by Vicente Araneta and the
corresponding to his salaries appeared in vouchers petitioner who is a vice-president of the company. Both
prepared upon the orders of, and approved by, the Aranetas disowned any personal liability, claiming that
respondent and were included in the semi-monthly they signed the checks in good faith as they were
payroll checks for the employees of the corporation. The approved by the respondent.
petitioner signed three of these checks on November 27, On April 13, 1964 the trial court rendered judgment
December 15 and December 29, 1953. The others were ordering the respondent to pay the Ace Advertising "the
signed by either the respondent, or Vicente Araneta sum of P5,043.20 with interest at the legal rate from
(company treasurer) who put up part of the bill August 23, 1954 until f ull payment," and dismissing
connected with Taylor's trip and also handed him the 3rd-party complaint.
letters for delivery in the United States. The Ace The respondent appealed to the Court of Appeals,
Advertising disbursed P5,043.20, all told, on account of which on August 2, 1965, rendered a decision affirming
Taylor's travel and studies. the trial court's judgment in favor of the Ace
On August 23, 1954 the Ace Advertising filed a Advertising but reversing the dismissal of the 3rd-party
complaint with the court of first instance of Manila complaint. The appellate court found as a fact that
against the respondent for recovery of the total sum Taylor's trip had been neither authorized nor
62
disbursed to Taylor, alleging that the trip was made
62 SUPREME COURT REPORTS ANNOTATED
without its knowledge, authority or ratification. The
Araneta vs. De Joya
respondent, in his answer, denied the charge and
claimed that the trip was nonetheless ratified by the ratif ied by the company.
company's board of directors, and that in any event The appellate court's full statement of its categorical
under the by-laws he had the discretion, as general and unequivocal findings of fact on the nature and
manager, to authorize the trip which was for the extent of the participation of the petitioner as well as
company's benefit. it. Vicente Araneta is hereunder quoted:
"The evidence not only is clear, but is even not disputed at all
A 3rd-party complaint was also filed by the
by Vicente and Luis Araneta who neither of them took the
respondent against Vicente Araneta, the petitioner and
witness stand to refute appellant's evidence, that as It is our view, and we so hold, that the judgment of
to Vicente it was to him that appellant first broached the the Court of Appeals should be upheld. The petitioner's
subject-matter of sending Taylor to America, that Vicente assertion that he signed the questioned payroll checks
Araneta evinced unusual interest, and went to the extent of in good f faith has not been substantiated, he in
entrusting Taylor with letters for delivery to certain
particular not having testified or
principals of Gregorio Araneta, Inc. in the United States, and 63
he even signed the check for P105.20 to cover expenses for
VOL. 57, MAY 24, 1974 63
his tax clearance, documentary stamps and passport fees, in
connection with the trip, on 8 September, 1953, and then on Araneta vs. De Joya
5 October, 1953, still another check for P868.00 which was offered testimony to prove such claim. Upon the
half the amount for his plane ticket; and as to Luis contrary, in spite of his being a vice-president and
Araneta, it not at all being disputed that when Taylor was director of the Ace Advertising, the petitioner remained
already in America, his salaries while abroad were paid on passive, throughput the period of Taylor's stay abroad,
vouchers and checks signed either by him or by Vicente, or concerning the unauthorized disbursements of
by appellant himself; because of all these, the conclusion is corporate funds for the latter. This plus the fact that he
forced upon this Court that it could not but have been but even approved thrice payroll checks for the payment of
that both Vicente and Luis were informed and gave their Taylor's salary, demonstrate quite distinctly that the
approval to Taylor's trip, and to the payment of his trip
petitioner neglected to perform his duties properly, to
expenses and salaries during his absence, from corporate
funds; if this was the case as it was, there can be no question
the damage of the firm of which he was an officer. The
but that they two were also privy to the unauthorized fact that he was occupying a contractual position at the
disbursement of the corporate moneys jointly with the Ace Advertising is of no moment. The existence of a
appellant; what had happened was in truth and in fact a contract between the parties, as has been repeatedly
venture by them given their stamp of approval; and as it was held by this Court, constitutes no bar to the commission
an unauthorized act of expenditure of corporate funds, and it of a tort by one against the other and the consequent
was these three without whose acts the same could not have recovery of damages. 2

happened, the juridical situation was a simple quasi-delict ACCORDINGLY, the judgment of the Court of
by them committed upon the corporation, /or which solidary Appeals is aff irmed, at petitioner's cost.
liability should have been imposed upon all in the first place, Makalintal,
Art. 2194, New Civil Code; and only De Joya having been
C.J., Makasiar, Esguerra and Muoz Palma,
sued and made liable by the corporation, it was the right of
the latter to ask that his two joint tortfeasors be made to JJ., concur.
shoulder their proportional responsibility." (italics supplied) Teehankee, J., took no part.
The basic legal issue is whether the petitioner is guilty Judgment affirmed.
of a quasi-delict as held below.
Notes.Liability for quasi-delict arises if the Railroad Co., 38 Phil. 768; Rakes vs. Atlantic Gulf &
following requisites concur: Pacif c Co., 7 Phil. 359).

1. 1.Damage or prejudice to the party claiming it; LEGAL RESEARCH SERVICE


2. 2.An unlawful act or omission amounting to fault
or negligence of which defendant personally, or See SCRA Quick Index-Digest, Volume Two, page 1840
some person for whose acts he must respond, on Quasi-Delict.
was guilty;
o0o
3. 3.A direct causal connection between the
negligent act or omission and the damage or Copyright 2016 Central Book Supply, Inc. All rights
prejudice (Taylor vs. MERALCO, 16 Phil. 8); reserved.
and
4. 4.No pre-existing contractual relation between
the parties (Art. 2176, New Civil Code; Fores vs.
Miranda, L-12163, Mar. 4, 1959).

The fault or negligence arising from contract referred to


in Articles 1170-1173 of the New Civil Code are those
incidental to the fulfillment or non-fulfillment of a
contractual obligation while the fault or negligence
referred to in Art. 2176 of the New Civil Code is
the culpa aquiliana of the civil law, homologous but not
identical totort of the common law, which gives rise to
________________

2 Singson vs. Bank of the Phil. Islands, 23 SCRA 1120; Air France

vs. Carrascoso,18 SCRA 155.


64
64 SUPREME COURT REPORTS ANNOTATED
Cucio vs. Court of Appeals
an obligation independently of any contract (De Borja
vs. Vazquez,74 Phil. 560; Manila Railroad Co. vs. Cia,
Transatlantica, 38 Phil. 875; Cangco vs. Manila

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