Sie sind auf Seite 1von 62

1.

in rentals, retroactive to January 1985, pending renewal of his contract until the
Republic of the Philippines arrival of Ms. Ma. Rosa Madrigal (one of the owners of Susana Realty).
SUPREME COURT
Manila Four days later or on February 9, 1985, petitioner Manolo Samson saw private
respondent in the latter's house and offered to buy the store of Santos & Sons and
SECOND DIVISION his right to lease the subject premises. 7 Petitioner was advised to return after a
week.
G.R. No. 108245 November 25, 1994
On February 15, 1985, petitioner returned to private respondent's house to confirm
MANOLO P. SAMSON, petitioner, his offer. On said occasion, private respondent presented petitioner with a letter
vs. containing his counter proposal, thus:
COURT OF APPEALS, SANTOS & SONS, INC., and ANGEL SANTOS, respondents.
MANOLO SAMSON
Clara Dumandan-Singh for petitioner. Marikina, Metro Manila

Paterno A. Catacutan for private respondents. Sir:

PUNO, J.: In line with our negotiation to sell our rights in the Madrigal building at Recto, Rizal
Avenue, I propose the following:
Petitioner MANOLO P. SAMSON prays for the reversal of the Decision of the Court
of Appeals, dated November 27, 1992, 1 modifying the decision of the Regional Trial 1. The lease contract between Santos and Sons, Inc. and Madrigal was impliedly
Court of Pasig, Branch 157, dated November 29, 1990, and absolving private renewed. It will be formally renewed this monthly (sic) when Tanya Madrigal
respondent Angel Santos from liability for the damages sustained by petitioner. arrives.

The antecedent facts, as borne by the records, are as follows: 2. To avoid breach of contract with Madrigal, I suggest that you acquire all our
shares in Santos and Sons, Inc.
The subject matter of this case is a commercial unit at the Madrigal Building,
located at Claro M. Recto Avenue, Sta. Cruz, Manila. The building is owned by 3. I will answer and pay all obligations of Santos and Sons, Inc. as of February 28,
Susana Realty Corporation and the subject premises was leased to private 1985.
respondent Angel Santos. The lessee's haberdashery store, Santos & Sons, Inc.,
occupied the premises for almost twenty (20) years on a yearly basis. 2 Thus, the Very truly yours,
lease contract in force between the parties in the year 1983 provided that the term
of the lease shall be one (1) year, starting on August 1, 1983 until July 31, 1984. 3 Angel C. Santos

On June 28, 1984, the lessor Susana Realty Corporation, through its representative Petitioner affixed his signature on the letter-proposal signifying his acceptance. 8
Mr. Jes Gal R. Sarmiento, Jr., informed respondents that the lease contract which They agreed that the consideration for the sale of the store and leasehold right of
was to expire on July 31, 1984 would not be renewed. 4 Santos & Sons, Inc. shall be P300,000.00.

Nonetheless, private respondent's lease contract was extended until December 31, On February 20, 1985, petitioner paid P150,000.00 to private respondent
1984. 5 Private respondent also continued to occupy the leased premises beyond representing the value of existing improvements in the Santos & Sons store. The
the extended term. parties agreed that the balance of P150,000.00 shall be paid upon the formal
renewal of the lease contract between private respondent and Susana Realty. It was
On February 5, 1985, private respondent received a letter 6 from the lessor, also a condition precedent to the transfer of the leasehold right of private
through its Real Estate Accountant Jane F. Bartolome, informing him of the increase respondent to petitioner. 9
4. The sum of P100,000.00 representing the profits which plaintiff failed to realize
In March 1985, petitioner began to occupy the Santos & Sons store. He utilized the from the sale of the goods referred to above, with legal interest thereon from the
store for the sale of his own goods. 10 date of the decision until said amount is fully paid;

All went well for a few months. In July 1985, however, petitioner received a notice 5. The amounts of P100,000.00 and P50,000.00 as moral and exemplary damages,
from Susana Realty, addressed to Santos & Sons, Inc., directing the latter to vacate respectively, also with legal interest thereon, from the date of this judgment until
the leased premises on or before July 15, 1985. 11 Private respondent failed to fully paid; and
renew his lease over the premises and petitioner was forced to vacate the same on
July 16, 1985. 6. The sum of P45,000.00 as and for attorney's fees and expenses of litigation, in
addition to judicial costs.
Petitioner then filed an action for damages against private respondent. He imputed
fraud and bad faith against private respondent when the latter stated in his letter- On the defendants' counterclaim, the plaintiff is ordered to return to the
proposal that his lease contract with Susana Realty has been impliedly renewed. defendants the latter's steel filing cabinet, adding machine, typewriter and all its
Petitioner claimed that this misrepresentation induced him to purchase the store of unused sales invoices, receipts and blank checks, if the plaintiff still has any of the
Santos & Sons and the leasehold right of private respondent. said papers or documents.

In defense, respondent alleged that their agreement was to the effect that the SO ORDERED. 13
consideration for the sale was P300,000.00, broken down as follows: P150,000.00
shall be for the improvements in the store, and the balance of P150,000.00 shall be Private respondent appealed to the Court of Appeals. In a Decision dated November
for the sale of the leasehold right of Santos & Sons over the subject premises. The 27, 1992, 14 the appellate court modified the decision of the trial court after finding
balance shall be paid only after the formal renewal of the lease contract and its that private respondent did not exercise fraud or bad faith in its dealings with
actual transfer to petitioner. petitioner. The dispositive portion of the impugned decision reads:

Trial on the merits ensued. On November 29, 1990, the trial court rendered a WHEREFORE, the appealed decision is hereby MODIFIED by reducing the amounts
decision 12 in favor of petitioner. The dispositive portion reads: the trial court awarded to appellee Manolo P. Samson in that appellants Santos &
Sons, Inc. and Angel C. Santos are ordered to pay appellee, by way of
WHEREFORE, AND IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered reimbursement, the P150,000.00 which the latter gave appellants as advance
in favor of plaintiff Manolo P. Samson and against defendants Santos and Sons, Inc., payment for their store and lease right with legal interest to be reckoned from the
and Angel C. Santos, ordering the said defendants to pay jointly and severally unto promulgation date of this decision; and AFFIRMED with respect to the trial court's
the plaintiff: judgment ordering appellee to return to appellants the latter's filing cabinet, adding
machine, typewriter, and all their unused sales invoices, receipts and blank checks,
1. The sum of P150,000.00, representing the cash advance payment for the store if appellee still has any of these documents. No costs.
and the right to occupy its leased premises subject matter of the sale involved, with
interest thereon at the legal rate from the filing of the complaint on November 5, SO ORDERED. 15
1985 until the same is fully paid;
Hence this petition for review with the following assigned errors:
2. The sum of P70,000.00 representing the cost of additional improvements of the
store sold, also with legal interest from November 5, 1985 until the full payment I
thereof;
WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISREGARDING THE
3. The sum of P150,000.00, representing the loss that the plaintiff suffered from the FOLLOWING FACTUAL FINDINGS OF THE TRIAL COURT:
sale at bargain prices of the goods taken out of the store, with legal interest
thereon from the (d)ate of this decision until the same is fully paid;
1. THAT RESPONDENTS DELIBERATELY AND FRAUDULENTLY CONCEALED FROM THE right to petitioner for his lease over the premises has not been renewed by Susana
PETITIONER THE FACT THAT THE LEASE ON THE SUBJECT STORE PREMISES HAD Realty Corporation.
ALREADY EXPIRED AND WOULD NO LONGER BE RENEWED BY THE LESSOR.
After carefully examining the records, we sustain the finding of public respondent
2. THAT SOLELY BY REASON OF RESPONDENTS' FRAUDULENT CONDUCT AND BAD Court of Appeals that private respondent was neither guilty of fraud nor bad faith in
FAITH, PETITIONER EXERCISING THE DILIGENCE REQUIRED UNDER THE claiming that there was implied renewal of his contract of lease with Susana Realty.
CIRCUMSTANCES, THE LATTER INCURRED DAMAGES AND LOSSES. The records will bear that the original contract of lease between the lessor Susana
Realty and the lessee private respondent was for a period of one year, commencing
II on August 1, 1983 until July 31, 1984. Subsequently, however, private respondent's
lease was extended until December 31, 1984. At this point, it was clear that the
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING RESPONDENTS FREE lessor had no intention to renew the lease contract of private respondent for
FROM LIABILITY TO PETITIONER FOR THE DAMAGES THE LATTER HAD INCURRED ON another year. However, on February 5, 1985, the lessor, thru its Real Estate
ACCOUNT OF THE RESPONDENTS' BAD FAITH. Accountant, sent petitioner a letter 20 of even date, worded as follows:

The pivotal issue in the case at bench is whether or not private respondent Angel February 5, 1985
Santos committed fraud or bad faith in representing to petitioner that his contract
of lease over the subject premises has been impliedly renewed by Susana Realty. Mr. Angel Santos
Undoubtedly, it was this representation which induced petitioner to enter into the 1609-1613 C.M. Recto Avenue
subject contract with private respondent. Sta. Cruz, Manila

We find the petition devoid of merit. Dear Mr. Santos:

Bad faith is essentially a state of mind affirmatively operating with furtive design or This is to notify you that the rentals for the 1609-1613 C.M. Recto Avenue, Sta.
with some motive of ill-will. 16 It does not simply connote bad judgment or Cruz, Manila, which you are leasing with (sic) us has been increased from P77.81 to
negligence. It imports a dishonest purpose or some moral obliquity and conscious P100.00 per square meter retroactive January 1985 (as you have not vacated the
doing of wrong. 17 Bad faith is thus synonymous with fraud and involves a design to place) pending renewal of your contract until the arrival of Miss Ma. Rosa A.S.
mislead or deceive another, not prompted by an honest mistake as to one's rights Madrigal.
or duties, but by some interested or sinister motive. 18
Thus, your new rate will be PESOS: FOURTEEN THOUSAND TWO HUNDRED FIFTY
In contracts, the kind of fraud that will vitiate consent is one where, through ONLY (P14,250.00) since you are occupying One Hundred Forty-Two and 50/100
insidious words or machinations of one of the contracting parties, the other is square meters.
induced to enter into a contract which, without them, he would not have agreed to.
19 This is known as dolo causante or causal fraud which is basically a deception Please note that we are charging the same for everybody and they all agreed to pay
employed by one party prior to or simultaneous to the contract in order to secure the new rate.
the consent of the other.
We do expect your full cooperation with regards (sic) to this matter.
Petitioner claims that their agreement was that the amount of P300,000.00 is the
consideration for the transfer of private respondent's leasehold right to him and he Very truly yours,
paid P150,000.00 as downpayment therefor. He insists that private respondent
acted in bad faith in assuring him that his lease contract with Susana Realty has (Sgd.) JANE F. BARTOLOME
been impliedly renewed and would be formally renewed upon the arrival of Tanya Accountant-Real Estate
Madrigal (representative of Susana Realty). As evidence of private respondent's bad
faith, petitioner stresses that private respondent himself admitted that prior to Clearly, this letter led private respondent to believe and conclude that his lease
February 15, 1985, he was informed by his lawyer that he could not yet sell his lease contract was impliedly renewed and that formal renewal thereof would be made
upon the arrival of Tanya Madrigal. This much was admitted by petitioner himself
when he testified during cross-examination that private respondent initially told In sum, we hold that under the facts proved, private respondent cannot be held
him of the fact that his lease contract with Susana Realty has already expired but he guilty of fraud or bad faith when he entered into the subject contract with
was anticipating its formal renewal upon the arrival of Madrigal. 21 Thus, from the petitioner. Causal fraud or bad faith on the part of one of the contracting parties
start, it was known to both parties that, insofar as the agreement regarding the which allegedly induced the other to enter into a contract must be proved by clear
transfer of private respondent's leasehold right to petitioner was concerned, the and convincing evidence. This petitioner failed to do.
object thereof relates to a future right. 22 It is a conditional contract recognized in
civil law, 23 the efficacy of which depends upon an expectancy — the formal IN VIEW WHEREOF, the appealed decision is hereby AFFIRMED in toto. Costs
renewal of the lease contract between private respondent and Susana Realty. against petitioner.

The records would also reveal that private respondent's lawyer informed him that SO ORDERED.
he could sell the improvements within the store for he already owned them but the
sale of his leasehold right over the store could not as yet be made for his lease Narvasa, C.J., Regalado and Mendoza, JJ., concur.
contract had not been actually renewed by Susana Realty. Indeed, it was precisely
pursuant to this advice that private respondent and petitioner agreed that the
improvements in the store shall be sold to petitioner for P150,000.00 24 while the
leasehold right shall be sold for the same amount of P150,000.00, payable only #Footnotes
upon the formal renewal of the lease contract and the actual transfer of the
leasehold right to petitioner. 25 The efficacy of the contract between the parties 1 Penned by Associate Justice Jesus M. Elbinias and concurred in by Associate
was thus made dependent upon the happening of this suspensive condition. Justices Nathanael P. De Pano, Jr. and Angelina S. Gutierrez.

Moreover, public respondent Court of Appeals was correct when it faulted


petitioner for failing to exercise sufficient diligence in verifying first the status of
private respondent's lease. We thus quote with approval the decision of the Court
of Appeals when it ruled, thus:

When appellant Angel C. Santos said that the lease contract had expired but that it
was impliedly renewed, that representation should have put appellee on guard. To
protect his interest, appellee should have checked with the lessor whether that was
so, and this he failed to do; or he would have simply deferred his decision on the
proposed sale until Miss Madrigal's arrival, and this appellee also failed to do. In
short, as a buyer of the store and lease right in question — or as a buyer of any
object of commerce for that matter — appellee was charged with the obligation of
caution aptly expressed in the universal maxim caveat emptor. 26

Indeed, petitioner had every opportunity to verify the status of the lease contract of
private respondent with Susana Realty. As held by this Court in the case of Caram,
Jr. v. Laureta, 27 the rule caveat emptor requires the purchaser to be aware of the
supposed title of the vendor and he who buys without checking the vendor's title
takes all the risks and losses consequent to such failure. In the case at bench, the
means of verifying for himself the status of private respondent's lease contract with
Susana Realty was open to petitioner. Nonetheless, no effort was exerted by
petitioner to confirm the status of the subject lease right. 28 He cannot now claim
that he has been deceived.
2. Defendant Laureano rode on the car of Atty. Dioquino on his way to the P.C. Barracks at
Republic of the Philippines Masbate. While about to reach their destination, the car driven by plaintiff's driver and
SUPREME COURT with defendant Federico Laureano as the sole passenger was stoned by some
Manila 'mischievous boys,' and its windshield was broken. Defendant Federico Laureano chased
the boys and he was able to catch one of them. The boy was taken to Atty. Dioquino
EN BANC [and] admitted having thrown the stone that broke the car's windshield. The plaintiff
and the defendant Federico Laureano with the boy returned to the P.C. barracks and the
father of the boy was called, but no satisfactory arrangements [were] made about the
G.R. No. L-25906 May 28, 1970 damage to the
windshield." 1
PEDRO D. DIOQUINO, plaintiff-appellee,
vs. It was likewise noted in the decision now on appeal: "The defendant Federico Laureano
FEDERICO LAUREANO, AIDA DE LAUREANO and JUANITO LAUREANO, defendants- refused to file any charges against the boy and his parents because he thought that the
appellants. stone-throwing was merely accidental and that it was due to force majeure. So he did
not want to take any action and after delaying the settlement, after perhaps consulting
Pedro D. Dioquino in his own behalf. a lawyer, the defendant Federico Laureano refused to pay the windshield himself and
challenged that the case be brought to court for judicial adjudication. There is no
Arturo E. Valdomero, Jose L. Almario and Rolando S. Relova for defendants-appellants. question that the plaintiff tried to convince the defendant Federico Laureano just to pay
the value of the windshield and he even came to the extent of asking the wife to
FERNANDO, J.: convince her husband to settle the matter amicably but the defendant Federico
Laureano refused to make any settlement, clinging [to] the belief that he could not be
The present lawsuit had its origin in a relationship, if it could be called such, the use of a held liable because a minor child threw a stone accidentally on the windshield and
car owned by plaintiff Pedro D. Dioquino by defendant Federico Laureano, clearly of a therefore, the same was due to force majeure." 2
character casual and temporary but unfortunately married by an occurrence resulting in
its windshield being damaged. A stone thrown by a boy who, with his other companions, 1. The law being what it is, such a belief on the part of defendant Federico Laureano was
was thus engaged in what undoubtedly for them must have been mistakenly thought to justified. The express language of Art. 1174 of the present Civil Code which is a
be a none too harmful prank did not miss its mark. Plaintiff would hold defendant restatement of Art. 1105 of the Old Civil Code, except for the addition of the nature of
Federico Laureano accountable for the loss thus sustained, including in the action filed an obligation requiring the assumption of risk, compels such a conclusion. It reads thus:
the wife, Aida de Laureano, and the father, Juanito Laureano. Plaintiff prevail in the "Except in cases expressly specified by the law, or when it is otherwise declared by
lower court, the judgment however going only against the principal defendant, his stipulation, or when the nature of the obligation requires the assumption of risk, no
spouse and his father being absolved of any responsibility. Nonetheless, all three of person shall be responsible for those events which could not be, foreseen, or which,
them appealed directly to us, raising two questions of law, the first being the failure of though foreseen were inevitable." Even under the old Civil Code then, as stressed by us
the lower court to dismiss such a suit as no liability could have been incurred as a result in the first decision dating back to 1908, in an opinion by Justice Mapa, the rule was
of a fortuitous event and the other being its failure to award damages against plaintiff well-settled that in the absence of a legal provision or an express covenant, "no one
for the unwarranted inclusion of the wife and the father in this litigation. We agree that should be held to account for fortuitous cases." 3 Its basis, as Justice Moreland stressed,
the lower court ought to have dismissed the suit, but it does not follow that thereby is the Roman law principle major casus est, cui humana infirmitas resistere non potest. 4
damages for the inclusion of the above two other parties in the complaint should have Authorities of repute are in agreement, more specifically concerning an obligation
been awarded appellants. arising from contract "that some extraordinary circumstance independent of the will of
the obligor, or of his employees, is an essential element of a caso fortuito." 5 If it could
The facts as found by the lower court follow: "Attorney Pedro Dioquino, a practicing be shown that such indeed was the case, liability is ruled out. There is no requirement of
lawyer of Masbate, is the owner of a car. On March 31, 1964, he went to the office of "diligence beyond what human care and foresight can provide." 6
the MVO, Masbate, to register the same. He met the defendant Federico Laureano, a
patrol officer of said MVO office, who was waiting for a jeepney to take him to the office The error committed by the lower court in holding defendant Federico Laureano liable
of the Provincial Commander, PC, Masbate. Attorney Dioquino requested the defendant appears to be thus obvious. Its own findings of fact repel the motion that he should be
Federico Laureano to introduce him to one of the clerks in the MVO Office, who could made to respond in damages to the plaintiff for the broken windshield. What happened
facilitate the registration of his car and the request was graciously attended to. was clearly unforeseen. It was a fortuitous event resulting in a loss which must be borne
by the owner of the car. An element of reasonableness in the law would be manifestly defendant Federico Laureano could be held liable. To repeat, that was clear error on its
lacking if, on the circumstances as thus disclosed, legal responsibility could be imputed part.
to an individual in the situation of defendant Laureano. Art. 1174 of the Civil Code
guards against the possibility of its being visited with such a reproach. Unfortunately, 2. Appellants do not stop there. It does not suffice for them that defendant Federico
the lower court was of a different mind and thus failed to heed its command. Laureano would be freed from liability. They would go farther. They would take plaintiff
to task for his complaint having joined the wife, Aida de Laureano, and the father,
It was misled, apparently, by the inclusion of the exemption from the operation of such Juanita Laureano. They were far from satisfied with the lower court's absolving these
a provision of a party assuming the risk, considering the nature of the obligation two from any financial responsibility. Appellants would have plaintiff pay damages for
undertaken. A more careful analysis would have led the lower court to a different and their inclusion in this litigation. We are not disposed to view the matter thus.
correct interpretation. The very wording of the law dispels any doubt that what is
therein contemplated is the resulting liability even if caused by a fortuitous event where It is to be admitted, of course, that plaintiff, who is a member of the bar, ought to have
the party charged may be considered as having assumed the risk incident in the nature exercised greater care in selecting the parties against whom he would proceed. It may
of the obligation to be performed. It would be an affront, not only to the logic but to the be said that his view of the law that would consider defendant Federico Laureano liable
realities of the situation, if in the light of what transpired, as found by the lower court, on the facts as thus disclosed, while erroneous, is not bereft of plausibility. Even the
defendant Federico Laureano could be held as bound to assume a risk of this nature. lower court, mistakenly of course, entertained similar view. For plaintiff, however, to
There was no such obligation on his part. have included the wife and the father would seem to indicate that his understanding of
the law is not all that it ought to have been.
Reference to the leading case of Republic v. Luzon Stevedoring Corp. 7 will illustrate
when the nature of the obligation is such that the risk could be considered as having Plaintiff apparently was not entirely unaware that the inclusion in the suit filed by him
been assumed. As noted in the opinion of Justice J.B.L. Reyes, speaking for the Court: was characterized by unorthodoxy. He did attempt to lend some color of justification by
"The appellant strongly stresses the precautions taken by it on the day in question: that explicitly setting forth that the father was joined as party defendant in the case as he
it assigned two of its most powerful tugboats to tow down river its barge L-1892; that it was the administrator of the inheritance of an undivided property to which defendant
assigned to the task the more competent and experienced among its patrons, had the Federico Laureano could lay claim and that the wife was likewise proceeded against
towlines, engines and equipment double-checked and inspected; that it instructed its because the conjugal partnership would be made to respond for whatever liability
patrons to take extra-precautions; and concludes that it had done all it was called to do, would be adjudicated against the husband.
and that the accident, therefore, should be held due to force majeure or fortuitous
event." Its next paragraph explained clearly why the defense of caso fortuito or force It cannot be said that such an attempt at justification is impressed with a high
majeure does not lie. Thus: "These very precautions, however, completely destroy the persuasive quality. Far from it. Nonetheless, mistaken as plaintiff apparently was, it
appellant's defense. For caso fortuito or force majeure (which in law are identical in so cannot be concluded that he was prompted solely by the desire to inflict needless and
far as they exempt an obligor from liability) by definition, are extraordinary events not unjustified vexation on them. Considering the equities of the situation, plaintiff having
foreseeable or avoidable, 'events that could not be foreseen, or which, though foreseen, suffered a pecuniary loss which, while resulting from a fortuitous event, perhaps would
were inevitable' (Art. 1174, Civil Code of the Philippines). It is, therefore, not enough not have occurred at all had not defendant Federico Laureano borrowed his car, we, feel
that the event should not have been foreseen or participated, as is commonly believed, that he is not to be penalized further by his mistaken view of the law in including them
but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the in his complaint. Well-worth paraphrasing is the thought expressed in a United States
happening is not impossibility to foresee the same: un hecho no constituye caso fortuito Supreme Court decision as to the existence of an abiding and fundamental principle that
por la sola circunstancia de que su existencia haga mas dificil o mas onerosa la accion the expenses and annoyance of litigation form part of the social burden of living in a
diligente del presente ofensor' (Peirano Facio, Responsibilidad Extra-contractual, p. 465; society which seeks to attain social control through law. 8
Mazeaud, Traite de la Responsibilite Civile, Vol. 2, sec. 1569). The very measures
adopted by appellant prove that the possibility of danger was not only foreseeable, but WHEREFORE, the decision of the lower court of November 2, 1965 insofar as it orders
actually foreseen, and was not caso fortuito." defendant Federico Laureano to pay plaintiff the amount of P30,000.00 as damages plus
the payment of costs, is hereby reversed. It is affirmed insofar as it dismissed the case
In that case then, the risk was quite evident and the nature of the obligation such that a against the other two defendants, Juanita Laureano and Aida de Laureano, and declared
party could rightfully be deemed as having assumed it. It is not so in the case before us. that no moral damages should be awarded the parties. Without pronouncement as to
It is anything but that. If the lower court, therefore, were duly mindful of what this costs.
particular legal provision contemplates, it could not have reached the conclusion that
3. 1. Shock, severe, sec. to intra-abdominal injuries due to blunt injury
FIRST DIVISION
2. Hemorrhage, massive, intraperitoneal sec. to laceration, (L) lobe liver
[G.R. No. 129792. December 21, 1999]
3. Rupture, stomach, anterior & posterior walls
JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE and ELISA PANELO,
petitioners, vs. HONORABLE COURT OF APPEALS, CONRADO C. AGUILAR and CRISELDA 4. Complete transection, 4th position, duodenum
R. AGUILAR, respondents.
5. Hematoma, extensive, retroperitoneal
DECISION
6. Contusion, lungs, severe
DAVIDE, JR., C.J.:
CRITICAL
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners
seek the reversal of the 17 June 1996 decision[1] of the Court of Appeals in C.A. G.R. No. After the burial of their daughter, private respondents demanded upon petitioners the
CV 37937 and the resolution[2]denying their motion for reconsideration. The assailed reimbursement of the hospitalization, medical bills and wake and funeral expenses[6]
decision set aside the 15 January 1992 judgment of the Regional Trial Court (RTC), which they had incurred. Petitioners refused to pay. Consequently, private respondents
Makati City, Branch 60 in Civil Case No. 7119 and ordered petitioners to pay damages filed a complaint for damages, docketed as Civil Case No. 7119 wherein they sought the
and attorneys fees to private respondents Conrado and Criselda (CRISELDA) Aguilar. payment of P157,522.86 for actual damages, P300,000 for moral damages, P20,000 for
attorneys fees and an unspecified amount for loss of income and exemplary damages.
Petitioner Jarco Marketing Corporation is the owner of Syvels Department Store, Makati
City. Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the stores branch In their answer with counterclaim, petitioners denied any liability for the injuries and
manager, operations manager, and supervisor, respectively. Private respondents are consequent death of ZHIENETH. They claimed that CRISELDA was negligent in exercising
spouses and the parents of Zhieneth Aguilar (ZHIENETH). care and diligence over her daughter by allowing her to freely roam around in a store
filled with glassware and appliances. ZHIENETH too, was guilty of contributory
In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd floor of Syvels negligence since she climbed the counter, triggering its eventual collapse on her.
Department Store, Makati City. CRISELDA was signing her credit card slip at the payment Petitioners also emphasized that the counter was made of sturdy wood with a strong
and verification counter when she felt a sudden gust of wind and heard a loud thud. She support; it never fell nor collapsed for the past fifteen years since its construction.
looked behind her. She then beheld her daughter ZHIENETH on the floor, her young
body pinned by the bulk of the stores gift-wrapping counter/structure. ZHIENETH was Additionally, petitioner Jarco Marketing Corporation maintained that it observed the
crying and screaming for help. Although shocked, CRISELDA was quick to ask the diligence of a good father of a family in the selection, supervision and control of its
assistance of the people around in lifting the counter and retrieving ZHIENETH from the employees. The other petitioners likewise raised due care and diligence in the
floor.[3] performance of their duties and countered that the complaint was malicious for which
they suffered besmirched reputation and mental anguish. They sought the dismissal of
ZHIENETH was quickly rushed to the Makati Medical Center where she was operated on. the complaint and an award of moral and exemplary damages and attorneys fees in
The next day ZHIENETH lost her speech and thereafter communicated with CRISELDA by their favor.
writing on a magic slate. The injuries she sustained took their toil on her young body.
She died fourteen (14) days after the accident or on 22 May 1983, on the hospital bed. In its decision[7] the trial court dismissed the complaint and counterclaim after finding
She was six years old.[4] that the preponderance of the evidence favored petitioners. It ruled that the proximate
cause of the fall of the counter on ZHIENETH was her act of clinging to it. It believed
The cause of her death was attributed to the injuries she sustained. The provisional petitioners witnesses who testified that ZHIENETH clung to the counter, afterwhich the
medical certificate[5] issued by ZHIENETHs attending doctor described the extent of her structure and the girl fell with the structure falling on top of her, pinning her stomach. In
injuries: contrast, none of private respondents witnesses testified on how the counter fell. The
trial court also held that CRISELDAs negligence contributed to ZHIENETHs accident.
Diagnoses:
In absolving petitioners from any liability, the trial court reasoned that the counter was
situated at the end or corner of the 2nd floor as a precautionary measure hence, it could The Court of Appeals, however, decided in favor of private respondents and reversed
not be considered as an attractive nuisance.[8] The counter was higher than ZHIENETH. the appealed judgment. It found that petitioners were negligent in maintaining a
It has been in existence for fifteen years. Its structure was safe and well-balanced. structurally dangerous counter. The counter was shaped like an inverted L[11] with a
ZHIENETH, therefore, had no business climbing on and clinging to it. top wider than the base. It was top heavy and the weight of the upper portion was
neither evenly distributed nor supported by its narrow base. Thus, the counter was
Private respondents appealed the decision, attributing as errors of the trial court its defective, unstable and dangerous; a downward pressure on the overhanging portion or
findings that: (1) the proximate cause of the fall of the counter was ZHIENETHs a push from the front could cause the counter to fall. Two former employees of
misbehavior; (2) CRISELDA was negligent in her care of ZHIENETH; (3) petitioners were petitioners had already previously brought to the attention of the management the
not negligent in the maintenance of the counter; and (4) petitioners were not liable for danger the counter could cause. But the latter ignored their concern. The Court of
the death of ZHIENETH. Appeals faulted the petitioners for this omission, and concluded that the incident that
befell ZHIENETH could have been avoided had petitioners repaired the defective
Further, private respondents asserted that ZHIENETH should be entitled to the counter. It was inconsequential that the counter had been in use for some time without
conclusive presumption that a child below nine (9) years is incapable of contributory a prior incident.
negligence. And even if ZHIENETH, at six (6) years old, was already capable of
contributory negligence, still it was physically impossible for her to have propped herself The Court of Appeals declared that ZHIENETH, who was below seven (7) years old at the
on the counter. She had a small frame (four feet high and seventy pounds) and the time of the incident, was absolutely incapable of negligence or other tort. It reasoned
counter was much higher and heavier than she was. Also, the testimony of one of the that since a child under nine (9) years could not be held liable even for an intentional
stores former employees, Gerardo Gonzales, who accompanied ZHIENETH when she wrong, then the six-year old ZHIENETH could not be made to account for a mere
was brought to the emergency room of the Makati Medical Center belied petitioners mischief or reckless act. It also absolved CRISELDA of any negligence, finding nothing
theory that ZHIENETH climbed the counter. Gonzales claimed that when ZHIENETH was wrong or out of the ordinary in momentarily allowing ZHIENETH to walk while she
asked by the doctor what she did, ZHIENETH replied, [N]othing, I did not come near the signed the document at the nearby counter.
counter and the counter just fell on me.[9] Accordingly, Gonzales testimony on
ZHIENETHs spontaneous declaration should not only be considered as part of res gestae The Court of Appeals also rejected the testimonies of the witnesses of petitioners. It
but also accorded credit. found them biased and prejudiced. It instead gave credit to the testimony of
disinterested witness Gonzales. The Court of Appeals then awarded P99,420.86 as
Moreover, negligence could not be imputed to CRISELDA for it was reasonable for her to actual damages, the amount representing the hospitalization expenses incurred by
have let go of ZHIENETH at the precise moment that she was signing the credit card slip. private respondents as evidenced by the hospital's statement of account.[12] It denied
an award for funeral expenses for lack of proof to substantiate the same. Instead, a
Finally, private respondents vigorously maintained that the proximate cause of compensatory damage of P50,000 was awarded for the death of ZHIENETH.
ZHIENETHs death, was petitioners negligence in failing to institute measures to have the
counter permanently nailed. We quote the dispositive portion of the assailed decision,[13] thus:

On the other hand, petitioners argued that private respondents raised purely factual WHEREFORE, premises considered, the judgment of the lower court is SET ASIDE and
issues which could no longer be disturbed. They explained that ZHIENETHs death while another one is entered against [petitioners], ordering them to pay jointly and severally
unfortunate and tragic, was an accident for which neither CRISELDA nor even ZHIENETH unto [private respondents] the following:
could entirely be held faultless and blameless. Further, petitioners adverted to the trial
courts rejection of Gonzales testimony as unworthy of credence. 1. P50,000.00 by way of compensatory damages for the death of Zhieneth Aguilar, with
legal interest (6% p.a.) from 27 April 1984;
As to private respondents claim that the counter should have been nailed to the ground,
petitioners justified that it was not necessary. The counter had been in existence for 2. P99,420.86 as reimbursement for hospitalization expenses incurred; with legal
several years without any prior accident and was deliberately placed at a corner to avoid interest (6% p.a.) from 27 April 1984;
such accidents. Truth to tell, they acted without fault or negligence for they had
exercised due diligence on the matter. In fact, the criminal case[10] for homicide 3. P100,000.00 as moral and exemplary damages;
through simple negligence filed by private respondents against the individual petitioners
was dismissed; a verdict of acquittal was rendered in their favor. 4. P20,000.00 in the concept of attorneys fees; and
On the other hand, negligence is the omission to do something which a reasonable man,
5. Costs. guided by those considerations which ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a prudent and reasonable man would not
Private respondents sought a reconsideration of the decision but the same was denied do.[17] Negligence is the failure to observe, for the protection of the interest of another
in the Court of Appeals resolution[14] of 16 July 1997. person, that degree of care, precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury.[18]
Petitioners now seek the reversal of the Court of Appeals decision and the
reinstatement of the judgment of the trial court. Petitioners primarily argue that the Accident and negligence are intrinsically contradictory; one cannot exist with the other.
Court of Appeals erred in disregarding the factual findings and conclusions of the trial Accident occurs when the person concerned is exercising ordinary care, which is not
court. They stress that since the action was based on tort, any finding of negligence on caused by fault of any person and which could not have been prevented by any means
the part of the private respondents would necessarily negate their claim for damages, suggested by common prudence.[19]
where said negligence was the proximate cause of the injury sustained. The injury in the
instant case was the death of ZHIENETH. The proximate cause was ZHIENETHs act of The test in determining the existence of negligence is enunciated in the landmark case
clinging to the counter. This act in turn caused the counter to fall on her. This and of Picart v. Smith,[20] thus: Did the defendant in doing the alleged negligent act use that
CRISELDAs contributory negligence, through her failure to provide the proper care and reasonable care and caution which an ordinarily prudent person would have used in the
attention to her child while inside the store, nullified private respondents claim for same situation? If not, then he is guilty of negligence.[21]
damages. It is also for these reasons that parents are made accountable for the damage
or injury inflicted on others by their minor children. Under these circumstances, We rule that the tragedy which befell ZHIENETH was no accident and that ZHIENETHs
petitioners could not be held responsible for the accident that befell ZHIENETH. death could only be attributed to negligence.

Petitioners also assail the credibility of Gonzales who was already separated from Syvels We quote the testimony of Gerardo Gonzales who was at the scene of the incident and
at the time he testified; hence, his testimony might have been tarnished by ill-feelings accompanied CRISELDA and ZHIENETH to the hospital:
against them.
Q While at the Makati Medical Center, did you hear or notice anything while the child
For their part, private respondents principally reiterated their arguments that neither was being treated?
ZHIENETH nor CRISELDA was negligent at any time while inside the store; the findings
and conclusions of the Court of Appeals are substantiated by the evidence on record; A At the emergency room we were all surrounding the child. And when the doctor asked
the testimony of Gonzales, who heard ZHIENETH comment on the incident while she the child what did you do, the child said nothing, I did not come near the counter and
was in the hospitals emergency room should receive credence; and finally, ZHIENETHs the counter just fell on me.
part of the res gestae declaration that she did nothing to cause the heavy structure to
fall on her should be considered as the correct version of the gruesome events. Q (COURT TO ATTY. BELTRAN)

We deny the petition. You want the words in Tagalog to be translated?

The two issues to be resolved are: (1) whether the death of ZHIENETH was accidental or ATTY. BELTRAN
attributable to negligence; and (2) in case of a finding of negligence, whether the same
was attributable to private respondents for maintaining a defective counter or to Yes, your Honor.
CRISELDA and ZHIENETH for failing to exercise due and reasonable care while inside the
store premises. COURT

An accident pertains to an unforeseen event in which no fault or negligence attaches to Granted. Intercalate wala po, hindi po ako lumapit doon. Basta bumagsak.[22]
the defendant.[15] It is a fortuitous circumstance, event or happening; an event
happening without any human agency, or if happening wholly or partly through human This testimony of Gonzales pertaining to ZHIENETHs statement formed (and should be
agency, an event which under the circumstances is unusual or unexpected by the person admitted as) part of the res gestae under Section 42, Rule 130 of the Rules of Court,
to whom it happens.[16] thus:
Part of res gestae. Statements made by a person while a startling occurrence is taking Ramon Guevarra, another former employee, corroborated the testimony of Gonzales,
place or immediately prior or subsequent thereto with respect to the circumstances thus:
thereof, may be given in evidence as part of the res gestae. So, also, statements
accompanying an equivocal act material to the issue, and giving it a legal significance, Q Will you please described [sic] to the honorable Court the counter where you were
may be received as part of the res gestae. assigned in January 1983?

It is axiomatic that matters relating to declarations of pain or suffering and statements xxx
made to a physician are generally considered declarations and admissions.[23] All that is
required for their admissibility as part of the res gestae is that they be made or uttered A That counter assigned to me was when my supervisor ordered me to carry that
under the influence of a startling event before the declarant had the time to think and counter to another place. I told him that the counter needs nailing and it has to be
concoct a falsehood as witnessed by the person who testified in court. Under the nailed because it might cause injury or accident to another since it was shaky.
circumstances thus described, it is unthinkable for ZHIENETH, a child of such tender age
and in extreme pain, to have lied to a doctor whom she trusted with her life. We Q When that gift wrapping counter was transferred at the second floor on February 12,
therefore accord credence to Gonzales testimony on the matter, i.e., ZHIENETH 1983, will you please describe that to the honorable Court?
performed no act that facilitated her tragic death. Sadly, petitioners did, through their
negligence or omission to secure or make stable the counters base. A I told her that the counter wrapper [sic] is really in good [sic] condition; it was shaky. I
told her that we had to nail it.
Gonzales earlier testimony on petitioners insistence to keep and maintain the
structurally unstable gift-wrapping counter proved their negligence, thus: Q When you said she, to whom are you referring to [sic]?

Q When you assumed the position as gift wrapper at the second floor, will you please A I am referring to Ms. Panelo, sir.
describe the gift wrapping counter, were you able to examine?
Q And what was the answer of Ms. Panelo when you told her that the counter was
A Because every morning before I start working I used to clean that counter and since it shaky?
is not nailed and it was only standing on the floor, it was shaky.
A She told me Why do you have to teach me. You are only my subordinate and you are
xxx to teach me? And she even got angry at me when I told her that.

Q Will you please describe the counter at 5:00 oclock [sic] in the afternoon on [sic] May xxx
9 1983?
Q From February 12, 1983 up to May 9, 1983, what if any, did Ms. Panelo or any
A At that hour on May 9, 1983, that counter was standing beside the verification employee of the management do to that (sic)
counter. And since the top of it was heavy and considering that it was not nailed, it can
collapse at anytime, since the top is heavy. xxx

xxx Witness:

Q And what did you do? None, sir. They never nailed the counter. They only nailed the counter after the accident
happened.[25] [Emphasis supplied]
A I informed Mr. Maat about that counter which is [sic] shaky and since Mr. Maat is fond
of putting display decorations on tables, he even told me that I would put some Without doubt, petitioner Panelo and another store supervisor were personally
decorations. But since I told him that it not [sic] nailed and it is shaky he told me better informed of the danger posed by the unstable counter. Yet, neither initiated any
inform also the company about it. And since the company did not do anything about the concrete action to remedy the situation nor ensure the safety of the stores employees
counter, so I also did not do anything about the counter.[24] [Emphasis supplied] and patrons as a reasonable and ordinary prudent man would have done. Thus, as
confronted by the situation petitioners miserably failed to discharge the due diligence
required of a good father of a family.
Further, at the time ZHIENETH was pinned down by the counter, she was just a foot
On the issue of the credibility of Gonzales and Guevarra, petitioners failed to establish away from her mother; and the gift-wrapping counter was just four meters away from
that the formers testimonies were biased and tainted with partiality. Therefore, the CRISELDA.[32] The time and distance were both significant. ZHIENETH was near her
allegation that Gonzales and Guevarras testimonies were blemished by ill feelings mother and did not loiter as petitioners would want to impress upon us. She even
against petitioners since they (Gonzales and Guevarra) were already separated from the admitted to the doctor who treated her at the hospital that she did not do anything; the
company at the time their testimonies were offered in court was but mere speculation counter just fell on her.
and deserved scant consideration.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED and the
It is settled that when the issue concerns the credibility of witnesses, the appellate challenged decision of the Court of Appeals of 17 June 1996 in C.A. G.R. No. CV 37937 is
courts will not as a general rule disturb the findings of the trial court, which is in a better hereby AFFIRMED.
position to determine the same. The trial court has the distinct advantage of actually
hearing the testimony of and observing the deportment of the witnesses.[26] However, Costs against petitioners.
the rule admits of exceptions such as when its evaluation was reached arbitrarily or it
overlooked or failed to appreciate some facts or circumstances of weight and substance SO ORDERED.
which could affect the result of the case.[27] In the instant case, petitioners failed to
bring their claim within the exception.

Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that
favors children below nine (9) years old in that they are incapable of contributory
negligence. In his book,[28] former Judge Cezar S. Sangco stated:

In our jurisdiction, a person under nine years of age is conclusively presumed to have
acted without discernment, and is, on that account, exempt from criminal liability. The
same presumption and a like exemption from criminal liability obtains in a case of a
person over nine and under fifteen years of age, unless it is shown that he has acted
with discernment. Since negligence may be a felony and a quasi-delict and required
discernment as a condition of liability, either criminal or civil, a child under nine years of
age is, by analogy, conclusively presumed to be incapable of negligence; and that the
presumption of lack of discernment or incapacity for negligence in the case of a child
over nine but under fifteen years of age is a rebuttable one, under our law. The rule,
therefore, is that a child under nine years of age must be conclusively presumed
incapable of contributory negligence as a matter of law. [Emphasis supplied]

Even if we attribute contributory negligence to ZHIENETH and assume that she climbed
over the counter, no injury should have occurred if we accept petitioners theory that
the counter was stable and sturdy. For if that was the truth, a frail six-year old could not
have caused the counter to collapse. The physical analysis of the counter by both the
trial court and Court of Appeals and a scrutiny of the evidence[29]on record reveal
otherwise, i.e., it was not durable after all. Shaped like an inverted L, the counter was
heavy, huge, and its top laden with formica. It protruded towards the customer waiting
area and its base was not secured.[30]

CRISELDA too, should be absolved from any contributory negligence. Initially, ZHIENETH
held on to CRISELDAs waist, later to the latters hand.[31] CRISELDA momentarily
released the childs hand from her clutch when she signed her credit card slip. At this
precise moment, it was reasonable and usual for CRISELDA to let go of her child.
4. The appellant was an officer of the Philippine National Police detailed in the Traffic
Republic of the Philippines Management Group (TMG) based in Camp Crame, Quezon City, but was on detached
SUPREME COURT service with the Motorcycle Unit of the Metropolitan Manila Development Authority
Manila (MMDA).

EN BANC At about 2:30 p.m. of September 26, 1998, Vincent asked permission from his mother
Felicisima if he could play outside. She agreed.5 Together with his playmate Whilcon
G.R. No. 137347 March 4, 2004 "Buddha" Rodriguez, Vincent played with his kite on top of the roof of an abandoned
carinderia beside the road in Sitio Militar, Barangay Bahay Toro. Beside this carinderia
PEOPLE OF THE PHILIPPINES, appellee, was a basketball court, where fourteen-year-old Ricardo Salvo and his three friends,
vs. nicknamed L.A., Nono and Puti, were playing backan, a game of basketball.
PO3 FERDINAND FALLORINA Y FERNANDO, appellant.
Ricardo heard the familiar sound of a motorcycle coming from the main road across the
DECISION basketball court. He was nonplussed when he looked at the person driving the
motorcycle and recognized the appellant. Ricardo knew that the appellant abhorred
CALLEJO, SR., J.: children playing on the roof of the carinderia and berated them for it. His friend Ong-
ong had previously been scolded by the appellant for playing on the roof.
For automatic review is the Decision1 of the Regional Trial Court of Quezon City, Branch
95, convicting appellant PO3 Ferdinand Fallorina y Fernando of murder for the killing of Ricardo called on Vincent and Whilcon to come down from the roof. When the appellant
eleven-year-old Vincent Jorojoro, Jr. while the latter was flying his kite on top of a roof. saw Vincent and Whilcon, the former stopped his motorcycle and shouted at them,
The court a quo sentenced the appellant to suffer the death penalty. "Putang inang mga batang ito, hindi kayo magsibaba d'yan!" After hearing the shouts of
the appellant, Whilcon immediately jumped down from the roof.6 Vincent, meanwhile,
The accusatory portion of the Information charging the appellant with murder reads: was lying on his stomach on the roof flying his kite. When he heard the appellant's
shouts, Vincent stood up and looked at the latter. Vincent turned his back, ready to get
That on or about the 26th day of September 1998, in Quezon City, Philippines, the said down from the roof. Suddenly, the appellant pointed his .45 caliber pistol7 towards the
accused, with intent to kill, by means of treachery and taking advantage of superior direction of Vincent and fired a shot. Vincent was hit on the left parietal area. He fell
strength, did then and there, wilfully, unlawfully and feloniously attack, assault and from the roof, lying prostrate near the canal beside the abandoned carinderia and the
employ personal violence upon the person of VINCENT JOROJORO, JR. y MORADAS, a basketball court.8
minor, eleven (11) years of age, by then and there, shooting him with a gun, hitting him
on the head, thereby inflicting upon him serious and mortal wound which was the direct Whilcon rushed to help Vincent up but was shocked when he saw blood on the latter's
and immediate cause of his death, to the damage and prejudice of the heirs of the said head. Whilcon retreated and left his friend.9 The appellant approached Vincent and
offended party. carried the latter's hapless body in a waiting tricycle and brought him to the Quezon City
General Hospital. Vincent was pronounced dead on arrival.
CONTRARY TO LAW.2
Meantime, word reached Vincent's parents that their son was shot and brought to the
Upon arraignment on October 20, 1998, the appellant, with the assistance of counsel, hospital. They rushed to the hospital, only to see their son's already lifeless body. The
pleaded not guilty. Thereafter, trial ensued. appellant was nowhere to be found.

Case for the Prosecution3 Dr. Ravell Ronald R. Baluyot of the Medico-Legal Division of the National Bureau of
Investigation (NBI) conducted an autopsy where he made the following findings:
Eleven-year-old Vincent Jorojoro, Jr. was the third child of Vicente and Felicisima
Jorojoro. The family lived at Sitio Militar, Barangay Bahay Toro, Project 8, Quezon City. Cyanosis, lips and nailbeds.
Vincent, nicknamed "Hataw," was a grade three pupil whose education was sponsored
by the Spouses Petinato, an American couple, through an educational foundation.4 Abrasion, 7.0 x 2.0 cms., right arm, middle third, postero-lateral aspect.

Contused-abrasion, 14.5 x 2.5 cms., postero-lateral chest wall, right side.


police station commander,20 Pajarillo took pictures of the crime scene, including the
Gunshot Wound, Entrance, 3.0 x 0.8 cms., roughly ovaloid, with irregular edges, carinderia and the roof with a bullet hole as part of the office filing.21 He did not inform
abrasion collar widest postero-inferiorly, located at the head, left parietal area, 9.0 cms. the prosecution that he took such pictures, nor did he furnish it with copies thereof.
above and 8.0 cms. behind the left external auditory meatus, directed forward upward However, the appellant's counsel learned of the existence of the said pictures.
and from left to right, involving the scalp, fracturing the left parietal bone (punched-in),
lacerating the left and right cerebral hemispheres of the brain, fracturing the right On October 5, 1998, P/Insp. Mario Prado signed Firearms Identification Report No. FAIB-
parietal bone (punched-out), lacerating the scalp, making an Exit wound, 3.3 x 1.0 cms., 124-98 stating that:
stellate with everted and irregular edges, 12.0 cms. above and 2.0 cms. in front of the
right external auditory meatus. FINDINGS:

Intracranial hemorrhage, subdural and subarachnoid, extensive, bilateral. Microscopic examination and comparison of the specimen marked "FAP" revealed the
same individual characteristics with cartridge cases fired from the above-mentioned
Scalp hematoma, fronto-parietal areas, bilateral. firearm.

Visceral organs, congested. CONCLUSION:

Stomach, one-fourth (1/4) filled with partially digested food particles. The specimen marked "FAP" was fired from the above-mentioned caliber .45 Thompson
Auto Ordnance pistol with serial number AOC-38701.22
CAUSE OF DEATH: GUNSHOT WOUND, HEAD.10
Vincent's family suffered mental anguish as a result of his death. As evidenced by
Dr. Baluyot testified that the victim died from a single gunshot wound in the head. The receipts, they spent P49,174 for the funeral.23
bullet entered the left upper back portion of the head (above the level of the left ear)11
and exited to the right side.12 Dr. Baluyot signed Vincent's certificate of death.13 Case for the Appellant

At about 3:00 p.m., SPO2 Felix Pajarillo and Police Inspector Abelardo P. Aquino The appellant denied shooting Vincent. He testified that at about 1:30 p.m. of
proceeded to the scene of the shooting but failed to find the victim and the appellant. September 26, 1998, Macario Ortiz, a resident of Sitio San Jose, Quezon City, asked for
They proceeded to the Quezon City General Hospital where they heard that the victim police assistance; Macario's brother-in-law was drunk and armed with a knife, and was
had died. They returned to the crime scene and recovered an empty shell from a .45 creating trouble in their house. The appellant's house was located along a narrow alley
caliber gun.14 (eskinita) perpendicular to the main road. It was 200 meters away from Macario's
house.24 Responding to the call, the appellant took his .45 service revolver, cocked it,
On September 28, 1998, Major Isidro Suyo, the Chief of the MMDA Motorcycle Unit to put the safety lock in place and tucked the gun at his right waistline. He brought out his
which the appellant was assigned on detached service, reported to the Sangandaan motorcycle from the garage and slowly negotiated the bumpy alley leading to the main
Police Station that the appellant had not reported for duty.15 At 2:10 p.m. of September road. Macario, who was waiting for him at the main road, called his attention to his
29, 1998, Police Senior Superintendent Alfonso Nalangan, the Regional Director of the revolver which was about to fall off from his waist. The appellant got distracted and
PNP-TMG, NCR, surrendered the appellant to the Sangandaan Police Station together brought his motorcycle to the right side of the road, near the abandoned carinderia
with his .45 caliber pistol bearing Serial No. AOC-38701.16 where he stopped. As he stepped his right foot on the ground to keep himself from
falling, the appellant lost his balance and slipped to the right. At this point, the revolver
Meantime, upon the urging of Vicente Jorojoro, Ricardo was brought to the Department fell to the ground near his foot and suddenly went off. Bystanders shouted, "Ano yon,
of Justice where he was enrolled under its Witness Protection Program. He gave his ano yon, mukhang may tinamaan." He picked up his gun and examined it. He put the
sworn statement to NBI Special Agent Roberto Divinagracia on September 29, 1998.17 safety latch back on and tucked it at his right waistline. He then told Macario to wait for
On the same date, P/Insp. Abelardo Aquino wrote the Chief of the PNP Crime a while to check if somebody was really hit. He went near the abandoned carinderia and
Laboratory Examination Unit requesting for the ballistic examination of the .45 caliber saw Vincent sprawled to the ground. He picked up the bloodied child, boarded him on a
pistol with Serial No. AOC-38701 and the empty shell of a .45 caliber gun found at the tricycle on queue and instructed its driver, Boy Candaje, to bring the boy to the
scene of the shooting.18 Before noon on September 30, 1998, Divinagracia arrived at hospital.25 On board the tricycle were Jeffrey Dalansay and Milbert Doring.
the station and turned over two witnesses, Raymond Castro and Ricardo Salvo. He also
turned over the witnesses' sworn statements.19 On October 2, 1998, on orders of the
The appellant rode his motorcycle and proceeded to his mother's house in Caloocan City The accused is to pay the costs.
but did not inform her of the incident. He then called his superior officer, Major Isidro
Suyo, at the Base 103, located at Roces Avenue, Quezon City. The appellant informed The .45 caliber pistol, service firearm (Exh. "R") of the accused, shall remain under the
Major Suyo that he met an accident; that his gun fell and fired; and, that the bullet custody of the Court and shall be disposed of in accordance with the existing rules and
accidentally hit a child. He also told his superior that he might not be able to report for regulations upon the finality of this decision.28
work that day and the following day. He assured his superior that he would surrender
later. He then went to Valenzuela City to the house of his friend PO3 Angelito Lam, who The appellant assigned the following errors for resolution:
was a motorcycle unit cop. The appellant stayed there for three days. He also visited
friends during that time. 1. THE COURT A QUO SERIOUSLY ERRED IN NOT GIVING DUE CREDENCE TO RELEVANT
PHYSICAL EVIDENCE, WHICH IF CONSIDERED COULD HAVE ALTERED THE CONCLUSIONS
On September 29, 1998, he went to the office of Major Suyo and surrendered his .45 ARRIVED AT BY THE COURT AND THE OUTCOME OF THE CASE.
caliber pistol. Major Suyo accompanied and turned over the appellant to the
commanding officer at Camp Crame, Quezon City. The appellant was subjected to a 2. THE COURT A QUO SERIOUSLY ERRED BY OVERSTEPPING THE LINE OF JUDGING AND
neuro and drug test. He stated that the results of the drug test were negative. The ADVOCACY, AND GOING INTO THE REALM OF SPECULATION, PATENTLY
appellant was then referred to the Sangandaan Police Station for investigation.26 The DEMONSTRATING BIAS AND PARTIALITY.
pictures27 of the crime scene were given to him by Barangay Tanod Johnny Yaket,
shown in one of the pictures pointing to a bullet hole. The appellant's testimony was 3. THE COURT A QUO ERRED IN GIVING UNDUE CREDENCE TO THE TESTIMONY OF
corroborated in pari materia by Macario Ortiz. RICARDO SALVO, ALLEGED PROSECUTION EYEWITNESS, WHOSE TESTIMONY IS
WANTING IN PROBABILITY, AS IT IS CONTRARY TO THE COMMON EXPERIENCE OF
Leonel Angelo Balaoro, Vincent's thirteen-year-old playmate, testified that at 1:30 p.m. MANKIND.
of September 26, 1998, he was playing basketball at Barangay Bahay Toro, at the
basketball court along the road beside the chapel. With him were Ricardo, Puti and 4. THE COURT A QUO GRAVELY ERRED IN INEQUITABLY APPRECIATING EXCULPATORY
Nono. Vincent was on the rooftop of the carinderia with Whilcon. While Puti was AND INCULPATORY FACTS AND CIRCUMSTANCES WHICH SHOULD HAVE BEEN
shooting the ball, an explosion ensued. He and Ricardo ran beside the chapel near the CONSIDERED IN FAVOR OF THE ACCUSED.
basketball court. He looked back towards the basketball court and saw the appellant,
about 15 meters away from the canal, holding the prostrate and bloodied Vincent. He 5. THE COURT A QUO ERRED IN FAILING TO APPRECIATE THE MITIGATING
did not see the appellant shoot Vincent. He did not report what he saw to the police CIRCUMSTANCE OF VOLUNTARY SURRENDER IN FAVOR OF THE ACCUSED.
authorities. He was ordered by his father to testify for the appellant. He also testified
that his mother was related to Daniel, the appellant's brother. 6. THE COURT A QUO GRAVELY ERRED IN APPRECIATING THE AGGRAVATING
CIRCUMSTANCE OF TAKING ADVANTAGE OF HIS POSITION BY ACCUSED.29
On January 19, 1999, the trial court rendered judgment convicting the appellant of
murder, qualified by treachery and aggravated by abuse of public position. The trial The appellant asserts that the trial court failed to appreciate in his favor the physical
court did not appreciate in favor of the appellant the mitigating circumstance of evidence, viz., the hole found on the rooftop of the carinderia where Vincent was when
voluntary surrender. The decretal portion of the decision reads: he was shot. The appellant contends that the picture30 taken on October 2, 1998 by no
less than SPO2 Felix Pajarillo, one of the principal witnesses of the prosecution, and the
WHEREFORE, judgment is hereby rendered finding the accused PO3 Ferdinand Fallorina pictures31 showing Barangay Tanod Yaket pointing to a hole on the roof buttress the
y Fernando GUILTY beyond reasonable doubt of the crime of Murder defined in and defense of the appellant that the shooting was accidental. The appellant maintains that
penalized by Article 248 of the Revised Penal Code, as amended by Republic Act No. his service revolver fell to the ground, hit a hard object, and as the barrel of the gun was
7659, and in view of the presence of the aggravating circumstance of taking advantage pointed to an oblique direction, it fired, hitting the victim who was on the rooftop. The
by the accused of his public position (par. 1, Art. 14, Revised Penal Code), is hereby bullet hit the back portion of the victim's head, before exiting and hitting the rooftop.
sentenced to suffer the penalty of DEATH. The appellant posits that the pictures belie Ricardo's testimony that he deliberately shot
the victim, and, instead, complements Dr. Baluyot's testimony that the gunshot wound
The accused is hereby ordered to indemnify the heirs of the late Vincent Jorojoro, Jr. the came from somewhere behind the victim, somewhere lower than the point of entrance.
amounts of P49,174.00, as actual damages; P50,000.00, as moral damages; P25,000.00, The appellant invokes P/Insp. Mario Prado's testimony that if a gun hits the ground in an
as exemplary damages; and, P50,000.00, as death indemnity. oblique position, the gun will fire and the bullet will exit in the same position as the gun,
that is, also in an oblique position.
simply the incident of another act performed without malice.37 The appellant must rely
The Office of the Solicitor General, for its part, asserts that the contention of the on the strength of his evidence and not on the weakness of that of the prosecution
appellant is based on speculations and surmises, the factual basis for his conclusion not because by admitting having caused the death of the victim, he can no longer be
having been proven by competent and credible evidence. There is no evidence on acquitted.
record that the hole shown in the pictures32 was caused by a bullet from a .45 caliber
pistol. The appellant did not present Barangay Tanod Johnny Yaket, who was shown in In this case, the appellant failed to prove, with clear and convincing evidence, his
the pictures, to testify on the matter. The appellant failed to prove that any slug was defense.
found on the rooftop or under the roof which came from the appellant's .45 caliber
pistol. According to the Solicitor General, the pictures relied upon by the appellant First. The appellant appended to his counter-affidavit in the Office of the Quezon City
cannot overcome the positive and straightforward testimony of the young eyewitness Prosecutor the pictures showing the hole on the roof of the carinderia38 to prove that
Ricardo Salvo. he shot the victim accidentally. However, when the investigating prosecutor
propounded clarificatory questions on the appellant relating to the pictures, the latter
We agree with the Office of the Solicitor General. Whether or not the appellant is refused to answer. This can be gleaned from the resolution of the investigating
exempt from criminal liability is a factual issue. The appellant was burdened to prove, prosecutor, thus:
with clear and convincing evidence, his affirmative defense that the victim's death was
caused by his gun accidentally going off, the bullet hitting the victim without his fault or Classificatory questions were propounded on the respondent but were refused to be
intention of causing it; hence, is exempt from criminal liability under Article 12, answered. This certainly led the undersigned to cast doubt on respondent's allegations.
paragraph 4 of the Revised Penal Code which reads – The defenses set forth by the respondent are evidentiary in character and best
appreciated in a full-blown trial; and that the same is not sufficient to overcome
The following are exempt from criminal liability: probable cause.39

… Second. The appellant did not see what part of the gun hit the victim.40 There is no
evidence showing that the gun hit a hard object when it fell to the ground, what part of
4. Any person who, while performing a lawful act with due care, causes an injury by the gun hit the ground and the position of the gun when it fell from the appellant's
mere accident without fault or intention of causing it. waist.

The basis for the exemption is the complete absence of intent and negligence on the Third. In answer to the clarificatory questions of the court, the appellant testified that
part of the accused. For the accused to be guilty of a felony, it must be committed either the chamber of his pistol was loaded with bullets and was cocked when he placed it on
with criminal intent or with fault or negligence.33 his right waistline.41 He also testified that the gun's safety lock was on. He was asked if
the gun would fire if the hammer is moved backward with the safety lock in place, and
The elements of this exempting circumstance are (1) a person is performing a lawful act; the appellant admitted that even if he pulled hard on the trigger, the gun would not fire:
(2) with due care; (3) he causes an injury to another by mere accident; and (4) without
any fault or intention of causing it.34 An accident is an occurrence that "happens Q Is this your service firearm?
outside the sway of our will, and although it comes about through some act of our will,
lies beyond the bounds of humanly foreseeable consequences." If the consequences are A Yes, Your Honor.
plainly foreseeable, it will be a case of negligence.
Q So the chamber might have been loaded when you went out of the house?
In Jarco Marketing Corporation v. Court of Appeals,35 this Court held that an accident is
a fortuitive circumstance, event or happening; an event happening without any human A Yes, Your Honor.
agency, or if happening wholly or partly through human agency, an event which under
the circumstance is unusual or unexpected by the person to whom it happens. Q What about the hammer, how was the hammer at that time when you tucked the
Negligence, on the other hand, is the failure to observe, for the protection of the gun in your waistline?
interest of another person, that degree of care, precaution and vigilance which the
circumstances justly demand without which such other person suffers injury. Accident A The hammer was cocked like this.
and negligence are intrinsically contradictory; one cannot exist with the other.36 In
criminal negligence, the injury caused to another should be unintentional, it being COURT:
COURT: (to the parties)
Can you not stipulate that the hammer is moved backwards near the safety grip.
Q Can you not admit that at this position, the accused pulled the trigger, the hammer
ATTY. AND PROS. SINTAY: did not move forward?

Admitted, Your Honor. PROS. SINTAY AND ATTY. PRINCIPE:

ATTY. PEREZ: Admitted, Your Honor.

Yes, Your Honor. COURT: (to the witness)

COURT: (to the witness) Q And therefore at this position, even if I pull the trigger many times, a bullet will not
come out from the muzzle of the gun because the hammer is on a safety locked (sic)?
Q You are a policeman, if there is a bullet inside the barrel of the gun and then the
hammer is moved backwards and therefore it is open, that means that if you pull the A Yes, Your Honor.
trigger, the bullet will fire because the hammer will move forward and then hit the base
of the bullet? Q Even if I pushed it very hard, it will not fire the gun?

A Yes, Your Honor. A Yes, Your Honor.

Q Therefore, the gun was cocked when you came out? Q Alright, I will ask you again a question. If the hammer of the gun is like this and
therefore it is open but it is on a safety lock, there is space between the safety grip
A Yes, Your Honor. which is found below the hammer, there is a space, is it not?

Q You did not place the safety lock before you went out of your house? A Yes, Your Honor.

A I safety (sic) it, sir. Q That even if I pushed the safety grip forward, like this.

Q So when you boarded the motorcycle, the gun was on a safety lock? The Court gave the gun to the accused for him to demonstrate.

A Yes, Your Honor. (to the witness)

Q Will you please place the safety lock of that gun, point it upwards. You push it forward in order to push the hammer. Hard if you want but do not remove
the safety lock.
(witness did as instructed)
(witness did as instructed)
It is now on a safety locked (sic)?
The witness tried to push the safety grip and it does not touch the hammer even if the
A Yes, Your Honor. hammer is cocked.42

Q Pull the trigger if the hammer will move forward? Fourth. The trial court was witness as the appellant's counsel himself proved that the
defense proffered by the appellant was incredible. This can be gleaned from the
(witness did as instructed) decision of the trial court:

A It will not, Your Honor. 3. More importantly, and which the Court considers it as providential, when the counsel
of the accused was holding the gun in a cocked position and the safety lock put in place,
the gun accidentally dropped on the cemented floor of the courtroom and the gun did Q So if you were able to visit your friends on September 27 or 28, 1998 and then
not fire and neither was the safety lock moved to its unlock position to cause the returned to the house of PO3 Lam in the evening, why did you not go to Major Suyo or
hammer of the gun to move forward. The safety lock of the gun remained in the same to your 103 Base?
position as it was when it dropped on the floor.43
A Your Honor, during those days I am really calling Major Suyo.
Fifth. After the shooting, the appellant refused to surrender himself and his service
firearm. He hid from the investigating police officers and concealed himself in the house Q Why did you not go to your office at Camp Crame, Quezon City?
of his friend SPO3 Angelito Lam in Valenzuela City, and transferred from one house to
another for three days to prevent his arrest: A At that time, I did not have money, Your Honor.

Q So did you surrender that afternoon of September 26, 1998? Q What is the connection of you having money to that of informing your officer that
you will surrender?
A No, Your Honor.
A What I know, Your Honor, is that if I do that I will already be detained and that I
Q I thought you were surrendering to Major Suyo? will have no money to spend.

A I was but I was not able to surrender to Major Suyo, Your Honor. ATTY. PRINCIPE: (to the witness)

Q Why, you were already able to talk to Major Suyo? Q Mr. Witness, from the time of the incident up to Sept. 29, 1998, you did not even
visit your family in Barangay Bahay Toro?
A Because at that time I was already confused and did not know what to do, Your
Honor. A No, sir.

ATTY. PRINCIPE: (to the witness) COURT: (to the witness)

Q What is your relation with PO3 Angelito Lam of Valenzuela? Q Did you send somebody to visit your family?

A Just my co-motorcycle unit cop in the TMG, sir. A No, Your Honor.

Q Did I hear you right that you slept at the residence of PO3 Lam for three days? ATTY. PRINCIPE: (to the witness)

A Yes, sir. Q Did you cause to blotter the shooting incident of Vincent?

Q Why instead of going home to your residence at Bahay Toro? A I was not able to do that, sir.

A Because I am worried, sir. Q You did not even talk to the Bgy. Officials in Bgy. Bahay Toro?

COURT: (to the witness) A No sir, because I already brought the child to the hospital.44

Q So what did you do for three days in the house of PO3 Lam? The conduct of the appellant after the shooting belies his claim that the death of the
victim was accidental and that he was not negligent.
A During daytime, I go to my friends, other friends and in the evening, I go back to
the house of PO3 Lam, Your Honor. We agree with the encompassing disquisitions of the trial court in its decision on this
matter:
The coup de grace against the claim of the accused, a policeman, that the victim was …
accidentally shot was his failure to surrender himself and his gun immediately after the
incident. As a police officer, it is hard to believe that he would choose to flee and keep Q: And in what place that Vincent was shot by Fallorina?
himself out of sight for about three (3) days if he indeed was not at fault. It is beyond
human comprehension that a policeman, who professes innocence would come out into A: He was at the roof of the karinderia, sir.
the open only three (3) days from the incident and claim that the victim was accidentally
shot. Human behavior dictates, especially when the accused is a policeman, that when Q: Was there any companion of Vincent?
one is innocent of some acts or when one is in the performance of a lawful act but
causes injury to another without fault or negligence, he would, at the first moment, A: Yes, sir.
surrender to the authorities and give an account of the accident. His failure to do so
would invite suspicion and whatever account or statement he would give later on Q: What was the position of Vincent at that time that you saw him and Fallorina shot
becomes doubtful. him?

For the accused, therefore, to claim that Vincent was accidentally shot is odious, if not, A: "Nakatalikod po siya."
an insult to human intelligence; it is incredible and unbelievable, and more of a fantasy
than a reality. It was a deliberate and intentional act, contrary to accused's claim, that it …
happened outside the sway of his will.45
Q: You included in this Exhibit O your drawing the figure of a certain Jeffrey and you
It is a well-entrenched rule that findings of facts of the trial court, its calibration of the and his tricycle? Why did you include this drawing?
testimonies of the witnesses, its assessment of the credibility of the said witnesses and
the probative weight of their testimonies are accorded high respect, if not conclusive A: Because it was in the tricycle where Vincent was boarded to and brought to the
effect by the appellate court, as the trial judge was in a better position to observe the hospital.
demeanor and conduct of the witnesses as they testified.46 We have carefully reviewed
the records of the case and found no reason to deviate from the findings of the trial (Witness referring to Exhibit O-11)
court.
Q: And who was the driver of that tricycle?
The testimony of prosecution witness Ricardo Salvo deserves credence. He testified in a
positive and straightforward manner, which testimony had the earmarks of truth and A: It was Jeffrey who drove the tricycle, sir.
sincerity. Even as he was subjected to a grueling cross-examination by the appellant's
counsel, he never wavered in his testimony. He positively identified the appellant as the Q: You also drew here a motorcycle already marked as Exhibit O-7. Why did you
assailant and narrated in detail how the latter deliberately aimed his gun and shot the include the motorcycle?
victim. The relevant portions of his testimony are quoted:
A: Because Fallorina was riding on that motorcycle at that time.
Q: While playing basketball with Nono, LA and Puti, do you remember of any unusual
incident which took place? COURT: (to the witness)

A: Yes, sir. Q: So when Ferdinand Fallorina shot the boy, the motorcycle was moving?

Q: What was that unusual incident? A: It was stationary, your Honor.

A: When Vincent was shot, sir. Q: Did you see where he came from, I am referring to Fallorina before you saw him
shot the boy?
Q: Who shot Vincent?

A: Ferdinand Fallorina, sir.
A: He came from their house, Your Honor.
A: I usually see him in that place at Sitio Militar, especially on Sundays, sir.
Q: What was his attire, I am referring to Ferdinand Fallorina?

A: He was wearing white shirt and blue pants, Your Honor.
Q: How many shots did you hear?

A: Only one, sir.
ATTY. PRINCIPE: (to the witness)
Q: Do you recognize the gun used by Fallorina?
Q: At that time that Fallorina shot the victim, was Buddha still there?
A: Yes, sir.
A: He ran, sir. He jumped in this place, sir.
Q: What was that gun?
(Witness is pointing to a place near the canal already marked as Exhibit O-14).
A: .45 cal., sir.
Q: Now from the witness stand that you are now seated. Can you tell the Court how
far where (sic) you from Fallorina at that time of the shooting? Q: Are you familiar with .45 cal.?

COURT: A: No, sir.

Can the prosecution and the accused stipulate that the distance pointed to by the Q: Why do you know that it was .45 cal.?
witness is more or less 7 meters.
A: Because that kind of gun, I usually see that in the movies, sir.

Q: Ricardo, you said that you have known Fallorina for two (2) years and you saw him
ATTY. PRINCIPE: (to the witness) shot Vincent on September 26, 1998 at around 2:30 in the afternoon. Please look
around the courtroom now and point at the person of PO3 Ferdinand Fallorina?
Q: How about the distance of Fallorina from Vincent, can you tell that?
CT. INTERPRETER:
COURT: (to the witness)
Witness is pointing to a male person the one seated at the back of the lady and wearing
Can you point a distance between Fallorina and the boy at that time the body (sic) was a yellow shirt and maong pants and when asked of his name, he stated his name as
shot? Ferdinand Fallorina.

COURT: ATTY. PRINCIPE: (to the witness)

10 meters more or less? Q: Can you tell to the Court whether you heard utterances at that time that he shot
the victim?


Q: How long have you known Ferdinand Fallorina before the incident?
A: Yes, sir.
A: More or less two years, sir.
Q: What was that?
Q: Why do you know him?
A: "Putang inang mga batang ito, hindi kayo magsisibaba diyan!"
the young victim's state of helplessness.51 Minor children, who by reason of their
… tender years, cannot be expected to put up a defense. When an adult person illegally
attacks a child, treachery exists.52 The abuse of superior strength as alleged in the
Q: After Fallorina shot Vincent Jorojoro, you saw Vincent Jorojoro falling from the Information is already absorbed by treachery and need not be considered as a separate
roof, what about Fallorina, what did he do? aggravating circumstance.53

A: He was still on board his motorcycle and then he went at the back of the We, however, note that the trial court appreciated the aggravating circumstance of
karinderia where Vincent fell, Your Honor. abuse of public position in this case. We reverse the trial court on this score.

Q: And after he went at the back of the karinderia and looked at Vincent Jorojoro, There is no dispute that the appellant is a policeman and that he used his service
what did he do? firearm, the .45 caliber pistol, in shooting the victim. However, there is no evidence on
record that the appellant took advantage of his position as a policeman when he shot
A: He carried Vincent, Your Honor. the victim.54 The shooting occurred only when the appellant saw the victim on the
rooftop playing with his kite. The trial court erred in appreciating abuse of public
Q: And after carrying Vincent, what did he do? position against the appellant.

A: He boarded Vincent in the tricycle. The trial court did not, however, err in ruling that the appellant is not entitled to the
mitigating circumstance of voluntary surrender. Surrender is said to be voluntary when
Q: What about the gun, what did he do with the gun? it is done by the accused spontaneously and made in such a manner that it shows the
intent of the accused to surrender unconditionally to the authorities, either because he
A: I do not know anymore.47 acknowledges his guilt or he wishes to save them the trouble and expense necessarily
incurred in his search and capture.55
The appellant even uttered invectives at the victim and Whilcon before he shot the
victim. In fine, his act was deliberate and intentional. In this case, the appellant deliberately evaded arrest, hid in the house of PO3 Lam in
Valenzuela City, and even moved from one house to another for three days. The
It bears stressing that of the eyewitnesses listed in the Information as witnesses for the appellant was a policeman who swore to obey the law. He made it difficult for his
prosecution, only Ricardo Salvo remained steadfast after he was brought under the brother-officers to arrest him and terminate their investigation. It was only after the
Witness Protection Program of the Department of Justice. He explained that the reason lapse of three days that the appellant gave himself up and surrendered his service
why he testified for the prosecution, despite the fact that the appellant was a firearm.
policeman, was because he pitied the victim's mother who was always crying,48 unable
to obtain justice for her son. We find no ill motive why Ricardo would falsely testify Under Article 248 of the Revised Penal Code, the penalty for murder is reclusion
against the appellant. It was only his purest intention of ferreting out the truth in this perpetua to death. Since there is no modifying circumstance in the commission of the
incident and that justice be done to the victim.49 Hence, the testimony of Ricardo is crime, the appellant should be sentenced to suffer the penalty of reclusion perpetua,
entitled to full faith and credence. conformably to Article 63 of the Revised Penal Code.

The Crime Committed by the Appellant IN LIGHT OF ALL THE FOREGOING, the Decision of the Regional Trial Court of Quezon
City, Branch 95, is AFFIRMED WITH MODIFICATION. The appellant PO3 Ferdinand
We agree with the trial court that the appellant committed murder under Article 248 of Fallorina y Fernando is found guilty beyond reasonable doubt of the crime of murder
the Revised Penal Code qualified by treachery. As the trial court correctly pointed out, under Article 248 of the Revised Penal Code and, there being no modifying
Vincent was shot intentionally while his back was turned against the appellant. The little circumstances in the commission of the crime, is hereby sentenced to suffer the penalty
boy was merely flying his kite and was ready to get down from the roof when the of reclusion perpetua. He is also ordered to pay the heirs of the victim Vincent Jorojoro,
appellant fired a shot directed at him. The essence of treachery is the sudden and Jr. the amount of P49,174 as actual damages; P50,000 as moral damages; P50,000 as
unexpected attack on an unsuspecting victim without the slightest provocation on his civil indemnity; and P25,000 as exemplary damages.
part.50 Nonetheless, Vincent was an eleven-year-old boy. He could not possibly put up a
defense against the appellant, a police officer who was armed with a gun. It is not so SO ORDERED.
much as to put emphasis on the age of the victim, rather it is more of a description of
5. 2. On the third cause of action, to pay to the plaintiff the amount of P18,200.00,
Republic of the Philippines representing the unrealized profit of 10% included in the contract price of P200,000.00
SUPREME COURT plus legal interest thereon from July 20,1967;
Manila
3. On the fourth cause of action, to pay to the plaintiff the amount of P20,000.00 as and
EN BANC for moral damages, with legal interest thereon from July 20, 1 967;

G.R. No. L-49188 January 30, 1990 4. On the sixth cause of action, to pay to the plaintiff the amount of P5,000.00 damages
as and for attorney's fee.
PHILIPPINE AIRLINES, INC., petitioner,
vs. Plaintiffs second and fifth causes of action, and defendant's counterclaim, are dismissed.
HON. COURT OF APPEALS, HON. JUDGE RICARDO D. GALANO, Court of First Instance of
Manila, Branch XIII, JAIME K. DEL ROSARIO, Deputy Sheriff, Court of First Instance, With costs against the defendant. (CA Rollo, p. 18)
Manila, and AMELIA TAN, respondents.
On July 28, 1972, the petitioner filed its appeal with the Court of Appeals. The case was
docketed as CA-G.R. No. 51079-R.

GUTIERREZ, JR., J.: On February 3, 1977, the appellate court rendered its decision, the dispositive portion of
which reads:
Behind the simple issue of validity of an alias writ of execution in this case is a more
fundamental question. Should the Court allow a too literal interpretation of the Rules IN VIEW WHEREOF, with the modification that PAL is condemned to pay plaintiff the
with an open invitation to knavery to prevail over a more discerning and just approach? sum of P25,000.00 as damages and P5,000.00 as attorney's fee, judgment is affirmed,
Should we not apply the ancient rule of statutory construction that laws are to be with costs. (CA Rollo, p. 29)
interpreted by the spirit which vivifies and not by the letter which killeth?
Notice of judgment was sent by the Court of Appeals to the trial court and on dates
This is a petition to review on certiorari the decision of the Court of Appeals in CA-G.R. subsequent thereto, a motion for reconsideration was filed by respondent Amelia Tan,
No. 07695 entitled "Philippine Airlines, Inc. v. Hon. Judge Ricardo D. Galano, et al.", duly opposed by petitioner PAL.
dismissing the petition for certiorari against the order of the Court of First Instance of
Manila which issued an alias writ of execution against the petitioner. On May 23,1977, the Court of Appeals rendered its resolution denying the respondent's
motion for reconsideration for lack of merit.
The petition involving the alias writ of execution had its beginnings on November 8,
1967, when respondent Amelia Tan, under the name and style of Able Printing Press No further appeal having been taken by the parties, the judgment became final and
commenced a complaint for damages before the Court of First Instance of Manila. The executory and on May 31, 1977, judgment was correspondingly entered in the case.
case was docketed as Civil Case No. 71307, entitled Amelia Tan, et al. v. Philippine
Airlines, Inc. The case was remanded to the trial court for execution and on September 2,1977,
respondent Amelia Tan filed a motion praying for the issuance of a writ of execution of
After trial, the Court of First Instance of Manila, Branch 13, then presided over by the the judgment rendered by the Court of Appeals. On October 11, 1977, the trial court,
late Judge Jesus P. Morfe rendered judgment on June 29, 1972, in favor of private presided over by Judge Galano, issued its order of execution with the corresponding writ
respondent Amelia Tan and against petitioner Philippine Airlines, Inc. (PAL) as follows: in favor of the respondent. The writ was duly referred to Deputy Sheriff Emilio Z. Reyes
of Branch 13 of the Court of First Instance of Manila for enforcement.
WHEREFORE, judgment is hereby rendered, ordering the defendant Philippine Air Lines:
Four months later, on February 11, 1978, respondent Amelia Tan moved for the
1. On the first cause of action, to pay to the plaintiff the amount of P75,000.00 as actual issuance of an alias writ of execution stating that the judgment rendered by the lower
damages, with legal interest thereon from plaintiffs extra-judicial demand made by the court, and affirmed with modification by the Court of Appeals, remained unsatisfied.
letter of July 20, 1967;
On March 1, 1978, the petitioner filed an opposition to the motion for the issuance of AN ALIAS WRIT OF EXECUTION CANNOT BE ISSUED WITHOUT PRIOR RETURN OF THE
an alias writ of execution stating that it had already fully paid its obligation to plaintiff ORIGINAL WRIT BY THE IMPLEMENTING OFFICER.
through the deputy sheriff of the respondent court, Emilio Z. Reyes, as evidenced by
cash vouchers properly signed and receipted by said Emilio Z. Reyes. II

On March 3,1978, the Court of Appeals denied the issuance of the alias writ for being PAYMENT OF JUDGMENT TO THE IMPLEMENTING OFFICER AS DIRECTED IN THE WRIT
premature, ordering the executing sheriff Emilio Z. Reyes to appear with his return and OF EXECUTION CONSTITUTES SATISFACTION OF JUDGMENT.
explain the reason for his failure to surrender the amounts paid to him by petitioner
PAL. However, the order could not be served upon Deputy Sheriff Reyes who had III
absconded or disappeared.
INTEREST IS NOT PAYABLE WHEN THE DECISION IS SILENT AS TO THE PAYMENT
On March 28, 1978, motion for the issuance of a partial alias writ of execution was filed THEREOF.
by respondent Amelia Tan.
IV
On April 19, 1978, respondent Amelia Tan filed a motion to withdraw "Motion for Partial
Alias Writ of Execution" with Substitute Motion for Alias Writ of Execution. On May 1, SECTION 5, RULE 39, PARTICULARLY REFERS TO LEVY OF PROPERTY OF JUDGMENT
1978, the respondent Judge issued an order which reads: DEBTOR AND DISPOSAL OR SALE THEREOF TO SATISFY JUDGMENT.

As prayed for by counsel for the plaintiff, the Motion to Withdraw 'Motion for Partial Can an alias writ of execution be issued without a prior return of the original writ by the
Alias Writ of Execution with Substitute Motion for Alias Writ of Execution is hereby implementing officer?
granted, and the motion for partial alias writ of execution is considered withdrawn.
We rule in the affirmative and we quote the respondent court's decision with approval:
Let an Alias Writ of Execution issue against the defendant for the fall satisfaction of the
judgment rendered. Deputy Sheriff Jaime K. del Rosario is hereby appointed Special The issuance of the questioned alias writ of execution under the circumstances here
Sheriff for the enforcement thereof. (CA Rollo, p. 34) obtaining is justified because even with the absence of a Sheriffs return on the original
writ, the unalterable fact remains that such a return is incapable of being obtained (sic)
On May 18, 1978, the petitioner received a copy of the first alias writ of execution because the officer who is to make the said return has absconded and cannot be
issued on the same day directing Special Sheriff Jaime K. del Rosario to levy on brought to the Court despite the earlier order of the court for him to appear for this
execution in the sum of P25,000.00 with legal interest thereon from July 20,1967 when purpose. (Order of Feb. 21, 1978, Annex C, Petition). Obviously, taking cognizance of this
respondent Amelia Tan made an extra-judicial demand through a letter. Levy was also circumstance, the order of May 11, 1978 directing the issuance of an alias writ was
ordered for the further sum of P5,000.00 awarded as attorney's fees. therefore issued. (Annex D. Petition). The need for such a return as a condition
precedent for the issuance of an alias writ was justifiably dispensed with by the court
On May 23, 1978, the petitioner filed an urgent motion to quash the alias writ of below and its action in this regard meets with our concurrence. A contrary view will
execution stating that no return of the writ had as yet been made by Deputy Sheriff produce an abhorent situation whereby the mischief of an erring officer of the court
Emilio Z. Reyes and that the judgment debt had already been fully satisfied by the could be utilized to impede indefinitely the undisputed and awarded rights which a
petitioner as evidenced by the cash vouchers signed and receipted by the server of the prevailing party rightfully deserves to obtain and with dispatch. The final judgment in
writ of execution, Deputy Sheriff Emilio Z. Reyes. this case should not indeed be permitted to become illusory or incapable of execution
for an indefinite and over extended period, as had already transpired. (Rollo, pp. 35-36)
On May 26,1978, the respondent Jaime K. del Rosario served a notice of garnishment on
the depository bank of petitioner, Far East Bank and Trust Company, Rosario Branch, Judicium non debet esse illusorium; suum effectum habere debet (A judgment ought
Binondo, Manila, through its manager and garnished the petitioner's deposit in the said not to be illusory it ought to have its proper effect).
bank in the total amount of P64,408.00 as of May 16, 1978. Hence, this petition for
certiorari filed by the Philippine Airlines, Inc., on the grounds that: Indeed, technicality cannot be countenanced to defeat the execution of a judgment for
execution is the fruit and end of the suit and is very aptly called the life of the law
I (Ipekdjian Merchandising Co. v. Court of Tax Appeals, 8 SCRA 59 [1963]; Commissioner
of Internal Revenue v. Visayan Electric Co., 19 SCRA 697, 698 [1967]). A judgment
cannot be rendered nugatory by the unreasonable application of a strict rule of Payment shall be made to the person in whose favor the obligation has been
procedure. Vested rights were never intended to rest on the requirement of a return, constituted, or his successor in interest, or any person authorized to receive it.
the office of which is merely to inform the court and the parties, of any and all actions (Emphasis supplied)
taken under the writ of execution. Where such information can be established in some
other manner, the absence of an executing officer's return will not preclude a judgment Thus, payment must be made to the obligee himself or to an agent having authority,
from being treated as discharged or being executed through an alias writ of execution as express or implied, to receive the particular payment (Ulen v. Knecttle 50 Wyo 94, 58
the case may be. More so, as in the case at bar. Where the return cannot be expected to [2d] 446, 111 ALR 65). Payment made to one having apparent authority to receive the
be forthcoming, to require the same would be to compel the enforcement of rights money will, as a rule, be treated as though actual authority had been given for its
under a judgment to rest on an impossibility, thereby allowing the total avoidance of receipt. Likewise, if payment is made to one who by law is authorized to act for the
judgment debts. So long as a judgment is not satisfied, a plaintiff is entitled to other creditor, it will work a discharge (Hendry v. Benlisa 37 Fla. 609, 20 SO 800,34 LRA 283).
writs of execution (Government of the Philippines v. Echaus and Gonzales, 71 Phil. 318). The receipt of money due on ajudgment by an officer authorized by law to accept it will,
It is a well known legal maxim that he who cannot prosecute his judgment with effect, therefore, satisfy the debt (See 40 Am Jm 729, 25; Hendry v. Benlisa supra; Seattle v.
sues his case vainly. Stirrat 55 Wash. 104 p. 834,24 LRA [NS] 1275).

More important in the determination of the propriety of the trial court's issuance of an The theory is where payment is made to a person authorized and recognized by the
alias writ of execution is the issue of satisfaction of judgment. creditor, the payment to such a person so authorized is deemed payment to the
creditor. Under ordinary circumstances, payment by the judgment debtor in the case at
Under the peculiar circumstances surrounding this case, did the payment made to the bar, to the sheriff should be valid payment to extinguish the judgment debt.
absconding sheriff by check in his name operate to satisfy the judgment debt? The Court
rules that the plaintiff who has won her case should not be adjudged as having sued in There are circumstances in this case, however, which compel a different conclusion.
vain. To decide otherwise would not only give her an empty but a pyrrhic victory.
The payment made by the petitioner to the absconding sheriff was not in cash or legal
It should be emphasized that under the initial judgment, Amelia Tan was found to have tender but in checks. The checks were not payable to Amelia Tan or Able Printing Press
been wronged by PAL. but to the absconding sheriff.

She filed her complaint in 1967. Did such payments extinguish the judgment debt?

After ten (10) years of protracted litigation in the Court of First Instance and the Court of Article 1249 of the Civil Code provides:
Appeals, Ms. Tan won her case.
The payment of debts in money shall be made in the currency stipulated, and if it is not
It is now 1990. possible to deliver such currency, then in the currency which is legal tender in the
Philippines.
Almost twenty-two (22) years later, Ms. Tan has not seen a centavo of what the courts
have solemnly declared as rightfully hers. Through absolutely no fault of her own, Ms. The delivery of promissory notes payable to order, or bills of exchange or other
Tan has been deprived of what, technically, she should have been paid from the start, mercantile documents shall produce the effect of payment only when they have been
before 1967, without need of her going to court to enforce her rights. And all because cashed, or when through the fault of the creditor they have been impaired.
PAL did not issue the checks intended for her, in her name.
In the meantime, the action derived from the original obligation shall be held in
Under the peculiar circumstances of this case, the payment to the absconding sheriff by abeyance.
check in his name did not operate as a satisfaction of the judgment debt.
In the absence of an agreement, either express or implied, payment means the
In general, a payment, in order to be effective to discharge an obligation, must be made discharge of a debt or obligation in money (US v. Robertson, 5 Pet. [US] 641, 8 L. ed.
to the proper person. Article 1240 of the Civil Code provides: 257) and unless the parties so agree, a debtor has no rights, except at his own peril, to
substitute something in lieu of cash as medium of payment of his debt (Anderson v. Gill,
79 Md.. 312, 29 A 527, 25 LRA 200,47 Am. St. Rep. 402). Consequently, unless
authorized to do so by law or by consent of the obligee a public officer has no authority
to accept anything other than money in payment of an obligation under a judgment safer procedure. Actual transfer of funds takes place within the safety of bank premises.
being executed. Strictly speaking, the acceptance by the sheriff of the petitioner's These practices are perfectly legal. The object is always the safe and incorrupt execution
checks, in the case at bar, does not, per se, operate as a discharge of the judgment debt. of the judgment.

Since a negotiable instrument is only a substitute for money and not money, the It is, indeed, out of the ordinary that checks intended for a particular payee are made
delivery of such an instrument does not, by itself, operate as payment (See. 189, Act out in the name of another. Making the checks payable to the judgment creditor would
2031 on Negs. Insts.; Art. 1249, Civil Code; Bryan Landon Co. v. American Bank, 7 Phil. have prevented the encashment or the taking of undue advantage by the sheriff, or any
255; Tan Sunco v. Santos, 9 Phil. 44; 21 R.C.L. 60, 61). A check, whether a manager's person into whose hands the checks may have fallen, whether wrongfully or in behalf of
check or ordinary cheek, is not legal tender, and an offer of a check in payment of a debt the creditor. The issuance of the checks in the name of the sheriff clearly made possible
is not a valid tender of payment and may be refused receipt by the obligee or creditor. the misappropriation of the funds that were withdrawn.
Mere delivery of checks does not discharge the obligation under a judgment. The
obligation is not extinguished and remains suspended until the payment by commercial As explained and held by the respondent court:
document is actually realized (Art. 1249, Civil Code, par. 3).
... [K]nowing as it does that the intended payment was for the private party respondent
If bouncing checks had been issued in the name of Amelia Tan and not the Sheriff's, Amelia Tan, the petitioner corporation, utilizing the services of its personnel who are or
there would have been no payment. After dishonor of the checks, Ms. Tan could have should be knowledgeable about the accepted procedures and resulting consequences of
run after other properties of PAL. The theory is that she has received no value for what the checks drawn, nevertheless, in this instance, without prudence, departed from what
had been awarded her. Because the checks were drawn in the name of Emilio Z. Reyes, is generally observed and done, and placed as payee in the checks the name of the
neither has she received anything. The same rule should apply. errant Sheriff and not the name of the rightful payee. Petitioner thereby created a
situation which permitted the said Sheriff to personally encash said checks and
It is argued that if PAL had paid in cash to Sheriff Reyes, there would have been payment misappropriate the proceeds thereof to his exclusive personal benefit. For the prejudice
in full legal contemplation. The reasoning is logical but is it valid and proper? Logic has that resulted, the petitioner himself must bear the fault. The judicial guideline which we
its limits in decision making. We should not follow rulings to their logical extremes if in take note of states as follows:
doing so we arrive at unjust or absurd results.
As between two innocent persons, one of whom must suffer the consequence of a
In the first place, PAL did not pay in cash. It paid in cheeks. breach of trust, the one who made it possible by his act of confidence must bear the
loss. (Blondeau, et al. v. Nano, et al., L-41377, July 26, 1935, 61 Phil. 625)
And second, payment in cash always carries with it certain cautions. Nobody hands over
big amounts of cash in a careless and inane manner. Mature thought is given to the Having failed to employ the proper safeguards to protect itself, the judgment debtor
possibility of the cash being lost, of the bearer being waylaid or running off with what he whose act made possible the loss had but itself to blame.
is carrying for another. Payment in checks is precisely intended to avoid the possibility
of the money going to the wrong party. The situation is entirely different where a Sheriff The attention of this Court has been called to the bad practice of a number of executing
seizes a car, a tractor, or a piece of land. Logic often has to give way to experience and officers, of requiring checks in satisfaction of judgment debts to be made out in their
to reality. Having paid with checks, PAL should have done so properly. own names. If a sheriff directs a judgment debtor to issue the checks in the sheriff's
name, claiming he must get his commission or fees, the debtor must report the sheriff
Payment in money or cash to the implementing officer may be deemed absolute immediately to the court which ordered the execution or to the Supreme Court for
payment of the judgment debt but the Court has never, in the least bit, suggested that appropriate disciplinary action. Fees, commissions, and salaries are paid through regular
judgment debtors should settle their obligations by turning over huge amounts of cash channels. This improper procedure also allows such officers, who have sixty (60) days
or legal tender to sheriffs and other executing officers. Payment in cash would result in within which to make a return, to treat the moneys as their personal finds and to
damage or interminable litigations each time a sheriff with huge amounts of cash in his deposit the same in their private accounts to earn sixty (60) days interest, before said
hands decides to abscond. finds are turned over to the court or judgment creditor (See Balgos v. Velasco, 108 SCRA
525 [1981]). Quite as easily, such officers could put up the defense that said checks had
As a protective measure, therefore, the courts encourage the practice of payments by been issued to them in their private or personal capacity. Without a receipt evidencing
cheek provided adequate controls are instituted to prevent wrongful payment and payment of the judgment debt, the misappropriation of finds by such officers becomes
illegal withdrawal or disbursement of funds. If particularly big amounts are involved, clean and complete. The practice is ingenious but evil as it unjustly enriches court
escrow arrangements with a bank and carefully supervised by the court would be the personnel at the expense of litigants and the proper administration of justice. The
temptation could be far greater, as proved to be in this case of the absconding sheriff. debtor's property into an amount equal to that due, and, it may be done otherwise than
The correct and prudent thing for the petitioner was to have issued the checks in the upon an execution (Section 47, Rule 39). Levy and delivery by an execution officer are
intended payee's name. not prerequisites to the satisfaction of a judgment when the same has already been
realized in fact (Section 47, Rule 39). Execution is for the sheriff to accomplish while
The pernicious effects of issuing checks in the name of a person other than the intended satisfaction of the judgment is for the creditor to achieve. Section 15, Rule 39 merely
payee, without the latter's agreement or consent, are as many as the ways that an artful provides the sheriff with his duties as executing officer including delivery of the
mind could concoct to get around the safeguards provided by the law on negotiable proceeds of his levy on the debtor's property to satisfy the judgment debt. It is but to
instruments. An angry litigant who loses a case, as a rule, would not want the winning stress that the implementing officer's duty should not stop at his receipt of payments
party to get what he won in the judgment. He would think of ways to delay the winning but must continue until payment is delivered to the obligor or creditor.
party's getting what has been adjudged in his favor. We cannot condone that practice
especially in cases where the courts and their officers are involved. We rule against the Finally, we find no error in the respondent court's pronouncement on the inclusion of
petitioner. interests to be recovered under the alias writ of execution. This logically follows from
our ruling that PAL is liable for both the lost checks and interest. The respondent court's
Anent the applicability of Section 15, Rule 39, as follows: decision in CA-G.R. No. 51079-R does not totally supersede the trial court's judgment in
Civil Case No. 71307. It merely modified the same as to the principal amount awarded as
Section 15. Execution of money judgments. — The officer must enforce an execution of actual damages.
a money judgment by levying on all the property, real and personal of every name and
nature whatsoever, and which may be disposed of for value, of the judgment debtor not WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The
exempt from execution, or on a sufficient amount of such property, if they be sufficient, judgment of the respondent Court of Appeals is AFFIRMED and the trial court's issuance
and selling the same, and paying to the judgment creditor, or his attorney, so much of of the alias writ of execution against the petitioner is upheld without prejudice to any
the proceeds as will satisfy the judgment. ... action it should take against the errant sheriff Emilio Z. Reyes. The Court Administrator
is ordered to follow up the actions taken against Emilio Z. Reyes.
the respondent court held:
SO ORDERED.
We are obliged to rule that the judgment debt cannot be considered satisfied and
therefore the orders of the respondent judge granting the alias writ of execution may Fernan, C.J., Cruz, Paras, Bidin, Griño-Aquino, Medialdea and Regalado, JJ., concur.
not be pronounced as a nullity.

xxx xxx xxx

It is clear and manifest that after levy or garnishment, for a judgment to be executed
there is the requisite of payment by the officer to the judgment creditor, or his attorney, Separate Opinions
so much of the proceeds as will satisfy the judgment and none such payment had been
concededly made yet by the absconding Sheriff to the private respondent Amelia Tan.
The ultimate and essential step to complete the execution of the judgment not having
been performed by the City Sheriff, the judgment debt legally and factually remains
unsatisfied.
NARVASA, J., dissenting:
Strictly speaking execution cannot be equated with satisfaction of a judgment. Under
unusual circumstances as those obtaining in this petition, the distinction comes out The execution of final judgments and orders is a function of the sheriff, an officer of the
clearly. court whose authority is by and large statutorily determined to meet the particular
exigencies arising from or connected with the performance of the multifarious duties of
Execution is the process which carries into effect a decree or judgment (Painter v. the office. It is the acknowledgment of the many dimensions of this authority, defined
Berglund, 31 Cal. App. 2d. 63, 87 P 2d 360, 363; Miller v. London, 294 Mass 300, 1 NE 2d by statute and chiselled by practice, which compels me to disagree with the decision
198, 200; Black's Law Dictionary), whereas the satisfaction of a judgment is the payment reached by the majority.
of the amount of the writ, or a lawful tender thereof, or the conversion by sale of the
A consideration of the wide latitude of discretion allowed the sheriff as the officer of the the redemptioner or if he has or acquires any lien other than that upon which the
court most directly involved with the implementation and execution of final judgments redemption was made, notice thereof must in like manner be given to the officer and
and orders persuades me that PAL's payment to the sheriff of its judgment debt to filed with the registrar of deeds," the effect of failure to file such notice being that
Amelia Tan, though made by check issued in said officer's name, lawfully satisfied said redemption may be made without paying such assessments, taxes, or liens (sec. 30, Rule
obligation and foreclosed further recourse therefor against PAL, notwithstanding the 39).
sheriffs failure to deliver to Tan the proceeds of the check.
The sheriff may likewise be appointed a receiver of the property of the judgment debtor
It is a matter of history that the judiciary .. is an inherit or of the Anglo-American where the appointment of the receiver is deemed necessary for the execution of the
tradition. While the common law as such .. "is not in force" in this jurisdiction, "to judgment (sec. 32, Rule 39).
breathe the breath of life into many of the institutions, introduced [here] under
American sovereignty, recourse must be had to the rules, principles and doctrines of the At any time before the sale of property on execution, the judgment debtor may prevent
common law under whose protecting aegis the prototypes of these institutions had the sale by paying the sheriff the amount required by the execution and the costs that
their birth" A sheriff is "an officer of great antiquity," and was also called the shire have been incurred therein (sec. 20, Rule 39).
reeve. A shire in English law is a Saxon word signifying a division later called a county. A
reeve is an ancient English officer of justice inferior in rank to an alderman .. appointed The sheriff is also authorized to receive payments on account of the judgment debt
to process, keep the King's peace, and put the laws in execution. From a very remote tendered by "a person indebted to the judgment debtor," and his "receipt shall be a
period in English constitutional history .. the shire had another officer, namely the shire sufficient discharge for the amount so paid or directed to be credited by the judgment
reeve or as we say, the sheriff. .. The Sheriff was the special representative of the legal creditor on the execution" (sec. 41, Rule 39).
or central authority, and as such usually nominated by the King. .. Since the earliest
times, both in England and the United States, a sheriff has continued his status as an Now, obviously, the sheriff s sale extinguishes the liability of the judgment debtor either
adjunct of the court .. . As it was there, so it has been in the Philippines from the time of in fun, if the price paid by the highest bidder is equal to, or more than the amount of the
the organization of the judiciary .. . (J. Fernando's concurring opinion in Bagatsing v. judgment or pro tanto if the price fetched at the sale be less. Such extinction is not in
Herrera, 65 SCRA 434) any way dependent upon the judgment creditor's receiving the amount realized, so that
the conversion or embezzlement of the proceeds of the sale by the sheriff does not
One of a sheriff s principal functions is to execute final judgments and orders. The Rules revive the judgment debt or render the judgment creditor liable anew therefor.
of Court require the writs of execution to issue to him, directing him to enforce such
judgments and orders in the manner therein provided (Rule 39). The mode of So, also, the taking by the sheriff of, say, personal property from the judgment debtor
enforcement varies according to the nature of the judgment to be carried out: whether for delivery to the judgment creditor, in fulfillment of the verdict against him,
it be against property of the judgment debtor in his hands or in the hands of a third extinguishes the debtor's liability; and the conversion of said property by the sheriff,
person i e. money judgment), or for the sale of property, real or personal (i.e. does not make said debtor responsible for replacing the property or paying the value
foreclosure of mortgage) or the delivery thereof, etc. (sec. 8, Rule 39). thereof.

Under sec. 15 of the same Rule, the sheriff is empowered to levy on so much of the In the instances where the Rules allow or direct payments to be made to the sheriff, the
judgment debtor's property as may be sufficient to enforce the money judgment and payments may be made by check, but it goes without saying that if the sheriff so
sell these properties at public auction after due notice to satisfy the adjudged amount. It desires, he may require payment to be made in lawful money. If he accepts the check,
is the sheriff who, after the auction sale, conveys to the purchaser the property thus he places himself in a position where he would be liable to the judgment creditor if any
sold (secs. 25, 26, 27, Rule 39), and pays the judgment creditor so much of the proceeds damages are suffered by the latter as a result of the medium in which payment was
as will satisfy the judgment. When the property sold by him on execution is an made (Javellana v. Mirasol, et al., 40 Phil. 761). The validity of the payment made by the
immovable which consequently gives rise to a light of redemption on the part of the judgment debtor, however, is in no wise affected and the latter is discharged from his
judgment debtor and others (secs. 29, 30, Rule 39), it is to him (or to the purchaser or obligation to the judgment creditor as of the moment the check issued to the sheriff is
redemptioner that the payments may be made by those declared by law as entitled to encashed and the proceeds are received by Id. office. The issuance of the check to a
redeem (sec. 31, Rule 39); and in this situation, it becomes his duty to accept payment person authorized to receive it (Art. 1240, Civil Code; See. 46 of the Code of Civil
and execute the certificate of redemption (Enage v. Vda. y Hijos de Escano, 38 Phil. 657, Procedure; Enage v. Vda y Hijos de Escano, 38 Phil. 657, cited in Javellana v. Mirasol, 40
cited in Moran, Comments on the Rules of Court, 1979 ed., vol. 2, pp. 326-327). It is also Phil. 761) operates to release the judgment debtor from any further obligations on the
to the sheriff that "written notice of any redemption must be given and a duplicate filed judgment.
with the registrar of deeds of the province, and if any assessments or taxes are paid by
The sheriff is an adjunct of the court; a court functionary whose competence involves ACCORDINGLY, I vote to grant the petition.
both discretion and personal liability (concurring opinion of J. Fernando, citing Uy Piaoco
v. Osmena, 9 Phil. 299, in Bagatsing v. Herrera, 65 SCRA 434). Being an officer of the Melencio-Herrera, Gancayco, J., concurs.
court and acting within the scope of his authorized functions, the sheriff s receipt of the
checks in payment of the judgment execution, may be deemed, in legal contemplation,
as received by the court itself (Lara v. Bayona, 10 May 1955, No. L- 10919).
FELICIANO, J., dissenting:
That the sheriff functions as a conduit of the court is further underscored by the fact
that one of the requisites for appointment to the office is the execution of a bond, I concur in the able dissenting opinions of Narvasa and Padilla, JJ. and would merely
"conditioned (upon) the faithful performance of his (the appointee's) duties .. for the wish to add a few footnotes to their lucid opinions.
delivery or payment to Government, or the person entitled thereto, of all properties or
sums of money that shall officially come into his hands" (sec. 330, Revised 1. Narvasa, J. has demonstrated in detail that a sheriff is authorized by the Rules of
Administrative Code). Court and our case law to receive either legal tender or checks from the judgment
debtor in satisfaction of the judgment debt. In addition, Padilla, J. has underscored the
There is no question that the checks came into the sheriffs possession in his official obligation of the sheriff, imposed upon him by the nature of his office and the law, to
capacity. The court may require of the judgment debtor, in complying with the turn over such legal tender, checks and proceeds of execution sales to the judgment
judgment, no further burden than his vigilance in ensuring that the person he is paying creditor. The failure of a sheriff to effect such turnover and his conversion of the funds
money or delivering property to is a person authorized by the court to receive it. Beyond (or goods) held by him to his own uses, do not have the effect of frustrating payment by
this, further expectations become unreasonable. To my mind, a proposal that would and consequent discharge of the judgment debtor.
make the judgment debtor unqualifiedly the insurer of the judgment creditor's
entitlement to the judgment amount which is really what this case is all about begs the To hold otherwise would be to throw the risk of the sheriff faithfully performing his duty
question. as a public officer upon those members of the general public who are compelled to deal
with him. It seems to me that a judgment debtor who turns over funds or property to
That the checks were made out in the sheriffs name (a practice, by the way, of long and the sheriff can not reasonably be made an insurer of the honesty and integrity of the
common acceptance) is of little consequence if juxtaposed with the extent of the sheriff and that the risk of the sheriff carrying out his duties honestly and faithfully is
authority explicitly granted him by law as the officer entrusted with the power to properly lodged in the State itself The sheriff, like all other officers of the court, is
execute and implement court judgments. The sheriffs requirement that the checks in appointed and paid and controlled and disciplined by the Government, more specifically
payment of the judgment debt be issued in his name was simply an assertion of that by this Court. The public surely has a duty to report possible wrongdoing by a sheriff or
authority; and PAL's compliance cannot in the premises be faulted merely because of similar officer to the proper authorities and, if necessary, to testify in the appropriate
the sheriffs subsequent malfeasance in absconding with the payment instead of turning judicial and administrative disciplinary proceedings. But to make the individual members
it over to the judgment creditor. of the general community insurers of the honest performance of duty of a sheriff, or
other officer of the court, over whom they have no control, is not only deeply unfair to
If payment had been in cash, no question about its validity or of the authority and duty the former. It is also a confession of comprehensive failure and comes too close to an
of the sheriff to accept it in settlement of PAL's judgment obligation would even have abdication of duty on the part of the Court itself. This Court should have no part in that.
arisen. Simply because it was made by checks issued in the sheriff s name does not
warrant reaching any different conclusion. 2. I also feel compelled to comment on the majority opinion written by Gutierrez, J. with
all his customary and special way with words. My learned and eloquent brother in the
As payment to the court discharges the judgment debtor from his responsibility on the Court apparently accepts the proposition that payment by a judgment debtor of cash to
judgment, so too must payment to the person designated by such court and authorized a sheriff produces the legal effects of payment, the sheriff being authorized to accept
to act in its behalf, operate to produce the same effect. such payment. Thus, in page 10 of his ponencia, Gutierrez, J. writes:

It is unfortunate and deserving of commiseration that Amelia Tan was deprived of what The receipt of money due on a judgment by an officer authorized by law to accept it will
was adjudged to her when the sheriff misappropriated the payment made to him by PAL satisfy the debt. (Citations omitted)
in dereliction of his sworn duties. But I submit that her remedy lies, not here and in
reviving liability under a judgment already lawfully satisfied, but elsewhere. The theory is where payment is made to a person authorized and recognized by the
creditor, the payment to such a person so authorized is deemed payment to the
creditor. Under ordinary circumstances, payment by the judgment debtor in the case at bonds before entering upon the performance of their duties and, presumably, to
bar, to the sheriff would be valid payment to extinguish the judgment debt. maintain such bonds in force and effect throughout their stay in office. 2 The judgment
creditor, in circumstances like those of the instant case, could be allowed to execute
Shortly thereafter, however, Gutierrez, J. backs off from the above position and strongly upon the absconding sheriff s bond. 3
implies that payment in cash to the sheriff is sheer imprudence on the part of the
judgment debtor and that therefore, should the sheriff abscond with the cash, the I believe the Petition should be granted and I vote accordingly.
judgment debtor has not validly discharged the judgment debt:

It is argued that if PAL had paid in cash to Sheriff Reyes, there would have been payment
in full legal contemplation. The reasoning is logical but is it valid and proper? PADILLA, J., Dissenting Opinion

In the first place, PAL did not pay in cash. It paid in checks. From the facts that appear to be undisputed, I reach a conclusion different from that of
the majority. Sheriff Emilio Z. Reyes, the trial court's authorized sheriff, armed with a
And second, payment in cash always carries with it certain cautions. Nobody hands over writ of execution to enforce a final money judgment against the petitioner Philippine
big amounts of cash in a careless and inane manner. Mature thought is given to the Airlines (PAL) in favor of private respondent Amelia Tan, proceeded to petitioner PAL's
possibility of the cash being lost, of the bearer being waylaid or running off with what he office to implement the writ.
is carrying for another. Payment in checks is precisely intended to avoid the possibility
of the money going to the wrong party.... There is no question that Sheriff Reyes, in enforcing the writ of execution, was acting
with full authority as an officer of the law and not in his personal capacity. Stated
Payment in money or cash to the implementing officer may be deemed absolute differently, PAL had every right to assume that, as an officer of the law, Sheriff Reyes
payment of the judgment debt but the court has never, in the least bit, suggested that would perform his duties as enjoined by law. It would be grossly unfair to now charge
judgment debtors should settle their obligations by turning over huge amounts of cash PAL with advanced or constructive notice that Mr. Reyes would abscond and not deliver
or legal tender to sheriffs and other executing officers. ... (Emphasis in the original) to the judgment creditor the proceeds of the writ of execution. If a judgment debtor
(Majority opinion, pp. 12-13) cannot rely on and trust an officer of the law, as the Sheriff, whom else can he trust?

There is no dispute with the suggestion apparently made that maximum safety is Pursued to its logical extreme, if PAL had delivered to Sheriff Reyes the amount of the
secured where the judgment debtor delivers to the sheriff not cash but a check made judgment in CASH, i.e. Philippine currency, with the corresponding receipt signed by
out, not in the name of the sheriff, but in the judgment creditor's name. The Sheriff Reyes, this would have been payment by PAL in full legal contemplation, because
fundamental point that must be made, however, is that under our law only cash is legal under Article 1240 of the Civil Code, "payment shall be made to the person in whose
tender and that the sheriff can be compelled to accept only cash and not checks, even if favor the obligation has been constituted or his successor in interest or any person
made out to the name of the judgment creditor. 1 The sheriff could have quite lawfully authorized to receive it." And said payment if made by PAL in cash, i.e., Philippine
required PAL to deliver to him only cash, i.e., Philippine currency. If the sheriff had done currency, to Sheriff Reyes would have satisfied PAL's judgment obligation, as payment is
so, and if PAL had complied with such a requirement, as it would have had to, one a legally recognized mode for extinguishing one's obligation. (Article 1231, Civil Code).
would have to agree that legal payment must be deemed to have been effected. It
requires no particularly acute mind to note that a dishonest sheriff could easily convert Under Sec. 15, Rule 39, Rules of Court which provides that-
the money and abscond. The fact that the sheriff in the instant case required, not cash
to be delivered to him, but rather a check made out in his name, does not change the Sec. 15. Execution of money judgments. — The officer must enforce an execution of a
legal situation. PAL did not thereby become negligent; it did not make the loss anymore money judgment by levying on all the property, real and personal of every name and
possible or probable than if it had instead delivered plain cash to the sheriffs. nature whatsoever, and which may be disposed of for value, of the judgment debtor not
exempt from execution, or on a sufficient amount of such property, if there be
It seems to me that the majority opinion's real premise is the unspoken one that the sufficient, and selling the same, and paying to the judgment creditor, or his attorney, so
judgment debtor should bear the risk of the fragility of the sheriff s virtue until the much of the proceeds as will satisfy the judgment. ... .(emphasis supplied)
money or property parted with by the judgment debtor actually reaches the hands of
the judgment creditor. This brings me back to my earlier point that risk is most it would be the duty of Sheriff Reyes to pay to the judgment creditor the proceeds of
appropriately borne not by the judgment debtor, nor indeed by the judgment creditor, the execution i.e., the cash received from PAL (under the above assumption). But, the
but by the State itself. The Court requires all sheriffs to post good and adequate fidelity duty of the sheriff to pay the cash to the judgment creditor would be a matter separate
the distinct from the fact that PAL would have satisfied its judgment obligation to Melencio-Herrera, Gancayco, Sarmiento, Cortes, JJ., concurs.
Amelia Tan, the judgment creditor, by delivering the cash amount due under the
judgment to Sheriff Reyes.

Did the situation change by PAL's delivery of its two (2) checks totalling P30,000.00
drawn against its bank account, payable to Sheriff Reyes, for account of the judgment
rendered against PAL? I do not think so, because when Sheriff Reyes encashed the Separate Opinions
checks, the encashment was in fact a payment by PAL to Amelia Tan through Sheriff
Reyes, an officer of the law authorized to receive payment, and such payment
discharged PAL'S obligation under the executed judgment.
NARVASA, J., dissenting:
If the PAL cheeks in question had not been encashed by Sheriff Reyes, there would be
no payment by PAL and, consequently no discharge or satisfaction of its judgment The execution of final judgments and orders is a function of the sheriff, an officer of the
obligation. But the checks had been encashed by Sheriff Reyes giving rise to a situation court whose authority is by and large statutorily determined to meet the particular
as if PAL had paid Sheriff Reyes in cash, i.e., Philippine currency. This, we repeat, is exigencies arising from or connected with the performance of the multifarious duties of
payment, in legal contemplation, on the part of PAL and this payment legally discharged the office. It is the acknowledgment of the many dimensions of this authority, defined
PAL from its judgment obligation to the judgment creditor. To be sure, the same by statute and chiselled by practice, which compels me to disagree with the decision
encashment by Sheriff Reyes of PAL's checks delivered to him in his official capacity as reached by the majority.
Sheriff, imposed an obligation on Sheriff Reyes to pay and deliver the proceeds of the
encashment to Amelia Tan who is deemed to have acquired a cause of action against A consideration of the wide latitude of discretion allowed the sheriff as the officer of the
Sheriff Reyes for his failure to deliver to her the proceeds of the encashment. As held: court most directly involved with the implementation and execution of final judgments
and orders persuades me that PAL's payment to the sheriff of its judgment debt to
Payment of a judgment, to operate as a release or satisfaction, even pro tanto must be Amelia Tan, though made by check issued in said officer's name, lawfully satisfied said
made to the plaintiff or to some person authorized by him, or by law, to receive it. The obligation and foreclosed further recourse therefor against PAL, notwithstanding the
payment of money to the sheriff having an execution satisfies it, and, if the plaintiff fails sheriffs failure to deliver to Tan the proceeds of the check.
to receive it, his only remedy is against the officer (Henderson v. Planters' and
Merchants Bank, 59 SO 493, 178 Ala. 420). It is a matter of history that the judiciary .. is an inherit or of the Anglo-American
tradition. While the common law as such .. "is not in force" in this jurisdiction, "to
Payment of an execution satisfies it without regard to whether the officer pays it over to breathe the breath of life into many of the institutions, introduced [here] under
the creditor or misapplies it (340, 33 C.J.S. 644, citing Elliot v. Higgins, 83 N.C. 459). If American sovereignty, recourse must be had to the rules, principles and doctrines of the
defendant consents to the Sheriff s misapplication of the money, however, defendant is common law under whose protecting aegis the prototypes of these institutions had
estopped to claim that the debt is satisfied (340, 33 C.J.S. 644, citing Heptinstall v. their birth" A sheriff is "an officer of great antiquity," and was also called the shire
Medlin 83 N.C. 16). reeve. A shire in English law is a Saxon word signifying a division later called a county. A
reeve is an ancient English officer of justice inferior in rank to an alderman .. appointed
The above rulings find even more cogent application in the case at bar because, as to process, keep the King's peace, and put the laws in execution. From a very remote
contended by petitioner PAL (not denied by private respondent), when Sheriff Reyes period in English constitutional history .. the shire had another officer, namely the shire
served the writ of execution on PAL, he (Reyes) was accompanied by private reeve or as we say, the sheriff. .. The Sheriff was the special representative of the legal
respondent's counsel. Prudence dictated that when PAL delivered to Sheriff Reyes the or central authority, and as such usually nominated by the King. .. Since the earliest
two (2) questioned checks (payable to Sheriff Reyes), private respondent's counsel times, both in England and the United States, a sheriff has continued his status as an
should have insisted on their immediate encashment by the Sheriff with the drawee adjunct of the court .. . As it was there, so it has been in the Philippines from the time of
bank in order to promptly get hold of the amount belonging to his client, the judgment the organization of the judiciary .. . (J. Fernando's concurring opinion in Bagatsing v.
creditor. Herrera, 65 SCRA 434)

ACCORDINGLY, I vote to grant the petition and to quash the court a quo's alias writ of One of a sheriff s principal functions is to execute final judgments and orders. The Rules
execution. of Court require the writs of execution to issue to him, directing him to enforce such
judgments and orders in the manner therein provided (Rule 39). The mode of
enforcement varies according to the nature of the judgment to be carried out: whether So, also, the taking by the sheriff of, say, personal property from the judgment debtor
it be against property of the judgment debtor in his hands or in the hands of a third for delivery to the judgment creditor, in fulfillment of the verdict against him,
person i e. money judgment), or for the sale of property, real or personal (i.e. extinguishes the debtor's liability; and the conversion of said property by the sheriff,
foreclosure of mortgage) or the delivery thereof, etc. (sec. 8, Rule 39). does not make said debtor responsible for replacing the property or paying the value
thereof.
Under sec. 15 of the same Rule, the sheriff is empowered to levy on so much of the
judgment debtor's property as may be sufficient to enforce the money judgment and In the instances where the Rules allow or direct payments to be made to the sheriff, the
sell these properties at public auction after due notice to satisfy the adjudged amount. It payments may be made by check, but it goes without saying that if the sheriff so
is the sheriff who, after the auction sale, conveys to the purchaser the property thus desires, he may require payment to be made in lawful money. If he accepts the check,
sold (secs. 25, 26, 27, Rule 39), and pays the judgment creditor so much of the proceeds he places himself in a position where he would be liable to the judgment creditor if any
as will satisfy the judgment. When the property sold by him on execution is an damages are suffered by the latter as a result of the medium in which payment was
immovable which consequently gives rise to a light of redemption on the part of the made (Javellana v. Mirasol, et al., 40 Phil. 761). The validity of the payment made by the
judgment debtor and others (secs. 29, 30, Rule 39), it is to him (or to the purchaser or judgment debtor, however, is in no wise affected and the latter is discharged from his
redemptioner that the payments may be made by those declared by law as entitled to obligation to the judgment creditor as of the moment the check issued to the sheriff is
redeem (sec. 31, Rule 39); and in this situation, it becomes his duty to accept payment encashed and the proceeds are received by Id. office. The issuance of the check to a
and execute the certificate of redemption (Enage v. Vda. y Hijos de Escano, 38 Phil. 657, person authorized to receive it (Art. 1240, Civil Code; See. 46 of the Code of Civil
cited in Moran, Comments on the Rules of Court, 1979 ed., vol. 2, pp. 326-327). It is also Procedure; Enage v. Vda y Hijos de Escano, 38 Phil. 657, cited in Javellana v. Mirasol, 40
to the sheriff that "written notice of any redemption must be given and a duplicate filed Phil. 761) operates to release the judgment debtor from any further obligations on the
with the registrar of deeds of the province, and if any assessments or taxes are paid by judgment.
the redemptioner or if he has or acquires any lien other than that upon which the
redemption was made, notice thereof must in like manner be given to the officer and The sheriff is an adjunct of the court; a court functionary whose competence involves
filed with the registrar of deeds," the effect of failure to file such notice being that both discretion and personal liability (concurring opinion of J. Fernando, citing Uy Piaoco
redemption may be made without paying such assessments, taxes, or liens (sec. 30, Rule v. Osmena, 9 Phil. 299, in Bagatsing v. Herrera, 65 SCRA 434). Being an officer of the
39). court and acting within the scope of his authorized functions, the sheriff s receipt of the
checks in payment of the judgment execution, may be deemed, in legal contemplation,
The sheriff may likewise be appointed a receiver of the property of the judgment debtor as received by the court itself (Lara v. Bayona, 10 May 1955, No. L- 10919).
where the appointment of the receiver is deemed necessary for the execution of the
judgment (sec. 32, Rule 39). That the sheriff functions as a conduit of the court is further underscored by the fact
that one of the requisites for appointment to the office is the execution of a bond,
At any time before the sale of property on execution, the judgment debtor may prevent "conditioned (upon) the faithful performance of his (the appointee's) duties .. for the
the sale by paying the sheriff the amount required by the execution and the costs that delivery or payment to Government, or the person entitled thereto, of all properties or
have been incurred therein (sec. 20, Rule 39). sums of money that shall officially come into his hands" (sec. 330, Revised
Administrative Code).
The sheriff is also authorized to receive payments on account of the judgment debt
tendered by "a person indebted to the judgment debtor," and his "receipt shall be a There is no question that the checks came into the sheriffs possession in his official
sufficient discharge for the amount so paid or directed to be credited by the judgment capacity. The court may require of the judgment debtor, in complying with the
creditor on the execution" (sec. 41, Rule 39). judgment, no further burden than his vigilance in ensuring that the person he is paying
money or delivering property to is a person authorized by the court to receive it. Beyond
Now, obviously, the sheriff s sale extinguishes the liability of the judgment debtor either this, further expectations become unreasonable. To my mind, a proposal that would
in fun, if the price paid by the highest bidder is equal to, or more than the amount of the make the judgment debtor unqualifiedly the insurer of the judgment creditor's
judgment or pro tanto if the price fetched at the sale be less. Such extinction is not in entitlement to the judgment amount which is really what this case is all about-begs the
any way dependent upon the judgment creditor's receiving the amount realized, so that question.
the conversion or embezzlement of the proceeds of the sale by the sheriff does not
revive the judgment debt or render the judgment creditor liable anew therefor. That the checks were made out in the sheriffs name (a practice, by the way, of long and
common acceptance) is of little consequence if juxtaposed with the extent of the
authority explicitly granted him by law as the officer entrusted with the power to
execute and implement court judgments. The sheriffs requirement that the checks in
payment of the judgment debt be issued in his name was simply an assertion of that
authority; and PAL's compliance cannot in the premises be faulted merely because of
the sheriffs subsequent malfeasance in absconding with the payment instead of turning
it over to the judgment creditor.

If payment had been in cash, no question about its validity or of the authority and duty
of the sheriff to accept it in settlement of PAL's judgment obligation would even have
arisen. Simply because it was made by checks issued in the sheriff s name does not
warrant reaching any different conclusion.

As payment to the court discharges the judgment debtor from his responsibility on the
judgment, so too must payment to the person designated by such court and authorized
to act in its behalf, operate to produce the same effect.

It is unfortunate and deserving of commiseration that Amelia Tan was deprived of what
was adjudged to her when the sheriff misappropriated the payment made to him by PAL
in dereliction of his sworn duties. But I submit that her remedy lies, not here and in
reviving liability under a judgment already lawfully satisfied, but elsewhere.

ACCORDINGLY, I vote to grant the petition.


6. while unloading, suddenly started moving forward, evidently to resume its trip,
Republic of the Philippines notwithstanding the fact that the conductor has not given the driver the customary
SUPREME COURT signal to start, since said conductor was still attending to the baggage left behind by
Manila Mariano Beltran. Incidentally, when the bus was again placed into a complete stop, it
had travelled about ten meters from the point where the plaintiffs had gotten off.
EN BANC
Sensing that the bus was again in motion, Mariano Beltran immediately jumped from
G.R. No. L-20761 July 27, 1966 the running board without getting his bayong from the conductor. He landed on the side
of the road almost in front of the shaded place where he left his wife and children. At
LA MALLORCA, petitioner, that precise time, he saw people beginning to gather around the body of a child lying
vs. prostrate on the ground, her skull crushed, and without life. The child was none other
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents. than his daughter Raquel, who was run over by the bus in which she rode earlier
together with her parents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for respondents. For the death of their said child, the plaintiffs commenced the present suit against the
defendant seeking to recover from the latter an aggregate amount of P16,000 to cover
BARRERA, J.: moral damages and actual damages sustained as a result thereof and attorney's fees.
After trial on the merits, the court below rendered the judgment in question.
La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No.
23267-R, holding it liable for quasi-delict and ordering it to pay to respondents Mariano On the basis of these facts, the trial court found defendant liable for breach of contract
Beltran, et al., P6,000.00 for the death of his minor daughter Raquel Beltran, plus of carriage and sentenced it to pay P3,000.00 for the death of the child and P400.00 as
P400.00 as actual damages. compensatory damages representing burial expenses and costs.

The facts of the case as found by the Court of Appeals, briefly are: On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach
of contract in the case, for the reason that when the child met her death, she was no
On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with longer a passenger of the bus involved in the incident and, therefore, the contract of
their minor daughters, namely, Milagros, 13 years old, Raquel, about 4½ years old, and carriage had already terminated. Although the Court of Appeals sustained this theory, it
Fe, over 2 years old, boarded the Pambusco Bus No. 352, bearing plate TPU No. 757 nevertheless found the defendant-appellant guilty of quasi-delict and held the latter
(1953 Pampanga), owned and operated by the defendant, at San Fernando, Pampanga, liable for damages, for the negligence of its driver, in accordance with Article 2180 of
bound for Anao, Mexico, Pampanga. At the time, they were carrying with them four the Civil Code. And, the Court of Appeals did not only find the petitioner liable, but
pieces of baggages containing their personal belonging. The conductor of the bus, who increased the damages awarded the plaintiffs-appellees to P6,000.00, instead of
happened to be a half-brother of plaintiff Mariano Beltran, issued three tickets (Exhs. A, P3,000.00 granted by the trial court.
B, & C) covering the full fares of the plaintiff and their eldest child, Milagros. No fare was
charged on Raquel and Fe, since both were below the height at which fare is charged in In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding
accordance with the appellant's rules and regulations. it liable for quasi-delict, considering that respondents complaint was one for breach of
contract, and (2) in raising the award of damages from P3,000.00 to P6,000.00 although
After about an hour's trip, the bus reached Anao whereat it stopped to allow the respondents did not appeal from the decision of the lower court.
passengers bound therefor, among whom were the plaintiffs and their children to get
off. With respect to the group of the plaintiffs, Mariano Beltran, then carrying some of Under the facts as found by the Court of Appeals, we have to sustain the judgement
their baggages, was the first to get down the bus, followed by his wife and his children. holding petitioner liable for damages for the death of the child, Raquel Beltran. It may
Mariano led his companions to a shaded spot on the left pedestrians side of the road be pointed out that although it is true that respondent Mariano Beltran, his wife, and
about four or five meters away from the vehicle. Afterwards, he returned to the bus in their children (including the deceased child) had alighted from the bus at a place
controversy to get his other bayong, which he had left behind, but in so doing, his designated for disembarking or unloading of passengers, it was also established that the
daughter Raquel followed him, unnoticed by her father. While said Mariano Beltran was father had to return to the vehicle (which was still at a stop) to get one of his bags or
on the running board of the bus waiting for the conductor to hand him his bayong which bayong that was left under one of the seats of the bus. There can be no controversy that
he left under one of its seats near the door, the bus, whose motor was not shut off as far as the father is concerned, when he returned to the bus for his bayong which was
not unloaded, the relation of passenger and carrier between him and the petitioner transport plaintiffs and their daughter safely as far as human care and foresight can
remained subsisting. For, the relation of carrier and passenger does not necessarily provide in the operation of their vehicle.
cease where the latter, after alighting from the car, aids the carrier's servant or
employee in removing his baggage from the car.1 The issue to be determined here is is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict,
whether as to the child, who was already led by the father to a place about 5 meters while incompatible with the other claim under the contract of carriage, is permissible
away from the bus, the liability of the carrier for her safety under the contract of under Section 2 of Rule 8 of the New Rules of Court, which allows a plaintiff to allege
carriage also persisted. causes of action in the alternative, be they compatible with each other or not, to the
end that the real matter in controversy may be resolved and determined.4
It has been recognized as a rule that the relation of carrier and passenger does not
cease at the moment the passenger alights from the carrier's vehicle at a place selected The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was
by the carrier at the point of destination, but continues until the passenger has had a predicated when it was alleged in the complaint that "the death of Raquel Beltran,
reasonable time or a reasonable opportunity to leave the carrier's premises. And, what plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost
is a reasonable time or a reasonable delay within this rule is to be determined from all diligence of a very cautious person on the part of the defendants and their agent." This
the circumstances. Thus, a person who, after alighting from a train, walks along the allegation was also proved when it was established during the trial that the driver, even
station platform is considered still a passenger.2 So also, where a passenger has alighted before receiving the proper signal from the conductor, and while there were still
at his destination and is proceeding by the usual way to leave the company's premises, persons on the running board of the bus and near it, started to run off the vehicle. The
but before actually doing so is halted by the report that his brother, a fellow passenger, presentation of proof of the negligence of its employee gave rise to the presumption
has been shot, and he in good faith and without intent of engaging in the difficulty, that the defendant employer did not exercise the diligence of a good father of the
returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus family in the selection and supervision of its employees. And this presumption, as the
continues to be a passenger entitled as such to the protection of the railroad and Court of Appeals found, petitioner had failed to overcome. Consequently, petitioner
company and its agents.3 must be adjudged peculiarily liable for the death of the child Raquel Beltran.

In the present case, the father returned to the bus to get one of his baggages which was The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of
not unloaded when they alighted from the bus. Raquel, the child that she was, must Appeals, however, cannot be sustained. Generally, the appellate court can only pass
have followed the father. However, although the father was still on the running board of upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs
the bus awaiting for the conductor to hand him the bag or bayong, the bus started to did not appeal from that portion of the judgment of the trial court awarding them on
run, so that even he (the father) had to jump down from the moving vehicle. It was at P3,000.00 damages for the death of their daughter. Neither does it appear that, as
this instance that the child, who must be near the bus, was run over and killed. In the appellees in the Court of Appeals, plaintiffs have pointed out in their brief the
circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost inadequacy of the award, or that the inclusion of the figure P3,000.00 was merely a
diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be clerical error, in order that the matter may be treated as an exception to the general
observed by a common carrier in the discharge of its obligation to transport safely its rule.5 Herein petitioner's contention, therefore, that the Court of Appeals committed
passengers. In the first place, the driver, although stopping the bus, nevertheless did not error in raising the amount of the award for damages is, evidently,
put off the engine. Secondly, he started to run the bus even before the bus conductor meritorious.1äwphï1.ñët
gave him the signal to go and while the latter was still unloading part of the baggages of
the passengers Mariano Beltran and family. The presence of said passengers near the Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the
bus was not unreasonable and they are, therefore, to be considered still as passengers petitioner to pay to the respondents Mariano Beltran, et al., the sum of P3,000.00 for
of the carrier, entitled to the protection under their contract of carriage. the death of the child, Raquel Beltran, and the amount of P400.00 as actual damages.
No costs in this instance. So ordered.
But even assuming arguendo that the contract of carriage has already terminated,
herein petitioner can be held liable for the negligence of its driver, as ruled by the Court Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and Castro,
of Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint, JJ., concur.
which reads — Makalintal, J., concurs in the result.

That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs'
daughter, was caused by the negligence and want of exercise of the utmost diligence of
a very cautious person on the part of the defendants and their agent, necessary to
Republic of the Philippines The suit arose by reason of the death of Lolita de Jesus, 20-year old daughter of Valentin
de Jesus and wife of Manolo Tolentino, in a head-on collision between petitioner's bus,
SUPREME COURT on which she was a passenger, and a freight truck traveling in the opposite direction, in
Manila a barrio in Marilao Bulacan, in the morning of October 8, 1959. The immediate cause of
the collision was the fact that the driver of the bus lost control of the wheel when its left
front tire suddenly exploded.

EN BANC

Petitioner maintains that a tire blow-out is a fortuitous event and gives rise to no
liability for negligence, citing the rulings of the Court of Appeals in Rodriguez vs. Red
G.R. No. L-21486 May 14, 1966
Line Transportation Co., CA-G.R. No. 8136, December 29, 1954, and People vs. Palapad,
CA-G.R. No. 18480, June 27, 1958. These rulings, however, not only are not not binding
on this Court but were based on considerations quite different from those that obtain in
LA MALLORCA and PAMPANGA BUS COMPANY, petitioner, the at bar. The appellate Court there made no findings of any specified acts of
negligence on the part of the defendants and confined itself to the question of whether
vs.
or not a tire blow-out, by itself alone and without a showing as to the causative factors,
VALENTIN DE JESUS, MANOLO TOLENTINO and COURT OF APPEALS, respondents. would generate liability. In the present case, the cause of the blow-out was known. The
inner tube of the left front tire, according to petitioner's own evidence and as found by
the Court of Appeals "was pressed between the inner circle of the left wheel and the rim
Manuel O. Chan for petitioners. which had slipped out of the wheel." This was, said Court correctly held, a mechanical
defect of the conveyance or a fault in its equipment which was easily discoverable if the
Sixto T. Antonio for respondents. bus had been subjected to a more thorough, or rigid check-up before it took to the road
that morning.

MAKALINTAL, J.:
Then again both the trial court and the Court of Appeals found as a fact that the bus was
running quite fast immediately before the accident. Considering that the tire which
La Mallorca and Pampanga Bus Company, Inc., commonly known as La Mallorca- exploded was not new — petitioner describes it as "hindi masyadong kalbo," or not so
Pambusco, filed this appeal by certiorari from the decision of the Court of Appeals which very worn out — the plea of caso fortuito cannot be entertained.1äwphï1.ñët
affirmed that rendered by the Court of First Instance of Bulacan in its civil case No. 2100,
entitled "Valentin de Jesus and Manolo Tolentino vs. La Mallorca-Pambusco." The court
a quo sentenced the defendant, now petitioner, "to pay to plaintiffs the amount of The second issue raised by petitioner is already a settled one. In this jurisdiction moral
P2,132.50 for actual damages; P14,400.00 as compensatory damages; P10,000.00 to damages are recoverable by reason of the death of a passenger caused by the breach of
each plaintiff by way of moral damages; and P3,000.00 as counsel fees." contract of a common carrier, as provided in Article 1764, in relation to Article 2206, of
the Civil Code. These articles have been applied by this Court in a number of cases,
among them Necesito, etc. vs. Paras, et al., L-10605-06, June 30, 1958; Mercado vs. Lira,
Two errors are attributed to the appellate Court: (1) "in sustaining the decision (of the L-13328-29, Sept. 29, 1961; Villa-Rey Transit vs. Bello, L-18957, April 23, 1963.
court a quo) holding that the petitioners were liable for the accident which was caused
by a blow-out of one of the tires of the bus and in not considering the same as caso
fortuito," and (2) in holding petitioners liable for moral damages. Wherefore, the judgment appealed from is affirmed, with costs against petitioners.
7. should be allowed to return to Cebu City for they were no longer willing to continue
THIRD DIVISION their voyage to Cagayan de Oro City. The captain acceded [sic] to their request and thus
the vessel headed back to Cebu City.
[G.R. No. 118126. March 4, 1996]
At Cebu City, plaintiff together with the other passengers who requested to be brought
TRANS-ASIA SHIPPING LINES, INC., petitioner, vs. COURT OF APPEALS and ATTY. RENATO back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to
T. ARROYO, respondents. Cagayan de Oro City. Plaintiff, the next day, boarded the M/V Asia Japan for its voyage
to Cagayan de Oro City, likewise a vessel of defendant.
DECISION
On account of this failure of defendant to transport him to the place of destination on
DAVIDE, JR., J.: November 12, 1991, plaintiff filed before the trial court a complaint for damages against
defendant.[4]
As formulated by the petitioner, the issue in this petition for review on certiorari under
Rule 45 of the Rules of Court is as follows: In his complaint, docketed as Civil Case No. 91-491, plaintiff (hereinafter private
respondent) alleged that the engines of the M/V Asia Thailand conked out in the open
In case of interruption of a vessels voyage and the consequent delay in that vessels sea, and for more than an hour it was stalled and at the mercy of the waves, thus
arrival at its port of destination, is the right of a passenger affected thereby to be causing fear in the passengers. It sailed back to Cebu City after it regained power, but
determined and governed by the vague Civil Code provision on common carriers, or for unexplained reasons, the passengers, including the private respondent, were
shall it be, in the absence of a specific provision thereon, governed by Art. 698 of the arrogantly told to disembark without the necessary precautions against possible injury
Code of Commerce?[1] to them. They were thus unceremoniously dumped, which only exacerbated the private
respondents mental distress. He further alleged that by reason of the petitioners
The petitioner considers it a novel question of law. wanton, reckless, and willful acts, he was unnecessarily exposed to danger and, having
been stranded in Cebu City for a day, incurred additional expenses and loss of income.
Upon a closer evaluation, however, of the challenged decision of the Court of Appeals of He then prayed that he be awarded P1,100.00, P50,000.00, and P25,000.00 as
23 November 1994,[2] vis-a-vis, the decision of 29 June 1992 in Civil Case No. 91-491 of compensatory, moral, and exemplary damages, respectively.[5]
the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 24,[3] as well as the
allegations and arguments adduced by the parties, we find the petitioners formulation In his pre-trial brief, the private respondent asserted that his complaint was an action
of the issue imprecise. As this Court sees it, what stands for resolution is a common for damage&arising from bad faith, breach of contract and from tort, with the former
carriers liability for damages to a passenger who disembarked from the vessel upon its arising from the petitioners failure to carry [him] to his place of destination as
return to the port of origin, after it suffered engine trouble and had to stop at sea, contracted, while the latter from the conduct of the [petitioner] resulting [in] the
having commenced the contracted voyage on one engine. infliction of emotional distress to the private respondent.[6]

The antecedents are summarized by the Court of Appeals as follows: After due trial, the trial court rendered its decision[7] and ruled that the action was only
for breach of contract, with Articles 1170, 1172, and 1173 of the Civil Code as applicable
Plaintiff [herein private respondent Atty. Renato Arroyo], a public attorney, bought a law - not Article 2180 of the same Code. It was of the opinion that Article 1170 made a
ticket [from] defendant [herein petitioner], a corporation engaged in x x x inter-island person liable for damages if, in the performance of his obligation, he was guilty of fraud,
shipping, for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu negligence, or delay, or in any manner contravened the tenor thereof; moreover,
City on November 12, 1991. pursuant to Article 2201 of the same Code, to be entitled to damages, the non-
performance of the obligation must have been tainted not only by fraud, negligence, or
At around 5:30 in the evening of November 12, 1991, plaintiff boarded the M/V Asia delay, but also bad faith, malice, and wanton attitude. It then disposed of the case as
Thailand vessel. At that instance, plaintiff noticed that some repair works [sic] were follows:
being undertaken on the engine of the vessel. The vessel departed at around 11:00 in
the evening with only one (1) engine running. WHEREFORE, it not appearing from the evidence that plaintiff was left in the Port of
Cebu because of the fault, negligence, malice or wanton attitude of defendants
After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its employees, the complaint is DISMISSED. Defendants counterclaim is likewise dismissed
anchor thereat. After half an hour of stillness, some passengers demanded that they
it not appearing also that filing of the case by plaintiff was motivated by malice or bad If plaintiff, therefore, was not able to [m]ake the trip that night of November 12, 1991, it
faith.[8] was not because defendant maliciously did it to exclude him [from] the trip. If he was
left, it was because of his fault or negligence.[9]
The trial court made the following findings to support its disposition:
Unsatisfied, the private respondent appealed to the Court of Appeals (CA-G.R. CV No.
In the light of the evidence adduced by the parties and of the above provisions of the 39901) and submitted for its determination the following assignment of errors: (1) the
New Civil Code, the issue to be resolved, in the resolution of this case is whether or not, trial court erred in not finding that the defendant-appellee was guilty of fraud, delay,
defendant thru its employee in [sic] the night of November 12, 1991, committed fraud, negligence, and bad faith; and (2) the trial court erred in not awarding moral and
negligence, bad faith or malice when it left plaintiff in the Port of Cebu when it sailed exemplary damages.[10]
back to Cagayan de Oro City after it has [sic] returned from Kawit Island.
In its decision of 23 November 1994,[11] the Court of Appeals reversed the trial courts
Evaluation of the evidence of the parties tended to show nothing that defendant decision by applying Article 1755 in relation to Articles 2201, 2208, 2217, and 2232 of
committed fraud. As early as 3:00 p.m. of November 12, 1991, defendant did not hide the Civil Code and, accordingly, awarded compensatory, moral, and exemplary damages
the fact that the cylinder head cracked. Plaintiff even saw during its repair. If he had as follows:
doubts as to the vessels capacity to sail, he had time yet to take another boat. The ticket
could be returned to defendant and corresponding cash [would] be returned to him. WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET
ASIDE and another one is rendered ordering defendant-appellee to pay plaintiff-
Neither could negligence, bad faith or malice on the part of defendant be inferred from appellant:
the evidence of the parties. When the boat arrived at [the] Port of Cebu after it returned
from Kawit Island, there was an announcement that passengers who would like to 1. P20,000.00 as moral damages;
disembark were given ten (10) minutes only to do so. By this announcement, it could be
inferred that the boat will [sic] proceed to Cagayan de Oro City. If plaintiff entertained 2. P10,000.00 as exemplary damages;
doubts, he should have asked a member of the crew of the boat or better still, the
captain of the boat. But as admitted by him, he was of the impression only that the boat 3. P5,000.00 as attorneys fees;
will not proceed to Cagayan de Oro that evening so he disembarked. He was instead,
the ones [sic] negligent. Had he been prudent, with the announcement that those who 4. Cost of suit.
will disembark were given ten minutes only, he should have lingered a little by staying in
his cot and inquired whether the boat will proceed to Cagayan de Oro City or not. SO ORDERED.[12]
Defendant cannot be expected to be telling [sic] the reasons to each passenger.
Announcement by microphone was enough. It did not, however, allow the grant of damages for the delay in the performance of the
petitioners obligation as the requirement of demand set forth in Article 1169 of the Civil
The court is inclined to believe that the story of defendant that the boat returned to the Code had not been met by the private respondent. Besides, it found that the private
Port of Cebu because of the request of the passengers in view of the waves. That it did respondent offered no evidence to prove that his contract of carriage with the
not return because of the defective engines as shown by the fact that fifteen (15) petitioner provided for liability in case of delay in departure, nor that a designation of
minutes after the boat docked [at] the Port of Cebu and those who wanted to proceed the time of departure was the controlling motive for the establishment of the contract.
to Cagayan de Oro disembarked, it left for Cagayan de Oro City. On the latter, the court a quo observed that the private respondent even admitted he
was unaware of the vessels departure time, and it was only when he boarded the vessel
The defendant got nothing when the boat returned to Cebu to let those who did not that he became aware of such. Finally, the respondent Court found no reasonable basis
want to proceed to Cagayan de Oro City including plaintiff disembarked. On the for the private respondents belief that demand was useless because the petitioner had
contrary, this would mean its loss instead because it will have to refund their tickets or rendered it beyond its power to perform its obligation; on the contrary, he even
they will use it the next trip without paying anymore. It is hard therefore, to imagine admitted that the petitioner had been assuring the passengers that the vessel would
how defendant by leaving plaintiff in Cebu could have acted in bad faith, negligently, leave on time, and that it could still perform its obligation to transport them as
want only and with malice. scheduled.

To justify its award of damages, the Court of Appeals ratiocinated as follows:


It is an established and admitted fact that the vessel before the voyage had undergone disregarded the not very remote possibility that because of the disability of the vessel,
some repair work on the cylinder head of the engine. It is likewise admitted by other problems might occur which would endanger the lives of the passengers sailing
defendant-appellee that it left the port of Cebu City with only one engine running. with a disabled vessel.
Defendant-appellee averred:
As expected, x x x engine trouble occurred. Fortunate[ly] for defendant-appellee, such
x x x The dropping of the vessels anchor after running slowly on only one engine when it trouble only necessitated the stoppage of the vessel and did not cause the vessel to
departed earlier must have alarmed some nervous passengers x x x capsize. No wonder why some passengers requested to be brought back to Cebu City.
Common carriers which are mandated to exercise utmost diligence should not be taking
The entries in the logbook which defendant-appellee itself offered as evidence these risks.
categorically stated therein that the vessel stopped at Kawit Island because of engine
trouble. It reads: On this premise, plaintiff-appellant should not be faulted why he chose to disembark
from the vessel with the other passengers when it returned back to Cebu City.
2330 HRS STBD ENGINE EMERGENCY STOP Defendant-appellee may call him a very panicky passenger or a nervous person, but this
will not relieve defendant-appellee from the liability it incurred for its failure to exercise
2350 HRS DROP ANCHOR DUE TO. ENGINE TROUBLE, 2 ENGINE STOP. utmost diligence.[13]

The stoppage was not to start and synchronized [sic] the engines of the vessel as xxx xxx xxx
claimed by defendant-appellee. It was because one of the engines of the vessel broke
down; it was because of the disability of the vessel which from the very beginning of the As to the second assigned error, we find that plaintiff-appellant is entitled to the award
voyage was known to defendant-appellee. of moral and exemplary damages for the breach committed by defendant-appellee.

Defendant-appellee from the very start of the voyage knew for a fact that the vessel As discussed, defendant-appellee in sailing to Cagayan de Oro City with only one engine
was not yet in its sailing condition because the second engine was still being repaired. and with full knowledge of the true condition of the vessel, acted in bad faith with
Inspite of this knowledge, defendant-appellee still proceeded to sail with only one malice, in complete disregard for the safety of the passengers and only for its own
engine running. personal advancement/interest.

Defendant-appellee at that instant failed to exercise the diligence which all common The Civil Code provides:
carriers should exercise in transporting or carrying passengers. The law does not merely
require extraordinary diligence in the performance of the obligation. The law mandates Art 2201.
that common carrier[s] should exercise utmost diligence in the transport of passengers.
xxx xxx xxx
Article 1755 of the New Civil Code provides:
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
ART. 1755. A common carrier is bound to carry the passengers safely as far as human all damages which may be reasonably attributed to the non-performance of the
care and foresight can provide, using the utmost diligence of very cautious persons, with obligation.
a due regard for all the circumstances.
Plaintiff-appellant is entitled to moral damages for the mental anguish, fright and
Utmost diligence of a VERY CAUTIOUS person dictates that defendant-appellee should serious anxiety he suffered during the voyage when the vessels engine broke down and
have pursued the voyage only when its vessel was already fit to sail. Defendant-appellee when he disembarked from the vessel during the wee hours of the morning at Cebu City
should have made certain that the vessel [could] complete the voyage before starting when it returned.[14]
[to] sail. Anything less than this, the vessel [could not] sail x x x with so many passengers
on board it. Moral damages are recoverable in a damage suit predicated upon a breach of contract
of carriage where it is proved that the carrier was guilty of fraud or bad faith even if
However, defendant-appellant [sic] in complete disregard of the safety of the death does not result.[15]
passengers, chose to proceed with its voyage even if only one engine was running as the
second engine was still being repaired during the voyage. Defendant-appellee
Fraud and bad faith by defendant-appellee having been established, the award of moral ART. 1764. Damages in cases comprised in this Section shall be awarded in accordance
damages is in order.[16] with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the
death of a passenger caused by the breach of contract by common carrier.
To serve as a deterrent to the commission of similar acts in the future, exemplary
damages should be imposed upon defendant-appellee.[17] Exemplary damages are The damages comprised in Title XVIII of the Civil Code are actual or compensatory,
designed by our civil law to permit the courts to reshape behavior that is socially moral, nominal, temperate or moderate, liquidated, and exemplary.
deleterious in its consequence by creating x x x negative incentives or deterrents against
such behavior.[18] In his complaint, the private respondent claims actual or compensatory, moral, and
exemplary damages.
Moral damages having been awarded, exemplary damages maybe properly awarded.
When entitlement to moral damages has been established, the award of exemplary Actual or compensatory damages represent the adequate compensation for pecuniary
damages is proper.[19] loss suffered and for profits the obligee failed to obtain.[22]

The petitioner then instituted this petition and submitted the question of law earlier In contracts or quasi-contracts, the obligor is liable for all the damages which may be
adverted to. reasonably attributed to the non-performance of the obligation if he is guilty of fraud,
bad faith, malice, or wanton attitude.[23]
Undoubtedly, there was, between the petitioner and the private respondent, a contract
of common carriage. The laws of primary application then are the provisions on Moral damages include moral suffering, mental anguish, fright, serious anxiety,
common carriers under Section 4, Chapter 3, Title VIII, Book IV of the Civil Code, while besmirched reputation, wounded feelings, moral shock, social humiliation, or similar
for all other matters not regulated thereby, the Code of Commerce and special laws.[20] injury. They may be recovered in the cases enumerated in Article 2219 of the Civil Code,
likewise, if they are the proximate result of, as in this case, the petitioners breach of the
Under Article 1733 of the Civil Code, the petitioner was bound to observe extraordinary contract of carriage.[24] Anent a breach of a contract of common carriage, moral
diligence in ensuring the safety of the private respondent. That meant that the damages may be awarded if the common carrier, like the petitioner, acted fraudulently
petitioner was, pursuant to Article 1755 of the said Code, bound to carry the private or in bad faith.[25]
respondent safely as far as human care and foresight could provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances. In this Exemplary damages are imposed by way of example or correction for the public good, in
case, we are in full accord with the Court of Appeals that the petitioner failed to addition to moral, temperate, liquidated or compensatory damages.[26] In contracts
discharge this obligation. and quasi-contracts, exemplary damages may be awarded if the defendant acted in a
wanton fraudulent, reckless, oppressive or malevolent manner.[27] It cannot, however,
Before commencing the contracted voyage, the petitioner undertook some repairs on be considered as a matter of right; the court having to decide whether or not they
the cylinder head of one of the vessels engines. But even before it could finish these should be adjudicated.[28] Before the court may consider an award for exemplary
repairs, it allowed the vessel to leave the port of origin on only one functioning engine, damages, the plaintiff must first show that he is entitled to moral, temperate or
instead of two. Moreover, even the lone functioning engine was not in perfect condition compensatory damages; but it is not necessary that he prove the monetary value
as sometime after it had run its course, it conked out. This caused the vessel to stop and thereof.[29]
remain adrift at sea, thus in order to prevent the ship from capsizing, it had to drop
anchor. Plainly, the vessel was unseaworthy even before the voyage began. For a vessel The Court of Appeals did not grant the private respondent actual or compensatory
to be seaworthy, it must be adequately equipped for the voyage and manned with a damages, reasoning that no delay was incurred since there was no demand, as required
sufficient number of competent officers and crew.[21] The failure of a common carrier by Article 1169 of the Civil Code. This article, however, finds no application in this case
to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear because, as found by the respondent Court, there was in fact no delay in the
breach of is duty prescribed in Article 1755 of the Civil Code. commencement of the contracted voyage. If any delay was incurred, it was after the
commencement of such voyage, more specifically, when the voyage was subsequently
As to its liability for damages to the private respondent, Article 1764 of the Civil Code interrupted when the vessel had to stop near Kawit Island after the only functioning
expressly provides: engine conked out.
As to the rights and duties of the parties strictly arising out of such delay, the Civil Code concludes, the private respondent was merely over-reacting to the situation obtaining
is silent. However, as correctly pointed out by the petitioner, Article 698 of the Code of then.[31]
Commerce specifically provides for such a situation. It reads:
We hold that the petitioners defense cannot exculpate it nor mitigate its liability. On the
In case a voyage already begun should be interrupted, the passengers shall be obliged to contrary, such a claim demonstrates beyond cavil the petitioners lack of genuine
pay the fare in proportion to the distance covered, without right to recover for losses concern for the safety of its passengers. It was, perhaps, only providential that the sea
and damages if the interruption is due to fortuitous event or force majeure, but with a happened to be calm. Even so, the petitioner should not expect its passengers to act in
right to indemnity if the interruption should have been caused by the captain the manner it desired. The passengers were not stoics; becoming alarmed, anxious, or
exclusively. If the interruption should be caused by the disability of the vessel and a frightened at the stoppage of a vessel at sea in an unfamiliar zone at nighttime is not the
passenger should agree to await the repairs, he may not be required to pay any sole prerogative of the faint-hearted. More so in the light of the many tragedies at sea
increased price of passage, but his living expenses during the stay shall be for his own resulting in the loss of lives of hopeless passengers and damage to property simply
account. because common carriers failed in their duty to exercise extraordinary diligence in the
performance of their obligations.
This article applies suppletorily pursuant to Article 1766 of the Civil Code.
We cannot, however, give our affirmance to the award of attorneys fees. Under Article
Of course, this does not suffice for a resolution of the case at bench for, as earlier 2208 of the Civil Code, these are recoverable only in the concept of actual damages,[32]
stated, the cause of the delay or interruption was the petitioners failure to observe not as moral damages[33] nor judicial costs.[34] Hence, to merit such an award, it is
extraordinary diligence. Article 698 must then be read together with Articles 2199, settled that the amount thereof must be proven.[35] Moreover, such must be
2200, 2201, and 2208 in relation to Article 21 of the Civil Code. So read, it means that specifically prayed for - as was not done in this case - and may not be deemed
the petitioner is liable for any pecuniary loss or loss of profits which the private incorporated within a general prayer for such other relief and remedy as this court may
respondent may have suffered by reason thereof. For the private respondent, such deem just and equitable.[36] Finally, it must be noted that aside from the following, the
would be the loss of income if unable to report to his office on the day he was supposed body of the respondent Courts decision was devoid of any statement regarding
to arrive were it not for the delay. This, however, assumes that he stayed on the vessel attorneys fees:
and was with it when it thereafter resumed its voyage; but he did not. As he and some
passengers resolved not to complete the voyage, the vessel had to return to its port of Plaintiff-appellant was forced to litigate in order that he can claim moral and exemplary
origin and allow them to disembark. The private respondent then took the petitioners damages for the suffering he encurred [sic]. He is entitled to attorneys fees pursuant to
other vessel the following day, using the ticket he had purchased for the previous days Article 2208 of the Civil Code. It states:
voyage.
Article 2208. In the absence of stipulation, attorney s fees and expenses of litigation,
Any further delay then in the private respondents arrival at the port of destination was other than judicial costs cannot be recovered except:
caused by his decision to disembark. Had he remained on the first vessel, he would have
reached his destination at noon of 13 November 1991, thus been able to report to his 1. When exemplary damages are awarded;
office in the afternoon. He, therefore, would have lost only the salary for half of a day.
But actual or compensatory damages must be proved,[30] which the private respondent 2. When the defendants act or omission has compelled the plaintiff to litigate with third
failed to do. There is no convincing evidence that he did not receive his salary for 13 persons or to incur expenses to protect his interest.
November 1991 nor that his absence was not excused.
This Court holds that the above does not satisfy the benchmark of factual, legal and
We likewise fully agree with the Court of Appeals that the petitioner is liable for moral equitable justification needed as basis for an award of attorneys fees.[37] In sum, for
and exemplary damages. In allowing its unseaworthy M/V Asia Thailand to leave the lack of factual and legal basis, the award of attorneys fees must be deleted.
port of origin and undertake the contracted voyage, with full awareness that it was
exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise WHEREFORE, the instant petition is DENIED and the challenged decision of the Court of
extraordinary diligence and obviously acted with bad faith and in a wanton and reckless Appeals in CA-G.R. CV No. 39901 is AFFIRMED subject to the modification as to the
manner. On this score, however, the petitioner asserts that the safety of the vessel and award for attorneys fees which is hereby SET ASIDE.
passengers was never at stake because the sea was calm in the vicinity where it stopped
as faithfully recorded in the vessels log book (Exhibit 4). Hence, the petitioner Costs against the petitioner.
SO ORDERED.
9. The facts:

Republic of the Philippines On February 24, 1999, in the RTC of Makati City, respondent PCIBANK filed a
complaint[3] for a sum of money with prayer for a writ of preliminary attachment
Supreme Court against petitioner ASIAKONSTRUKT. Docketed as Civil Case No. 99-432, the complaint
Baguio City alleged, inter alia, as follows:

SECOND DIVISION FIRST CAUSE OF ACTION

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, 2.01 On various occasions, ASIAKONSTRUKT obtained U.S. dollar denominated
credit accommodations from PCIBANK in the amount of Four Million Four Hundred
Petitioner, Eighty Seven Thousand U.S. dollars (US$4,487,000.00), exclusive of interests, charges
and fees thereon and the cost of collecting the same. These credit accommodations are
- versus -
covered by the following promissory notes:
PHILIPPINE COMMERCIAL INTERNATIONAL BANK,
xxx xxx xxx
Respondent.
2.02 Prompt and faithful payment of all the foregoing promissory notes was
G.R. No. 153827 secured by the following deeds of assignment executed by ASIAKONSTRUKT in favor of
PCIBANK:
Present:
(a) Deed of Assignment of Receivables/Contract Proceeds dated 20 July 1994 where
PUNO, J., Chairperson,* ASIAKONSTRUKT assigned its receivables from its Contract with the National Power
Corporation (NPC) in the amount of .P54,500,000;
SANDOVAL-GUTIERREZ,**
(b) Deed of Assignment of Receivables dated 28 June 1995 where ASIAKONSTRUKT
CORONA,
assigned its receivables from its Contract with the NPC in the amount of
AZCUNA, and P26,281,000.00;

GARCIA, JJ. (c) Deed of Assignment of Receivables dated 28 August 1995 where ASIAKONSTRUKT
assigned its receivables from its Sub-Contract with ABB Power, Inc., in the amount of
Promulgated: P43,000,000.00;
April 25, 2006 (d) Deed of Assignment of Contract Proceeds dated 27 March 1996 where
ASIAKONSTRUKT assigned its receivables from its contracts with PNOC in the aggregate
DECISION
amount of P46,000,000.00; and
GARCIA, J.:
(e) Deed of Assignment of Contract Proceeds dated 20 February 1997 where
In this petition for review under Rule 45 of the Rules of Court, petitioner Asian ASIAKONSTRUKT assigned its receivables from the Ormat Philippines, Inc., in the
Construction and Development Corporation or ASIAKONSTRUKT, seeks the reversal and aggregate amount of US$3,350,000.00;
setting aside of the decision[1]dated March 15, 2002 and the Resolution[2] dated June
2.03 All the foregoing deeds of assignments stipulate, among others, the following
3, 2002 of the Court of Appeals (CA) in CA-G.R. CV No. 68189. The assailed decision
terms and conditions:
affirm with modification the Summary Judgment rendered by the Regional Trial Court
(RTC) of Makati City in an action for a sum of money thereat commenced by the herein a) The assignment is for the purpose of securing payment of the principal
respondent, Philippine Commercial International Bank (PCIBANK) against the petitioner, amount and the interests and bank charges accruing thereon, the costs of collecting the
while the challenged resolution denied petitioners motion for reconsideration.
same and all other expenses which PCIBANK may be put in connection with or as an 4.02.3 Costs of suit.
incident of the assignment;
In support of its prayer for a writ of preliminary attachment embodied in the complaint,
b) That the assignment secures also any extension or renewal of the credit plaintiff PCIBANK alleges the following:
which is the subject thereof as any and all other obligations of ASIAKONSTRUKT of
whatever kind and nature as appear in the records of PCIBANK, which ASIAKONSTRUKT 3.02 ASIAKONSTRUKT is guilty of fraud in contracting the debt, in the performance
accepts as the final and conclusive evidence of such obligations to PCIBANK, whether thereof, or both, xxx;
contracted before, during or after the constitution of [the assignment agreement]; 303. PCIBANK agreed to enter into the above-mentioned credit accommodations
c) That PCIBANK authorizes ASIAKONSTRUKT, at the latters expense, to collect primarily because of the existence of the deeds of assignment listed above. However,
and receive for [PCIBANK] all the Receivables; and from telephone inquiries made with responsible officers of the National Power
Corporation, ABB Power, Inc., PNOC and Ormat Philippines, Inc., PCIBANK was surprised
d) That ASIAKONSTRUKT shall have no right, and agrees not to use any of to learn that ASIAKONSTRUKT had long ago collected the contract proceeds, or portions
the proceeds of any collections, it being agreed by the parties that [ASIAKONSTRUKT] thereof, which were previously assigned to PCIBANK. However, to date, it has yet to
divests itself of all the rights, title and interest in said Receivables and the proceeds of turn over these proceeds to PCIBANK. Worse, PCIBANK learned that the contract
the collection received thereon. proceeds were used by ASIAKONSTRUKT for its own purposes clear evidence of fraud,
which has deprived PCIBANK of its security. ASIAKONSTRUKTs unauthorized use of the
2.04 The promissory notes have remained not fully paid despite their having contract proceeds for its own purposes was subsequently confirmed by Mr. Napoleon
become due and demandable. Repeated verbal and written demands were made upon Garcia, Vice President for Finance of ASIAKONSTRUKT, in a telephone discussion on 12
ASIAKONSTRUKT, but to no avail. It has failed and refused, and continues to fail and January 1999 with Ms. Maricel E. Salaveria of PCIBANK. xxx Needless to say,
refuse, to pay its outstanding obligations to PCIBANK; ASIAKONSTRUKT has fraudulently collected such receivables to the prejudice of
2.05 As a result of ASIAKONSTRUKTs refusal to pay its outstanding obligations, PCIBANK.
PCIBANK was constrained to refer the matter to counsel and thus incur attorneys fees 3.04 it is evident that ASIAKONSTRUKT never had any intention of complying with the
and legal costs. deeds of assignment. ASIAKONSTRUKT only misled PCIBANK into believing that it had
2.06 The aggregate unpaid obligation of ASIAKONSTRUKT to PCIBANK, as of 31 sufficient security to ensure payment of its loan obligations.
December 1998, amounts to US$4,553,446.06, broken down as follows: 3.05 Alternatively, granting, in argumenti gratia, that ASIAKONSTRUKT, at the time it
Principal US$ 4,067,867.23 executed the foregoing deeds of assignment, really intended to abide by their terms and
conditions, it nevertheless committed manifest fraud when it collected the contract
Interest US$ 291,263.27 proceeds, and instead of remitting them to PCIBANK, used them for its own purposes.

Penalties US$ 194,315.56 In an order[4] dated April 13, 1999, the trial court, after receiving ex parte PCIBANKs
evidence in support of its prayer for preliminary attachment, directed the issuance of
TOTAL US$ 4,553,446.06
the desired writ, thus:
For its second cause of action, PCIBANK alleged in the same complaint as follows:
WHEREFORE, let a writ of preliminary attachment issue against all the property of
SECOND CAUSE OF ACTION defendant not exempt from execution or so much thereof as may be sufficient to satisfy
plaintiffs principal claim of US$4,553,446.06, representing the alleged unpaid obligation
4.02 as a result of the fraudulent acts of ASIAKONSTRUKT, PCIBANK suffered the of defendant, inclusive of interest and penalty charges, as of December 31, 1998, which
following damages, all of which ASIAKONSTRUKT must be held to pay PCIBANK: is equivalent to P174,260,380.72, upon plaintiffs filing of a bond in an equal amount to
answer for all it may sustain by reason of the attachment if the Court shall finally
4.02.1 Exemplary damages, in the interest of public good and purposes of correction, in
adjudge that plaintiff was not entitled thereto.
the amount of not less than .P50,000.00;
SO ORDERED.
4.02.2 Attorneys fees in the amount of not less than . P1,800,000.00; and
With plaintiff PCIBANK having posted the requisite bond, a writ of preliminary 3. Whether or not defendant is virtually insolvent as a result of the regionwide
attachment was thereafter issued by the trial court. Per records, defendant economic crisis that hit Asia, causing the Philippine peso to depreciate drastically; and
ASIAKONSTRUKT did not file any motion for the quashal or dissolution of the writ.
4. Whether the parties dealt with each other on equal footing with respect to the
Meanwhile, on August 27, 1999, defendant ASIAKONSTRUKT filed its Answer,[5] execution of the deeds of assignment as to give the defendant an honest opportunity to
thereunder making admissions and denials. Defendant admits, subject to its defenses, reject the onerous terms imposed therein.
the material allegations of the Complaint as regards its indebtedness to plaintiff
PCIBANK and its execution of the various deeds of assignment enumerated therein. It, Significantly, defendant did not append to its aforementioned Opposition any affidavit
however, denies, for lack of knowledge sufficient to form a belief as to the truth thereof, in support of the alleged genuine issues of material facts mentioned therein.
the averments in the Complaint that it has not paid, despite demands, its due and Before the pending incident (motion for summary judgment) could be resolved by the
demandable obligations, as well as the amounts due the plaintiff as itemized in trial court, plaintiff PCIBANK waived its claim for exemplary damages and agreed to
paragraph 2.06, supra, of the Complaint. It likewise denies PCIBANKs allegations in the reduce its claim for attorneys fees from P1,800,000.00 to P1,260,000.00, but made it
same Complaint in support of its prayer for a writ of preliminary attachment, clear that its waiver of exemplary damages and reduction of attorneys fees are subject
particularly its having fraudulently misappropriated for its own use the contract to the condition that a full and final disposition of the case is obtained via summary
proceeds/receivables under the contracts mentioned in the several deeds of judgment.
assignments, claiming in this respect that it has still remaining receivables from those
contracts. On May 16, 2000, the trial court, acting favorably on PCIBANKs motion for summary
judgment, came out with its Summary Judgment,[8] the decretal portion of which reads:
By way of defenses, defendant pleads in its Answer the alleged severe financial and
currency crisis which hit the Philippines in July 1997, which adversely affected and WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff:
ultimately put it out of business. Defendant adds that the deeds of assignments it
1. the sum of US$4,553,446.06, or its equivalent in Philippine currency at the
executed in favor of PCIBANK were standard forms proposed by the bank as pre-
time of payment, with interest thereon at the rate of 8.27% per annum from February
condition for the release of the loans and therefore partake of the nature of contracts of
24, 1999 until fully paid;
adhesion, leaving the defendant to the alternative of taking it or leaving it. By way of
counterclaim, defendant prayed for an award of P1,000,000.00 as and for attorneys fees 2. P1,260,000.00 as and for attorneys fees; and
and P200,000.00 as litigation expenses.
3. the costs of suit.
On January 24, 2000, plaintiff PCIBANK filed a verified Motion for Summary
Judgment,[6] therein contending that the defenses interposed by the defendant are SO ORDERED.
sham and contrived, that the alleged financial crisis pleaded in the Answer is not a
Explains the trial court in rendering its Summary Judgment:
fortuitous event that would excuse debtors from their loan obligations, nor is it an
exempting circumstance under Article 1262 of the New Civil Code where, as here, the A thorough examination of the parties pleadings and their respective stand in the
same is attended by bad faith. In the same motion, PCIBANK also asserts that the deeds foregoing motion, the court finds that indeed with defendants admission of the first
of assignments executed in its favor are not contracts of adhesion, and even if they cause of action there remains no question of facts in issue. Further, the proffered
were, the same are valid. defenses are worthless, unsubstantial, sham and contrived.

To the Motion for Summary Judgment, defendant interposed an Opposition[7] insisting Considering that there is no more issue to be resolved, the court hereby grants plaintiffs
that its Answer tendered or raised genuine and substantial issues of material facts which Motion and renders Judgment in favor of the plaintiff against the defendant based on
require full-blown trial, namely: their respective pleadings in accordance with Section 4, Rule 35 of the Rules of Court.

1. Whether or not defendant received all or part of the proceeds/receivables due from In time, petitioner went to the CA whereat its appellate recourse was docketed as CA-
the contracts mentioned in the deeds of assignment at the time the complaint was filed; G.R. CV No. 68189. As stated at the threshold hereof, the CA, in its decision[9] of May
15, 2002, affirmed with modification the Summary Judgment rendered by the trial
2. Granting that defendant received those proceeds/receivables, whether or not
defendant fraudulently misappropriated the same;
court, the modification being as regards the award for attorneys fees which the CA A genuine issue is an issue of fact which requires the presentation of evidence as
reduced to P1,000,000.00, to wit: distinguished from a sham, fictitious, contrived or false claim. When the facts as pleaded
appear uncontested or undisputed, then there is no real or genuine issue or question as
IN THE LIGHT OF ALL THE FOREGOING, the appeal is PARTIALLY GRANTED. The Decision to the facts, and summary judgment is called for. The party who moves for summary
appealed from is AFFIRMED with the MODIFICATION THAT THE AWARD FOR ATTORNEYS judgment has the burden of demonstrating clearly the absence of any genuine issue of
FEES is reduced to P1,000,000.00. fact, or that the issue posed in the complaint is patently unsubstantial so as not to
SO ORDERED. constitute a genuine issue for trial. Trial courts have limited authority to render
summary judgments and may do so only when there is clearly no genuine issue as to any
With its motion for reconsideration having been denied by the CA in its Resolution[10] material fact. When the facts as pleaded by the parties are disputed or contested,
of June 3, 2002, petitioner is now with us via the present recourse, raising the following proceedings for summary judgment cannot take the place of trial.[13]
issues:
The CA, in its challenged decision, stated and we are in full accord with it:
I WHETHER OR NOT THERE IS A GENUINE ISSUE AS TO A MATERIAL FACT WHICH RULES
OUT THE PROPRIETY OF A SUMMARY JUDGMENT. In the present recourse, the [petitioner] relied not only on the judicial admissions in its
pleadings, more specifically its Answer to the complaint, the testimony of Maricel
II WHETHER OR NOT THE AWARD OF ATTORNEYS FEES IS EXORBITANT OR Salaveria as well as Exhibits A to T-3, adduced in evidence by the [respondent], during
UNCONSCIONABLE. the hearing on its plea for the issuance, by the Court a quo, of a writ of preliminary
attachment. Significantly, the [petitioner] did not bother filing a motion for the quashal
We DENY.
of the Writ issued by the Court a quo.
As in the two courts below, it is petitioners posture that summary judgment is improper
It must be borne in mind, too, that the [petitioner] admitted, in its Answer the due
in this case because there are genuine issues of fact which have to be threshed out
execution and authenticity of the documents appended to the complaint . The
during trial, to wit: (a) whether or not petitioner was able to collect only a portion of the
[petitioner] did not deny its liability for the principal amount claimed by the
contract proceeds/receivables it was bound to deliver, remit and tender to respondent
[respondent] in its complaint. The [petitioner] merely alleged, by way of defenses, that
under the several deeds of assignment it executed in favor of the latter; and (b) whether
it failed to pay its account because of the region-wide economic crisis that engulfed
or not petitioner fraudulently misappropriated and used for its benefit the said
Asia, in July, 1997, and the Deeds of Assignment executed by it in favor of the
proceeds/receivables. Ergo, so petitioner maintains, genuine triable issues of fact are
[respondent] were contracts of adhesion:
present in this case, which thereby precludes rendition of summary judgment.
The [petitioner] elaborated on and catalogued its defenses in its Appellants Brief what it
We are not persuaded.
believed, as genuine issues.
Under Rule 35 of the 1997 Rules of Procedure, as amended, except as to the amount of
(i) Whether or not [petitioner] received all or part of the proceeds/receivables due from
damages, when there is no genuine issue as to any material fact and the moving party is
the construction contracts at the time the civil action was filed;
entitled to a judgment as a matter of law, summary judgment may be allowed.[11]
Summary or accelerated judgment is a procedural technique aimed at weeding out (ii) Granting that [petitioner] received the proceeds/receivables from the
sham claims or defenses at an early stage of litigation thereby avoiding the expense and construction contracts, whether or not [petitioner] fraudulently misappropriated the
loss of time involved in a trial.[12] same;

Under the Rules, summary judgment is appropriate when there are no genuine issues of (iii) Whether or not [petitioner] had become virtually insolvent as a result of the
fact which call for the presentation of evidence in a full-blown trial. Even if on their face region-wide economic crisis that hit Asia, causing the Philippine peso to depreciate
the pleadings appear to raise issues, when the affidavits, depositions and admissions dramatically; and
show that such issues are not genuine, then summary judgment as prescribed by the
Rules must ensue as a matter of law. The determinative factor, therefore, in a motion (iv) Whether or not [respondent] and [petitioner] dealt with each other on equal
for summary judgment, is the presence or absence of a genuine issue as to any material footing with respect to the execution of the deeds of assignment of receivables as to
fact. give [petitioner] an honest opportunity to reject the onerous terms imposed on it.
However, the [petitioner] failed to append, to its Opposition to the Motion for Summary be complied with in good faith. But the law recognizes exceptions to the principle of the
Judgment, Affidavits showing the factual basis for its defenses of extraordinary obligatory force of contracts. One exception is laid down in Article 1266 of the Civil
deflation, including facts, figures and data showing its financial condition before and Code, which reads: The debtor in obligations to do shall also be released when the
after the economic crisis and that the crisis was the proximate cause of its financial prestation becomes legally or physically impossible without the fault of the obligor.
distress. It bears stressing that the [petitioner] was burdened to demonstrate, by its
Affidavits and documentary evidence, that, indeed, the Philippines was engulfed in an
extraordinary deflation of the Philippine Peso and that the same was the proximate
cause of the financial distress, it claimed, it suffered.

Where, on the basis of the records, inclusive of the pleadings of the parties, and the
testimonial and documentary evidence adduced by the [respondent], supportive of its Petitioner cannot, however, successfully take refuge in the said article, since it is
plea for a writ of preliminary attachment, the [respondent] had causes of action against applicable only to obligations to do, and not obligations to give. An obligation to do
the [petitioner], it behooved the [petitioner] to controvert the same with includes all kinds of work or service; while an obligation to give is a prestation which
affidavits/documentary evidence showing a prima facie genuine defense. As the consists in the delivery of a movable or an immovable thing in order to create a real
Appellate Court of Illinois so aptly declared: right, or for the use of the recipient, or for its simple possession, or in order to return it
to its owner.
The defendant must show that he has a bona fide defense to the action, one which he
may be able to establish. It must be a plausible ground of defense, something fairly In this case, petitioner wants this Court to believe that the abrupt change in the political
arguable and of a substantial character. This he must show by affidavits or other proof. climate of the country after the EDSA Revolution and its poor financial condition
rendered the performance of the lease contract impractical and inimical to the
The trial court, of course, must determine from the affidavits filed whether the corporate survival of the petitioner. (Philippine National Construction Corporation
defendant has interposed a sufficiently good defense to entitle it to defend, but where versus Court of Appeals, et al., 272 SCRA 183, at pages 191-192, supra)
defendants affidavits present no substantial triable issues of fact, the court will grant
the motion for summary judgment. The [petitioner] even failed to append any Affidavit to its Opposition showing how much
it had received from its construction contracts and how and to whom the said
The failure of the [petitioner] to append to its Opposition any Affidavits showing that its collections had been appended. The [petitioner] had personal and sole knowledge of
defenses were not contrived or cosmetic to delay judgment created a presumption that the aforesaid particulars while the [respondent] did not.
the defenses of the [petitioner] were not offered in good faith and that the same could
not be sustained (Unites States versus Fiedler, et al., Federal Reported, 2nd, 578). In fine, we rule and so hold that the CA did not commit any reversible error in affirming
the summary judgment rendered by the trial court as, at bottom, there existed no
If, indeed, the [petitioner] believed it that was prevented from complying with its genuine issue as to any material fact. We also sustain the CAs reduction in the award of
obligations to the [respondent], under its contracts, it should have interposed a attorneys fees to only P1,000,000.00, given the fact that there was no full-blown trial.
counterclaims for rescission of contracts, conformably with the pronouncement of our
Supreme Court, thus: WHEREFORE, the assailed CA decision is AFFIRMED in toto and this petition is DENIED
for lack of merit.
The [petitioner] did not. This only exposed the barrenness of the pose of the
[petitioner]. Costs against petitioner.

The [petitioner] may have experienced financial difficulties because of the 1997
economic crisis that ensued in Asia. However, the same does not constitute a valid
SO ORDERED.
justification for the [petitioner] to renege on its obligations to the [respondent]. The
[petitioner] cannot even find solace in Articles 1266 and 1267 of the New Civil Code for,
as declared by our Supreme Court:

It is a fundamental rule that contracts, once perfected, bind both contracting parties,
and obligations arising therefrom have the force of law between the parties and should
9. QUISUMBING, J., Chairperson,

second DIVISION

CARPIO,

CARPIO MORALES,

FIL-ESTATE PROPERTIES, INC.,

TINGA, and

Petitioner,

VELASCO, JR., JJ.

G.R. No. 165164

SPOUSES GONZALO and CONSUELO GO,

Respondents.

Promulgated:

- versus -

August 17, 2007

Present:

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION
any fluctuation in the value of the peso is a daily occurrence which is foreseeable and its
deleterious effects avoided by economic measures. The HLURB went on to say that
when petitioner discontinued the development of its condominium project, it failed to
QUISUMBING, J.: fulfill its contractual obligations to the spouses. And following Article 1475[3] of the Civil
Code, upon perfection of the contract, the parties, here the spouses Go, may demand
performance. And under Article 1191[4] of the same code, should one of the parties, in
this instance Fil-Estate, fail to comply with the obligation, the aggrieved party may
choose between fulfillment or rescission of the obligation, with damages in either case.
Inasmuch as Fil-Estate could no longer fulfill its obligation, the spouses Go may ask for
rescission of the contract with damages. The dispositive portion of the decision reads:
For review on certiorari are the Decision[1] dated June 9, 2004 of the Court of Appeals
in CA-G.R. SP No. 79624, and its Resolution[2] dated August 3, 2004, denying the motion
for reconsideration.
WHEREFORE, the foregoing considered, judgment is hereby rendered as follows:

The basic facts in this case are undisputed.


1. Ordering the respondent, Fil-Estate Properties, Inc., to refund to the complainants,
P3,439,000.07 (the amount proved) plus 12% interest thereon reckoned from 09 August
1999 (the date the respondent received the demand letter) until the same is fully paid.
On December 29, 1995, petitioner Fil-Estate Properties, Inc. (Fil-Estate) entered into a
contract to sell a condominium unit to respondent spouses Gonzalo and Consuelo Go at
Eight Sto. Domingo Place, a condominium project of petitioner located on Sto. Domingo
2. Ordering the respondent to pay to the complainants P25,000.00 attorneys fees as
Avenue, Quezon City. The spouses paid a total of P3,439,000.07 of the full contract price
and by way of damages.
set at P3,620,000.00.

All other claims and counterclaims are dismissed.


Because petitioner failed to develop the condominium project, on August 4, 1999, the
spouses demanded the refund of the amount they paid, plus interest. When petitioner
did not refund the spouses, the latter filed a complaint against petitioner for
reimbursement of P3,620,000 representing the lump sum price of the condominium IT IS SO ORDERED.[5]
unit, plus interest, P100,000 attorneys fees, and expenses of litigation before the
Housing and Land Use Regulatory Board (HLURB).
The Board of Commissioners of the HLURB denied petitioners petition for review and
consequent motion for reconsideration.[6] The Office of the President dismissed
In answer, petitioner claimed that respondents had no cause of action since the delay in petitioners appeal and denied its motion for reconsideration.[7]
the construction of the condominium was caused by the financial crisis that hit the Asian
region, a fortuitous event over which petitioner had no control.
On appeal, asserting that both the HLURB and the Office of the President committed
reversible errors, Fil-Estate asked the Court of Appeals to set aside the orders it is
On July 18, 2000, the HLURB Regional Director approved the decision of the Housing and appealing.
Land Use Arbiter in favor of the spouses Go. The HLURB ratiocinated that the Asian
financial crisis that resulted in the depreciation of the peso is not a fortuitous event as
The Court of Appeals affirmed the actions taken by the HLURB and the Office of the they entered the contract. Petitioner further asserts that the resultant economic
President and declared that the Asian financial crisis could not be considered a collapse of the real estate industry was unforeseen by the whole Asia and if it was
fortuitous event and that respondents right is provided for in Section 23[8] of indeed foreseeable, then all those engaged in the real estate business should have
Presidential Decree (P.D.) No. 957, otherwise known as The Subdivision and foreseen the impending fiasco. Petitioner adds that it had not committed any fraud; that
Condominium Buyers Protective Decree. The appellate court also noted that there was it had all the required government permits; and that it had not abandoned the project
yet no crisis in 1995 and 1996 when the project should have been started, and but only suspended the work. It also admits its obligation to complete the project. It
petitioner cannot blame the 1997 crisis for failure of the project, nor for even not says that it had in fact asked the HLURB for extension to complete it.[12]
starting it, because the project should have been completed by 1997.

In their Comment, respondents submit that the instant petition be rejected outright for
The appellate court denied petitioners motion for reconsideration. the reason that petitioner has not raised any question of law in the instant petition. The
questions of whether or not the Asian financial crisis is a fortuitous event, and whether
or not attorneys fees should be granted, are questions of facts which the Court of
Hence, this petition raising two issues for our resolution as follows: Appeals recognized as such.

I. Respondent spouses reiterate that contrary to what petitioner avers, the delay in the
construction of the building was not attributable to the Asian financial crisis which
happened in 1997[13] because petitioner did not even start the project in 1995 when it
should have done, so that it could have finished it in 1997, as stipulated in the contract.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE ASIAN FINANCIAL
CRISIS IS NOT A FORTUITOUS EVENT THAT WOULD EXCUSE THE DELIVERY BY
PETITIONER OF THE SUBJECT CONDOMINIUM UNIT TO RESPONDENTS.
Preliminarily, respondents bring to the attention of this Court the strange discrepancy in
the dates of notarization of the Certification of Non-Forum Shopping and the Affidavit of
Service both notarized on September 24, 2004, while the Secretarys Certification was
II.
notarized a day earlier on September 23, 2004. However, we shall not delve into
technicalities, but we shall proceed with the resolution of the issues raised on the
merits.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING PETITIONER LIABLE FOR THE
PAYMENT OF ATTORNEYS FEES.[9]
Indeed, the question of whether or not an event is fortuitous is a question of fact. As a
general rule, questions of fact may not be raised in a petition for review for as long as
On the first issue, did the Court of Appeals err in ruling that the Asian financial crisis was there is no variance between the findings of the lower court and the appellate court, as
not a fortuitous event? in this case where the HLURB, the Office of the President, and the Court of Appeals were
agreed on the fact.

Petitioner, citing Article 1174[10] of the Civil Code, argues that the Asian financial crisis
was a fortuitous event being unforeseen or inevitable. Petitioner likewise cites Servando Worthy of note, in a previous case, Asian Construction and Development Corporation v.
v. Philippine Steam Navigation Co.,[11] to bolster its case. Petitioner explains that the Philippine Commercial International Bank,[14] the Court had said that the 1997 financial
extreme economic exigency and extraordinary currency fluctuations could not have crisis that ensued in Asia did not constitute a valid justification to renege on obligations.
been reasonably foreseen and were beyond the contemplation of both parties when We emphatically stressed the same view in Mondragon Leisure and Resorts Corporation
v. Court of Appeals,[15] that the Asian financial crisis in 1997 is not among the fortuitous secure the services of counsel over eight years to protect their interest due to
events contemplated under Article 1174 of the Civil Code. petitioners delay in the performance of their clear obligation.

Also, we cannot generalize that the Asian financial crisis in 1997 was unforeseeable and WHEREFORE, the petition is DENIED for lack of merit. Petitioner is hereby ordered (1) to
beyond the control of a business corporation. It is unfortunate that petitioner reimburse respondents P3,439,000.07 at 6% interest starting August 4, 1999 until full
apparently met with considerable difficulty e.g. increase cost of materials and labor, payment, and (2) to pay respondents P100,000.00 attorneys fees. Costs against
even before the scheduled commencement of its real estate project as early as 1995. petitioner.
However, a real estate enterprise engaged in the pre-selling of condominium units is
concededly a master in projections on commodities and currency movements and
business risks. The fluctuating movement of the Philippine peso in the foreign exchange SO ORDERED.
market is an everyday occurrence, and fluctuations in currency exchange rates happen
everyday, thus, not an instance of caso fortuito.

Are respondents entitled to reimbursement of the amount paid, plus interest and
attorneys fees?

Yes. Section 23 of P.D. No. 957 is clear on this point.

It will be noted that respondents sent a demand letter dated August 4, 1999 to Fil-Estate
asking for the return of the total amount paid including amortization interests and legal
interest due thereon.[16] The latter did not respond favorably, and so the spouses filed
a complaint demanding the reimbursement of P3,620,000 representing the lump sum
price of the condominium unit with interest at the legal rate, and P100,000 attorneys
fees. But the respondents actually sought the refund of P3,620,000.00, the lump sum
cost of the condominium, more than their actual payment of P3,439,000.07. We are
thus constrained to award only P3,439,000.07, representing the sum of their actual
payments plus amortization interests and interest at legal rate which is 6% per annum
from the date of demand on August 4, 1999. We are not unaware that the appellate
court pegged the interest rate at 12% on the basis of Resolution No. R-421, Series of
1988 of the HLURB. But, conformably with our ruling in Eastern Shipping Lines, Inc. v.
Court of Appeals,[17] the award of 12% interest on the amount of refund must be
reduced to 6%.

Moreover, we are constrained to modify the Court of Appeals grant of attorneys fees
from P25,000 to P100,000 as just and equitable since respondents were compelled to
10. virtue of the laws of the Philippines, with main offices at Victorias, Negros Occidental,
and Manapla, Negros Occidental, respectively, and were organized by, and are
Republic of the Philippines composed of, sugar cane planters in the districts of Victorias, Manapla and Cadiz,
SUPREME COURT respectively, having been established principally as the representative entities of the
numerous sugar cane planters in said districts whose sugar cane productions are milled
Manila by the respondent corporation, with the main object of safeguarding their interests and
of taking up with the latter problems and questions which from time to time, may come
up between the said respondent corporation the said sugar cane planters; the other
EN BANC petitioners are Filipinos, of legal age, and together with numerous other sugar cane
planters who own sugar cane producing properties at Victorias, Manapla, and Cadiz
Districts, Negros Occidental, are bona fide officials and members of either one of the
two petitioner associations; that petitioner Fernando Gonzaga is a resident of Victorias,
G.R. No. L-6648 July 25, 1955
Negros Occidental, petitioner Jose Gaston is a resident of Victorias, Negros Occidental,
and petitioner Cesar L. Lopez is a resident of Bacolod City, Negros Occidental; and that
said petitioners bring this action for the benefit and on behalf of all their fellow sugar
VICTORIAS PLANTERS ASSOCIATION, INC., NORTH NEGROS PLANTERS ASSOCIATION, cane planters, owners of sugar cane producing lands in the said districts of Victorias,
INC., FERNANDO GONZAGA, JOSE GASTON and CESAR L. LOPEZ, on their own behalf and Manapla, and Cadiz, whose sugar cane productions are milled by respondent
on behalf of other sugar cane planters in Manapla, Cadiz and Victorias Districts, corporation, and who are so numerous that it would be impractical to include them all
petitioners-appellees, as parties herein;
vs.

VICTORIAS MILLING CO., INC., respondent-appellant. 2. That respondent Victorias Milling Co., Inc. is a corporation likewise duly organized and
established under and by virtue of the laws of the Philippines, with main offices at Ayala
Building Manila, where it may be served with summons;
Ross, Selph, Carrascoso and Janda for appellant.

Tañada, Pelaez and Teehankee for appellees.


3. That at various dates, from the year 1917 to 1934, the sugar cane planters pertaining
to the districts of Manapla and Cadiz, Negros Occidental, executed identical milling
contracts, setting forth the terms and conditions under which the sugar central "North
PADILLA, J.: Negros Sugar Co. Inc." would mill the sugar produced by the sugar cane planters of the
Manapla and Cadiz districts;

This is an action for declaratory judgment under Rule 66. The relief prayed for calls for
an interpretation of contracts entered into by and between the sugar cane planters in A copy of the standard form of said milling contracts with North Negros Sugar Co., Inc. is
the districts of Manapla, Cadiz and Victorias, Occidental Negros, and the Victorias hereto attached and made an integral part hereof as Annex "A.
Milling Company, Inc. After issues had been joined the parties submitted the case for
judgment upon the testimony of Jesus Jose Ossorio and the following stipulation of
facts:
As may be seen from the said standard form of milling contract, Annex "A," the sugar
cane planters of Manapla and Cadiz, Negros Occidental had executed on November 17,
1916 with Miguel J. Ossorio, a contract entitled "Contrato de la Central Azucarrera de
1. That petitioners Victorias Planters Association, Inc. and North Negros Planters 300 Toneladas," whereby said Miguel J. Ossorio was given a period up to December 31,
Association, Inc. are non-stock corporations duly established and existing under and by 1916 within which to make a study of and decide whether he would construct a sugar
central or mill with a capacity of milling 300 tons of sugar cane every 24 hours and period of their milling contracts executed in the year 1918 had already expired and
setting forth the mutual obligations and undertakings of such central and the planters terminated in the crop year 1947-1948, and the planters-members of the Victorias
and the terms and conditions under which the sugar cane produced by said sugar can Planters Association, Inc. likewise considered the stipulated 30-year period of their
planters would be milled in the event of the construction of such sugar central by said milling contracts, as having likewise expired and terminated in the crop year 1948-1949,
Miguel J. Ossorio. Such central was in fact constructed by said Miguel J. Ossorio in under the pertinent provisions of the standard milling contract (Annex "A") on the
Manapla, Negros Occidental, through the North Negros Sugar Co., Inc., where after the duration thereof, which provided in Par. 21 thereof as follows:
standard form of milling contracts (Annex "A") were executed, as above stated.

(a) Que entregaran a la Central de la `North Negros Sugar Co., Inc.' o a la que se
The parties cannot stipulate as to the milling contracts executed by the planters by construya en Victorias por Don Miguel J. Ossorio o sus cesionarios por espacio de treinta
Victorias, Negros Occidental, other than as follows; a number of them executed such (30) años desde la primera molienda, la caña que produzcan sus respectivas haciendas,
milling contracts with the North Negros Sugar Co., Inc., as per the standard forms hereto obligandose ademas a sembrar anualmente con cañadulce por lo menos en tres quintas
attached and made an integral part as Annexes "B" and "B-1," while a number of them partes de su extension total apropiado para caña, incluyendo en esta denominacion
executed milling contracts with the Victorias Milling Co., Inc., which was likewise tanto la siembra con puntas nuevas como el cultivo del retoño o cala-anan y sujetando
organized by Miguel J. Ossorio and which had constructed another Central at Victorias, la siembra a las epocas convenientes designadas por el comite de hacenderos a fin de
Negros Occidental, as per the standard form hereto attached and made an integral part poder proporcionar caña a la Central de conformidad con las clausulas 17 y 18 de esta
hereof as Annex "C". escritura.

4. The North Negros Sugar Co., Inc. had its first molienda or milling during the 1918- xxx xxx xxx
1919 crop year, and the Victorias Milling Co., had its first molienda or milling during the
1921-1922 crop year.
(i) Los hacenderos' imponen sobre sus haciendas mencionadas y citadas en esta
escritura servidumbres voluntarias a favor de Don Miguel J. Ossorio de sembrar caña
Subsequent moliendas or millings took place every successive crop year thereafter, por lo menos en tres quintas partes (3/5) de su extension superficial y entregar la caña
except the 6-year period, comprising 4 years of the last World War II and 2 years of que produzcan a Don Miguel J. Ossorio, de acuerdo con este contrato, por espacio de
post-war reconstruction of respondent's central at Victorias, Negros Occidental. treinta (30) años, a contar un (1) año desde la fecha de la primera molienda. repeated
representation were made with respondent corporation for negotiations regarding the
execution of new milling contracts which would take into consideration the charged
5. That after the liberation, the North Negros Sugar Co., Inc. did not reconstruct its circumstances presently prevailing in the sugar industry as compared with those
destroyed central at Manapla, Negros Occidental, and in 1946, it advised the North prevailing over 30 years ago and would provide for an increased participation in the
Negros Planters Association, Inc. that it had made arrangements with the respondent milled sugar for the benefit of the planters and their workers.
Victorias Milling Co., Inc. for said respondent corporation to mill the sugar cane
produced by the planters of Manapla and Cadiz holding milling contracts with it. Thus,
after the war, all the sugar cane produced by the planters of petitioner associations, in 7. That notwithstanding these repeated representations made by the herein petitioners
Manapla, Cadiz, as well as in Victorias, who held milling contracts, were milled in only with the respondent corporation for the negotiation and execution of new milling
one central, that of the respondent corporation at Victorias; contracts, the herein respondent has refused and still refuses to accede to the same,
contending that under the provisions of the mining contract (Annex "A".) "It is the view
of the majority of the stockholder-investors, that our contracts with the planters call for
6. Beginning with the year 1948, and in the following years, when the planters-members 30 years of milling — not 30 years in time" and that "as there was no milling during 4
of the North Negros Planters Association, Inc. considered that the stipulated 30-year years of the recent war and two years of reconstruction, when these six years are added
on to the earliest of our contracts in Manapla, the contracts by this view terminate in
the autumn of 1952," and the "the contracts for the Victorias Planters would terminate the appellant in its brief, where the parties stipulated that in the event of flood,
in 1957, and still later for those in the Cadiz districts," and that "apart from the typhoon, earthquake, or other force majeure, war, insurrection, civil commotion,
contractual agreements, the Company believes these war and reconstruction years organized strike, etc., the contract shall be deemed suspended during said period, does
accrue to it in equity. not mean that the happening of any of those events stops the running of the period
agreed upon. It only relieves the parties from the fulfillment of their respective
obligations during that time — the planters from delivering sugar cane and the central
The trial court rendered judgment the dispositive part of which is — from milling it. In order that the central, the herein appellant, may be entitled to
demand from the other parties the fulfillment of their part in the contracts, the latter
must have been able to perform it but failed or refused to do so and not when they
were prevented by force majeure such as war. To require the planters to deliver the
Wherefore, the Court renders judgment in favor of the petitioners and against the
sugar cane which they failed to deliver during the four years of the Japanese occupation
respondent and declares that the milling contracts executed between the sugar cane
and the two years after liberation when the mill was being rebuilt is to demand from the
planters of Victorias, Manapla and Cadiz, Negros Occidental, and the respondent
obligors the fulfillment of an obligation which was impossible of performance at the
corporation or its predecessors-in-interest, the North Negros Sugar Co., Inc., expired
time it became due. Nemo tenetur ad impossibilia. The obligee not being entitled to
and terminated upon the lapse of the therein stipulated 30-year period, and that
demand from the obligors the performance of the latters' part of the contracts under
respondent corporation is not entitled to claim any extension of or addition to the said
those circumstances cannot later on demand its fulfillment. The performance of what
30-year term or period of said milling contracts by virtue of an equivalent to 6 years of
the law has written off cannot be demanded and required. The prayer that the plaintiffs
the last war and reconstruction of its central, during which there was no planting and/or
be compelled to deliver sugar cane to the appellant for six more years to make up for
milling.
what they failed to deliver during those trying years, the fulfillment of which was
impossible, if granted, would in effect be an extension of the term of the contracts
entered into by and between the parties.
From this judgment the respondent corporation has appealed.

In accord with the rule laid down in the case of Lacson vs. Diaz, 47 Off. Gaz., Supp. No.
The appellant contends that the term stipulated in the contracts is thirty milling years 12, p. 337, where despite the fact that the lease contract stipulated seven sugar crops
and not thirty calendar years and postulates that the planters fulfill their obligation — and not seven crop years as the term thereof, we held that such stipulation
the six installments of their indebtedness--which they failed to perform during the six contemplated seven consecutive agricultural years and affirmed the judgment which
milling years from 1941-42 to 1946-47. The reason the planters failed to deliver the declared that the leasee was not entitled to an extension of the term of the lease for the
sugar cane was the war or a fortuitious event. The appellant ceased to run its mill due to number of years the country was occupied by the Japanese Army during which no sugar
the same cause. cane was planted2 we are of the opinion and so hold that the thirty-year period
stipulated in the contracts expired on the thirtieth agricultural year. The period of six
years — four during the Japanese occupation when the appellant did not operate its mill
Fortuitious event relieves the obligor from fulfilling a contractual obligation.1 The fact and the last two during which the appellant reconstructed its mill — cannot be
that the contracts make reference to "first milling" does not make the period of thirty deducted from the thirty-year period stipulated in the contracts.
years one of thirty milling years. The term "first milling" used in the contracts under
The judgment appealed from is affirmed, with costs against the appellant.
consideration was for the purpose of reckoning the thirty-year period stipulated therein.
Even if the thirty-year period provided for in the contracts be construed as milling years,
the deduction or extension of six years would not be justified. At most on the last year
of the thirty-year period stipulated in the contracts the delivery of sugar cane could be
extended up to a time when all the amount of sugar cane raised and harvested should
have been delivered to the appellant's mill as agreed upon. The seventh paragraph of
Annex "C", not found in the earlier contracts (Annexes "A", "B", and "B-1"), quoted by
11. respondent's daily production of 8,000 cases. Unlike petitioner, Aren Enterprises
rendered service outside private respondent's plant.
Republic of the Philippines

SUPREME COURT
On April 25, 1990, fire broke out in private respondent's plant, destroying, among other
Manila places, the area where petitioner did its work. As a result, petitioner's work was
stopped.

SECOND DIVISION

G.R. No. 119729 January 21, 1997 On May 15, 1990, petitioner asked private respondent to allow it to resume its service,
but petitioner was advised that on account of the fire, which had "practically burned all .
. . old soft drink bottles and wooden shells," private respondent was terminating their
contract.
ACE-AGRO DEVELOPMENT CORPORATION, petitioner,

vs.
Petitioner expressed surprise at the termination of the contract and requested private
COURT OF APPEALS and COSMOS BOTTLING CORPORATION, respondents.
respondent, on June 13, 1990, to reconsider its decision and allow petitioner to resume
MENDOZA, J.: its work in order to "cushion the sudden impact of the unemployment of many of [its]
workers." As it received no reply from private respondent, petitioner, on June 20, 1990,
informed its employees of the termination of their employment. Petitioner's
memorandum 1 read:
This case originated in a complaint for damages for breach of contract which petitioner
filed against private respondent. From the decision of the Regional Trial Court, Branch
72, Malabon, Metro Manila, finding private respondent guilty of breach of contract and
ordering it to pay damages, private respondent appealed to the Court of Appeals which MEMORANDUM TO : All Workers/Union Members
reversed the trial court's decision and dismissed the complaint for lack of merit.
THRU : Mr. Angelito B. Catalan
Petitioner in turn moved for a reconsideration, but its motion was denied. Hence, this
petition for review on certiorari. Local Chapter President

The facts are as follows: Bisig Manggagawa sa Ace Agro-NAFLU

Petitioner Ace-Agro Development Corporation and private respondent Cosmos Bottling This is to inform you that the Cosmos Bottling Corp. has sent a letter to Ace Agro-
Corporation are corporations duly organized and existing under Philippine laws. Private Development Corp. terminating our contract with them.
respondent Cosmos Bottling Corp. is engaged in the manufacture of soft drinks. Since
1979 petitioner Ace-Agro Development Corp. (Ace-Agro) had been cleaning soft drink
bottles and repairing wooden shells for Cosmos, rendering its services within the However, we are still doing what we can to save our contract and resume our
company premises in San Fernando, Pampanga. The parties entered into service operations, though this might take some time.
contracts which they renewed every year. On January 18, 1990, they signed a contract
covering the period January 1, 1990 to December 31, 1990. Private respondent had
earlier contracted the services of Aren Enterprises in view of the fact that petitioner
could handle only from 2,000 to 2,500 cases a day and could not cope with private We will notify you whatever would be the outcome of our negotiation with them in due
time.
Our workers, who have been anxiously waiting for the resumption of the operations and
who are the ones most affected by your sudden decision, are now becoming restless
Truly yours, due to the financial difficulties they are now suffering.

ACE AGRO-DEVELOPMENT CORP. We are, therefore, again seeking for the reconsideration of your decision to help
alleviate the sufferings of the displaced workers, which we also have to consider for
humanitarian reason.
(Sgd.) ANTONIO L. ARQUIZA

Manager
Yours very truly,

This led the employees to file a complaint for illegal dismissal before the Labor Arbiter
against petitioner and private respondent. ACE AGRO-DEVELOPMENT CORP.

On July 17, 1990, petitioner sent another letter to private respondent, reiterating its (Sgd.) ANTONIO I. ARQUIZA
request for reconsideration. Its letter 2 read: Manager

COSMOS BOTTLING CORPORATION In response, private respondent advised petitioner on August 28, 1990 that the latter
San Isidro MacArthur Highway could resume the repair of wooden shells under terms similar to those contained in its
contract but work had to be done outside the company premises. Private respondent's
San Fernando, Pampanga letter 3 read:

Attention: Mr. Norman P. Uy MR. ANTONIO I. ARQUIZA

General Services Manager Manager

ACE-AGRO DEVELOPMENT CORPORATION

Gentlemen: 165 J.P. Bautista Street

Malabon, Metro Manila

In our letter to you dated June 13, 1990 seeking your kind reconsideration of your
sudden drastic decision to terminate our mutually beneficial contract of long standing, it
is more than a month now but our office has not received a reply from you. Dear Mr. Arquiza:
We are pleased to inform you that COSMOS BOTTLING CORPORATION, San Fernando
Plant is again accepting job-out contract for the repair of our wooden shells.
This is to officially inform you that you can now resume the repair of wooden shells
inside the plant according to your existing contract with the Company.

Work shall be done outside the premises of the plant and under similar terms you
previously had with the company. We intend to give you priority so please see or
contact me at my office soonest for the particulars regarding the job. Please see Mr. Ener G. Ocampo, OIC-PDGS, on your new job site in the Plant.

Here is looking forward to doing business with you at the earliest possible time. Very truly yours,

(Sgd.) DANILO M. DE CASTRO COSMOS BOTTLING CORPORATION

Plant General Manager


(Sgd.) MICHAEL M. ALBINO

Petitioner refused the offer, claiming that to do its work outside the company's VP-Luzon/Plant General Manager
premises would make it (petitioner) incur additional costs for transportation which "will
eat up the meager profits that [it] realizes from its original contract with Cosmos." In
subsequent meetings with Danilo M. de Castro, Butch Ceña and Norman Uy of Cosmos, On November 17, 1990, petitioner rejected private respondent's offer, this time, citing
petitioner's manager, Antonio I. Arquiza, asked for an extension of the term of the the fact that there was a pending labor case. Its letter 5 to private respondent stated:
contract in view of the suspension of work. But its request was apparently turned down.

Mr. Michael M. Albino


On November 7, 1990, private respondent advised petitioner that the latter could then
VP-Luzon/Plant General Manager
resume its work inside the plant in accordance with its original contract with Cosmos.
Private respondent's letter 4 stated: Cosmos Bottling Corporation

San Fernando, Pampanga


MR. ANTONIO I. ARQUIZA

General Manager Dear Mr. Albino,


Ace-Agro Development Corporation

165 J. P. Bautista St., Malabon This is in connection with your letter dated November 7, 1990 regarding the resumption
of the repair of your wooden shells inside San Fernando, Pampanga Plant according to
Metro Manila
the existing contract with your company.

Dear Mr. Arquiza:


At present, there is a pending case before the Department of Labor and Employment in
San Fernando, Pampanga which was a result of the premature termination of the said
existing contract with your company. In view of that, we find it proper for us to work for WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff
the resolution of the said pending case and include in the Compromise Agreement the Ace-Agro Development Corporation and against defendant Cosmos Bottling
matter of the resumption of the repair of wooden shells in your San Fernando, Corporation, ordering the latter to pay to the former the following:
Pampanga Plant.

a) The amount of P1,008,418.01 as actual damages;


Thank you very much.

b) P100,000.00 as corrective or exemplary damages;


Very truly yours,

c) The amount of P50,000.00 as and for attorney's fees; and


ACE AGRO-DEVELOPMENT CORP.

d) Costs and expenses of litigation.


(Sgd.) ANTONIO I. ARQUIZA

Manager Defendant's counterclaims are dismissed.

On January 3, 1991, petitioner brought this case against private respondent for breach SO ORDERED.
of contract and damages in the Regional Trial Court of Malabon. It complained that the
termination of its service contract was illegal and arbitrary and that, as a result, it stood
to lose profits and to be held liable to its employees for backwages, damages and/or
Private respondent appealed to the Court of Appeals, which on December 29, 1994,
separation pay.
reversed the trial court's decision and dismissed petitioner's complaint. The appellate
court found that it was petitioner which had refused to resume work, after failing to
secure an extension of its contract. Petitioner now seeks a review of the Court of
On January 16, 1991, a decision was rendered in the labor case, finding petitioner liable Appeals' decision.
for the claims of its employees. Petitioner was ordered to reinstate the employees and
pay them backwages. However, private respondent Cosmos was absolved from the
employees' claims on the ground that there was no privity of contract between them
First. Petitioner claims that the appellate court erred "in ruling that respondent was
and private respondent.
justified in unilaterally terminating the contract on account of a force majeure." Quite
possibly it did not understand the appellate court's decision, or it would not be
contending that there was no valid cause for the termination of the contract but only for
On the other hand, in its decision rendered on November 21, 1991, the RTC found its suspension. The following is what the appellate court said: 6
private respondent guilty of breach of contract and ordered it to pay damages to
petitioner. Petitioner's claim for reimbursement for what it had paid to its employees in
the labor case was denied. The dispositive portion of the trial court's decision read:
Article 1231 of the New Civil Code on extinguishment of obligations does not specifically
mention unilateral termination as a mode of extinguishment of obligation but, according
to Tolentino, "there are other causes of extinguishment of obligations which are not It is obvious that what petitioner thought was the appellate court's ruling is merely its
expressly provided for in this chapter" (Tolentino, Civil Code of the Phils., Vol. IV, 1986 summary of private respondent's allegations. Precisely the appellate court, does not
ed., p. 273). He further said: agree with private respondent, that is why, in the last paragraph of the above excerpt,
the court says that there was no cause for terminating the contract but at most a
"temporary suspension of work." The court thus rejects private respondent's claim that,
But in some contracts, either because of its indeterminate duration or because of the as a result of the fire, the obligation of contract must be deemed to have been
nature of the prestation which is its object, one of the parties may free himself from the extinguished.
contractual tie by his own will (unilateral extinguishment); . . . (p. 274-275, Ibid)

Nonetheless, the Court of Appeals found that private respondent had reconsidered its
And that was just what defendant-appellant did when it unilaterally terminated the decision to terminate the contract and tried to accommodate the request of petitioner,
agreement it had with plaintiff-appellee by sending the May 23, 1990 letter. As per its first, by notifying petitioner on August 28, 1990 that it could resume work provided that
letter, the reason given by defendant-appellant for unilaterally terminating the this was done outside the premises and, later, on November 7, 1990, by notifying
agreement was because the April 25, 1990 fire practically burned all of the softdrink petitioner that it could then work in its premises, under the terms of their contract.
bottles and wooden shells which plaintiff-appellee was working on under the However, petitioner unjustifiably refused the offer because it wanted an extension of
agreement. What defendant-appellant was trying to say was that the prestation or the the contract to make up for the period of inactivity. As the Court of Appeals said in its
object of their agreement had been lost and destroyed in the above-described fire. decision: 7
Apparently, the defendant-appellant would like this situation to fall within what —
according to Tolentino — would be:
It took defendant-appellant time to make a reply to plaintiff-appellee's letters. But when
it did on August 28, 1990, it granted plaintiff-appellee priority to resume its work under
. . . (O)bligations may be extinguished by the happening of unforeseen events, under the terms of their agreement (but outside its premises), and the plaintiff-appellee
whose influence the obligation would never have been contracted, because in such refused the same on the ground that working outside the defendant-appellant's San
cases, the very basis upon which the existence of the obligation is founded would be Fernando Plant would mean added transportation costs that would offset any profit it
wanting. would earn.

Both parties admitted that the April 25, 1990 fire was a force majeure or unforeseen The appellee was without legal ground to refuse resumption of work as offered by the
event and that the same even burned practically all the softdrink bottles and wooden appellant, under the terms of their above agreement. It could not legally insist on
shells — which are the objects of the agreement. But the story did not end there. staying inside property it did not own, nor was under lease to

it . . . . In its refusal to resume its work because of the additional transportation costs to
be brought about by working outside the appellant's San Fernando plant, the appellee
It is true that defendant-appellant still had other bottles that needed cleaning and could be held liable for damages for breach of contract.
wooden shells that needed repairing (pp. 110-111, orig. rec.); therefore, the suspension
of the work of the plaintiff-appellee brought about by the fire is, at best, temporary as
found by the trial court. Hence, plaintiff-appellee's letters of reconsideration of the xxx xxx xxx
termination of the agreement addressed to defendant-appellant dated June 13, 1990
and July 17, 1990.

Thereafter, appellant sent its November 7, 1990 letter to appellee, this time specifically
stating that plaintiff-appellee can now resume work in accordance with their existing
agreement. This time, it could not be denied that by the tenor of the letter, appellant
was willing to honor its agreement with appellee, that it had finally made a (pertaining to defendant-appellant's August 28, 1990 letter), but the second refusal
reconsideration of appellee's plea to resume work under the contract. But again, must be construed as a breach of contract by plaintiff-appellee. . . .
plaintiff-appellee refused this offer to resume work.

The Court of Appeals was right that petitioner had no basis for refusing private
Why did the appellee refuse to resume work? Its November 17, 1990 letter stated that it respondent's offer unless petitioner was allowed to carry out its work in the company
had something to do with the settlement of the NLRC case filed against it by its premises. That petitioner would incur additional cost for transportation was not a good
employees. But that was not the real reason. In his cross-examination, the witness for reason for its refusal. Petitioner has not shown that on August 28, 1990, when it was
appellee stated that its real reason for refusing to resume work with the appellant was notified of the private respondent's offer, the latter's premises had so far been restored
— as in its previous refusal — because it wanted an extension of the period or duration so as to permit petitioner to resume work there. In fact, even when petitioner was
of the contract beyond December 31, 1991, to cover the period within which it was finally allowed to resume work within the plant, it was not in the former work place but
unable to work. in a new one, which shows that private respondent's reason for not granting petitioner's
request was not just a pretext.

The agreement between the appellee and the appellant is with a resolutory period,
beginning from January 1, 1990 and ending on December 31, 1990. When the fire broke Nor was petitioner justified in refusing to resume work on November 7 when it was
out on April 25, 1990, there resulted a suspension of the appellee's work as per again notified by petitioner to work. Although it cited the pending labor case as reason
agreement. But this suspension of work due to force majeure did not merit an for turning down private respondent's offer, it would appear that the real reason for
automatic extension of the period of the agreement between them. According to petitioner's refusal was the fact that the term of the contract was expiring in two
Tolentino: months and its request for an extension was not granted. But, as the appellate court
correctly ruled, the suspension of work under the contract was brought about by force
majeure. Therefore, the period during which work was suspended did not justify an
The stipulation that in the event of a fortuitous event or force majeure the contract shall extension of the term of the contract. 8 For the fact is that the contract was subject to a
be deemed suspended during the said period does not mean that the happening of any resolutory period which relieved the parties of their respective obligations but did not
of those events stops the running of the period the contract has been agreed upon to stop the running of the period of their contract.
run. It only relieves the parties from the fulfillment of their respective obligations during
that time. If during six of the thirty years fixed as the duration of a contract, one of the
parties is prevented by force majeure to perform his obligation during those years, he The truth of the matter is that while private respondent had made efforts towards
cannot after the expiration of the thirty-year period, be compelled to perform his accommodation, petitioner was unwilling to make adjustments as it insisted that it
obligation for six more years to make up for what he failed to perform during the said "cannot profitably resume operation under the same terms and conditions [of] the
six years, because it would in effect be an extension of the term of the contract. The terminated contract but with an outside work venue [as] transportation costs alone will
contract is stipulated to run for thirty years, and the period expires on the thirtieth year; eat up the meager profit that Ace-Agro realizes from its original contract." 9 While this
the period of six years during which performance by one of the parties is prevented by so-called "job-out" offer of private respondent had the effect of varying the terms of the
force majeure cannot be deducted from the period stipulated. contract in the sense that it could increase its cost, what petitioner did not seem to
realize was that the change was brought about by circumstances not of private
respondent's making.
In fine, the appellant withdrew its unilateral termination of its agreement with appellee
in its letter dated November 7, 1990. But the appellee's refusal to resume work was, in
effect, a unilateral termination of the parties' agreement — an act that was without Again when private respondent finally advised petitioner on November 7, 1990 to work
basis. When the appellee asked for an extension of the period of the contract beyond under the strict terms of its contract and inside the plant, petitioner thought only of its
December 31, 1990 it was, in effect, asking for a new contract which needed the interest by insisting that the contract be extended. Petitioner's manager, Antonio I.
consent of defendant-appellant. The appellee might be forgiven for its first refusal Arquiza, testified that he tried to secure a term extension for his company but his
request was turned down because the management of private respondent wanted a But this was not the petitioner's complaint. There was never an issue whether the
new contract after the expiration of the contract on December 31, 1990. Arquiza company's offer included the cleaning of bottles. Both parties understood private
testified. 10 respondent's offer as including the cleaning of empty soft drink bottles and the repair of
the wooden crates. Rather, the discussions between petitioner and private respondent's
representatives focused first, on the insistence of petitioner that it be allowed to work
A [Butch Ceña] told me that Cosmos is agreeable to allow us to resume our operation inside the company plant and, later, on its request for the extension of the life of the
and when I inquired about the extension of the contract he told me that I better refer contract.
the matter to Mr. Norman Uy.

Q Did you see Mr. Norman Uy? Petitioner claims that private respondent had a reason to want to terminate the
contract and that was to give the business to Aren Enterprises, as the latter offered its
services at a much lower rate than petitioner. Aren Enterprises' rate was P2.50 per shell
A Yes, sir, when I went to see Mr. Norman Uy he asked me why I was there and he told while petitioner's rates were P4.00 and P6.00 per shell for ordinary and super sized
me why I did not start operation I told him that what we are expecting that Mr. Ceña bottles, respectively. 11
would give me the formal letter regarding the resumption of the operation and
honoring of contract and he said that our price was so high and if we are willing to use The contention has no basis in fact. The contract between private respondent and Aren
said contract and when I said yes he told me that we will just send you a letter Enterprises had been made on March 29, 1990 — before the fire broke out. The
considering that another contractor repairing our damaged shells and cleaning of dirty contract between petitioner and private respondent did not prohibit the hiring by
bottles. When I asked him that does that mean that the meeting I had with Mr. Ceña, he private respondent of another service contractor. With private respondent hitting
told me that was null and void and he told me that Mr. Ceña want a new contract. production at 8,000 bottles of soft drinks per day, petitioner could clearly not handle
the business, since it could clean only 2,500 bottles a day. 12 These facts show that
As already stated, because the suspension of work was due to force majeure, there was although Aren Enterprises' rate was lower than petitioner's, they did not affect private
no justification for petitioner's demand for an extension of the terms of the contract. respondent's business relation with petitioner. Despite private respondent's contract
Private respondent was justified in insisting that after the expiration of the contract, the with Aren Enterprises, private respondent continued doing business with petitioner and
parties must negotiate a new one as they had done every year since the start of their would probably have done so were it not for the fire. On the other hand, Aren
business relations in 1979. Enterprises could not be begrudged for being allowed to continue rendering service
even after the fire because it was doing its work outside private respondent's plant. For
Second. Petitioner slams the Court of Appeals for ruling that "it was [petitioner's]
that matter, after the fire, private respondent on August 28, 1990 offered to let
unjustified refusal which finally terminated the contract between the parties." This
petitioner resume its service provided this was done outside the plant.
contention is likewise without merit. Petitioner may not be responsible for the
termination of the contract, but neither is private respondent, since the question in this Petitioner may not be to blame for the failure to resume work after the fire, but neither
case is whether private respondent is guilty of breach of contract. The trial court held is private respondent. Since the question is whether private respondent is guilty of
that private respondent committed a breach of contract because, even as its August 28, breach of contract, the fact that private respondent is blameless can only lead to the
1990 letter allowed petitioner to resume work, private respondent's offer was limited to conclusion that the appealed decision is correct.
the repairs of wooden shells and this had to be done outside the company's premises.
On the other hand, the final offer made on November 7, 1990, while allowing the WHEREFORE, the petition for review is DENIED and the decision of the Court of Appeals
"repair of wooden shells [to be done] inside the plant according to your contract with is AFFIRMED.
the company," was still limited to the repair of the wooden shells, when the fact was
that the parties' contract was both for the repair of wooden crates and for the cleaning
of soft drink bottles. SO ORDERED.
12. In the early afternoon of August 17, 1960, barge L-1892, owned by the Luzon
Stevedoring Corporation was being towed down the Pasig river by tugboats "Bangus"
Republic of the Philippines and "Barbero"1 also belonging to the same corporation, when the barge rammed
SUPREME COURT against one of the wooden piles of the Nagtahan bailey bridge, smashing the posts and
causing the bridge to list. The river, at the time, was swollen and the current swift, on
Manila account of the heavy downpour of Manila and the surrounding provinces on August 15
and 16, 1960.

EN BANC
Sued by the Republic of the Philippines for actual and consequential damage caused by
its employees, amounting to P200,000 (Civil Case No. 44562, CFI of Manila), defendant
G.R. No. L-21749 September 29, 1967 Luzon Stevedoring Corporation disclaimed liability therefor, on the grounds that it had
exercised due diligence in the selection and supervision of its employees; that the
damages to the bridge were caused by force majeure; that plaintiff has no capacity to
sue; and that the Nagtahan bailey bridge is an obstruction to navigation.
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee,

vs.
After due trial, the court rendered judgment on June 11, 1963, holding the defendant
LUZON STEVEDORING CORPORATION, defendant-appellant.
liable for the damage caused by its employees and ordering it to pay to plaintiff the
actual cost of the repair of the Nagtahan bailey bridge which amounted to P192,561.72,
with legal interest thereon from the date of the filing of the complaint.
Office of the Solicitor General for plaintiff-appellee.

H. San Luis and L.V. Simbulan for defendant-appellant.


Defendant appealed directly to this Court assigning the following errors allegedly
committed by the court a quo, to wit:

I — The lower court erred in not holding that the herein defendant-appellant had
exercised the diligence required of it in the selection and supervision of its personnel to
prevent damage or injury to others.1awphîl.nèt

REYES, J.B.L., J.:


II — The lower court erred in not holding that the ramming of the Nagtahan bailey
bridge by barge L-1892 was caused by force majeure.

The present case comes by direct appeal from a decision of the Court of First Instance of
Manila (Case No. 44572) adjudging the defendant-appellant, Luzon Stevedoring
III — The lower court erred in not holding that the Nagtahan bailey bridge is an
Corporation, liable in damages to the plaintiff-appellee Republic of the Philippines.
obstruction, if not a menace, to navigation in the Pasig river.
IV — The lower court erred in not blaming the damage sustained by the Nagtahan bailey As to the first question, considering that the Nagtahan bridge was an immovable and
bridge to the improper placement of the dolphins. stationary object and uncontrovertedly provided with adequate openings for the
passage of water craft, including barges like of appellant's, it is undeniable that the
unusual event that the barge, exclusively controlled by appellant, rammed the bridge
V — The lower court erred in granting plaintiff's motion to adduce further evidence in supports raises a presumption of negligence on the part of appellant or its employees
chief after it has rested its case. manning the barge or the tugs that towed it. For in the ordinary course of events, such a
thing does not happen if proper care is used. In Anglo American Jurisprudence, the
inference arises by what is known as the "res ipsa loquitur" rule (Scott vs. London Docks
Co., 2 H & C 596; San Juan Light & Transit Co. vs. Requena, 224 U.S. 89, 56 L. Ed., 680;
VI — The lower court erred in finding the plaintiff entitled to the amount of P192,561.72
Whitwell vs. Wolf, 127 Minn. 529, 149 N.W. 299; Bryne vs. Great Atlantic & Pacific Tea
for damages which is clearly exorbitant and without any factual basis.
Co., 269 Mass. 130; 168 N.E. 540; Gribsby vs. Smith, 146 S.W. 2d 719).

However, it must be recalled that the established rule in this jurisdiction is that when a
The appellant strongly stresses the precautions taken by it on the day in question: that it
party appeals directly to the Supreme Court, and submits his case there for decision, he
assigned two of its most powerful tugboats to tow down river its barge L-1892; that it
is deemed to have waived the right to dispute any finding of fact made by the trial
assigned to the task the more competent and experienced among its patrons, had the
Court. The only questions that may be raised are those of law (Savellano vs. Diaz, L-
towlines, engines and equipment double-checked and inspected; that it instructed its
17441, July 31, 1963; Aballe vs. Santiago, L-16307, April 30, 1963; G.S.I.S. vs. Cloribel, L-
patrons to take extra precautions; and concludes that it had done all it was called to do,
22236, June 22, 1965). A converso, a party who resorts to the Court of Appeals, and
and that the accident, therefore, should be held due to force majeure or fortuitous
submits his case for decision there, is barred from contending later that his claim was
event.
beyond the jurisdiction of the aforesaid Court. The reason is that a contrary rule would
encourage the undesirable practice of appellants' submitting their cases for decision to
either court in expectation of favorable judgment, but with intent of attacking its
jurisdiction should the decision be unfavorable (Tyson Tan, et al. vs. Filipinas Compañia These very precautions, however, completely destroy the appellant's defense. For caso
de Seguros) et al., L-10096, Res. on Motion to Reconsider, March 23, 1966). fortuito or force majeure (which in law are identical in so far as they exempt an obligor
Consequently, we are limited in this appeal to the issues of law raised in the appellant's from liability)2 by definition, are extraordinary events not foreseeable or avoidable,
brief. "events that could not be foreseen, or which, though foreseen, were inevitable" (Art.
1174, Civ. Code of the Philippines). It is, therefore, not enough that the event should not
have been foreseen or anticipated, as is commonly believed, but it must be one
impossible to foresee or to avoid. The mere difficulty to foresee the happening is not
Taking the aforesaid rules into account, it can be seen that the only reviewable issues in
impossibility to foresee the same: "un hecho no constituye caso fortuito por la sola
this appeal are reduced to two:
circunstancia de que su existencia haga mas dificil o mas onerosa la accion diligente del
presento ofensor" (Peirano Facio, Responsibilidad Extra-contractual, p. 465; Mazeaud
Trait de la Responsibilite Civil, Vol. 2, sec. 1569). The very measures adopted by
1) Whether or not the collision of appellant's barge with the supports or piers of the appellant prove that the possibility of danger was not only foreseeable, but actually
Nagtahan bridge was in law caused by fortuitous event or force majeure, and foreseen, and was not caso fortuito.

2) Whether or not it was error for the Court to have permitted the plaintiff-appellee to Otherwise stated, the appellant, Luzon Stevedoring Corporation, knowing and
introduce additional evidence of damages after said party had rested its case. appreciating the perils posed by the swollen stream and its swift current, voluntarily
entered into a situation involving obvious danger; it therefore assured the risk, and can
not shed responsibility merely because the precautions it adopted turned out to be
insufficient. Hence, the lower Court committed no error in holding it negligent in not
suspending operations and in holding it liable for the damages caused.

It avails the appellant naught to argue that the dolphins, like the bridge, were
improperly located. Even if true, these circumstances would merely emphasize the need
of even higher degree of care on appellant's part in the situation involved in the present
case. The appellant, whose barges and tugs travel up and down the river everyday,
could not safely ignore the danger posed by these allegedly improper constructions that
had been erected, and in place, for years.

On the second point: appellant charges the lower court with having abused its discretion
in the admission of plaintiff's additional evidence after the latter had rested its case.
There is an insinuation that the delay was deliberate to enable the manipulation of
evidence to prejudice defendant-appellant.

We find no merit in the contention. Whether or not further evidence will be allowed
after a party offering the evidence has rested his case, lies within the sound discretion of
the trial Judge, and this discretion will not be reviewed except in clear case of abuse.3

In the present case, no abuse of that discretion is shown. What was allowed to be
introduced, after plaintiff had rested its evidence in chief, were vouchers and papers to
support an item of P1,558.00 allegedly spent for the reinforcement of the panel of the
bailey bridge, and which item already appeared in Exhibit GG. Appellant, in fact, has no
reason to charge the trial court of being unfair, because it was also able to secure, upon
written motion, a similar order dated November 24, 1962, allowing reception of
additional evidence for the said defendant-appellant.4

WHEREFORE, finding no error in the decision of the lower Court appealed from, the
same is hereby affirmed. Costs against the defendant-appellant.

Das könnte Ihnen auch gefallen