G.R. No. L-5671 August 24,
The grounds
1910
BENITO DE LOS
REYES, plaintiff-appellant,
vs.
VERONICA
ALOJADO, defendant-appellee.
Ramon Diokno, for appellant.
No appearance for appellee.
TORRES, J.:
On or about January 22, 1905, Veronica
Alojado received, as a loan, from Benito
de los Reyes that the sum P67 .60, for the
purpose of paying a debt she owed to
Olimpia Zaballa. It was agreed between
Alojado and Reyes that the debtor should
remain as a servant in the house and in
the service of her creditor, without any
renumeration whatever, until she should
find some one who would furnish her with
the said sum where with to repeat the loan.
The defendant, Veronica Alojado,
afterwards left the house of the plaintiff, on
March 12, 1906, without having paid him
her debt, nor did she do so at any
subsequent date, notwithstanding his
demands. The plaintiff, therefore, on the
15th of march, 1906, filed suit in the court
of the justice of the peace of Santa Rosa,
La Laguna, against Veronica Alojado to
recover the said sum or, in a contrary case,
to compel her to return to his service. The
trial having been had, the justice of the
peace, on April 14, 1906, rendered
judgment whereby he sentenced the
defendant to pay to the plaintiff the sum
claimed and declared that, in case the
debtor should be insolvent, she should be
obliged to fulfill the agreement between
her and the plaintiff. The costs of the trial
were assessed against the defendant.
The defendant appealed from the said
judgment to the Court of First Instance to
which the plaintiff, after the case had been
docketed by the clerk of court, made a
motion on May 4, 1906, requesting that
the appeal interposed by the defendant be
disallowed, with the costs of both
instances against her.
alleged in support of this motion. were that
the appeal had been filed on the sixth day
following that when judgment was
rendered in the trial, on April 14th, and that
it, therefore, did not come within the period
of the five days prescribed by section 76 of
the Code of Civil Procedure, as proven by
the certificate issued by the justice of the
peace of Santa Rosa. The Court of First
Instance, however, by order of July 16,
1906, overruled the motion of the
plaintiff-appellee, for the reasons therein
stated, namely, that the defendant was not
notified of the judgment rendered in the
case on April 14th of that year until the
16th of the same month, and the appeal
having been filed four days later, on the
20th, it could having seen that the five
days specified by section 76 of the Code
of Civil Procedure had not expired. The
plaintiff was advised to reproduce his
complaint within ten days, in order that
due procedure might he had thereupon.
The plaintiff took exception to the
aforementioned order and at the same
time reproduced the complaint he had filed
in the court of the justice of the peace, in
which, after relating to the facts
hereinbefore stated, added that the
defendant, besides the sum
above-mentioned, had also received from
the plaintiff, under the same conditions,
various small amounts between the dates
of January 22, 1905, and March 10, 1906,
aggregating altogether P11.97, and that
they had not been repaid to him. He
therefore asked that judgment be
rendered sentencing the defendant to
comply with the said contract and to pay to
the plaintiff the sums referred to,
amounting in all to P79.57, and that until
this amount should have been in paid, the
defendant should remain gratuitously in
the service of plaintiff's household, and
that she should pay the costs of the trial.
The defendant, in her written answer of
August 15, 1906, to the aforesaid
complaint, denied the allegations
contained in paragraphs 1 and 2 of the
complaint and alleged that, although she
had left the plaintiff's service, it was
because the latter had paid her no sum
whatever for the services she had
rendered in his house. The defendant
likewise denied the conditions expressed
in paragraph 4 of the complaint, averring
that the effects purchased, to the amount
of P11.97, were in the possession of the
plaintiff, who refused to deliver them to her.
She therefore asked that she be absolved
from the complaint and that the plaintiff be
absolved from the complaint the wages
due her for the services she had rendered.
The case came to trial on October 19,
1906, and, after the production of
testimony by both parties, the judge, on
November 21st of the same year,
rendered judgment absolving the
defendant from the complain, with the
costs against the plaintiff, and sentencing
the latter to pay to the former the sum of
P2.43, the balance found to exist between
the defendant's debt of P79.57 and the
wages due her by the plaintiff, which
amounted to P82. The plaintiff, on the 6th
of December, filed a written exception to
the judgment aforesaid through the
regular channels, and moved for a new
trial on the ground that the findings of fact
set forth in the judgment were manifestly
contrary to the weight of the evidence.
This motion was overruled on the 17th of
the same month, to which exception was
taken by the appellant, who afterwards
filed the proper bill of exceptions, which
was approved, certified, and forwarded to
the clerk of this court.
The present suit, initiated in a justice of the
peace court and appealed to the Court of
First Instance of La Laguna at a time prior
to the enactment of Act No. 1627, which
went into effect on July 1, 1907, which
limited to two instances the procedure to
be observed in verbal actions, concerns
the collection of certain sum received as a
loan by the defendant from the plaintiff,
and of the wages earned by the former for
services rendered as a servant in the said
plaintiff's house.
Notwithstanding the denial of the
defendant, it is a fact clearly proven, as
found in the judgment appealed from, that
the plaintiff did deliver to Hermenegildo de
los Santos the sum of P67.60 to pay a
debt was paid by De los Santos with the
knowledge and in behalf of the said
defendant who, of her free will, entered the
service of the plaintiff and promised to pay
him as soon as she should find the money
wherewith to do so.
The duty to pay the said sum, as well as
that of P11.97 delivered to the defendant
in small amounts during the time that she
was in the plaintiff's house, is
unquestionable, inasmuch as it is a
positive debt demandable of the
defendant by her creditor. (Arts. 1754,
1170, Civil Code.) However, the reason
alleged by the plaintiff as a basis for the
loan is untenable, to wit, that the
defendant was obliged to render service in
his house as a servant without
remuneration whatever and to remain
therein so long as she had not paid her
debt, inasmuch as this condition is
contrary to law and morality. (Art. 1255,
Civil Code.)
Domestic services are always to be
remunerated, and no agreement may
subsist in law in which it is stipulated that
any domestic service shall be absolutely
gratuitous, unless it be admitted that
slavery may be established in this country
through a covenant entered into between
the interested parties.
Articles 1583, 1584, and 1585 of the Civil
Code prescribe rules governing the hiring
of services of domestics servants, the
conditions of such hire, the term during
which the service may rendered and the
wages that accrue to the servant, also the
duties of the latter and of the master. The
first of the articles cited provides that a
hiring for life by either of the contracting
parties is void, and, according to the last of
three articles just mentioned, besides what
is prescribed in the preceding articles with
regard to masters and servants, the
provisions of special laws and local and we hereby affirm the said judgment,
ordinances shall be observed. with the costs against the appellant.

During the regime of the former Arellano, C. J., Johnson, Moreland and
sovereignty, the police regulations Trent, JJ., concur.
governing domestic service, of the date of
September 9, 1848, were in force, article
19 of which it is ordered that all usurious
conduct toward the servants and
employees of every class is prohibited,
and the master who, under pretext of an
advance of pay or of having paid the debts
G.R. No.
or the taxes of his servant, shall have
L-21676 Febru
succeeded in retaining the latter in his
ary 28, 1969
service at his house, shall be compelled to
pay to such servant all arrears due him
and any damages he may have VICENTE ALDABA, ET
occasioned him, and the master shall also AL., petitioners,
be fined. vs.
COURT OF APPEALS,
CESAR ALDABA, ET
The aforementioned article 1585 of the
AL., respondents.
Civil Code undoubtedly refers to the
provisions of the regulations just cited.
Rodas and Almeda for
petitioners.
When legal regulations prohibit even a
Dakila F. Castro and
usurious contract and all abuses
Associates for
prejudicial to subordinates and servant, in
respondents.
connection with their salaries and wages,
it will be understood at once that the
compact whereby service rendered by a ZALDIVAR, J.:
domestic servant in the house of any
inhabitant of this country is to be This is a petition to review
gratuitous, is in all respects reprehensible the decision of the Court of
and censurable; and consequently, the Appeals in case CA-G.R.
contention of the plaintiff, that until the No. 27561-R, entitled
defendant shall have paid him her debt "Vicente Aldaba, et al.,
she must serve him in his house plaintiffs-appellants,
gratuitously is absolutely inadmissible. versus Cesar Aldaba, et al.,
defendants-appellees",
The trial record discloses no legal reason affirming the decision of
for the rejection of the findings of fact and the Court of First Instance
of law contained in the judgment appealed of Manila in its Civil Case
from, nor for an allowance of the errors No. 41260.
attributed appealed from, nor for an
allowance of the errors attributed thereto; When Belen Aldaba, a rich
on the contrary, the reasons hereinabove woman of Malolos,
stated show the propriety of the said Bulacan, died on February
judgment. 25, 1955, she left as her
presumptive heirs her
For the foregoing reasons, and accepting surviving husband
those set forth in the judgment appealed Estanislao Bautista, and
from, it is proper, in our opinion, to affirm her brother Cesar Aldaba.
Belen Aldaba was
childless. Among the
properties that she left
were the two lots involved
in this case, situated at
427 Maganda Street,
Santa Mesa, Manila.
Petitioners Dr. Vicente
Aldaba and Jane Aldaba,
father and daughter,
respectively, lived during
the last war in their house
in Malate, Manila. Belen
Aldaba used to go to their
house to seek the advice
and medical assistance of
Dr. Vicente Aldaba. When
the latter's house was
burned during the
liberation of Manila in 1945,
Belen Aldaba invited Dr.
Aldaba and his daughter,
who was then a student in
medicine, to live in one of
her two houses standing
on the lots in question, and
the Aldaba father and
daughter accepted the
offer of Belen and they
actually lived in one of
those two houses until
sometime in 1957 when
respondent Emmanuel
Bautista filed an ejectment
case against them in the
city court of Manila. Dr.
Vicente Aldaba continued
to act as a sort of adviser
of Belen and Jane, after
becoming a qualified
doctor of medicine,
became the personal
physician of Belen until the
latter's death on February
25, 1955.
On June 24, 1955, the
presumptive heirs
Estanislao Bautista and
Cesar Aldaba, executed a
deed of extrajudicial
partition of the properties
left by the deceased Belen
Aldaba, by virtue of which
deed the two lots in
question were alloted to
Cesar Aldaba.
Subsequently, on August
26, 1957, herein
respondents Cesar Aldaba
and Emmanuel Bautista,
the latter being a grandson
of Estanislao Bautista by
his first marriage,
executed a deed whereby
the two lots that were
alloted to Cesar Aldaba
were ceded to Emmanuel
Bautista in exchange of
the latter's lot situated at
San Juan, Rizal. By virtue
of the deed of extra-judicial
partition and the deed of
exchange, Transfer
certificates of Title Nos.
1334 and 1335,
respectively, covering lots
Nos. 32 and 34 — now in
question — both in the
name of Belen Aldaba,
were cancelled by the
Register of Deeds of
Manila, and Transfer
Certificates of Title Nos.
49996 and 49997 in the
name of Emmanuel
Bautista were issued in
lieu thereof.
Emmanuel Bautista then
required Dr. Vicente
Aldaba to vacate the lots in
question and, upon the
latter's refusal, filed an
ejectment case against
him in the City Court of
Manila. Without awaiting
the final result of the
ejectment case, herein
petitioners filed, on August
22, 1959, a complaint in
the Court of First Instance
of Manila, docketed as
Civil Case No. 41260,
against herein
respondents Cesar Aldaba
and Emmanuel Bautista
and the Register of Deeds
of Manila, alleging that
they had become the
owners of the two lots in
question, and praying that
the deed of partition
entered into by Estanislao
Bautista and Cesar Aldaba
be declared null and void
with respect to Lot No. 32,
covered by Transfer
Certificate of Title No.
1334, and lot No. 34
covered by Transfer
Certificate of Title No 1335;
that said lots be declared
the property of therein
plaintiffs (herein
petitioners); and that the
Register of Deeds of
Manila be ordered to
cancel TCT Nos. 49996
and 49997 in the name of
Emmanuel Bautista and in
lieu thereof issue two new
TCTs in the name of
therein plaintiffs.
After hearing, the court a
quo rendered a decision
dismissing the complaint,
and declaring, among
others, that if the
deceased Belen Aldaba
intended to convey the lots
in question to Vicente
Aldaba and Jane Aldaba,
by way of donation, the
conveyance should be
considered a donation
inter vivos, for the validity
of which a public
instrument was necessary
pursuant to Article 749 of
the Civil Code. The
dispositive portion of the
decision of the trial court
reads as follows:
IN VIEW WHEREOF both
complaint and
counterclaim dismissed;
the Court holds Emmanuel
Bautista to be the absolute
owner of the property in
question, land and
improvement, but with the
right of plaintiffs to stay
until they should have
been reimbursed of
P5,000.00 but without any
obligation, until such
reimbursement, to pay any
rental unto defendant
Emmanuel Bautista. No
pronouncement as to
costs.
From this decision, therein
plaintiffs appealed to the
Court of Appeals, and the
latter court rendered a
decision, on June 21, 1963,
raising from P5,000 to
P8,000 the amount to be
reimbursed to
plaintiffs-appellants, but
affirming in all other
respects the decision of
the lower court. Herein
petitioners' motion for
reconsideration of the
decision having been
denied by the Court of
Appeals, they forthwith
filed the present petition in
this Court.
Before this Court,
petitioners now contend
that the Court of Appeals
erred: (1) in affirming the
decision of the Court of
First Instance; (2) in
holding that the donation,
as found by the Court of
First Instance of Manila,
was a simple
donation inter vivos and
not a donation "con causa
onerosa and so it was void
for it did not follow the
requirements of Article 749
of the Civil Code; (3) in not
holding that the property in
question had already been Huag
donated to herein kayong
petitioners in consideration umalis
of the latter's services; (4) diyan.
in not declaring petitioners Talagang
to be the absolute owners iyan ay
of the property in dispute; para sa
and (5) in considering inyo. Alam
testimonies which had nila na iyan
been stricken out. ay sa inyo.

The errors assigned by Belen A.

petitioners being Bautista.
interrelated, We are going
to discuss them together.
Petitioners maintain that
Petitioners contend that the note, although it could
petitioners Dr. Vicente not transmit title, showed,
Aldaba and Jane Aldaba nevertheless, that a
had rendered services to donation had already been
the deceased Belen made long before its
Aldaba for more than ten writing, in consideration of
years without receiving the services rendered
any compensation, and so before the writing and to
in compensation for their be rendered after its
services Belen Aldaba writing. And the donation
gave them the lots in being with an onerous
dispute including the cause, petitioners maintain
improvements thereon. It that it was valid even if it
is the stand of petitioners was done orally.
that the property in Petitioners further maintain
question was conveyed to that if Exhibit 6 labors
them by way of an onerous under some ambiguity, this
donation which is ambiguity is cured by
governed by Article 733, Exhibit 7, which reads as
and not Article 749, of the follows:
Civil Code. Under Article
733 of the Civil Code an June 27,
onerous donation does not 1956
have to be done by virtue
of a public instrument. The
petitioners point to the Dear Nana
note, Exhibit 6, as Tering,
indicating that a donation
had been made, which Narito po
note reads as follows: ang notice
tungkol sa
June 18, amillarami
1953 ento na
pagbabaya
ran diyan
Jane, sa lupa at
bahay na
 kinatatayu
an ninyo.
Sa Malolos
po ito
tinanggap.
Ang
pagbabaya
ran po ng
Inkong ay
bayad na.
Gumagala
ng,
"Cely."
The addressee, Tering, was the wife of Dr.
Vicente Aldaba, and the sender, Cely was
the wife of respondent Emmanuel Bautista.
This note, petitioners argue, proves that
respondents had recognized the
ownership of the petitioners of the house
and lot, for, otherwise, Cely should have
sent the notice of real estate tax to
respondent Cesar Aldaba, to whom was
alloted the property in question by virtue of
the extra-judicial partition.
Respondents, Cesar Aldaba and
Emmanuel Bautista, on the other hand,
contend that the evidence of the plaintiff
does not disclose clearly that a donation
had been made. Respondents point out
that the note, Exhibit 6, as worded, is
vague, in that it could not be interpreted as
referring to the lots in question, or that
which was given therein was given for a
valuable consideration. And finally,
respondents contend that if the property
had really been given to petitioners, why
did they not take any step to transfer the
property in their names?
The Court of Appeals, in its decision,
made the following findings and
conclusions:
(1) The note Exhibit 6 did not make any
reference to the lots in question, nor to the
services rendered, or to be rendered, in
favor of Belen. The note was insufficient is
a conveyance, and hence could not be
considered as evidence of a donation with
onerous cause. This note can be
considered, at most, as indicative of the
intention to donate.
(2) There is no satisfactory explanation
why from 1945 to 1955, no notarial
document was executed by Belen in favor
of petitioners who were educated persons.
The reason given was "extremada
delicadeza" which reason the Court of
Appeals considered as unsatisfactory.
(3) The evidence regarding the value of
the services (P53,000.00) rendered by
petitioners (father and daughter) to Belen
does not improve the proof regarding the
alleged donation. If petitioners believed
that the gratuitous use of the property was
not sufficient to compensate them for their
services, they could have presented their
claims in the intestate proceedings, which
they themselves could have initiated, if
none was instituted.
The conclusion of the Court of Appeals, as
well as that of the trial court, that there was
no onerous donation made by Belen
Aldaba to petitioners is based upon their
appreciation of the evidence, and this
Court will not disturb the factual findings of
those courts.lawphi1.nêt
The question to be resolved in the instant
case is: Was there a disposition of the
property in question made by the
deceased Belen Aldaba in favor of herein
petitioners? The note, Exhibit 6,
considered alone, was, as held by the
Court of Appeals, confirming the opinion of
the lower court, only an indication of the
intention of Belen Aldaba to donate to the
petitioners the property occupied by the
latter. We agree with this conclusion of the
trial court and the Court of Appeals. The
note, in fact, expressed that the property
was really intended for the petitioners,
"talagang iyan ay para sa inyo." If the
property was only intended for petitioners
then, at the time of its writing, the property
had not yet been disposed of in their favor.
There is no evidence in the record that
such intention was effectively carried out
after the writing of the note. Inasmuch as
the mere expression of an intention is not
a promise, because a promise is an
undertaking to carry the intention into
effect, 1 We cannot, considering Exhibit 6
alone, conclude that the deceased
promised, much less did convey, the
property in question to the petitioners.
That the note, Exhibit 6, was only an
indication of an intention to give was also
the interpretation given by petitioners
themselves, when they said in their
memorandum, dated February 2, 1960, in
the lower court 2 thus:
Legally speaking, there was a contractual
relation created between Belen Aldaba
and the plaintiff since 1945 whereby the
former would give to the latter the two
parcels of land, together with the house
standing thereon, upon the rendition of
said services. This fact can be gleaned
from the note (Exh. "6", Plaintiffs) which in
part says: TALAGANG IYAN AY PARA
SAINYO
We have said that Exhibit 6 expressed
only the intention to donate. Let us
suppose, for the sake of argument, that
previous to the writing of the note there
had already been a disposition of the
property in favor of the petitioners. This
disposition alone, would not make the
donation a donation for a valuable
consideration. We still have to ask: What
was the consideration of such disposition?
We do not find in the record that there had
been an express agreement between
petitioners and Belen Aldaba that the latter
would pay for the services of the former. If
there was no express agreement, could it
not be at least implied? There could not be
an implied contract for payment because
We find in the record that Jane did not
expect to be paid for her services. In the
memorandum of counsel for the
petitioners in the trial court We find this
statement:
For all she did to her aunt she expected
not to be paid.3
When a person does not expect to be paid
for his services, there cannot be a contract
implied in fact to make compensation for
said services.
However, no contract implied in fact to
make compensation for personal services
performed for another arises unless the
party furnishing the services then
expected or had reason to expect the
payment or compensation by the other
party. To give rise to an implied contract to
pay for services, they must have been
rendered by one party in expectation that
the other party would pay for them, and
have been accepted by the other party
with knowledge of that expectation. (58
Am. Jur. p. 512 and cases cited therein).
In the same manner when the person
rendering the services has renounced his
fees, the services are not demandable
obligations. 4
Even if it be assumed for the sake of
argument that the services of petitioners
constituted a demandable debt, We still
have to ask whether in the instant case
this was the consideration for which the
deceased made the (alleged) disposition
of the property to the petitioners. As we
have adverted to, we have not come
across in the record even a claim that
there was an express agreement between
petitioners and Belen Aldaba that the latter
would give the property in question in
consideration of the services of petitioners.
All that petitioners could claim regarding
this matter was that "it was impliedly
understood" between them. 5 How said
agreement was implied and from what
facts it was implied, petitioners did not
make clear. The question of whether or
not what is relied upon as a consideration
had been knowingly accepted by the
parties as a consideration, is a question of
fact, 6 and the Court of Appeals has not
found in the instant case that the lots in
question were given to petitioners in
consideration of the services rendered by
them to Belen Aldaba.
We find, therefore, that the conditions to
constitute a donation cum causa
onerosa are not present in the instant
case, and the claim of petitioners that the
two lots in question were donated to them
by Belen Aldaba cannot be sustained.
WHEREFORE, the decision of the Court
of Appeals is affirmed, with costs against
the petitioners. It is so ordered.
G.R. No. L-14414 April 27,
1960
SEVERINO SALEN and ELENA
SALBANERA, plaintiffs-appellants,
vs.
JOSE BALCE, defendant-appellee.
Marciano C. Dating, Jr. for appellants.
Severino Balce for appellee.
BAUTISTA ANGELO, J.:
On February 5, 1957, plaintiffs brought
this action against defendant before the
Court of First Instance of Camarines Norte
to recover the sum of P2,000.00, with legal
interest thereon from July 18, 1952, plus
attorney' fees and other incidental
expenses.
Defendant, in his answer, set up the
defense that the law upon which plaintiffs
predicate their right to recover does not
here apply for the reason that law refers to
quasi-delicts and not to criminal cases.
After trial, the court sustained the theory of
defendant and dismissed the complaint
with costs. Hence the present appeal.
Plaintiffs are the legitimate parents of
Carlos Salen who died single from wounds
caused by Gumersindo Balce, a legitimate
son of defendant. At the time, Gumersindo
Balce was also Single, a minor below 18
years of age, and was living with
defendant. As a result of Carlos Salen's
death, Gumersindo Balce accused and
convicted of homicide and was sentenced
to imprisonment and to pay the heirs of the
deceased an indemnity in the amount of
P2,000.00. Upon petition of plaintiff, the
only heirs of the deceased, a writ of
execution was issued for the payment of
the indemnity but it was returned
unsatisfied because Gumersindo Balce
was insolvent and had no property in his
name. Thereupon, plaintiffs demanded
upon defendant, father of Gumersindo, the
payment of the indemnity the latter has
failed to pay, but defendant refused, thus
causing plaintiffs to institute the present
action.
The question for determination is whether
appellee can be held subsidiary liable to
pay the indemnity of P2,000.00 which his
son was sentenced to pay in the criminal
case filed against him.
In holding that the civil liability of the son of
appellee arises from his criminal liability
and, therefore, the subsidiary liability of
appellee must be determined under the
provisions of the Revised Penal Code, and
not under Article 2180 of the new Civil
Code which only applies to obligations
which arise from quasi-delicts, the trial
court made the following observation:
The law provides that a person criminally
liable for a felony is also civilly liable (Art.
100 of the Revised Penal Code). But there
is no law which holds the father either
primarily or subsidiarily liable for the
civiliability inccured by the son who is a
minor of 8 years. Under Art. 101 of the
Penal Code, the father is civilly liable for
the acts committed by his son if the latter
is an imbecile, or insane, or under 9 years
of age or over 9 but under 15, who has
acted without discernment. Under Art. 102,
only in keepers and tavern-keepers are
held subsidiarily liable and under Art. 103
of the same Penal Code, the subsidiary
liability established in Art. 102 shall apply
only to "employers, teachers, persons and
corporations engaged in any kind of
industry for felonies committed by their
servants, pupils, workmen, apprentices or
employees in the discharge of their
duties." By the principle of exclusio unus
exclusio ulterius, the defendant in this
case cannot be held subsidiary liable for
the civil liability of Gumersindo Balce who
has been convicted of homicide for the
killing of the plaintiff's son Carlos Salen.
Art. 2180 of the Civil Code, relied by the
plaintiff's, is not applicable to the case at
bar. It applies to obligations which arise
from quasi-delicts and not obligations
which arise from criminal offenses. Civil
liability arising from criminal negligence or
offenses is governed by the provisions of
the Penal Code and civil liability arising
from civil negligence is governed by the
provision of the Civil Code. The obligation
imposed by Art. 2176 of the New Civil
Code expressly refers to obligations which
arise from quasi-delicts. And obligations
arising from quasi-delict (Commissioner's
note). And according to Art. 2177, the
'responsibility for fault of negligence under
Art. 2176 is entirely separate and distinct
from the civil liabilty arising from
negligence under the Penal Code. . . .
While we agree with the theory that, as a
rule, the civil liability arising from a crime
shall be governed by the provisions of the
Revised Penal Code, we disagree with the
contention that the subsidiary liability of
persons for acts of those who are under
their custody should likewise be governed
by the same Code even in the absence of
any provision governing the case, for that
would leave the transgression of certain
right without any punishment or sanction
in the law. Such would be the case if we
would uphold the theory of appellee as
sustained by the trial court.
It is true that under Article 101 of the
Revised Penal Code, a father is made
civilly liable for the acts committed by his
son only if the latter is an imbecile, an
insane, under 9 years of age, over 9 but
under 15 years of age, who act without
discernment, unless it appears that there
is no fault or negligence on his part. This is
because a son who commits the act under
any of those conditions is by law exempt
from criminal liability (Article 12,
subdivisions 1, 2 and 3, Revised Penal
Code). The idea is not to leave the act
entirely unpunished but to attach certain
civil liability to the person who has the
deliquent minor under his legal authority or
control. But a minor over 15 who acts with
discernment is not exempt from criminal
liability, for which reason the Code is silent
as to the subsidiary liability of his parents
should he stand convicted. In that case,
resort should be had to the general law
which is our Civil Code.
The particular law that governs this case is
Article 2180, the pertinent portion of which
provides: "The father and, in case of his
death or incapacity, the mother, are
responsible for damages caused by the
minor children who lived in their
company." To hold that this provision does
not apply to the instant case because it
only covers obligations which arise from
quasi-delicts and not obligations which
arise from criminal offenses, would result
in the absurdity that while for an act where
mere negligence intervenes the father or
mother may stand subsidiarily liable for
the damage caused by his or her son, no
liability would attach if the damage is
caused with criminal intent. Verily, the void
that apparently exists in the Revised Penal
Code is subserved by this particular
provision of our Civil Code, as may be
gleaned from some recent decisions of
this Court which cover equal or identical
cases.
A case in point is Exconde vs. Capuno,
101 Phil., 843, the facts of which are as
follows:
Dante Capuno, a minor of 15 years of age,
lives in the company of his father, Delfin
Capuno. He is a student of the Balintawak
Elementary School in the City of San
Pablo and a member of the Boy Scout
Organization of his school. On Marcy 31,
1949, on the occasion of a certain parade
in honor of Dr. Jose Rizal in the City of
San Pablo, Dante Capuno was one of
those instructed by the City School
Supervisor to join the parade. From the
school, Dante Capuno, together with other
students, boarded a jeep. When the jeep
started to run, Dante Capuno took hold of
the wheel and drove it while the driver sat
on his left side. They have not gone far
when the jeep turned turtle and two of its
passengers, Amando Ticson and Isidro
Caperina died as a consequence. The
corresponding criminal action for double
homicide through reckless imprudence
was instituted against Dante Capuno.
During the trial, Sabina Exconde, as
mother of the deceased Isidro Caperina,
reserved her right to bring a separate civil
action for damages against the accused.
Dante Capuno was found guilty of the
criminal offense charged against him. In
line with said reservation of Sabina
Exconde, the corresponding civil action for
damages was filed against Delfin Capuno,
Dante Capuno and others.
In holding Delfin Capuno jointly and
severally liable with his minor son Dante
Capuno arising from the criminal act
committed by the latter, this Court made
the following ruling:
The civil liability which the law imposes
upon the father and, in case of his death
or incapacity, the mother, for any
damages that may be caused by the minor
children who live with them, is obvious.
This is a necessary consequence of the
parental authority they exercise over them
which imposes upon the parents the "duty
of supporting them, keeping them in their
company, educating them in proportion to
their means", while, on the other hand,
gives them the "right to correct and punish
them in moderation" (Arts. 134 and 135,
Spanish Civil Code). The only way by
which they can relieved themselves of this
liability is if they prove that they exercised
all the diligence of a good father of a family
to prevent the damage (Art. 1903, last
paragraph, Spanish Civil Code.) This
defendants failed to prove.
Another case in point is
Araneta vs. Arreglado 104 Phil., 524; 55
Off. Gaz. [9] 1961. The facts of this case
are as follows:
On March 7, 1951, while plaintiff Benjamin
Araneta was talking with the other
students of the Ateneo de Manila while
seated atop a low ruined wall bordering
the Ateneo grounds along Dakota Street,
in the City of Manila, Dario Arreglado, a
former student of the Ateneo, chanced to
pass by. Those on the wall called Dario
and conversed with him, and in the course
of their talk, twitted him on his leaving the
Ateneo and enrolling in the De La Salle
College. Apparently, Arreglado resented
the banter and suddenly pulling from his
pocket a Japanese Luger pistol (licensed
in the name of his father Juan Arreglado),
fired the same at Araneta, hitting him in
the lower jaw, causing him to drop
backward, bleeding profusely. Helped by
his friends, the injured lad was taken first
to the school infirmary and later to the
Singian Hospital, where he lay hovering
between life and death for three days. The
vigor of youth came to his rescue; he
rallied and after sometime finally
recovered, the gunshot would left him with
a degenerative injury to the jawbone
(mandible) and a scar in the lower portion
of the face, where the bullet had plowed
through. The behavior of Benjamin was
likewise affected, he becoming inhibited
and morose after leaving the hospital.
Dario Arreglado was indicted for frustrated
homicide and pleaded guilty, but in view of
his youth, he being only 14 years of age,
the court suspended the proceedings as
prescribed by Article 80 of the Revised
Penal Code. Thereafter, an action was
instituted by Araneta and his father
against Juan Arreglado, his wife, and their
son Dario, to recover material, moral and
exemplary damages. The court of first
instance, after trial, sentenced the
Arreglados to pay P3,943.00 as damages
and attorney's fees. From this decision,
the Araneta appealed in view of the
meager amount of indemnity awarded.
This Court affirmed the decision but
increased the indemnity to P18,000.00.
This is a typical case of parental
subsidiary liability arising from the criminal
act of a minor son.
Wherefore, the decision appealed from is
reversed. Judgement is hereby rendered
ordering appellee to pay appellants the
sum of P2,000.00, with legal interest
thereon from the filing of the complaint,
and the costs.
G.R. No. L-35095 August 31, 1973
GERMAN C. GARCIA, LUMINOSA L.
GARCIA, and ESTER
FRANCISCO, petitioners,
vs.
THE HONORABLE MARIANO M.
FLORIDO OF THE COURT OF FIRST
INSTANCE OF MISAMIS OCCIDENTAL,
MARCELINO INESIN, RICARDO
VAYSON, MACTAN TRANSIT CO., INC.,
and PEDRO TUMALA Y
DIGAL, respondents.
Paulino A. Conol for petitioners.
Dominador M. Canastra and Wilfredo C.
Martinez for private respondents.
Hon. Mariano M. Florido for and in his own
behalf.
ANTONIO, J.:
Appeal by certiorari from the decision of
the Court of First Instance of Misamis
Occidental, Branch III, in Civil Case No.
2850 (German C. Garcia, et al. vs.
Marcelino Inesin et al.) dated October 21,
1971, dismissing petitioners' action for
damages against respondents, Mactan
Transit Co., Inc. and Pedro Tumala
"without prejudice to refiling the said civil
action after conviction of the defendants in
the criminal case filed by the Chief of
Police of Sindangan Zamboanga del
Norte", and from the order of said Court
dated January 21, 1972, denying
petitioners' motion for reconsideration.
On August 4, 1971, petitioners, German C.
Garcia, Chief of the Misamis Occidental
Hospital, together with his wife, Luminosa
L. Garcia, and Ester Francisco,
bookkeeper of said hospital, hired and
boarded a PU car with plate No. 241-8 G
Ozamis 71 owned and operated by
respondent, Marcelino Inesin, and driven
by respondent, Ricardo Vayson, for a
round-trip from Oroquieta City to
Zamboanga City, for the purpose of
attending a conference of chiefs of
government hospitals, hospital
administrative officers, and bookkeepers
of Regional Health Office No. 7 at
Zamboanga City. At about 9:30 a.m., while
the PU car was negotiating a slight curve
on the national highway at kilometer 21 in
Barrio Guisukan, Sindangan, Zamboanga
del Norte, said car collided with an
oncoming passenger bus (No. 25) with
plate No. 77-4 W Z.N. 71 owned and
operated by the Mactan Transit Co., Inc.
and driven by defendant, Pedro Tumala.
As a result of the aforesaid collision,
petitioners sustained various physical
injuries which necessitated their medical
treatment and hospitalization.
Alleging that both drivers of the PU car
and the passenger bus were at the time of
the accident driving their respective
vehicles at a fast clip, in a reckless,
grossly negligent and imprudent manner in
gross violation of traffic rules and without
due regard to the safety of the passengers
aboard the PU car, petitioners, German C.
Garcia, Luminosa L. Garcia, and Ester
Francisco, filed on September 1, 1971
with respondent Court of First Instance of
Misamis Occidental an action for damages
(Civil Case No. 2850) against the private
respondents, owners and drivers,
respectively, of the PU car and the
passenger bus that figured in the collision,
with prayer for preliminary attachment.
On September 16, 1971, Marcelino Inesin
and Ricardo Vayson filed their answer in
the aforementioned Civil Case No. 2850
admitting the contract of carriage with
petitioners but alleged, by way of defense,
that the accident was due to the
negligence and reckless imprudence of
the bus driver, as when Ricardo Vayson,
driver of the PU car, saw the oncoming
passenger bus No. 25 coming from the
opposite direction ascending the incline at
an excessive speed, chasing another
passenger bus, he had to stop the PU car
in order to give way to the passenger bus,
but, in spite of such precaution, the
passenger bus bumped the PU car, thus
causing the accident in question, and,
therefore, said private respondents could
not be held liable for the damages caused
on petitioners.
On September 29, 1971, respondents,
Mactan Transit Co., Inc. and Pedro
Tumala, filed a motion to dismiss on three
(3) grounds, namely: 1) that the plaintiffs
(petitioners) had no cause of action; 2)
that the complaint carries with it a prayer
for attachment but without the requisite
verification, hence defective under the
provision of Sec. 3, Rule 57 of the Rules of
Court; and 3) that the defendants
(respondents), Mactan Transit Co., Inc.
and its driver, accused Pedro Tumala, had
operated said passenger bus with
maximum care and prudence.
The principal argument advanced in said
motion to dismiss was that the petitioners
had no cause of action for on August 11,
1971, or 20 days before the filing of the
present action for damages, respondent
Pedro Tumala was charged in Criminal
Case No. 4960 of the Municipal Court of
Sindangan, Zamboanga del Norte, in a
complaint filed by the Chief of Police for
"double serious and less serious physical
injuries through reckless imprudence", and
that, with the filing of the aforesaid criminal
case, no civil action could be filed
subsequent thereto unless the criminal
case has been finally adjudicated,
pursuant to Sec. 3 of Rule 111 of the
Rules of Court, and, therefore, the filing of
the instant civil action is premature,
because the liability of the employer is
merely subsidiary and does not arise until
after final judgment has been rendered
finding the driver, Pedro Tumala guilty of
negligence; that Art. 33 of the New Civil
Code, is not applicable because Art. 33
applied only to the crimes of physical
injuries or homicide, not to the negligent
act or imprudence of the driver.
On October 14, 1971, petitioners filed an
opposition to said motion to dismiss
alleging that the aforesaid action for
damages was instituted not to enforce the
civil liability of the respondents under Art.
100 of the Revised Penal Code but for
their civil liability on quasi-delicts pursuant
to Articles 2176-2194, as the same
negligent act causing damages may
produce civil liability arising from a crime
under the Revised Penal Code or create
an action for quasi-delict or culpa
extra-contractual under the Civil Code,
and the party seeking recovery is free to
choose which remedy to enforce.
In dismissing the complaint for damages in
Civil Case No. 2850, the lower court
sustained the arguments of respondents,
Mactan Transit Co., Inc. and Pedro
Tumala, and declared that whether or not
"the action for damages is based on
criminal negligence or civil negligence
known as culpa aquiliana in the Civil Code
or tort under American law" there "should
be a showing that the offended party
expressly waived the civil action or
reserved his right to institute it separately"
and that "the allegations of the complaint
in culpa aquiliana must not be tainted by
any assertion of violation of law or traffic
rules or regulations" and because of the
prayer in the complaint asking the Court to
declare the defendants jointly and
severally liable for moral, compensatory
and exemplary damages, the Court is of
the opinion that the action was not based
on "culpa aquiliana or quasi-delict."
Petitioners' motion for reconsideration was
denied by the trial court on January 21,
1972, hence this appeal on certiorari.
There is no question that from a careful
consideration of the allegations contained
in the complaint in Civil Case No. 2850,
the essential averments for a Sec. 1 of Rule 111 of the Revised Rules of
quasi-delictual action under Articles
2176-2194 of the New Civil Code are
present, namely: a) act or omission of the
private respondents; b) presence of fault
or negligence or the lack of due care in the
operation of the passenger bus No. 25 by
respondent Pedro Tumala resulting in the
collision of the bus with the passenger car;
c) physical injuries and other damages
sustained by petitioners as a result of the
collision; d) existence of direct causal
connection between the damage or
prejudice and the fault or negligence of
private respondents; and e) the absence
of pre-existing contractual relations
between the parties. The circumstance
that the complaint alleged that
respondents violated traffic rules in that
the driver drove the vehicle "at a fast clip
in a reckless, grossly negligent and
imprudent manner in violation of traffic
rules and without due regard to the safety
of the passengers aboard the PU car"
does not detract from the nature and
character of the action, as one based on
culpa aquiliana. The violation of traffic
rules is merely descriptive of the failure of
said driver to observe for the protection of
the interests of others, that degree of care,
precaution and vigilance which the
circumstances justly demand, which
failure resulted in the injury on petitioners.
Certainly excessive speed in violation of
traffic rules is a clear indication of
negligence. Since the same negligent act
resulted in the filing of the criminal action
by the Chief of Police with the Municipal
Court (Criminal Case No. 4960) and the
civil action by petitioners, it is inevitable
that the averments on the drivers'
negligence in both complaints would
substantially be the same. It should be
emphasized that the same negligent act
causing damages may produce a civil
liability arising from a crime under Art. 100
of the Revised Penal Code or create an
action for quasi-delict or culpa
extra-contractual under Arts. 2176-2194 of
the New Civil Code. This distinction has
been amply explained in Barredo vs.
Garcia, et al. (73 Phil. 607, 620-621). 1
It is true that under Sec. 2 in relation to
Court which became effective on January
1, 1964, in the cases provided for by
Articles 31, 33, 39 and 2177 of the Civil
Code, an independent civil action entirely
separate and distinct from the civil action,
may be instituted by the injured party
during the pendency of the criminal case,
provided said party has reserved his right
to institute it separately, but it should be
noted, however, that neither Section 1 nor
Section 2 of Rule 111 fixes a time limit
when such reservation shall be made.
In Tactaquin v. Palileo, 2 where the
reservation was made after the tort-feasor
had already pleaded guilty and after the
private prosecutor had entered his
appearance jointly with the prosecuting
attorney in the course of the criminal
proceedings, and the tort-feasor was
convicted and sentenced to pay damages
to the offended party by final judgment in
said criminal case, We ruled that such
reservation is legally ineffective because
the offended party cannot recover
damages twice for the same act or
omission of the defendant. We explained
in Meneses vs. Luat 3 that when the
criminal action for physical injuries against
the defendant did not proceed to trial as
he pleaded guilty upon arraignment and
the Court made no pronouncement on the
matter or damages suffered by the injured
party, the mere appearance of private
counsel in representation of the offended
party in said criminal case does not
constitute such active intervention as
could impart an intention to press a claim
for damages in the same action, and,
therefore, cannot bar a separate civil
action for damages subsequently
instituted on the same ground under
Article 33 of the New Civil Code.
In the case at bar, there is no question that
petitioners never intervened in the criminal
action instituted by the Chief of Police
against respondent Pedro Tumala, much
less has the said criminal action been
terminated either by conviction or acquittal
of said accused.
It is, therefore, evident that by the
institution of the present civil action for
damages, petitioners have in effect
abandoned their right to press recovery for
damages in the criminal case, and have
opted instead to recover them in the
present civil case.
As a result of this action of petitioners the
civil liability of private respondents to the
former has ceased to be involved in the
criminal action. Undoubtedly an offended
party loses his right to intervene in the
prosecution of a criminal case, not only
when he has waived the civil action or
expressly reserved his right to institute,
but also when he has actually instituted
the civil action. For by either of such
actions his interest in the criminal case
has disappeared.
As we have stated at the outset, the same
negligent act causing damages may
produce a civil liability arising from crime
or create an action for quasi-delict or culpa
extra-contractual. The former is a violation
of the criminal law, while the latter is a
distinct and independent negligence,
having always had its own foundation and
individuality. Some legal writers are of the
view that in accordance with Article 31, the
civil action based upon quasi-delict may
proceed independently of the criminal
proceeding for criminal negligence and
regardless of the result of the latter. Hence,
"the proviso in Section 2 of Rule 111 with
reference to ... Articles 32, 33 and 34 of
the Civil Code is contrary to the letter and
spirit of the said articles, for these articles
were drafted ... and are intended to
constitute as exceptions to the general
rule stated in what is now Section 1 of
Rule 111. The proviso which is procedural,
may also be regarded as an unauthorized
amendment of substantive law, Articles 32,
33 and 34 of the Civil Code, which do not
provide for the reservation required in
the proviso." 4 But in whatever way We
view the institution of the civil action for
recovery of damages under quasi-delict by
petitioners, whether as one that should be
governed by the provisions of Section 2 of
Rule 111 of the Rules which require
reservation by the injured party
considering that by the institution of the
civil action even before the
commencement of the trial of the criminal
case, petitioners have thereby foreclosed
their right to intervene therein, or one
where reservation to file the civil action
need not be made, for the reason that the
law itself (Article 33 of the Civil Code)
already makes the reservation and the
failure of the offended party to do so does
not bar him from bringing the action, under
the peculiar circumstances of the case,
We find no legal justification for
respondent court's order of dismissal.
WHEREFORE, the decision and order
appealed from are hereby reversed and
set aside, and the court a quo is directed
to proceed with the trial of the case. Costs
against private respondents.
Zaldivar, Castro Fernando, Teehankee,
Makasiar and Esguerra, JJ., concur.
Makalintal, Actg., C.J., concurs in the
result.
Separate Opinions
BARREDO, J., concurring:
I would like to limit my concurrence.
I believe that the only substantive legal
provision involved in this case are Articles
2176 and 2177 of the Civil Code which
read as follows:
ART 2176. Whoever by act or omission
causes damage to another, there being
fault or negligence, is obliged to pay for
the damage done. Such fault or
negligence, if there is no pre-existing
contractual relation between the parties, is
called a quasi-delict and is governed by
the provisions of this Chapter.
ART 2177. Responsibility for fault or
negligence under the preceding article is
entirely separate and distinct from the civil
liability arising from negligence under the
Penal Code. But the plaintiff cannot
recover damages twice for the same act or
omission of the defendant.
These provisions definitely create a civil
liability distinct and different from the civil
action arising from the offense of
negligence under the Revised Penal Code.
Since Civil Case No. 2850 is predicated on
the above civil code articles and not on the
civil liability imposed by the Revised Penal
Code, I cannot see why a reservation had
to be made in the criminal case. As to the
specific mention of Article 2177 in Section
2 of the Rule 111, it is my considered view
that the latter provision is inoperative, it
being substantive in character and is not
within the power of the Supreme Court to
promulgate, and even if it were not
substantive but adjective, it cannot stand
because of its inconsistency with Article
2177, an enactment of the legislature
superseding the Rules of 1940.
Besides, the actual filing of Civil Case No.
2850 should be deemed as the
reservation required, there being no
showing that prejudice could be caused by
doing so.
Accordingly, I concur in the judgment
reversing the order of dismissal of the trial
court in order that Civil Case No. 2850
may proceed, subject to the limitation
mentioned in the last sentence of Article
2177 of the Civil Code, which means that
of the two possible judgments, the injured
party is entitled exclusively to the bigger
one.
Separate Opinions
BARREDO, J., concurring:
I would like to limit my concurrence.
I believe that the only substantive legal
provision involved in this case are Articles
2176 and 2177 of the Civil Code which
read as follows:
ART 2176. Whoever by act or omission
causes damage to another, there being
fault or negligence, is obliged to pay for
the damage done. Such fault or
negligence, if there is no pre-existing
contractual relation between the parties, is
called a quasi-delict and is governed by
the provisions of this Chapter.
ART 2177. Responsibility for fault or
negligence under the preceding article is
entirely separate and distinct from the civil
liability arising from negligence under the
Penal Code. But the plaintiff cannot
recover damages twice for the same act or
omission of the defendant.
These provisions definitely create a civil
liability distinct and different from the civil
action arising from the offense of
negligence under the Revised Penal Code.
Since Civil Case No. 2850 is predicated on
the above civil code articles and not on the
civil liability imposed by the Revised Penal
Code, I cannot see why a reservation had
to be made in the criminal case. As to the
specific mention of Article 2177 in Section
2 of the Rule 111, it is my considered view
that the latter provision is inoperative, it
being substantive in character and is not
within the power of the Supreme Court to
promulgate, and even if it were not
substantive but adjective, it cannot stand
because of its inconsistency with Article
2177, an enactment of the legislature
superseding the Rules of 1940.
Besides, the actual filing of Civil Case No.
2850 should be deemed as the
reservation required, there being no
showing that prejudice could be caused by
doing so.
Accordingly, I concur in the judgment
reversing the order of dismissal of the trial
court in order that Civil Case No. 2850
may proceed, subject to the limitation
mentioned in the last sentence of Article
2177 of the Civil Code, which means that
of the two possible judgments, the injured
party is entitled exclusively to the bigger
one.
Footnotes
1 "Firstly, the Revised Penal Code in
article 365 punishes not only reckless but
also simple negligence. If we were to hold
that articles 1902 to 1910 of the Civil Code
refer only to fault or negligence not
punished by law, according to the literal
import of article 1093 of the Civil Code, the
legal institution of culpa aquiliana would
have very little scope and application in
actual life. Death or injury to persons and
damage to property through any degree of
negligence — even the slightest — would
have to be indemnified only through the
principle of civil liability arising from a
crime. In such a state of affairs, what
sphere would remain
for cuasi-delito or culpa aquiliana? We are
loath to impute to the lawmaker any
intention to bring about a situation so
absurd and anomalous. Nor are we, in the
interpretation of the laws, disposed to
uphold the letter that killeth rather than the
spirit that giveth life. We will not use the
literal meaning of the law to smother and
render almost lifeless a principle of such
ancient origin and such full-grown
development as culpa
aquiliana or cuasi-delito, which is
conserved and made enduring in articles
1902 to 1910 of the Spanish Civil Code.
"Secondly, to find the accused guilty in a
criminal case, proof of guilt beyond
reasonable doubt is required, while in a
civil case, preponderance of evidence is
sufficient to make the defendant pay in
damages. There are numerous cases of
criminal negligence which cannot be
shown beyond reasonable doubt, but can
be proved by a preponderance of
evidence. In such cases, the defendant
can and should be made responsible in a
civil action under articles 1902 to 1910 of
the Civil Code. Otherwise, there would be
many instances of unvinticated civil
wrongs. Ubi jus ibi remedium.
"Thirdly, to hold that there is only one way
to make defendants liability effective, and
that is, to sue the driver and exhaust his
(the latter's) property first, would be
tantamount to compelling the plaintiff to
follow a devious and cumbersome method
of obtaining relief. True, there is such a
remedy under our laws, but there is also a
more expeditious way, which is based on
the primary and direct responsibility of the
defendant under article 1903 of the Civil
Code. Our view of the law is more likely to
facilitate remedy for civil wrongs, because
the procedure indicated by the defendant
is wasteful and productive of delay, it
being a matter of common knowledge that
professional drivers of taxis and similar
public conveyances usually do not have
sufficient means with which to pay
damages. Why, then, should the plaintiff
be required in all cases to go through this
round about, unnecessary, and probably
useless procedure? In construing the laws,
courts have endeavored to shorted and
facilitate the pathways of right and justice.
"At this juncture, it should be said that the
primary and direct responsibility of
employers and their presumed negligence
are principles calculated to protect society.
Workmen and employees should be
carefully chosen and supervised in order
to avoid injury to the public. It is the
masters or employers who principally reap
the profits resulting from the services of
these servants and employees. It is but
right that they should guarantee the latter's
careful conduct for the personnel and
patrimonial safety of others. As Theilhard
has said, "they should reproach
themselves, at least, some for their
weakness, others for their poor selection
and all for their negligence." And
according to Manresa, "It is much more
equitable and just that such responsibility
should fall upon the principal or director
who could have chosen a careful and
prudent employee, and not upon the
injured person who could not exercise
such selection and who used such
employee because of his confidence in the
principal or director." (Vol. 12, p. 622, 2nd
Ed.) Many jurists also base this primary
responsibility of the employer on the
principle of representation of the principal
by the agent. Thus, Oyuelos says in the
work already cited (Vol. 7, p. 747) that
before third persons the employer and
employee "vienen a ser como una sola
personalidad, por refundicion de la del
dependiente en la de quien la emplea y
utiliza." (become as one personality by the
merging of the person of the employee in
that of him who employs and utilizes him.)
All these observations acquire a peculiar
force and significance when it comes to
motor accidents, and there is need of
stressing and accentuating the
responsibility of owners of motor vehicles.
"Fourthly, because of the broad sweep of
the provisions of both the Penal Code and
the Civil Code on this subject, which has
given rise to overlapping or concurrence of
spheres already discussed, and for lack of
understanding of the character and
efficacy of the action for culpa
aquiliana there has grown up common
practice to seek damages only by virtue of
the civil responsibility arising from a crime,
forgetting that there is another remedy
which is by invoking articles 1902-1910 of
the Civil Code. Although this habitual
method is allowed by our laws, it has
nevertheless rendered practically useless
and nugatory the more expeditions and
effective remedy based on culpa
aquiliana or culpa extra-contractual. In the
present case, we are asked to help
perpetuate this usual course. But we
believe it is high time we pointed out to the
harm done by such practice and to restore
the principle of responsibility for fault or
negligence under articles 1902 et seq. of
the Civil Code to its full rigor. It is high time
we cause the stream of quasi-delict
or culpa aquiliana to flow on its own
natural channel, so that its waters may no
longer be diverted into that of crime under
the Penal Code. This will, it is believed,
made for the better safeguarding of private
rights because it re-establishes an ancient
and additional remedy, and for the further
reason that an independent civil action,
not depending on the issues, limitations an
results of a criminal prosecution, and
entirely directed by the party wronged or
his counsel, is more likely to secure
adequate and efficacious redress."
2 No. L-20865, September 29, 1967, 21
SCRA 346.
3 No. L-18116, November 28, 1964, 12
SCRA 454.
4 Footnote of Justice Capistrano in
Corpus v. Paje, L-26737, July 31, 1969, 28
SCRA, 1062, 1069.
CF. Tolentino, Commentaries and
Jurisprudence on the Civil Code, Vol. 1.
page 142, 1968 Ed.
G.R. No. L-12219 March 15,
1918
AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.
G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart,
seeks to recover of the defendant, Frank
Smith, jr., the sum of P31,000, as
damages alleged to have been caused by
an automobile driven by the defendant.
From a judgment of the Court of First
Instance of the Province of La Union
absolving the defendant from liability the
plaintiff has appealed.
The occurrence which gave rise to the
institution of this action took place on
December 12, 1912, on the Carlatan
Bridge, at San Fernando, La Union. It
appears that upon the occasion in
question the plaintiff was riding on his
pony over said bridge. Before he had
gotten half way across, the defendant
approached from the opposite direction in
an automobile, going at the rate of about
ten or twelve miles per hour. As the
defendant neared the bridge he saw a
horseman on it and blew his horn to give
warning of his approach. He continued his
course and after he had taken the bridge
he gave two more successive blasts, as it
appeared to him that the man on
horseback before him was not observing
the rule of the road.
The plaintiff, it appears, saw the
automobile coming and heard the warning
signals. However, being perturbed by the
novelty of the apparition or the rapidity of
the approach, he pulled the pony closely
up against the railing on the right side of
the bridge instead of going to the left. He
says that the reason he did this was that
he thought he did not have sufficient time
to get over to the other side. The bridge is
shown to have a length of about 75 meters
and a width of 4.80 meters. As the
automobile approached, the defendant
guided it toward his left, that being the
proper side of the road for the machine. In
so doing the defendant assumed that the
horseman would move to the other side.
The pony had not as yet exhibited fright,
and the rider had made no sign for the
automobile to stop. Seeing that the pony
was apparently quiet, the defendant,
instead of veering to the right while yet
some distance away or slowing down,
continued to approach directly toward the
horse without diminution of speed. When
he had gotten quite near, there being then
no possibility of the horse getting across to
the other side, the defendant quickly
turned his car sufficiently to the right to
escape hitting the horse alongside of the
railing where it as then standing; but in so
doing the automobile passed in such close
proximity to the animal that it became
frightened and turned its body across the
bridge with its head toward the railing. In
so doing, it as struck on the hock of the left
hind leg by the flange of the car and the
limb was broken. The horse fell and its
rider was thrown off with some violence.
From the evidence adduced in the case
we believe that when the accident
occurred the free space where the pony
stood between the automobile and the
railing of the bridge was probably less than
one and one half meters. As a result of its
injuries the horse died. The plaintiff
received contusions which caused
temporary unconsciousness and required
medical attention for several days.
The question presented for decision is
whether or not the defendant in
maneuvering his car in the manner above
described was guilty of negligence such
as gives rise to a civil obligation to repair
the damage done; and we are of the
opinion that he is so liable. As the
defendant started across the bridge, he
had the right to assume that the horse and
the rider would pass over to the proper
side; but as he moved toward the center of
the bridge it was demonstrated to his eyes
that this would not be done; and he must
in a moment have perceived that it was
too late for the horse to cross with safety in
front of the moving vehicle. In the nature of
things this change of situation occurred
while the automobile was yet some
distance away; and from this moment it
was not longer within the power of the
plaintiff to escape being run down by
going to a place of greater safety. The
control of the situation had then passed
entirely to the defendant; and it was his
duty either to bring his car to an immediate
stop or, seeing that there were no other
persons on the bridge, to take the other
side and pass sufficiently far away from
the horse to avoid the danger of collision.
Instead of doing this, the defendant ran
straight on until he was almost upon the
horse. He was, we think, deceived into
doing this by the fact that the horse had
not yet exhibited fright. But in view of the
known nature of horses, there was an
appreciable risk that, if the animal in
question was unacquainted with
automobiles, he might get exited and jump
under the conditions which here
confronted him. When the defendant
exposed the horse and rider to this danger
he was, in our opinion, negligent in the eye
of the law.
The test by which to determine the
existence of negligence in a particular
case may be stated as follows: Did the
defendant in doing the alleged negligent
act use that person would have used in
the same situation? If not, then he is guilty
of negligence. The law here in effect
adopts the standard supposed to be
supplied by the imaginary conduct of the
discreet paterfamilias of the Roman law.
The existence of negligence in a given
case is not determined by reference to the
personal judgment of the actor in the
situation before him. The law considers
what would be reckless, blameworthy, or
negligent in the man of ordinary
intelligence and prudence and determines
liability by that.
The question as to what would constitute
the conduct of a prudent man in a given
situation must of course be always
determined in the light of human
experience and in view of the facts
involved in the particular case. Abstract
speculations cannot here be of much
value but this much can be profitably said:
Reasonable men govern their conduct by
the circumstances which are before them
or known to them. They are not, and are
not supposed to be, omniscient of the
future. Hence they can be expected to
take care only when there is something
before them to suggest or warn of danger.
Could a prudent man, in the case under
consideration, foresee harm as a result of
the course actually pursued? If so, it was
the duty of the actor to take precautions to
guard against that harm. Reasonable
foresight of harm, followed by ignoring of
the suggestion born of this prevision, is
always necessary before negligence can
be held to exist. Stated in these terms, the
proper criterion for determining the
existence of negligence in a given case is
this: Conduct is said to be negligent when
a prudent man in the position of the
tortfeasor would have foreseen that an
effect harmful to another was sufficiently
probable to warrant his foregoing conduct
or guarding against its consequences.
Applying this test to the conduct of the
defendant in the present case we think
that negligence is clearly established. A
prudent man, placed in the position of the
defendant, would in our opinion, have
recognized that the course which he was
pursuing was fraught with risk, and would
therefore have foreseen harm to the horse
and the rider as reasonable consequence
of that course. Under these circumstances
the law imposed on the defendant the duty
to guard against the threatened harm.
It goes without saying that the plaintiff
himself was not free from fault, for he was
guilty of antecedent negligence in planting
himself on the wrong side of the road. But
as we have already stated, the defendant
was also negligent; and in such case the
problem always is to discover which agent
is immediately and directly responsible. It
will be noted that the negligent acts of the
two parties were not contemporaneous,
since the negligence of the defendant
succeeded the negligence of the plaintiff
by an appreciable interval. Under these
circumstances the law is that the person
who has the last fair chance to avoid the
impending harm and fails to do so is
chargeable with the consequences,
without reference to the prior negligence
of the other party.
The decision in the case of Rkes vs.
Atlantic, Gulf and Pacific Co. (7 Phil. Rep.,
359) should perhaps be mentioned in this
connection. This Court there held that
while contributory negligence on the part
of the person injured did not constitute a
bar to recovery, it could be received in
evidence to reduce the damages which
would otherwise have been assessed
wholly against the other party. The
defendant company had there employed
the plaintiff, as a laborer, to assist in
transporting iron rails from a barge in
Manila harbor to the company's yards
located not far away. The rails were
conveyed upon cars which were hauled
along a narrow track. At certain spot near
the water's edge the track gave way by
reason of the combined effect of the
weight of the car and the insecurity of the
road bed. The car was in consequence
upset; the rails slid off; and the plaintiff's
leg was caught and broken. It appeared in
evidence that the accident was due to the
effects of the typhoon which had dislodged
one of the supports of the track. The court
found that the defendant company was
negligent in having failed to repair the bed
of the track and also that the plaintiff was,
at the moment of the accident, guilty of
contributory negligence in walking at the
side of the car instead of being in front or
behind. It was held that while the
defendant was liable to the plaintiff by
reason of its negligence in having failed to
keep the track in proper repair
nevertheless the amount of the damages
should be reduced on account of the
contributory negligence in the plaintiff. As
will be seen the defendant's negligence in
that case consisted in an omission only.
The liability of the company arose from its
responsibility for the dangerous condition
of its track. In a case like the one now
before us, where the defendant was
actually present and operating the
automobile which caused the damage, we
do not feel constrained to attempt to weigh
the negligence of the respective parties in
order to apportion the damage according
to the degree of their relative fault. It is
enough to say that the negligence of the
defendant was in this case the immediate
and determining cause of the accident and
that the antecedent negligence of the
plaintiff was a more remote factor in the
case.
A point of minor importance in the case is
indicated in the special defense pleaded in
the defendant's answer, to the effect that
the subject matter of the action had been
previously adjudicated in the court of a
justice of the peace. In this connection it
appears that soon after the accident in
question occurred, the plaintiff caused
criminal proceedings to be instituted
before a justice of the peace charging the
defendant with the infliction of serious
injuries (lesiones graves). At the
preliminary investigation the defendant
was discharged by the magistrate and the
proceedings were dismissed. Conceding
that the acquittal of the defendant at the
trial upon the merits in a criminal
prosecution for the offense mentioned
would be res adjudicata upon the question
of his civil liability arising from negligence
-- a point upon which it is unnecessary to
express an opinion -- the action of the
justice of the peace in dismissing the
criminal proceeding upon the preliminary
hearing can have no effect. (See U. S. vs.
Banzuela and Banzuela, 31 Phil. Rep.,
564.)
From what has been said it results that the
judgment of the lower court must be
reversed, and judgment is her rendered
that the plaintiff recover of the defendant
the sum of two hundred pesos (P200),
with costs of other instances. The sum
here awarded is estimated to include the
value of the horse, medical expenses of
the plaintiff, the loss or damage
occasioned to articles of his apparel, and
lawful interest on the whole to the date of
this recovery. The other damages claimed
by the plaintiff are remote or otherwise of
such character as not to be recoverable.
So ordered.
Arellano, C.J., Torres, Carson, Araullo,
Avanceña, and Fisher, JJ., concur.
Johnson, J., reserves his vote.
Separate Opinions
MALCOLM, J., concurring:
After mature deliberation, I have finally
decided to concur with the judgment in this
case. I do so because of my
understanding of the "last clear chance"
rule of the law of negligence as particularly
applied to automobile accidents. This rule
cannot be invoked where the negligence
of the plaintiff is concurrent with that of the
defendant. Again, if a traveler when he
reaches the point of collision is in a
situation to extricate himself and avoid
injury, his negligence at that point will
prevent a recovery. But Justice Street
finds as a fact that the negligent act of the
interval of time, and that at the moment
the plaintiff had no opportunity to avoid the
accident. Consequently, the "last clear
chance" rule is applicable. In other words,
when a traveler has reached a point where
he cannot extricate himself and vigilance
on his part will not avert the injury, his
negligence in reaching that position
becomes the condition and not the
proximate cause of the injury and will not
preclude a recovery. (Note especially
Aiken vs. Metcalf [1917], 102 Atl., 330.)
EN BANC
[G.R. No. L-27454. April 30, 1970.]
ROSENDO O.
CHAVES, Plaintiff-Appellant, v.
FRUCTUOSO
GONZALES, Defendant-Appellee.
Chaves, Elio, Chaves & Associates,
for Plaintiff-Appellant.
Sulpicio E. Platon,
for Defendant-Appellee.
SYLLABUS
1. CIVIL LAW; CONTRACTS; BREACH
OF CONTRACT FOR
NON-PERFORMANCE; FIXING OF
PERIOD BEFORE FILING OF
COMPLAINT FOR
NON-PERFORMANCE, ACADEMIC.—
Where the time for compliance had
expired and there was breach of
contract by non-performance, it was
academic for the plaintiff to have first
petitioned the court to fix a period for
the performance of the contract
before filing his complaint.
2. ID.; ID.; ID.; DEFENDANT CANNOT
INVOKE ARTICLE 1197 OF THE CIVIL
CODE OF THE PHILIPPINES.— Where
the defendant virtually admitted
non-performance of the contract by
returning the typewriter that he was
obliged to repair in a non-working
condition, with essential parts
missing, Article 1197 of the Civil Code
of the Philippines cannot be invoked.
The fixing of a period would thus be a
mere formality and would serve no
purpose than to delay.
3. ID.; ID.; ID.; DAMAGES
RECOVERABLE; CASE AT BAR.—
Where the defendant-appellee
contravened the tenor of his
obligation because he not only did not
repair the typewriter but returned it
"in shambles,’’ he is liable for the cost
of the labor or service expended in
the repair of the typewriter, which is
in the amount of P58.75, because the
obligation or contract was to repair it.
In addition, he is likewise liable under
Art. 1170 of the Code, for the cost of
the missing parts, in the amount of
P31.10, for in his obligation to repair
the typewriter he was bound, but
failed or neglected, to return it in the
same condition it was when he
received it.
4. ID.; ID.; ID.; CLAIMS FOR
DAMAGES OR ATTORNEY’S FEES NOT
RECOVERABLE; NOT ALLEGED OR
PROVED IN INSTANT CASE.— Claims
for damages and attorney’s fees must
be pleaded, and the existence of the
actual basis thereof must be proved.
As no findings of fact were made on
the claims for damages and
attorney’s fees, there is no factual
basis upon which to make an award
therefor.
5. REMEDIAL LAW; APPEALS; APPEAL
FROM COURT OF FIRST INSTANCE TO
SUPREME COURT; ONLY QUESTIONS
OF LAW REVIEWABLE.— Where the
appellant directly appeals from the
decision of the trial court to the
Supreme Court on questions of law,
he is bound by the judgment of the
court a quo on its findings of fact.
DECISION
REYES, J.B.L., J.:
This is a direct appeal by the party
who prevailed in a suit for breach of
oral contract and recovery of
damages but was unsatisfied with the
decision rendered by the Court of
First Instance of Manila, in its Civil
Case No. 65138, because it awarded
him only P31.10 out of his total claim
of P690 00 for actual, temperate and
moral damages and attorney’s fees.
The appealed judgment, which is brief,
is hereunder quoted in
full:jgc:chanrobles.com.ph
"In the early part of July, 1963, the
plaintiff delivered to the defendant,
who is a typewriter repairer, a
portable typewriter for routine
cleaning and servicing. The defendant
was not able to finish the job after
some time despite repeated
reminders made by the plaintiff. The
defendant merely gave assurances,
but failed to comply with the same. In
October, 1963, the defendant asked
from the plaintiff the sum of P6.00 for
the purchase of spare parts, which
amount the plaintiff gave to the
defendant. On October 26, 1963,
after getting exasperated with the
delay of the repair of the typewriter,
the plaintiff went to the house of the
defendant and asked for the return of
the typewriter. The defendant
delivered the typewriter in a wrapped
package. On reaching home, the
plaintiff examined the typewriter
returned to him by the defendant and
found out that the same was in
shambles, with the interior cover and
some parts and screws missing. On
October 29, 1963. the plaintiff sent a
letter to the defendant formally
demanding the return of the missing
parts, the interior cover and the sum
of P6.00 (Exhibit D). The following
day, the defendant returned to the
plaintiff some of the missing parts,
the interior cover and the P6.00.
"On August 29, 1964, the plaintiff had
his typewriter repaired by Freixas
Business Machines, and the repair job
cost him a total of P89.85, including
labor and materials (Exhibit C).
"On August 23, 1965, the plaintiff
commenced this action before the
City Court of Manila, demanding from
the defendant the payment of P90.00
as actual and compensatory damages,
P100.00 for temperate damages,
P500.00 for moral damages, and
P500.00 as attorney’s fees.
"In his answer as well as in his
testimony given before this court, the
defendant made no denials of the
facts narrated above, except the
claim of the plaintiff that the
typewriter was delivered to the
defendant through a certain Julio
Bocalin, which the defendant denied
allegedly because the typewriter was
delivered to him personally by the
plaintiff.
"The repair done on the typewriter by
Freixas Business Machines with the
total cost of P89.85 should not,
however, be fully chargeable against
the defendant. The repair invoice,
Exhibit C, shows that the missing
parts had a total value of only P31.10.
"WHEREFORE, judgment is hereby
rendered ordering the defendant to
pay the plaintiff the sum of P31.10,
and the costs of suit.
"SO ORDERED."cralaw virtua1aw
library
The error of the court a quo,
according to the plaintiff-appellant,
Rosendo O. Chaves, is that it awarded
only the value of the missing parts of
the typewriter, instead of the whole
cost of labor and materials that went
into the repair of the machine, as
provided for in Article 1167 of the
Civil Code, reading as
follows:jgc:chanrobles.com.ph
"ART. 1167. If a person obliged to do
something fails to do it, the same
shall be executed at his cost.
This same rule shall be observed if he
does it in contravention of the tenor
of the obligation. Furthermore it may
be decreed that what has been poorly
done he undone."cralaw virtua1aw
library
On the other hand, the position of the
defendant-appellee, Fructuoso
Gonzales, is that he is not liable at all,
not even for the sum of P31.10,
because his contract with
plaintiff-appellant did not contain a
period, so that plaintiff-appellant
should have first filed a petition for
the court to fix the period, under
Article 1197 of the Civil Code, within
which the defendant appellee was to
comply with the contract before said
defendant-appellee could be held
liable for breach of contract.
Because the plaintiff appealed
directly to the Supreme Court and the
appellee did not interpose any appeal,
the facts, as found by the trial court,
are now conclusive and
non-reviewable. 1
The appealed judgment states that
the "plaintiff delivered to the
defendant . . . a portable typewriter
for routine cleaning and servicing" ;
that the defendant was not able to
finish the job after some time despite
repeated reminders made by the
plaintiff" ; that the "defendant merely
gave assurances, but failed to comply
with the same" ; and that "after
getting exasperated with the delay of
the repair of the typewriter", the
plaintiff went to the house of the
defendant and asked for its return,
which was done. The inferences
derivable from these findings of fact
are that the appellant and the
appellee had a perfected contract for
cleaning and servicing a typewriter;
that they intended that the defendant
was to finish it at some future time
although such time was not specified;
and that such time had passed
without the work having been
accomplished, far the defendant
returned the typewriter cannibalized
and unrepaired, which in itself is a
breach of his obligation, without
demanding that he should be given
more time to finish the job, or
compensation for the work he had
already done. The time for
compliance having evidently expired,
and there being a breach of contract
by non-performance, it was academic
for the plaintiff to have first petitioned
the court to fix a period for the
performance of the contract before
filing his complaint in this case.
Defendant cannot invoke Article 1197
of the Civil Code for he virtually
admitted non-performance by
returning the typewriter that he was
obliged to repair in a non-working
condition, with essential parts
missing. The fixing of a period would
thus be a mere formality and would
serve no purpose than to delay (cf.
Tiglao. Et. Al. V. Manila Railroad Co.
98 Phil. 18l).
It is clear that the defendant-appellee
contravened the tenor of his
obligation because he not only did not
repair the typewriter but returned it
"in shambles", according to the
appealed decision. For such
contravention, as appellant contends,
he is liable under Article 1167 of the
Civil Code. jam quot, for the cost of
executing the obligation in a proper
manner. The cost of the execution of
the obligation in this case should be
the cost of the labor or service
expended in the repair of the
typewriter, which is in the amount of
P58.75. because the obligation or
contract was to repair it.
In addition, the defendant-appellee is
likewise liable, under Article 1170 of
the Code, for the cost of the missing
parts, in the amount of P31.10, for in
his obligation to repair the typewriter
he was bound, but failed or neglected,
to return it in the same condition it
was when he received it.
Appellant’s claims for moral and
temperate damages and attorney’s
fees were, however, correctly
rejected by the trial court, for these
were not alleged in his complaint
(Record on Appeal, pages 1-5).
Claims for damages and attorney’s
fees must be pleaded, and the
existence of the actual basis thereof
must be proved. 2 The appealed
judgment thus made no findings on
these claims, nor on the fraud or
malice charged to the appellee. As no
findings of fact were made on the
claims for damages and attorney’s
fees, there is no factual basis upon
which to make an award therefor.
Appellant is bound by such judgment
of the court, a quo, by reason of his
having resorted directly to the
Supreme Court on questions of law.
IN VIEW OF THE FOREGOING
REASONS, the appealed judgment is
hereby modified, by ordering the
defendant-appellee to pay, as he is
hereby ordered to pay, the
plaintiff-appellant the sum of P89.85,
with interest at the legal rate from the
filing of the complaint. Costs in all
instances against appellee Fructuoso
Gonzales.
Concepcion, C.J., Dizon, Makalintal,
Zaldivar, Castro, Fernando,
Teehankee and Villamor, JJ., concur.
Barredo, J., did not take part.
G.R. No. L-28999 May 24, 1977
COMPAÑIA
MARITIMA, plaintiff-appellee,
vs.
ALLIED FREE WORKERS UNION,
SALVADOR T. LLUCH, MARIANO LL.
BADELLES, individually and in their
capacities as President and
Vice-President, respectively of the
Allied Free Workers Union, NICANOR
HALEBAS and LAURENTINO LL.
BADELLES, individually and officers of
Allied Free Workers
Union, defendants-appellants.
Halibas, Badelles, Padilla & Sepulveda
and Vicente A. Rafael & Associates for
defendants-appellants.
Rufino J. Abadies, Francisco Obach &
Jesus Quijano for appellee.

AQUINO, J.:
Antecedents. - Since the onset in 1954 of
litigation between the parties herein, this is
the fifth case between them that has been
elevated to this Court. The incidents
preceding the instant appeal are as
follows:
On August 11, 1952 the Compañia
Maritima and the Allied Free Workers
Union entered into a written contract
whereby the union agreed to perform
arrastre and stevedoring work for the
consignees. vessels at Iligan City. The
contract was to be effective for one month
counted from August 12, 1952.
It was stipulated that the company could
revoke the contract before the expiration
of the term if the union failed to render
proper service. The contract could be
renewed by agreement of the parties (Exh.
J).
At the time the contract was entered into,
the union had just been organized. Its
primordial desire was to find work for its
members. The union agreed to the
stipulation that the company would not be
liable for the payment of the services of
the union "for the loading, unloading and
deliveries of cargoes" and that the
compensation for such services would be
paid "by the owners and consigness of the
cargoes" as "has been the practice in the
port of Iligan City" (Par. 2 of Exh. J).
The union found out later that that
stipulation was oppressive and that the
company was unduly favored by that
arrangement.
Under the contract, the work of the union
consisted of arrastre and stevedoring
service. Arrastre, a Spanish word which
refers to hauling of cargo, comprehends
the handling of cargo on the wharf or
between the establishment of the
consignee or shipper and the ship's tackle.
The service is usually performed by
longshoremen.
On the other hand, stevedoring refers to
the handling of the cargo in the holds of
the vessel or between the ship's tackle
and the holds of the vessel.
The shippers and consignees paid the
union oth for the arrastre work. They
refused to pay for the stevedoring service.
They claimed that the shipowner was the
one obligated to pay for the stevedoring
service because the bill of lading provided
that the unloading of the cargo was at the
shipowner's expense (Exh. 1).
On the other hand, the company refused
to pay for the stevedoring service because
the contract (Exh. J) explicitly provided
that the compensation for both arrastre
and stevedoring work should be paid by
the shippers and consignees, as was the
alleged practice in Iligan City, and that the
shipowner would not be liable for the
payment of such services.
Thus, the issue of whether the company
should pay for the stevedoring service
became a sore point of contention
between the parties. The union members
labored under the impression that they
were not being compensated for their
stevedoring service as distinguished from
arrastre service.
Although the arrastre and stevedoring
contract (Exh. J) was disadvantageous to
the union, it did not terminate the contract
because its members were in dire need of
work and work, which was not adequately
compensated, was preferable to having no
work at all (204, 214-5, 226-7 tsn May 20,
1960).
Upon the expiration of the one-month
period, the said contract was verbally
renewed. The company allowed the union
to continue performing arrastre and
stevedoring work.
On July 23, 1954 the union sent a letter to
the company requesting that it be
recognized as the exclusive bargaining
unit to load and unload the cargo of its
vessels at Iligan City. The company
ignored that demand. So, the union filed
on August 6, 1954 in the Court of
Industrial Relations (CIR) a petition
praying that it be certified as the sole
collective bargaining unit.
Despite that certification case, the
company on August 24, 1954 served a
written notice on the union that, in
accordance with payment of the 1952
contract, the same would be terminated on
August 31, 1954. Because of that notice,
the union on August 26, 1954 filed in the
CIR charges of unfair labor practice
against the company.
On August 31, 1954 the company entered
into a new stevedoring and arrastre
contract with the Iligan Stevedoring
Association. On the following day,
September 1, the union members picketed
the wharf and prevented the Iligan
Stevedoring Association from performing
arrastre and stevedoring work. The picket
lasted for nine days.
On September 8, 1954 the company sued
the union and its officers in the Court of
First Instance of Lanao for the rescission
of the aforementioned 1952 contract, to
enjoin the union from interfering with the
loading and unloading of the cargo, and
for the recovery of damages.
On the following day, September 9, the
lower court issued ex parte a writ of
preliminary injunction after the company
had posted a bond in the sum of P20,000.
A few hours lateron that same day the
union was allowed to file a counterbond.
The injunction was lifted. The union
members resumed their arrastre and
stevedoring work.
Later, the union assailed in a prohibition
action in this Court the jurisdiction of the
trial court to entertain the action for
damages, and injunction.
A majority of this Court held that the lower
court had jurisdiction to issue the
injunction and to take cognizance of the
damage suit filed by the company but that
the injunction was void because it was
issued ex parte and the procedure laid
down in section 9(d) of Republic Act No.
875 was not followed by the trial court
(Allied Free Workers Union vs. Judge
Apostol, 102 Phil. 292, 298).
After trial, the lower court rendered a
decision dated December 5, 1960,
amended on January 11, 1961, (1)
declaring the arrastre and stevedoring
contract terminated on August $1, 1954;
(2) dismissing the union's counterclaim; (3)
ordering the union and its officers to pay
solidarily to the company P520,000 as
damages, with six percent interest per
annum from September 9, 1954, when the
complaint. was filed; (4) permanently
enjoining the union from performing any
arrastre and stevedoring work for the
company at Iligan City, and (5) requiring
the union to post a supersedeas bond in
the sum of P520,000 to stay execution.
The union filed a motion for
reconsideration. On the other hand, the
company filed a motion for the execution
pending appeal of the money judgment. It
filed another motion for the immediate
issuance of a writ of injunction. That
second motion was filed in the municipal
court of Iligan City in view of the absence
of the District Judge.
The municipal court issued the writ of
injunction. However, this Court set it aside
because it was not an interlocutory order
and no special reasons were adduced to
justify its issuance (Allied Free Workers
Union vs. Judge Estipona, 113 Phil. 748).
The union on January 6, 1961 had
perfected an appeal from the lower
court's original decision. It did not appeal
from the amended decision. On March 24,
1962 the lower court issued an order
declaring its amended decision final and
executory in view of the union's failure to
appeal therefrom. The court directed the
clerk of court to issue a writ of execution.
That order was assailed by the union in a
certiorari action filed in this Court. A
preliminary injunction was issued by this
Court to restrain the execution of the
judgment.
On May 16, 1962 this Court dissolved the
injunction at the instance of the company
which had filed a counterbond. Thereupon,
the 225 members of the union yielded their
ten-year old jobs to the new set of workers
contracted by the company.
The certiorari incident was decided on
June 30, 1966. This Court noted that the
lower court amended its decision for the
purpose of correcting certain errors and
omissions which were not substantial in
character and that its amended decision
was served upon the parties after the
union had perfected its appeal from the
original decision.
Under those circumstances, this Court
held that the union's appeal should be
given due coarse, subject to the
amendment of its record on appeal. This
Court reserved to the members of the
union the right to secure restitution under
sections 2 and 5, Rule 39 of the Rules of
Court (Allied Free Workers Union vs.
Estipona, L-19651, June 30, 1966,17
SCRA 513, 64 O.G. 2701).
Pursuant to that reservation, the union on
December 16, 1966 filed a motion for
restitution, praying that its 225 members
be restored to their jobs and that the
company be ordered to pay P 1,620,000
as damages, consisting of the lost
earnings during the four-years period from
May 8, 1962 to May 8, 1966.
On the other hand, the company in its
motion of January 18, 1967 reiterated its
1960 motion for the execution of the lower
court's judgment as to the damages, of
P520,000 and the permanent injunction.
Later, the company called the lower
court's attention to this Court's decision
dated January 31, 1967. In that decision,
this Court affirmed the CIR's decision
holding that the company did not commit
any unfair labor practice and reversed the
CIR's directive that a certification election
be held to determine whether the union
should be the exonemtod bargaining unit.
This Court held that the union could not
act as a collective bargaining unit because
the union was an independent contractor
and its members were not employees of
the company (Allied Free Workers Union
vs. Compañia Maritima, L-22951-2 and
L-22971, 19 SCRA 258).
The lower court in its order of April 25,
1967 (1) denied the union's motion for
restitution and to stay execution of its
amended decision on January 11, 1961
and (2) required the union to file a
supersedeas bond in the sum of P100,000
within thirty days from notice. The bond
was reduced to P50,000 in the lower
court's order of August 16, 1967. The
union posted the bond on August 24,1967.
The lower court approved the union's
amended record on appeal in its order of
October 6, 1967.
The union appealed directly to this Court
because the amount involved exceeds
P200,000. The appeal was perfected
before Republic Act No. 5440 took effect
on September 9,1968.
Other proceedings. - The company in its
original complaint prayed that the union
and its officials be ordered to pay actual
damages, amounting to P15,000 for the
union's failure to load and unload cargo in
and from the consignees. vessels from
September 1 to 8, 1954; P50,000 as
damages, due to the union's inefficiency in
performing arrastre and stevedoring work
"during the latter part of the existence" of
the contract; P50,000 as moral and
exemplary damages, (not supported by
any allegation in the body of the complaint)
and P5,000 as attorney's Considering
(10-12, Record on Appeal).
On September 15, 1954 the company
added a fourth cause ofaction to its
complaint. It alleged that by reason of the
acts of harassment and obstruction
perpetrated by the union in the loading
and unloading ofcargo the company
suffered additional damage in the form of
lost and unrealized freight and passenger
charges in the amount of P10,000 for
September 9 and 10, 1954 (66, Record on
Appeal).
On November 2, 1954 the company
attached to its motion for the revival of the
injunction against the union an auditor's
report dated September 15, 1954 wherein
it was indicated that the company lost
freight revenues amounting to
P178,579.20 during the period from
January 1 to September 7, 1954 (121-143,
Record on Appeal).
On November 27, 1954 the company filed
another motion for the restoration of the
injunction. In support of that motion the
company attached a trip operation report
showing the unloaded cargoes on the
consignees. vessels, when they docked at
Iligan City on September 14, 19, 22 and
26 and October 3 and 5, 1954, as well as
the delays in their departure (157-162,
Record on Appeal).
On March 5, 1955 the company added a
fifth cause ofaction too its complaint. It
alleged that during the period from
September 12 to December 28, 1954 it
lost freight charges on unloaded cargoes
in the sum of P62,680.12, as shown in a
detailed statement, and that it incurred an
estimated amount of P20,000 for
overhead expenses. for the delay in the
dismissal of its vessels attributable to the
union's unsatisfactory stevedoring and
arrastre work (225-229, 237-8, Record on
Appeal).
Also on March 5, 1955 the union
answered the original and supplemental
complaints. It denied that its members had
rendered inefficient service. It averred that
the termination of the contract was
prompted by the consignees. desire to
give the work to the Iligan Stevedoring
Association which the company had
allegedly organized and subsidized. The
union filed a counterclaim for P200,000 as
compensation for its services to the
company and P500,000 as other damages,
(239-252, Record on Appeal).
On March 9, 1960 the company filed a
third supplemental complaint, It alleged
that the continuation of the stevedoring
and arrastre work by the union for the
company from 1955 to date had caused
losses to the company at the rate of
P25,000 annually in the form of lost freight
on shutout cargoes and the expenses. for
the equipment used to assist the union
members in performing their work (320-3,
Record on Appeal).
Plaintiff company's evidence. - Jose C.
Teves, the consignees. branch manager
at Iligan City, testified that on August 24,
1954 he terminated the arrastre and
stevedoring contract with the union (Exh. J)
upon instruction of the head office. The
contract was terminated in order to avoid
further losses to the company caused by
the union's inefficient service (85-86 tsn
March 11, 1960).
After the termination of the contract, the
members of the union allegedly harassed
the company with the help of goons. The
cargoes could not be unloaded in spite of
the fact that the company had sought the
protection of the law-enforcing authorities
(88). The consignees. last recourse was to
go to court. (89).
The company supposedly suffered losses
as a result of the union's inefficient service
since September 1, 1954 (91). Teves
hired auditors to ascertain the losses
suffered by the company during the period
from January 1 to September 11, 1954.
The trial court awarded actual damages,
amounting to P450,000 on the basis of the
auditor's reports, Exhibits A to I. It did not
carefully examine the said exhibits.
Contrary to the trial court's impression,
Exhibits B, C and D are not auditors'
reports.
The trial court did not bother to make a
(6) Additional subsistence expenses. for the
breakdown of the alleged damages,
totalling P450,000. The reports of the two M.V. Mindoro and Panay due to the delays in
hired accountants, Demetrio S. Jayme and
M. J. Siojo, show the following alleged their dismissal from January 1 to August 31,
damages, in the aggregate amount of
P349,245.37 (not P412,663.17, as 1954 as certified by the pursers of the two
erroneously added by the consignees.
counsel, 161,163-4 tsn March 11, 1960): vessels, Statement C, Exh. A.....................

(7) Estimated loss in freight and passenger

TABULATION OF ALLEGED
revenue for the period from January 1 to
DAMAGES CLAIMED BY COMPAÑIA
MARITIMA August 31, 1954, based on 1953 freight revenue

for the same period Statement D, Exh. A.....

(1) Freight for 74,751 bags of fertilizer
(8) Estimated loss in passenger fares for
allegedly booked for shipment in the
the period from September to December 31,
company's vessels but loaded in other vessels
1954, Statement D, Exh. A.......................
during the period from Jan. 1 to August 31,
(9) Lost freight charges from September
1954, Statement A in Exh. A, CPA Jayme's
12 to December 28, 1954, as certified by the
report......................................................... P29,900.40
chief clerk of the consignees. Iligan office. Exh.
(2) Lost freight on other shutout cargoes
B.............................................................
for January 1 to August 31, 1954, Statement A
(10) Estimated overhead expenses for
in Exh. A, of CPA Jayme ......................... 4,339.64
delay of vessels in port, Exh. B.................
(3) Lost freight on shutout cargoes for
(11) Forklift operating expenses. for 1955,
September 2 to 7, 1954 booked for shipment in
consisting of salaries and maintenance
M. V. Mindoro, Panay and Masterhead Knot,
expenses, Exh. E- 1....................................
Statement B in Exh. A, CPA Jayme's report... 6,167.16
(12) Lost freight revenue for 1955, Exh. E-
(4) Losses sustained in voyages of M.V.
2...............................................................
Panay and Mindoro in four voyages from
(13) Forklift operating expenses. for 1956,
September 4 to 11, 1954, with estimates,
Exh. F- 1...................................................
Statement B, Exh. A............................... 3,764.50
(14) Lost freight revenue for 1956, Exh. F-2
(5) Other estimated losses for the said
(15) Forklift operating expenses. for 1957,
voyages of M.V. Panay and Mindoro for the
Exh. G- 1...................................................
same period, based on interviews of parties at
(16) Lost freight revenue for 1957, Exh. G-
the wharf, Statement B, Exh. A............... 10,000.00

2....................................................................
(17) Forklift operating expenses. for 1958,
Exh. H-1...................................................
(18) Lost freight revenue for 1958, Exh. H-
2.............................................................
(19) Forklift operating expenses. for 1959,
Exh. I-1....................................................
(20) Lost freight revenue for 1959, Exh. I-2
T OT A L -
We tabulated the alleged damages, to
show that the trial court's award to the
company of P450,000 as damages, is not
supported by the evidence. On the other
hand, the statement of the consignees.
counsel that the damages, totalled
P412,663.17 (162- 164 tsn March 11,
1960) is wrong.
Teves, the consignees. branch manager,
submitted a statement (Exh. K) showing
the alleged cost of three forklifts, 200
pieces of pallet boards, 530 pieces of wire
rope slings and two pieces of tarpaulins in
the total sum of P27,215. In that statement,
he claims that the damages, to the
company by reason of the depreciation of
the said items of equipment amounted to
P38,835 or more than the cost thereof.
The company's counsel, in his summary of
the damages, ignored the alleged
damages, of P38,835 indicated by Teves
in Exhibit K. The consignees. counsel
relied oth on the auditors' reports, Exhibits
A and E to I and on Exhibit B, the chief
clerk's statement. As already noted, those
documents show that the total damages,
claimed by the company amounted to
P349,245.37.
The best evidence on the cost of the said
equipment would have been the sales
invoices instead of the oral testimony of
Teves. He did not produce the sales
invoices.
Teves further testified that Salvador T.
14,538.10
Lluch was the president of the union;
Nicanor Halibas, the treasurer; Mariano
Badelles, the general manager, and
Luarentino Badelles, a vice president.
7,503.45
Appellants' statement of facts. - To sustain
their appeal, the appellants made the
10,193.46
following exceedingly short and deficient
recital of the facts:
Sometime in the8,745.35
month of August, 1954,
defendant, Allied Free Workers Union filed
an unfair labor7,959.83
practice case against
defendant (should be plaintiff) and its
branch manager,P349,245.37
Mr. Jose Teves, with the
Court of Industrial Relations, Manila, and
docketed as Case No. 426-UPL:
defendant union also filed a petition for
certification election docketed as Case No,
175-MC against plaintiff; defendant union
also filed a notice of strike dated August
27, 1954; the Secretary of Labor wired the
public defender, Iligan City, on August 27,
1954 (see annexes 1-4, motion to dismiss,
Record on Appeal, pp. 54-65).
To counteract these legitimate moves of
labor, plaintiff filed the complaint docketed
as Civil Case No. 577 in the Court of First
Instance of Lanao (now Lanao del Norte)
for damages, and/or resolution of contract
with writ of preliminary injunction, On a
decision adverse to their interests,
defendants take this appeal.
On the question of jurisdiction taken
before this Honorable Tribunal in G.R. No.
L-8876, it was held:
... for the instant case merely refers to the
recovery of damages, occasioned by the
picketing undertaken by the members of
the union and the rescission of the arrastre
and stevedoring contract previously
entered into between the parties.
The appellants did not discuss their oral
and documentary evidence. *
First assignment of error. - The appellants
contend that the trial court erred in
awarding to the company actual damages,
amounting to P450,000, moral damages,
of P50,000 and attorney's Considering of
P20,000, and in holding that the four
officers of the union are solidarily liable for
the said damages.
Appellants' counsel assailed the award of
actual damages, on the ground that the
auditors' reports, on which they were
based, were hearsay.
After analyzing the nature of the damages,
awarded, how the same were computed,
and the trustworthiness of the company's
evidence, we find the first assignment of
error meritorious.
We have already stress that, on the basis
of the reports of the two accountants, the
damages, claimed by the complaint as a
matter of simple addition, does not reach
the sum of P 450,000 fixed by the trial
court. The damages, shown in the
accountants' reports and in the statement
made by the consignees. chief clerk (who
did not testify) amount to P349,245.37, or
much less than P450,000.
The company argues that the accountants'
reports are admissible in evidence
because of the rule that "when the original
consists of numerous accounts or other
documents which cannot be examined in
court without great loss-of time and the
fact sought to be established from them is
oth the general result of the whole", the
original writings need not be produced
(Sec. 2[e], Rule 130, Rules of Court).
That rule cannot be applied in this case
because the voluminous character of the
records, on which the accountants' reports
were based, was not duly established (U.
S. vs. Razon and Tayag, 37 Phil. 856, 861;
29 Am Jur 2nd 529).
It is also a requisite for the application of
the rule that the records and accounts
should be made accessible to the adverse
party so that the company, of the summary
may be tested on cross-examination (29
Am Jur 2nd 517-8; 32A C.J.S. 111).
What applies to this case is the general
rule "that an audit made by, or the
testimony of, a private auditor, is
inadmissible in evidence as proof of the
original records, books of accounts,
reports or the like" (Anno 52 ALR 1266).
That general rule cannot be relaxed in this
case because the company failed to make
a preliminary showing as to the difficulty or
impossibility attending the production of
the records in court and their examination
and analysis as evidence by the court (29
Am Jur 2nd 529).
A close scrutiny of the accountants'
reports reveals their lack of probative
value. The propriety of allowing the
different items of damages, is discussed
below.
Unrealized freight and passenger revenue
for 1954 ascertained by Accountant
Demetrio S. Jayme. - In his report (Exh. A,
pp. 134 to 147, Record on Appeal), Jayme
used the pronouns "we" and "our" and
made reference to the examination made
by the "auditors" and his accounting office.
He did not disclose the names of other
"auditors" who assisted him in making the
examination of the consignees. records.
He gave the impression that he was an
independent accountant hired by the
company to make a "special investigation"
of the consignees. losses for the period
from January 1 to September 7, 1954.
The truth is that Jayme was a "personal
friend" of Teves, the consignees. branch
manager at Iligan City. Teves was the
consignees. principal witness in this case.
He verified the complaint. herein. He
signed for the company the stevedoring
and arrastre contract which he later
rescinded. In fact, Teves intervened in the
drafting of the contract. It was his Idea that
the company should not pay the arrastre
and stevedoring Considering and that
those charges should be borne by the
shippers and consignees.
Jayme was not only the friend of Teves
but was also his co-employee. Jayme was
the consignees. branch manager at
Ozamis City and later at Cagayan de Oro
City (217-8 tsn May 20, 1960; Exh. 12). He
suppressed that fact in his report of
examination. Apparently, the practice of
accounting was his sideline or he
practised accounting and, as the saying
goes, he moonlighted as the consignees.
branch manager. Obviously, Jayme would
be biased for the company. He violated a
rule of the accountants' code of ethics by
not disclosing in his report of examination
that he was an employee of the company
(84 tsn June 2, 1960).
Accountant Jayme allegedly found from
the consignees. records at Iligan City that
its freight and passenger revenue for the
eight- month period from January 1 to
August 31, 1953 amounted to
P373,333.14 and that for the same period
in 1954, that revenue amounted to
P470,716.29, or an increase of
P97,383.12 (Statement D of Exh. A, 145,
Record on Appeal).
Jayme interpreted those figures as
signifying that the company would have
realized more revenue if the union had
rendered better service. He reasoned out
that there was a big volume of business in
Iligan City due to the Maria Cristina
Fertilizer Plant, Iligan Steel Mill and NPC
Hydroelectric Plant. He imagined that the
consignees. freight revenue during the first
eight months of 1954 could have
amounted to at least P600,000 and that
since it actually realized oth P 470,716.29,
its loss of freight revenue for that period
could be "conservatively" estimated at
least P100,000 (item 7 of the tabulation of
damages).
He stated that he attached to his report on
the comparative statement of gross
revenue a certificate of the captain of the
vessel Panay showing the delays in its
dismissal in Iligan City as indicated in its
logbook. No such document was attached
to Jayme's report.
And from the fact that the total fares
received by the company during the
eight-month period were reduced in the
sum of P3,951.58 (Jayme fixed the
reduction at the round figure of P4,000),
he calculated that the company suffered a
loss of at least P20,000 in passenger
revenue up to December 31, 1954 (Item 8
of the tabulation of damages).
Jayme also included in his report (a)
damages, amounting to P10,000 as
his estimate of losses supposedly "based
on interviews with disinterested parties at
the wharf and city proper customers"; (b)
damages, amounting to P3,764.50
allegedly suffered in the operation of the
vessels Mindoro and Panay from
September 4 to 11, 1954, consisting of
extra meals, expenses. for unloading
cargo, estimated loss in passage revenue
for four voyages, and estimated loss from
14 re-routed freights to competing
vessels" (consisting of rice, corn and
bananas), and (e) the sum of P4,407.50
as alleged additional subsistence incurred
for the crew of
the Panay and Mindoro from January 1 to
August 31, 1954 (items 4, 5 and 6 of the
tabulation of damages). The records of the
purser and chief steward were allegedly
examined in ascertaining those damages.
It would not be proper to allow Jayme's
estimates as recoverable damages. They
are not supported by reliable evidence.
They can hardly be sanctioned by the
"generally accepted auditing standards"
alluded to in Jayme's report. The pertinent
records of the company should have been
produced in court. The purser and steward
did not testify.
The rule is that the auditor's summary
should not include his conclusions or
inferences (29 Am Jur 2d 519). His opinion
is not evidence.
The trial court unreservedly gave
credence to the conjectures of Jayme.
Obviously, his inflated guesses are
inherently speculative and devoid of
probative value. Furthermore, his estimate
of the unrealized freight revenue for
January 1 to August 31, 1954 overlapped
with his computation of the lost freight for
the unloaded 74,751 bags of fertilizer and
other cargoes covering the same period
(Statement A of Exh. A).
The foregoing discussion shows Jayme's
unreliable modus operandi in ascertaining
the 1954 losses which the company
claimed to have suffered in consequence
of the union's alleged inefficiency or poor
service. It is noteworthy that those losses
were not averred with particularity and
certitude in the consignees. complaint.
The same observations apply with equal
cogency to the damages, amounting to
P40,407.20 as lost freight revenue also for
the year 1954 (items 1 to 3 of the
tabulation of damages) which were
computed by Accountant Jayme.
Those items refer to (1) the sum of
P29,900.40 as lost freight revenue on
74,751 bags of fertilizer, already
mentioned, which were booked for
shipment in the consignees. vessels from
January 1 to August 31, 1954 but which
were allegedly loaded in other vessels; (2)
P4,339.64 as unrealized freight revenue
for other cargoes booked in the
consignees. vessels but not loaded
therein during the same eight-month
period, and (3) P6,167,16 as unrealized
freight revenue on shutout cargoes not
loaded in the consignees. vessels during
the six-day period from September 2 to 7,
1954.
Jayme allegedly based his computations
on the records of the company which were
not produced in court. The union objected
to Jayme's report as inadmissible under
the hearsay rule or as not being the best
evidence.
Even if the presentation of the records
themselves as exhibits should have been
dispensed with, yet the complaint to show
good faith and fair dealing, could have
brought the records in court (manifests,
bills of lading, receipts for the freights, if
any, etc.) and enabled the court and the
union's counsel and its expert accountant
to verify the accuracy of Jayme's
summaries.
Photostatic copies of some manifests and
bills of lading proving that the company
was not able to collect the stipulated
freight on the alleged shutout cargoes
should have been proforma. in evidence
as supporting papers for Jayme's report.
No such exhibits were presented.
The flaw or error in relying merely on
Jayme's summaries is that, as pointed out
by witness Mariano LL. Badelles, cargoes
might be shutout due to causes other than
the supposed inefficiency of the union. He
testified that cargoes were shutout
deliberately by the company because they
could not be loaded in one vessel (for
example, 50,000 bags of fertilizer), or a
shipper had no allotment, or because the
company did not want to load cargoes like
bananas (189-194 tsn May 20, 1960).
Jayme's summaries did not take into
account the probability that a part of the
cargo booked in the consignees. vessel
for a certain date might not have been
loaded on that date but was loaded in
another vessel of the company which
docked at the port a few days later, In that
case, there would be no loss of freight
revenue. The mere shutting out of cargo in
a particular voyage did not ipso
facto produce loss of freight revenue.
Our conclusion is that an injustice would
be perpetrated if the damages,
aggregating P178,579 computed and
estimated in the report of Jayme, a biased
witness, should be accepted at their face
value.
Damages computed by Salvador M.
Magante. - The company also claims as
damages, for the period from September
12 to December 28, 1954 lost freight
charges on shutout cargoes in the sum of
P62,680.12, and the sum of P20,000 as
"overhead expenses. for delay of vessels
in port", as set forth by Salvador M.
Magante, the consignees. chief clerk at
Iligan City, in his statement, Exhibit B
(items 9 and 10 of the tabulation of
damages).
Magante did not testify on his statement.
Instead, accountant Jayme, substituting
for Magante, testified on that statement.
Jayme said that he verified the consignees.
records on which Magante based his
statement. Jayme assured the court that
the figures in Magante's statement were
supported by the consignees. records.
But as to the damages, of P20,000, Jayme
said that he could not certify as to their
company, because he had not finished his
investigation (33 tsn March 9, 1955). In
spite of that admission, the trial court
allowed that item of damages.
The trial court erred in allowing the
damages, totalling P82,680.12 because
Magante's statement, Exhibit B, is hearsay.
Magante should have been proforma. as a
witness. Jayme was not competent to take
his place since the statement was
prepared by Magante, not by Jayme. More
appropriate still, the documents and
records on which the statement was
based should have been proforma. as
evidence or at least brought to the court
for examination by the union's counsel and
its accountant. The trial court required the
production of the manifests supporting
Magante's statement (85-86 tsn march 9,
1955). Only one such manifest, Exhibit C,
was produced. The nonproduction of the
other records was not explained.
Lost freight revenue and operating
expenses for the forklifts. - The company
claimed as damages, the sum of
P87,986.05 (P151,403.85 as erroneously
computed by the consignees. counsel,
163 tsn March 11, 1950) consisting of
supposed unrealized freight charges for
shutout or unloaded cargoes for the year
1955 to 1959 (Exh. E to I, Items 11 to 20 of
the tabulation of damages).
The claim is covered by the company's
third supplemental complaint dated March
9, 1960 wherein it was alleged that due to
the acts of the union and its officers the
company had suffered damages, of not
less than P25,000 annually since 1955
(320-3, Record on Appeal). That
supplemental complaint was hurriedly filed
during the trial as directed by the trial
court.
The said damages, were computed in the
reports of Miguel J. Siojo, an accountant
who, for two days and nights, March 8 to
10, 1960, or shortly before and during the
trial, allegedly examined the consignees.
record at Iligan City, such as its cash book,
cash vouchers, reports to the head office,
shipping manifests, and liquidation reports.
Those records were not produced in court.
Their nonproduction was not explained. If
the accountant was able to summarize the
contents of those records in two days, they
could not have been very voluminous.
They should have been offered in
evidence.
The alleged expenses. in the operation of
the forklifts consisted of (a) the wates of
the operators hired by the company and (b)
the cost of gasoline and oil and expenses.
for repair.
The company's theory is that under the
1952 contract (Exh. J) the union was
obligated to provide for forklifts in the
loading and unloading of cargo. Inasmuch
as the union allegedly did not have forklifts,
the complaint to expedite the arrastre and
stevedoring work, purchase forklifts, hired
laborers to operate the same, and paid for
the maintenance expenses. The company
treated those expenses as losses or
damages.
Those alleged damages, amounting to
P87,986.05 are in the same category as
the depreciation allowances amounting to
P38,835 which the company claimed for
the forklifts, pallet boards, tarpaulins and
wire rope slings that it purchased for oth
P27,215, We have stated that the
consignees. counsel ignored that
depreciation in his recapitulation of the
damages, claimed by the plaintiff.
The union contends that Siojo's reports
(Exh. E to I) were inadmissible evidence
because they were hearsay, meaning that
the original documents, on which the
reports were based, were not presented in
evidence and, therefore, appellants'
counsel and the court itself were not able
to gauge the correctness of the figures or
data contained in the said reports. The
person who had personal knowledge of
the operating expenses. was not
examined in court.
We are of the opinion that, to avoid fraud
or fabrication, the documents evidencing
the alleged expenses. should have been
proforma. in evidence. Siojo's reports
were not the best evidence on the said
operating expenses. The explanation of
Badelles with respect to shutout cargoes
and our observations on Jayme's
summaries are applicable to accountant
Siojo's reports.
A more substantial ground for rejecting
Siojo's reports is that the said expenses, if
really incurred, cannot be properly treated
as darn ages to the company.
The union's witness, Mariano LI. Badelles,
testified that the consignees. forklifts were
not used exclusively on the wharf. They
were used in the fertilizer and carbide
plants. Sometimes, the union supplied the
driver and the gasoline for the operation of
the forklifts (174-177 tsn May 20, 1960).
Moreover, as stated earlier, the company
was not paying the union a single centavo
for arrastre and stevedoring work. The
shippers and consignees paid for the
arrastre service rendered by the union.
The union did not receive any
compensation for stevedoring work.
The company complained that the union
had been rendering unsatisfactory arrastre
and stevedoring services. That grievance
was controverted by the union.
The use of the forklifts, tarpaulins pallet
boards and wire rope slings immeasurably
benefitted the company. It is not proper
nor just that the consignees. investment in
those pieces of equipment should be
considered damages, just because it was
able to bind the union to a one-sided
contract which exempted it from the
payment of arrastre and stevedoring
Considering and which impliedly obligated
the union to purchase the said equipment.
If the service rendered by the union
members was unsatisfactory, it must be
because the poor stevedores were
underfed and underpaid. They were
underfed and underpaid because the
company was astute enough to insure that
it would obtain stevedoring service without
paying for it.
If to improve the arrastre and stevedoring
service, the company had to incur
expenses. for the purchase of forklifts,
pallet boards, tarpaulins and wire rope
slings and for the operation of the forklifts,
the union should not be required to
reimburse the company for those
expenses. The company should bear
those expenses. because the same
redounded to its benefit.
The trial court erred in ordering the union
and its officials to pay the amount of the
said expenses. as damages, to the
company.
Moral damages and attorney's fees. -
Considering that the consignees. claim for
moral damages, was based on the same
facts on which it predicated its claim for
actual deduction which we have found to
be groundless, it follows that the company,
a juridical person, is not entitled to moral
damages.
Anyway, the company did not plead and
prove moral damages. It merely claimed
moral damages, in the prayer of its
complaint. That is not sufficient (Darang vs.
Ty Belizar, L-19487, January 31, 1967, 19
SCRA 214, 222).
Under the facts of this case, we do not find
any justification for awarding attorney's
Considering to the company. Hence, the
trial court's award of P20,000 as attorney's
Considering is set aside.
Appellants' first assignment of error,
although not properly argued by their
counsel, should be sustained.
Other assignments of error. - The union
and its officers contend that the lower
court erred in dismissing their
counterclaims. Their counsel did not even
bother to state in their brief the amount of
the counterclaims.
The union filed counterclaims for
P200,000 as compensation for
stevedoring services from August, 1952 to
March 4, 1955; P500,000 as deduction
P10,000 as attorney's Considering and
P5,000 as premium on the counterbond
(251-2, Record on Appeal). In their
supplemental counterclaim, they
demanded P500,000 as stevedoring
charges for the period from March 4, 1955
to March 4, 1960 and additional damages,
of P10,000 (308-10, Record on Appeal).
The trial court dismissed the said
counterclaims.
The appellants in their three-sentence
argument in support of their counterclaims
alleged that the company's bill of lading
provided that the unloading of the cargoes
was at the consignees. expense (Exh. 1);
that the company had not paid the sum of
P500,000 as compensation for the
stevedoring services rendered by the
laborers up to 1960, and that the
stipulation in the arrastre contract, "that
the Compañia Maritima shall not be liable
for the payment of the services rendered
by the Allied Free Workers Union for the
loading and deliveries of cargoes as same
is payable by the owners and consignees
of cargoes, as it has been the practice in
the port of Iligan City" (Exh. J, pp. 14, 334,
359, 500 Record on Appeal), was 'non-
operative" and void, "being contrary to
morals and public policy".
That superficial argument is not well-taken.
The printed stipulation in the bill of lading
was superseded by the contractual
stipulation. The contract was prepared by
the union officials. As already noted, it was
stipulated in the contract that the
stevedoring and arrastre charges should
be paid by the shippers and consignees in
consonance with the practice in Iligan City.
That stipulation was binding and
enforceable.
The supposed illegality of that stipulation
was not squarely raised by the union and
its officials in their answer. They merely
averred that the contract did not express
the true agreement of the parties. They did
not sue for reformation of the instrument
evidencing the contract. The lower court
did not err in dismissing defendants'
counterclaims.
The other two errors assigned by the
appellants, namely, that the lower court
erred in issuing a permanent injunction
against them and in executing its decision
pending appeal, are devoid of merit.
The appellants invoke section 9(d) of the
Magna Carta of Labor regarding the
issuance of injunctions. That section has
no application to this case because it was
definitively ruled by this Court in the
certification and unfair labor practice
cases that there is no employer-employee
relationship between the company and the
stevedores. (They work under
the cabo system).
The lower court did not execute the money
aspect of its judgment. It merely required
the defendants to file a supersedeas bond
of P50,000.
As to the injunction, it should be recalled
that it was this Court which, in its
resolution of May 16, 1962 in the
execution and appeal incident (L-19651,
17 SCRA 513), allowed the company to
terminate the stevedoring and arrastre
work of the union and to use another union
to perform that work.
The company had the contractual right to
terminate the 1952 contract (Taylor vs. Uy
Teng Piao, 43 Phil. 873). The lower court
did not err in sustaining the consignees.
rescission of the contract and in enjoining
the union from performing arrastre and
stevedoring work.
WHEREFORE, that portion of the trial
court's judgment declaring the arrastre
and stevedoring contract terminated,
permanently enjoining the union and its
officials from performing arrastre and
stevedoring work for the vessels of the
Compañia Maritima, and dismissing
defendants' counterclaim is affirmed.
The lower court's award of damages, is
reversed and set aside. No costs.
SO ORDERED.
Barredo, Antonio, and Martin, JJ., concur.
Concepcion Jr., J., took no part.
Martin, J., was designated to sit in the
Second Division.
Separate Opinions
FERNANDO, J., concurring:
Concur in the exhaustive and ably-written
opinion of Justice Aquino with the
observation that the objective of industrial
peace and the Ideal of a "compassionate
society" so clearly manifested in the
present Constitution call for greater
understanding and more sympathetic
approach on the part of management.
Separate Opinions
FERNANDO, J., concurring:
Concur in the exhaustive and ably-written
opinion of Justice Aquino with the
observation that the objective of industrial
peace and the Ideal of a "compassionate
society" so clearly manifested in the
present Constitution call for greater
understanding and more sympathetic
approach on the part of management.
Footnotes
* This case was submitted for decision on
July 9, 1970. One reason for the delay in
its disposition is the fact that the briefs are
exceedingly brief and do not give much
enlightenment to the Court.
The decision under appeal consists of 70
printed pages; the record on appeal, 883
printed pages; the folder of exhibits, 140
pages, and the transcripts of the
testimonies, 1, 101 pages.
The briefs do not conform with the
requirements of sections 16 and l7, Rule
46 of the Rules of Court. Their subject
indexes do not contain a digest of the
argument (Secs. 16[a] and 17[a], Rule 46).
Appellants' inadequate statement of the
case does not contain "a clear and
concise statement of the nature of the
action, a summary of the proceedings, the
appealed rulings and orders of the court,
the nature of the judgment and any other
matters necessary to an understanding of
the nature of the controversy, with page
references to the record." (Sec. 16[c], Rule
46).
Their statement of facts does not contain
"a clear and concise statement in a
narrative form of the facts admitted by
both parties and of those in controversy,
together with the substance of the proof
relating thereto in sufficient detail to make
it clearly intelligible, with page reference to
the record" (See. 16[d], Rule 46).
Under section l(g), Rule 50 of the Rules of
Court, this Court may dismiss motu
proprio the union's appeal for want of page
references to the record in its skimpy
statement of facts (Genobiagon vs. Court
of Appeals, L-44323, March 2, 1977).
G.R. No. L-6291 April 29,
1954
THE SAN PEDRO BUS LINE, PAULINO
DE LA CRUZ, and TEODOLO LACDAN,
doing business under the name of
"THE SAN PEDRO BUS
LINE," petitioners,
vs.
NICOLAS NAVARRO, and the HON.
ASSOCIATE JUSTICES OF THE FIRST
DIVISION, COURT OF
APPEALS, respondents.
Estanislao R. Bayot for petitioners.
Antonio Enrile Inton and Camilo V. Peña
for respondents.
PARAS, C.J.:
Nicolas Navarro filed a complaint in the
court of First Instance of Rizal against the
San Pedro Bus Line, Paulino de la Cruz
and Teodulo Lacdan, doing business in
the name of the San Pedro Bus Line,
alleging that the plaintiff, on April 21, 1943,
rode as a passenger in Manila bound bus
No. TPU-7654 owned and operated by the
defendants; that while on its way the bus
collided with another vehicle, causing
serious physical injuries to the plaintiff,
with subsequent post-traumatic psychosis
which might incapacitate him for life; that
as a result thereof the plaintiff suffered
damages, for actual medical and hospital
expenses and loss of earning power, in
the total sum of P4,500 which the plaintiff
sought to recover from the defendants. In
their answer the defendants admitted the
occurrence of the accident and the injuries
received the plaintiff, but disclaimed
responsibility for the accident. After trial,
the court dismissed the complaint on the
ground that there was "no proof
whatsoever of the relation of the
defendants San Pedro Bus Line and
Paulino de la Cruz with the damages
claimed by the plaintiff." The plaintiff
appealed to the Court of Appeals which,
on part of which reads as follows:
"WHEREFORE, it appearing that the trial
court erred as charged, and that the facts
and the lawfully warrant a recovery by the
appellant, the judgment appealed in the
total sum of P9,500, with interests thereon
from the date this action was commenced.
Costs are charged against the appellees."
The defendants have elevated the case by
way of a petition for certiorari.
It is contended for the herein petitioners
that they cannot be held civilly liable to
respondents Nicolas Navarro, for the
reason that the Court of First Instance of
Rizal had dismissed the criminal charge
against petitioner Paulino de la Cruz,
driver of the bus involved in the accident,
citing the case of Martinez vs.
Barredo,* Off. Gaz., 4922. In answer to
this contention, it is enough to advert to
the conclusion of the Court of Appeals —
which is correct — that the action was not
based on tort or quasi delict, but was one
for breach of a carrier's contract, there
being a clear distinction between culpa as
a source and creator of obligations
(aquiliana) and culpa in the performance
of an already existing obligation
(contractual). As already held in the case
of Castro vs. Acro Taxicab Co.** 46 Off.
Gaz., 2023, "para que prosperase la
accion del demandante pidiendo
indemnizacion de daños y perjuicios
bastaba que probase la existencia del
contrato de pasaje esto es, que causo
lesiones y daños en el pasajero. De
acuerdo con la doctrina enunciada, para el
exito de la accion de daños no era
necesario que se probase la culpa,
desuido a negligencia del chofer que
guiaba el taximetro No. 962." The case
of Martinez vs. Barredo is not controlling,
since it referred to an action based on
criminal negligence.
The other contention of the petitioners is
that it was erroneous for the Court of
Appeals to award in favor of respondent
Navarro damages in the amount of P9,500,
his claim in the complaint being only for
P4,500. It appears, however, that the
complaint prayed for "such further relief as
may be deemed just and equitable," and
this of course warranted the granting in the
complaint. Indeed, under section 9, Rule
35, of the Rules of Court, "the judgment
shall grant the relief to which the party in
whose favor it is rendered is entitled, even
if the party has not demanded such relief
in his pleadings."
It is also urged by counsel for the
petitioners that the finding of the Court of
Appeals that respondent Navarro is insane,
is not supported by any evidence, and that
on the other hand, in the motion for new
trial filed by the petitioners, accompanied
by the affidavits of Marcelo Legaspi and
Ceferino Terello, respondent Navarro is
shown not to be insane, with the result that
there is no basis for awarding the
additional amount of P5,000. However,
apart from the fact that the finding of the
Court of Appeals is factual and therefore
conclusive, the said sum was granted by
the Court of Appeals, not only for the
resulting insanity of respondent Navarro
but for his pain and suffering in general;
and we are not prepared to hold that the
award is excessive as compensation for
moral damages.
Wherefore, the decision complained of is
affirmed, and it is so ordered with costs
against petitioners.
Pablo, Bengzon, Reyes, Jugo, Bautista
Angelo, and Concepcion, JJ., concur
G.R. No. L-48006 July 8, 1942
FAUSTO BARREDO, petitioner,
vs.
SEVERINO GARCIA and TIMOTEA
ALMARIO, respondents.
Celedonio P. Gloria and Antonio Barredo
for petitioner.
Jose G. Advincula for respondents.
BOCOBO, J.:
This case comes up from the Court of
Appeals which held the petitioner herein,
Fausto Barredo, liable in damages for the
death of Faustino Garcia caused by the
negligence of Pedro Fontanilla, a taxi
driver employed by said Fausto Barredo.
At about half past one in the morning of
May 3, 1936, on the road between
Malabon and Navotas, Province of Rizal,
there was a head-on collision between a
taxi of the Malate Taxicab driven by Pedro
Fontanilla and a carretela guided by Pedro
Dimapalis. The carretela was overturned,
and one of its passengers, 16-year-old
boy Faustino Garcia, suffered injuries from
which he died two days later. A criminal
action was filed against Fontanilla in the
Court of First Instance of Rizal, and he
was convicted and sentenced to an
indeterminate sentence of one year and
one day to two years of prision
correccional. The court in the criminal
case granted the petition that the right to
bring a separate civil action be reserved.
The Court of Appeals affirmed the
sentence of the lower court in the criminal
case. Severino Garcia and Timotea
Almario, parents of the deceased on
March 7, 1939, brought an action in the
Court of First Instance of Manila against
Fausto Barredo as the sole proprietor of
the Malate Taxicab and employer of Pedro
Fontanilla. On July 8, 1939, the Court of
First Instance of Manila awarded damages
in favor of the plaintiffs for P2,000 plus
legal interest from the date of the
complaint. This decision was modified by
the Court of Appeals by reducing the
damages to P1,000 with legal interest
from the time the action was instituted. It is
undisputed that Fontanilla 's negligence
was the cause of the mishap, as he was
driving on the wrong side of the road, and
at high speed. As to Barredo's
responsibility, the Court of Appeals found:
... It is admitted that defendant is
Fontanilla's employer. There is proof that
he exercised the diligence of a good father
of a family to prevent damage. (See p. 22,
appellant's brief.) In fact it is shown he was
careless in employing Fontanilla who had
been caught several times for violation of
the Automobile Law and speeding (Exhibit
A) — violation which appeared in the
records of the Bureau of Public Works
available to be public and to himself.
Therefore, he must indemnify plaintiffs
under the provisions of article 1903 of the
Civil Code.
The main theory of the defense is that the
liability of Fausto Barredo is governed by
the Revised Penal Code; hence, his
liability is only subsidiary, and as there has
been no civil action against Pedro
Fontanilla, the person criminally liable,
Barredo cannot be held responsible in the
case. The petitioner's brief states on page
10:
... The Court of Appeals holds that the
petitioner is being sued for his failure to
exercise all the diligence of a good father
of a family in the selection and supervision
of Pedro Fontanilla to prevent damages
suffered by the respondents. In other
words, The Court of Appeals insists on
applying in the case article 1903 of the
Civil Code. Article 1903 of the Civil Code
is found in Chapter II, Title 16, Book IV of
the Civil Code. This fact makes said article
to a civil liability arising from a crime as in
the case at bar simply because Chapter II
of Title 16 of Book IV of the Civil Code, in
the precise words of article 1903 of the
Civil Code itself, is applicable only to
"those (obligations) arising from wrongful
or negligent acts or commission
not punishable by law.
The gist of the decision of the Court of
Appeals is expressed thus:
... We cannot agree to the defendant's
contention. The liability sought to be
imposed upon him in this action is not a
civil obligation arising from a felony or a
misdemeanor (the crime of Pedro
Fontanilla,), but an obligation imposed in
article 1903 of the Civil Code by reason of
his negligence in the selection or
supervision of his servant or employee.
The pivotal question in this case is
whether the plaintiffs may bring this
separate civil action against Fausto
Barredo, thus making him primarily and
directly, responsible under article 1903 of
the Civil Code as an employer of Pedro
Fontanilla. The defendant maintains that
Fontanilla's negligence being punishable
by the Penal Code, his (defendant's)
liability as an employer is only subsidiary,
according to said Penal code, but
Fontanilla has not been sued in a civil
action and his property has not been
exhausted. To decide the main issue, we
must cut through the tangle that has, in the
minds of many confused and jumbled
together delitos and cuasi delitos, or
crimes under the Penal Code and fault or
negligence under articles 1902-1910 of
the Civil Code. This should be done,
because justice may be lost in a labyrinth,
unless principles and remedies are
distinctly envisaged. Fortunately, we are
aided in our inquiry by the luminous
presentation of the perplexing subject by
renown jurists and we are likewise guided
by the decisions of this Court in previous
cases as well as by the solemn clarity of
the consideration in several sentences of
the Supreme Tribunal of Spain.
Authorities support the proposition that
a quasi-delict or "culpa aquiliana " is a
separate legal institution under the Civil
Code with a substantivity all its own, and
individuality that is entirely apart and
independent from delict or crime. Upon
this principle and on the wording and spirit
article 1903 of the Civil Code, the primary
and direct responsibility of employers may
be safely anchored.
The pertinent provisions of the Civil Code
and Revised Penal Code are as follows:
CIVIL CODE
ART. 1089 Obligations arise from law,
from contracts and quasi-contracts, and
from acts and omissions which are
unlawful or in which any kind of fault or
negligence intervenes.
xxx xxx xxx
ART. 1092. Civil obligations arising from
felonies or misdemeanors shall be
governed by the provisions of the Penal
Code.
ART. 1093. Those which are derived from
acts or omissions in which fault or
negligence, not punishable by law,
intervenes shall be subject to the
provisions of Chapter II, Title XVI of this
book.
xxx xxx xxx
ART 1902. Any person who by an act or
omission causes damage to another by
his fault or negligence shall be liable for
the damage so done.
ART. 1903. The obligation imposed by the
next preceding article is enforcible, not
only for personal acts and omissions, but
also for those of persons for whom
another is responsible.
The father and in, case of his death or
incapacity, the mother, are liable for any
damages caused by the minor children
who live with them.
Guardians are liable for damages done by
minors or incapacitated persons subject to
their authority and living with them.
Owners or directors of an establishment or
business are equally liable for any
damages caused by their employees while
engaged in the branch of the service in
which employed, or on occasion of the
performance of their duties.
The State is subject to the same liability
when it acts through a special agent, but
not if the damage shall have been caused
by the official upon whom properly
devolved the duty of doing the act
performed, in which case the provisions of
the next preceding article shall be
applicable.
Finally, teachers or directors of arts trades
are liable for any damages caused by their
pupils or apprentices while they are under
their custody.
The liability imposed by this article shall
cease in case the persons mentioned
therein prove that they are exercised all
the diligence of a good father of a family to
prevent the damage.
ART. 1904. Any person who pays for
damage caused by his employees may
recover from the latter what he may have
paid.
REVISED PENAL CODE
ART. 100. Civil liability of a person guilty of
felony. — Every person criminally liable for
a felony is also civilly liable.
ART. 101. Rules regarding civil liability in
certain cases. — The exemption from
criminal liability established in subdivisions
1, 2, 3, 5, and 6 of article 12 and in
subdivision 4 of article 11 of this Code
does not include exemption from civil
liability, which shall be enforced to the
following rules:
First. In cases of subdivision, 1, 2 and 3 of
article 12 the civil liability for acts
committed by any imbecile or insane
person, and by a person under nine years
of age, or by one over nine but under
fifteen years of age, who has acted without
discernment shall devolve upon those
having such person under their legal
authority or control, unless it appears that
there was no fault or negligence on their
part.
Should there be no person having such
insane, imbecile or minor under his
authority, legal guardianship, or control, or
if such person be insolvent, said insane,
imbecile, or minor shall respond with their
own property, excepting property exempt
from execution, in accordance with the
civil law.
Second. In cases falling within subdivision
4 of article 11, the person for whose
benefit the harm has been prevented shall
be civilly liable in proportion to the benefit
which they may have received.
The courts shall determine, in their sound
discretion, the proportionate amount for
which each one shall be liable.
When the respective shares can not be
equitably determined, even approximately,
or when the liability also attaches to the
Government, or to the majority of the
inhabitants of the town, and, in all events,
whenever the damage has been caused
with the consent of the authorities or their
agents, indemnification shall be made in
the manner prescribed by special laws or
regulations.
Third. In cases falling within subdivisions 5
and 6 of article 12, the persons using
violence or causing the fear shall be
primarily liable and secondarily, or, if there
be no such persons, those doing the act
shall be liable, saving always to the latter
that part of their property exempt from
execution.
ART. 102. Subsidiary civil liability of
innkeepers, tavern keepers and
proprietors of establishment. — In default
of persons criminally liable, innkeepers,
tavern keepers, and any other persons or
corporation shall be civilly liable for crimes
committed in their establishments, in all
cases where a violation of municipal
ordinances or some general or special
police regulation shall have been
committed by them or their employees.
Innkeepers are also subsidiarily liable for
the restitution of goods taken by robbery
or theft within their houses lodging therein,
or the person, or for the payment of the
value thereof, provided that such guests
shall have notified in advance the
innkeeper himself, or the person
representing him, of the deposit of such
goods within the inn; and shall furthermore
have followed the directions which such
innkeeper or his representative may have
given them with respect to the care of and
vigilance over such goods. No liability
shall attach in case of robbery with
violence against or intimidation against or
intimidation of persons unless committed
by the innkeeper's employees.
ART. 103. Subsidiary civil liability of other
persons. — The subsidiary liability
established in the next preceding article
shall also apply to employers, teachers,
persons, and corporations engaged in any
kind of industry for felonies committed by
their servants, pupils, workmen,
apprentices, or employees in the
discharge of their duties.
xxx xxx xxx
ART. 365. Imprudence and negligence. —
Any person who, by reckless imprudence,
shall commit any act which, had it been
intentional, would constitute a grave felony,
shall suffer the penalty of arresto mayor in
its maximum period to prision correccional
in its minimum period; if it would have
constituted a less grave felony, the penalty
of arresto mayor in its minimum and
medium periods shall be imposed.
Any person who, by simple imprudence or
negligence, shall commit an act which
would otherwise constitute a grave felony,
shall suffer the penalty of arresto mayor in
its medium and maximum periods; if it
would have constituted a less serious
felony, the penalty of arresto mayor in its
minimum period shall be imposed."
It will thus be seen that while the terms of
articles 1902 of the Civil Code seem to be
broad enough to cover the driver's
negligence in the instant case,
nevertheless article 1093
limits cuasi-delitos to acts or omissions
"not punishable by law." But inasmuch as
article 365 of the Revised Penal Code
punishes not only reckless but even
simple imprudence or negligence, the fault
or negligence under article 1902 of the
Civil Code has apparently been crowded
out. It is this overlapping that makes the
"confusion worse confounded." However,
a closer study shows that such a
concurrence of scope in regard to
negligent acts does not destroy the
distinction between the civil liability arising
from a crime and the responsibility for
cuasi-delitos or culpa extra-contractual.
The same negligent act causing damages
may produce civil liability arising from a
crime under article 100 of the Revised
Penal Code, or create an action
for cuasi-delito or culpa
extra-contractual under articles 1902-1910
of the Civil Code.
The individuality of cuasi-delito or culpa
extra-contractual looms clear and
unmistakable. This legal institution is of
ancient lineage, one of its early ancestors
being the Lex Aquilia in the Roman Law.
In fact, in Spanish legal terminology, this
responsibility is often referred to as culpa
aquiliana. The Partidas also contributed to
the genealogy of the present fault or
negligence under the Civil Code; for
instance, Law 6, Title 15, of Partida 7,
says: "Tenudo es de fazer emienda,
porque, como quier que el non fizo a
sabiendas en daño al otro, pero acaescio
por su culpa."
The distinctive nature
of cuasi-delitos survives in the Civil Code.
According to article 1089, one of the five
sources of obligations is this legal
institution of cuasi-delito or culpa
extra-contractual: "los actos . . . en que
intervenga cualquier genero de culpa o
negligencia." Then article 1093 provides
that this kind of obligation shall be
governed by Chapter II of Title XVI of
Book IV, meaning articles 1902-0910. This
portion of the Civil Code is exclusively
devoted to the legal institution of culpa
aquiliana.
Some of the differences between crimes
under the Penal Code and the culpa
aquiliana or cuasi-delito under the Civil
Code are:
1. That crimes affect the public interest,
while cuasi-delitos are only of private
concern.
2. That, consequently, the Penal Code
punishes or corrects the criminal act, while
the Civil Code, by means of
indemnification, merely repairs the
damage.
3. That delicts are not as broad as
quasi-delicts, because the former are
punished only if there is a penal law
clearly covering them, while the
latter, cuasi-delitos, include all acts in
which "any king of fault or negligence
intervenes." However, it should be noted
that not all violations of the penal law
produce civil responsibility, such as
begging in contravention of ordinances,
violation of the game laws, infraction of the
rules of traffic when nobody is hurt. (See
Colin and Capitant, "Curso Elemental de
Derecho Civil," Vol. 3, p. 728.)
Let us now ascertain what some jurists
say on the separate existence of
quasi-delicts and the employer's primary
and direct liability under article 1903 of the
Civil Code.
Dorado Montero in his essay on
"Responsibilidad" in the "Enciclopedia
Juridica Española" (Vol. XXVII, p. 414)
says:
El concepto juridico de la responsabilidad
civil abarca diversos aspectos y
comprende a diferentes personas. Asi,
existe una responsabilidad civil
propiamente dicha, que en ningun casl
lleva aparejada responsabilidad criminal
alguna, y otra que es consecuencia
indeclinable de la penal que nace de todo
delito o falta."
The juridical concept of civil responsibility
has various aspects and comprises
different persons. Thus, there is a civil
responsibility, properly speaking, which in
no case carries with it any criminal
responsibility, and another which is a
necessary consequence of the penal
liability as a result of every felony or
misdemeanor."
Maura, an outstanding authority, was
consulted on the following case: There
had been a collision between two trains
belonging respectively to the Ferrocarril
Cantabrico and the Ferrocarril del Norte.
An employee of the latter had been
prosecuted in a criminal case, in which the
company had been made a party as
subsidiarily responsible in civil damages.
The employee had been acquitted in the
criminal case, and the employer, the
Ferrocarril del Norte, had also been
exonerated. The question asked was
whether the Ferrocarril Cantabrico could
still bring a civil action for damages
against the Ferrocarril del Norte. Maura's
opinion was in the affirmative, stating in
part (Maura, Dictamenes, Vol. 6, pp.
511-513):
Quedando las cosas asi, a proposito de la
realidad pura y neta de los hechos,
todavia menos parece sostenible que
exista cosa juzgada acerca de la
obligacion civil de indemnizar los
quebrantos y menoscabos inferidos por el
choque de los trenes. El titulo en que se
funda la accion para demandar el
resarcimiento, no puede confundirse con
las responsabilidades civiles nacidas de
delito, siquiera exista en este, sea el cual
sea, una culpa rodeada de notas
agravatorias que motivan sanciones
penales, mas o menos severas. La lesion
causada por delito o falta en los derechos
civiles, requiere restituciones,
reparaciones o indemnizaciones, que cual
la pena misma atañen al orden publico;
por tal motivo vienen encomendadas, de
ordinario, al Ministerio Fiscal; y claro es
que si por esta via se enmiendan los
quebrantos y menoscabos, el agraviado
excusa procurar el ya conseguido
desagravio; pero esta eventual
coincidencia de los efectos, no borra la
diversidad originaria de las acciones
civiles para pedir indemnizacion.
Estas, para el caso actual (prescindiendo
de culpas contractuales, que no vendrian
a cuento y que tiene otro regimen),
dimanan, segun el articulo 1902 del
Codigo Civil, de toda accion u omision,
causante de daños o perjuicios, en que
intervenga culpa o negligencia. Es trivial
que acciones semejantes son ejercitadas
ante los Tribunales de lo civil
cotidianamente, sin que la Justicia
punitiva tenga que mezclarse en los
asuntos. Los articulos 18 al 21 y 121 al
128 del Codigo Penal, atentos al espiritu y
a los fines sociales y politicos del mismo,
desenvuelven y ordenan la materia de
responsabilidades civiles nacidas de delito,
en terminos separados del regimen por
ley comun de la culpa que se denomina
aquiliana, por alusion a precedentes
legislativos del Corpus Juris. Seria
intempestivo un paralelo entre aquellas
ordenaciones, y la de la obligacion de
indemnizar a titulo de culpa civil; pero
viene al caso y es necesaria una de las
diferenciaciones que en el tal paralelo se
notarian.
Los articulos 20 y 21 del Codigo Penal,
despues de distribuir a su modo las
responsabilidades civiles, entre los que
sean por diversos conceptos culpables del
delito o falta, las hacen extensivas a las
empresas y los establecimientos al
servicio de los cuales estan los
delincuentes; pero con caracter
subsidiario, o sea, segun el texto literal, en
defecto de los que sean responsables
criminalmente. No coincide en ello el
Codigo Civil, cuyo articulo 1903, dice; La
obligacion que impone el articulo
anterior es exigible, no solo por los actos y
omisiones propios, sino por los de
aquellas personas de quienes se debe
responder; personas en la enumeracion
de las cuales figuran los dependientes y
empleados de los establecimientos o
empresas, sea por actos del servicio, sea
con ocasion de sus funciones. Por esto
acontece, y se observa en la
jurisprudencia, que las empresas,
despues de intervenir en las causas
criminales con el caracter subsidiario de
su responsabilidad civil por razon del
delito, son demandadas y itself, affect public order; for this reason,
condenadas directa y aisladamente,
cuando se trata de la obligacion, ante los
tribunales civiles.
Siendo como se ve, diverso el titulo de
esta obligacion, y formando verdadero
postulado de nuestro regimen judicial la
separacion entre justicia punitiva y
tribunales de lo civil, de suerte que tienen
unos y otros normas de fondo en distintos
cuerpos legales, y diferentes modos de
proceder, habiendose, por añadidura,
abstenido de asistir al juicio criminal la
Compañia del Ferrocarril Cantabrico, que
se reservo ejercitar sus acciones, parece
innegable que la de indemnizacion por los
daños y perjuicios que le irrogo el choque,
no estuvo sub judice ante el Tribunal del
Jurado, ni fue sentenciada, sino que
permanecio intacta, al pronunciarse el
fallo de 21 de marzo. Aun cuando el
veredicto no hubiese sido de
inculpabilidad, mostrose mas arriba, que
tal accion quedaba legitimamente
reservada para despues del proceso; pero
al declararse que no existio delito, ni
responsabilidad dimanada de delito,
materia unica sobre que tenian
jurisdiccion aquellos juzgadores, se
redobla el motivo para la obligacion
civil ex lege, y se patentiza mas y mas que
la accion para pedir su cumplimiento
permanece incolume, extraña a la cosa
juzgada.
As things are, apropos of the reality pure
and simple of the facts, it seems less
tenable that there should be res
judicata with regard to the civil obligation
for damages on account of the losses
caused by the collision of the trains. The
title upon which the action for reparation is
based cannot be confused with the civil
responsibilities born of a crime, because
there exists in the latter, whatever each
nature, a culpa surrounded with
aggravating aspects which give rise to
penal measures that are more or less
severe. The injury caused by a felony or
misdemeanor upon civil rights requires
restitutions, reparations, or
indemnifications which, like the penalty
they are ordinarily entrusted to the office of
the prosecuting attorney; and it is clear
that if by this means the losses and
damages are repaired, the injured party no
longer desires to seek another relief; but
this coincidence of effects does not
eliminate the peculiar nature of civil
actions to ask for indemnity.
Such civil actions in the present case
(without referring to contractual faults
which are not pertinent and belong to
another scope) are derived, according to
article 1902 of the Civil Code, from every
act or omission causing losses and
damages in which culpa or negligence
intervenes. It is unimportant that such
actions are every day filed before the civil
courts without the criminal courts
interfering therewith. Articles 18 to 21 and
121 to 128 of the Penal Code, bearing in
mind the spirit and the social and political
purposes of that Code, develop and
regulate the matter of civil
responsibilities arising from a crime,
separately from the regime under common
law, of culpa which is known as aquiliana,
in accordance with legislative precedent of
the Corpus Juris. It would be unwarranted
to make a detailed comparison between
the former provisions and that regarding
the obligation to indemnify on account of
civil culpa; but it is pertinent and
necessary to point out to one of such
differences.
Articles 20 and 21 of the Penal Code, after
distriburing in their own way the civil
responsibilities among those who, for
different reasons, are guilty of felony or
misdemeanor, make such civil
responsibilities applicable to enterprises
and establishments for which the guilty
parties render service, but with subsidiary
character, that is to say, according to the
wording of the Penal Code, in default of
those who are criminally responsible. In
this regard, the Civil Code does not
coincide because article 1903 says: "The
obligation imposed by the next preceding
article is demandable, not only for
personal acts and omissions, but also for
those of persons for whom another is
responsible." Among the persons
enumerated are the subordinates and
employees of establishments or
enterprises, either for acts during their
service or on the occasion of their
functions. It is for this reason that it
happens, and it is so observed in judicial
decisions, that the companies or
enterprises, after taking part in the criminal
cases because of their subsidiary civil
responsibility by reason of the crime, are
sued and
sentenced directly and separately with
regard to the obligation, before the civil
courts.
Seeing that the title of this obligation is
different, and the separation between
punitive justice and the civil courts being a
true postulate of our judicial system, so
that they have different fundamental
norms in different codes, as well as
different modes of procedure, and
inasmuch as the Compaña del Ferrocarril
Cantabrico has abstained from taking part
in the criminal case and has reserved the
right to exercise its actions, it seems
undeniable that the action for
indemnification for the losses and
damages caused to it by the collision was
not sub judice before the Tribunal del
Jurado, nor was it the subject of a
sentence, but it remained intact when the
decision of March 21 was rendered. Even
if the verdict had not been that of acquittal,
it has already been shown that such action
had been legitimately reserved till after the
criminal prosecution; but because of the
declaration of the non-existence of the
felony and the non-existence of the
responsibility arising from the crime, which
was the sole subject matter upon which
the Tribunal del Jurado had jurisdiction,
there is greater reason for the civil
obligation ex lege, and it becomes clearer
that the action for its enforcement remain
intact and is not res judicata.
Laurent, a jurist who has written a
monumental work on the French Civil
Code, on which the Spanish Civil Code is
largely based and whose provisions
on cuasi-delito or culpa
extra-contractual are similar to those of
the Spanish Civil Code, says, referring to
article 1384 of the French Civil Code
which corresponds to article 1903,
Spanish Civil Code:
The action can be brought directly against
the person responsible (for another),
without including the author of the act. The
action against the principal is accessory in
the sense that it implies the existence of a
prejudicial act committed by the employee,
but it is not subsidiary in the sense that it
can not be instituted till after the judgment
against the author of the act or at least,
that it is subsidiary to the principal action;
the action for responsibility (of the
employer) is in itself a principal action.
(Laurent, Principles of French Civil Law,
Spanish translation, Vol. 20, pp. 734-735.)
Amandi, in his "Cuestionario del Codigo
Civil Reformado" (Vol. 4, pp. 429, 430),
declares that the responsibility of the
employer is principal and not subsidiary.
He writes:
Cuestion 1. La responsabilidad declarada
en el articulo 1903 por las acciones u
omisiones de aquellas personas por las
que se debe responder, es subsidiaria? es
principal? Para contestar a esta pregunta
es necesario saber, en primer lugar, en
que se funda el precepto legal. Es que
realmente se impone una responsabilidad
por una falta ajena? Asi parece a primera
vista; pero semejante afirmacion seria
contraria a la justicia y a la maxima
universal, segun la que las faltas son
personales, y cada uno responde de
aquellas que le son imputables. La
responsabilidad de que tratamos se
impone con ocasion de un delito o culpa,
pero no por causa de ellos, sino por causa
del causi delito, esto es, de la imprudencia
o de la negligencia del padre, del tutor, del
dueño o director del establecimiento, del
maestro, etc. Cuando cualquiera de las
personas que enumera el articulo citado
(menores de edad, incapacitados,
dependientes, aprendices) causan un
daño, la ley presume que el padre, el tutor,
el maestro, etc., han cometido una falta de
negligencia para prevenir o evitar el daño.
Esta falta es la que la ley castiga. No hay,
pues, responsabilidad por un hecho ajeno,
sino en la apariencia; en realidad la
responsabilidad se exige por un hecho
propio. La idea de que esa
responsabilidad sea subsidiaria es, por lo
tanto, completamente inadmisible.
Question No. 1. Is the responsibility
declared in article 1903 for the acts or
omissions of those persons for who one is
responsible, subsidiary or principal? In
order to answer this question it is
necessary to know, in the first place, on
what the legal provision is based. Is it true
that there is a responsibility for the fault of
another person? It seems so at first sight;
but such assertion would be contrary to
justice and to the universal maxim that all
faults are personal, and that everyone is
liable for those faults that can be imputed
to him. The responsibility in question is
imposed on the occasion of a crime or
fault, but not because of the same, but
because of the cuasi-delito, that is to say,
the imprudence or negligence of the father,
guardian, proprietor or manager of the
establishment, of the teacher, etc.
Whenever anyone of the persons
enumerated in the article referred to
(minors, incapacitated persons,
employees, apprentices) causes any
damage, the law presumes that the father,
guardian, teacher, etc. have committed an
act of negligence in not preventing or
avoiding the damage. It is this fault that is
condemned by the law. It is, therefore,
only apparent that there is a responsibility
for the act of another; in reality the
responsibility exacted is for one's own act.
The idea that such responsibility is
subsidiary is, therefore, completely
inadmissible.
Oyuelos, in his "Digesto: Principios,
Doctrina y Jurisprudencia, Referentes al
Codigo Civil Español," says in Vol. VII, p.
743:
Es decir, no responde de hechos ajenos,
porque se responde solo de su propia
culpa, doctrina del articulo 1902; mas por
excepcion, se responde de la ajena
respecto de aquellas personas con las
que media algun nexo o vinculo, que
motiva o razona la responsabilidad. Esta
responsabilidad, es directa o es
subsidiaria? En el orden penal, el Codigo
de esta clase distingue entre menores e
incapacitados y los demas, declarando
directa la primera (articulo 19) y
subsidiaria la segunda (articulos 20 y 21);
pero en el orden civil, en el caso del
articulo 1903, ha de entenderse directa,
por el tenor del articulo que impone la
responsabilidad precisamente "por los
actos de aquellas personas de quienes se
deba responder."
That is to say, one is not responsible for
the acts of others, because one is liable
only for his own faults, this being the
doctrine of article 1902; but, by exception,
one is liable for the acts of those persons
with whom there is a bond or tie which
gives rise to the responsibility. Is this
responsibility direct or subsidiary? In the
order of the penal law, the Penal Code
distinguishes between minors and
incapacitated persons on the one hand,
and other persons on the other, declaring
that the responsibility for the former is
direct (article 19), and for the latter,
subsidiary (articles 20 and 21); but in the
scheme of the civil law, in the case of
article 1903, the responsibility should be
understood as direct, according to the
tenor of that articles, for precisely it
imposes responsibility "for the acts of
those persons for whom one should be
responsible."
Coming now to the sentences of the
Supreme Tribunal of Spain, that court has
upheld the principles above set forth: that
a quasi-delict or culpa extra-contractual is
a separate and distinct legal institution,
independent from the civil responsibility
arising from criminal liability, and that an
employer is, under article 1903 of the Civil
Code, primarily and directly responsible
for the negligent acts of his employee.
One of the most important of those
Spanish decisions is that of October 21,
1910. In that case, Ramon Lafuente died
as the result of having been run over by a
street car owned by the "compañia Electric
Madrileña de Traccion." The conductor
was prosecuted in a criminal case but he
was acquitted. Thereupon, the widow filed
a civil action against the street car
company, paying for damages in the
amount of 15,000 pesetas. The lower
court awarded damages; so the company
appealed to the Supreme Tribunal,
alleging violation of articles 1902 and 1903
of the Civil Code because by final
judgment the non-existence of fault or
negligence had been declared. The
Supreme Court of Spain dismissed the
appeal, saying:
Considerando que el primer motivo del
recurso se funda en el equivocado
supuesto de que el Tribunal a quo, al
condonar a la compañia Electrica
Madrileña al pago del daño causado con
la muerte de Ramon La fuente Izquierdo,
desconoce el valor y efectos juridicos de
la sentencia absolutoria deictada en la
causa criminal que se siguio por el mismo
hecho, cuando es lo cierto que de este
han conocido las dos jurisdicciones bajo
diferentes as pectos, y como la de lo
criminal declrao dentro de los limites de su
competencia que el hecho de que se trata
no era constitutivo de delito por no haber
mediado descuido o negligencia graves,
lo que no excluye, siendo este el unico
fundamento del fallo absolutorio, el
concurso de la culpa o negligencia no
califacadas, fuente de obligaciones civiles
segun el articulo 1902 del Codigo, y que
alcanzan, segun el 1903, netre otras
perosnas, a los Directores de
establecimientos o empresas por los
daños causados por sus dependientes en
determinadas condiciones, es manifesto
que la de lo civil, al conocer del mismo
hehco baho este ultimo aspecto y al
condenar a la compañia recurrente a la
indemnizacion del daño causado por uno
de sus empleados, lejos de infringer los
mencionados textos, en relacion con el
articulo 116 de la Ley de Enjuciamiento
Criminal, se ha atenido estrictamente a
ellos, sin invadir atribuciones ajenas a su
jurisdiccion propia, ni contrariar en lo mas
minimo el fallo recaido en la causa.
Considering that the first ground of the
appeal is based on the mistaken
supposition that the trial court, in
sentencing the Compañia Madrileña to the
payment of the damage caused by the
death of Ramon Lafuente Izquierdo,
disregards the value and juridical effects
of the sentence of acquittal rendered in
the criminal case instituted on account of
the same act, when it is a fact that the two
jurisdictions had taken cognizance of the
same act in its different aspects, and as
the criminal jurisdiction declared within the
limits of its authority that the act in
question did not constitute a felony
because there was no grave carelessness
or negligence, and this being the only
basis of acquittal, it does no exclude the
co-existence of fault or negligence which
is not qualified, and is a source of civil
obligations according to article 1902 of the
Civil Code, affecting, in accordance with
article 1903, among other persons, the
managers of establishments or
enterprises by reason of the damages
caused by employees under certain
conditions, it is manifest that the civil
jurisdiccion in taking cognizance of the
same act in this latter aspect and in
ordering the company, appellant herein, to
pay an indemnity for the damage caused
by one of its employees, far from violating
said legal provisions, in relation with article
116 of the Law of Criminal
Procedure, strictly followed the same,
without invading attributes which are
beyond its own jurisdiction, and without in
any way contradicting the decision in that
cause. (Emphasis supplied.)
It will be noted, as to the case just cited:
First. That the conductor was not sued in a
civil case, either separately or with the
street car company. This is precisely what
happens in the present case: the driver,
Fontanilla, has not been sued in a civil
action, either alone or with his employer.
Second. That the conductor had been
acquitted of grave criminal negligence, but
the Supreme Tribunal of Spain said that
this did not exclude the co-existence of
fault or negligence, which is not qualified,
on the part of the conductor, under article
1902 of the Civil Code. In the present case,
the taxi driver was found guilty of criminal
negligence, so that if he had even sued for
his civil responsibility arising from the
crime, he would have been held primarily
liable for civil damages, and Barredo
would have been held subsidiarily liable
for the same. But the plaintiffs are directly
suing Barredo, on his primary
responsibility because of his own
presumed negligence — which he did not
overcome — under article 1903. Thus,
there were two liabilities of Barredo: first,
the subsidiary one because of the civil
liability of the taxi driver arising from the
latter's criminal negligence; and, second,
Barredo's primary liability as an employer
under article 1903. The plaintiffs were free
to choose which course to take, and they
preferred the second remedy. In so doing,
they were acting within their rights. It might
be observed in passing, that the plaintiff
choose the more expeditious and effective
method of relief, because Fontanilla was
either in prison, or had just been released,
and besides, he was probably without
property which might be seized in
enforcing any judgment against him for
damages.
Third. That inasmuch as in the above
sentence of October 21, 1910, the
employer was held liable civilly,
notwithstanding the acquittal of the
employee (the conductor) in a previous
criminal case, with greater reason should
Barredo, the employer in the case at bar,
be held liable for damages in a civil suit
filed against him because his taxi driver
had been convicted. The degree of
negligence of the conductor in the Spanish
case cited was less than that of the taxi
driver, Fontanilla, because the former was
acquitted in the previous criminal case
while the latter was found guilty of criminal
negligence and was sentenced to an
indeterminate sentence of one year and
one day to two years of prision
correccional.
(See also Sentence of February 19, 1902,
which is similar to the one above quoted.)
In the Sentence of the Supreme Court of
Spain, dated February 14, 1919, an action
was brought against a railroad company
for damages because the station agent,
employed by the company, had unjustly
and fraudulently, refused to deliver certain
articles consigned to the plaintiff. The
Supreme Court of Spain held that this
action was properly under article 1902 of
the Civil Code, the court saying:
Considerando que la sentencia discutida
reconoce, en virtud de los hechos que
consigna con relacion a las pruebas del
pleito: 1.º, que las expediciones
facturadas por la compañia ferroviaria a la
consignacion del actor de las vasijas
vacias que en su demanda relacionan
tenian como fin el que este las devolviera
a sus remitentes con vinos y alcoholes; 2.º,
que llegadas a su destino tales mercanias
no se quisieron entregar a dicho
consignatario por el jefe de la estacion sin
motivo justificado y con intencion dolosa, y
3.º, que la falta de entrega de estas
expediciones al tiempo de reclamarlas el
demandante le originaron daños y
perjuicios en cantidad de bastante
importancia como expendedor al por
mayor que era de vinos y alcoholes por
las ganancias que dejo de obtener al
verse privado de servir los pedidos que se
le habian hecho por los remitentes en los
envases:
Considerando que sobre esta base hay
necesidad de estimar los cuatro motivos
que integran este recurso, porque la
demanda inicial del pleito a que se
contrae no contiene accion que nazca del
incumplimiento del contrato de transporte,
toda vez que no se funda en el retraso de
la llegada de las mercancias ni de ningun
otro vinculo contractual entre las partes
contendientes, careciendo, por tanto, de
aplicacion el articulo 371 del Codigo de
Comercio, en que principalmente
descansa el fallo recurrido, sino que se
limita a pedir la reparaction de los daños y
perjuicios producidos en el patrimonio del
actor por la injustificada y dolosa negativa
del porteador a la entrega de las
mercancias a su nombre consignadas,
segun lo reconoce la sentencia, y cuya
responsabilidad esta claramente
sancionada en el articulo 1902 del Codigo
Civil, que obliga por el siguiente a la
Compañia demandada como ligada con el
causante de aquellos por relaciones de
caracter economico y de jurarquia
administrativa.
Considering that the sentence, in question
recognizes, in virtue of the facts which it
declares, in relation to the evidence in the
case: (1) that the invoice issued by the
railroad company in favor of the plaintiff
contemplated that the empty receptacles
referred to in the complaint should be
returned to the consignors with wines and
liquors; (2) that when the said
merchandise reached their destination,
their delivery to the consignee was
refused by the station agent without
justification and with fraudulent intent, and
(3) that the lack of delivery of these goods
when they were demanded by the plaintiff
caused him losses and damages of
considerable importance, as he was a
wholesale vendor of wines and liquors and
he failed to realize the profits when he was
unable to fill the orders sent to him by the
consignors of the receptacles:
Considering that upon this basis there is
need of upholding the four assignments of
error, as the original complaint did not
contain any cause of action arising from
non-fulfillment of a contract of
transportation, because the action was not
based on the delay of the goods nor on
any contractual relation between the
parties litigant and, therefore, article 371
of the Code of Commerce, on which the
decision appealed from is based, is not
applicable; but it limits to asking for
reparation for losses and damages
produced on the patrimony of the plaintiff
on account of the unjustified
and fraudulent refusal of the carrier to
deliver the goods consigned to the plaintiff
as stated by the sentence, and the
carrier's responsibility is clearly laid down
in article 1902 of the Civil Code which
binds, in virtue of the next article, the
defendant company, because the latter is
connected with the person who caused
the damage by relations of economic
character and by administrative hierarchy.
(Emphasis supplied.)
The above case is pertinent because it
shows that the same act may come under
both the Penal Code and the Civil Code. In
that case, the action of the agent was
unjustified and fraudulent and therefore
could have been the subject of a criminal
action. And yet, it was held to be also a
proper subject of a civil action under article
1902 of the Civil Code. It is also to be
noted that it was the employer and not the
employee who was being sued.
Let us now examine the cases previously
decided by this Court.
In the leading case of Rakes vs. Atlantic
Gulf and Pacific Co. (7 Phil., 359, 362-365
[year 1907]), the trial court awarded
damages to the plaintiff, a laborer of the
defendant, because the latter had
negligently failed to repair a tramway in
consequence of which the rails slid off
while iron was being transported, and
caught the plaintiff whose leg was broken.
This Court held:
It is contended by the defendant, as its
first defense to the action that the
necessary conclusion from these collated
laws is that the remedy for injuries through
negligence lies only in a criminal action in
which the official criminally responsible
must be made primarily liable and his
employer held only subsidiarily to him.
According to this theory the plaintiff should
have procured the arrest of the
representative of the company
accountable for not repairing the track,
and on his prosecution a suitable fine
should have been imposed, payable
primarily by him and secondarily by his
employer.
This reasoning misconceived the plan of
the Spanish codes upon this subject.
Article 1093 of the Civil Code makes
obligations arising from faults or
negligence not punished by the law,
subject to the provisions of Chapter II of
Title XVI. Section 1902 of that chapter
reads:
"A person who by an act or omission
causes damage to another when there is
fault or negligence shall be obliged to
repair the damage so done.
"SEC. 1903. The obligation imposed by
the preceeding article is demandable, not
only for personal acts and omissions, but
also for those of the persons for whom
they should be responsible.
"The father, and on his death or incapacity,
the mother, is liable for the damages
caused by the minors who live with them.
xxx xxx xxx
"Owners or directors of an establishment
or enterprise are equally liable for the
damages caused by their employees in
the service of the branches in which the
latter may be employed or in the
performance of their duties.
xxx xxx xxx
"The liability referred to in this article shall
cease when the persons mentioned
therein prove that they employed all the
diligence of a good father of a family to
avoid the damage."
As an answer to the argument urged in
this particular action it may be sufficient to
point out that nowhere in our general
statutes is the employer penalized for
failure to provide or maintain safe
appliances for his workmen. His obligation
therefore is one 'not punished by the laws'
and falls under civil rather than criminal
jurisprudence. But the answer may be a
broader one. We should be reluctant,
under any conditions, to adopt a forced
construction of these scientific codes,
such as is proposed by the defendant, that
would rob some of these articles of effect,
would shut out litigants against their will
from the civil courts, would make the
assertion of their rights dependent upon
the selection for prosecution of the proper
criminal offender, and render recovery
doubtful by reason of the strict rules of
proof prevailing in criminal actions. Even if
these articles had always stood alone,
such a construction would be unnecessary,
but clear light is thrown upon their
meaning by the provisions of the Law of
Criminal Procedure of Spain (Ley de
Enjuiciamiento Criminal), which, though
never in actual force in these Islands, was
formerly given a suppletory or explanatory
effect. Under article 111 of this law, both
classes of action, civil and criminal, might
be prosecuted jointly or separately, but
while the penal action was pending the
civil was suspended. According to article
112, the penal action once started, the civil
remedy should be sought therewith,
unless it had been waived by the party
injured or been expressly reserved by him
for civil proceedings for the future. If the
civil action alone was prosecuted, arising
out of a crime that could be enforced only
on private complaint, the penal action
thereunder should be extinguished. These
provisions are in harmony with those of
articles 23 and 133 of our Penal Code on
the same subject.
An examination of this topic might be
carried much further, but the citation of
these articles suffices to show that the civil
liability was not intended to be merged in
the criminal nor even to be suspended
thereby, except as expressly provided in
the law. Where an individual is civilly liable
for a negligent act or omission, it is not
required that the injured party should seek
out a third person criminally liable whose
prosecution must be a condition precedent
to the enforcement of the civil right.
Under article 20 of the Penal Code the
responsibility of an employer may be
regarded as subsidiary in respect of
criminal actions against his employees
only while they are in process of
prosecution, or in so far as they determine
the existence of the criminal act from
which liability arises, and his obligation
under the civil law and its enforcement in
the civil courts is not barred thereby unless
by the election of the injured person.
Inasmuch as no criminal proceeding had
been instituted, growing our of the
accident in question, the provisions of the
Penal Code can not affect this action. This
construction renders it unnecessary to
finally determine here whether this
subsidiary civil liability in penal actions has
survived the laws that fully regulated it or
has been abrogated by the American civil
and criminal procedure now in force in the
Philippines.
The difficulty in construing the articles of
the code above cited in this case appears
from the briefs before us to have arisen
from the interpretation of the words of
article 1093, "fault or negligence not
punished by law," as applied to the
comprehensive definition of offenses in
articles 568 and 590 of the Penal Code. It
has been shown that the liability of an
employer arising out of his relation to his
employee who is the offender is not to be
regarded as derived from negligence
punished by the law, within the meaning of
articles 1902 and 1093. More than this,
however, it cannot be said to fall within the
class of acts unpunished by the law, the
consequence of which are regulated by
articles 1902 and 1903 of the Civil Code.
The acts to which these articles are
applicable are understood to be those not
growing out of pre-existing duties of the
parties to one another. But where relations
already formed give rise to duties, whether
springing from contract or quasi contract,
then breaches of those duties are subject
to articles 1101, 1103, and 1104 of the
same code. A typical application of this
distinction may be found in the
consequences of a railway accident due to
defective machinery supplied by the
employer. His liability to his employee
would arise out of the contract of
employment, that to the passengers out of
the contract for passage, while that to the
injured bystander would originate in the
negligent act itself.
In Manzanares vs. Moreta, 38 Phil., 821
(year 1918), the mother of the 8 of
9-year-old child Salvador Bona brought a
civil action against Moreta to recover
damages resulting from the death of the
child, who had been run over by an
automobile driven and managed by the
defendant. The trial court rendered
judgment requiring the defendant to pay
the plaintiff the sum of P1,000 as
indemnity: This Court in affirming the
judgment, said in part:
If it were true that the defendant, in coming
from the southern part of Solana Street,
had to stop his auto before crossing Real
Street, because he had met vehicles
which were going along the latter street or
were coming from the opposite direction
along Solana Street, it is to be believed
that, when he again started to run his auto
across said Real Street and to continue its
way along Solana Street northward, he
should have adjusted the speed of the
auto which he was operating until he had
fully crossed Real Street and had
completely reached a clear way on Solana
Street. But, as the child was run over by
the auto precisely at the entrance of
Solana Street, this accident could not
have occurred if the auto had been
running at a slow speed, aside from the
fact that the defendant, at the moment of
crossing Real Street and entering Solana
Street, in a northward direction, could
have seen the child in the act of crossing
the latter street from the sidewalk on the
right to that on the left, and if the accident
had occurred in such a way that after the
automobile had run over the body of the
child, and the child's body had already
been stretched out on the ground, the
automobile still moved along a distance of
about 2 meters, this circumstance shows
the fact that the automobile entered
Solana Street from Real Street, at a high
speed without the defendant having blown
the horn. If these precautions had been
taken by the defendant, the deplorable
accident which caused the death of the
child would not have occurred.
It will be noticed that the defendant in the
above case could have been prosecuted
in a criminal case because his negligence
causing the death of the child was
punishable by the Penal Code. Here is
therefore a clear instance of the same act
of negligence being a proper
subject-matter either of a criminal action
with its consequent civil liability arising
from a crime or of an entirely separate and
independent civil action for fault or
negligence under article 1902 of the Civil
Code. Thus, in this jurisdiction, the
separate individually of
a cuasi-delito or culpa aquiliana under the
Civil Code has been fully and clearly
recognized, even with regard to a
negligent act for which the wrongdoer
could have been prosecuted and
convicted in a criminal case and for which,
after such a conviction, he could have
been sued for this civil liability arising from
his crime.
Years later (in 1930) this Court had
another occasion to apply the same
doctrine. In Bernal and Enverso vs. House
and Tacloban Electric & Ice Plant, Ltd., 54
Phil., 327, the parents of the five-year-old
child, Purificacion Bernal, brought a civil
action to recover damages for the child's
death as a result of burns caused by the
fault and negligence of the defendants. On
the evening of April 10, 1925, the Good
Friday procession was held in Tacloban,
Leyte. Fortunata Enverso with her
daughter Purificacion Bernal had come
from another municipality to attend the
same. After the procession the mother and
the daughter with two others were passing
along Gran Capitan Street in front of the
offices of the Tacloban Electric & Ice Plant,
Ltd., owned by defendants J. V. House,
when an automobile appeared from the
opposite direction. The little girl, who was
slightly ahead of the rest, was so
frightened by the automobile that she
turned to run, but unfortunately she fell
into the street gutter where hot water from
the electric plant was flowing. The child
died that same night from the burns. The
trial courts dismissed the action because
of the contributory negligence of the
plaintiffs. But this Court held, on appeal,
that there was no contributory negligence,
and allowed the parents P1,000 in
damages from J. V. House who at the time
of the tragic occurrence was the holder of
the franchise for the electric plant. This
Court said in part:
Although the trial judge made the findings
of fact hereinbefore outlined, he
nevertheless was led to order the
dismissal of the action because of the
contributory negligence of the plaintiffs. It
is from this point that a majority of the
court depart from the stand taken by the
trial judge. The mother and her child had a
perfect right to be on the principal street of
Tacloban, Leyte, on the evening when the
religious procession was held. There was
nothing abnormal in allowing the child to
run along a few paces in advance of the
mother. No one could foresee the
coincidence of an automobile appearing
and of a frightened child running and
falling into a ditch filled with hot water. The
doctrine announced in the much debated
case of Rakes vs. Atlantic Gulf and Pacific
Co. ([1907]), 7 Phil., 359), still rule. Article
1902 of the Civil Code must again be
enforced. The contributory negligence of
the child and her mother, if any, does not
operate as a bar to recovery, but in its
strictest sense could only result in
reduction of the damages.
It is most significant that in the case just
cited, this Court specifically applied article
1902 of the Civil Code. It is thus that
although J. V. House could have been
criminally prosecuted for reckless or
simple negligence and not only punished
but also made civilly liable because of his
criminal negligence, nevertheless this
Court awarded damages in an
independent civil action for fault or
negligence under article 1902 of the Civil
Code.
In Bahia vs. Litonjua and Leynes (30 Phil.,
624 [year 1915), the action was for
damages for the death of the plaintiff's
daughter alleged to have been caused by
the negligence of the servant in driving an
automobile over the child. It appeared that
the cause of the mishap was a defect in
the steering gear. The defendant Leynes
had rented the automobile from the
International Garage of Manila, to be used
by him in carrying passengers during the
fiesta of Tuy, Batangas. Leynes was
ordered by the lower court to pay P1,000
as damages to the plaintiff. On appeal this
Court reversed the judgment as to Leynes
on the ground that he had shown that the
exercised the care of a good father of a
family, thus overcoming the presumption
of negligence under article 1903. This
Court said:
As to selection, the defendant has clearly
shown that he exercised the care and
diligence of a good father of a family. He
obtained the machine from a reputable
garage and it was, so far as appeared, in
good condition. The workmen were
likewise selected from a standard garage,
were duly licensed by the Government in
their particular calling, and apparently
thoroughly competent. The machine had
been used but a few hours when the
accident occurred and it is clear from the
evidence that the defendant had no notice,
either actual or constructive, of the
defective condition of the steering gear.
The legal aspect of the case was
discussed by this Court thus:
Article 1903 of the Civil Code not only
establishes liability in cases of negligence,
but also provides when the liability shall
cease. It says:
"The liability referred to in this article shall
cease when the persons mentioned
therein prove that they employed all the
diligence of a good father of a family to
avoid the damage."
From this article two things are apparent:
(1) That when an injury is caused by the
negligence of a servant or employee there
instantly arises a presumption of law that
there was negligence on the part of the
matter or employer either in the selection
of the servant or employee, or in
supervision over him after the selection, or
both; and (2) that presumption is juris
tantum and not juris et de jure, and
consequently, may be rebutted. It follows
necessarily that if the employer shows to
the satisfaction of the court that in
selection and supervision he has
exercised the care and diligence of a good
father of a family, the presumption is
overcome and he is relieve from liability.
This theory bases the responsibility of the
master ultimately on his own negligence
and not on that of his servant.
The doctrine of the case just cited was
followed by this Court in Cerf vs.
Medel (33 Phil., 37 [year 1915]). In the
latter case, the complaint alleged that the
defendant's servant had so negligently
driven an automobile, which was operated
by defendant as a public vehicle, that said
automobile struck and damaged the
plaintiff's motorcycle. This Court, applying
article 1903 and following the rule in Bahia
vs. Litonjua and Leynes, said in part (p. 41)
that:
The master is liable for the negligent acts
of his servant where he is the owner or
director of a business or enterprise and
the negligent acts are committed while the
servant is engaged in his master's
employment as such owner.
Another case which followed the decision
in Bahia vs. Litonjua and Leynes was
Cuison vs. Norton & Harrison Co., 55 Phil.,
18 (year 1930). The latter case was an
action for damages brought by Cuison for
the death of his seven-year-old son
Moises. The little boy was on his way to
school with his sister Marciana. Some
large pieces of lumber fell from a truck and
pinned the boy underneath, instantly
killing him. Two youths, Telesforo Binoya
and Francisco Bautista, who were working
for Ora, an employee of defendant Norton
& Harrison Co., pleaded guilty to the crime
of homicide through reckless negligence
and were sentenced accordingly. This
Court, applying articles 1902 and 1903,
held:
The basis of civil law liability is
not respondent superior but the
relationship of pater familias. This theory
bases the liability of the master ultimately
on his own negligence and not on that of
his servant. (Bahia vs. Litonjua and
Leynes [1915], 30 Phil., 624; Cangco vs.
Manila Railroad Co. [1918], 38 Phil., 768.)
In Walter A. Smith & Co. vs. Cadwallader
Gibson Lumber Co., 55 Phil., 517 (year
1930) the plaintiff brought an action for
damages for the demolition of its wharf,
which had been struck by the steamer
Helen C belonging to the defendant. This
Court held (p. 526):
The evidence shows that Captain Lasa at
the time the plaintiff's wharf collapsed was
a duly licensed captain, authorized to
navigate and direct a vessel of any
tonnage, and that the appellee contracted
his services because of his reputation as a
captain, according to F. C. Cadwallader.
This being so, we are of the opinion that
the presumption of liability against the
defendant has been overcome by the
exercise of the care and diligence of a
good father of a family in selecting Captain
Lasa, in accordance with the doctrines laid
down by this court in the cases cited
above, and the defendant is therefore
absolved from all liability.
It is, therefore, seen that the defendant's
theory about his secondary liability is
negatived by the six cases above set forth.
He is, on the authority of these cases,
primarily and directly responsible in
damages under article 1903, in relation to
article 1902, of the Civil Code.
Let us now take up the Philippine
decisions relied upon by the defendant.
We study first, City of Manila vs. Manila
Electric Co., 52 Phil., 586 (year 1928). A
collision between a truck of the City of
Manila and a street car of the Manila
Electric Co. took place on June 8, 1925.
The truck was damaged in the amount of
P1,788.27. Sixto Eustaquio, the motorman,
was prosecuted for the crime of damage to
property and slight injuries through
reckless imprudence. He was found guilty
and sentenced to pay a fine of P900, to
indemnify the City of Manila for P1,788.27,
with subsidiary imprisonment in case of
insolvency. Unable to collect the indemnity
from Eustaquio, the City of Manila filed an
action against the Manila Electric
Company to obtain payment, claiming that
the defendant was subsidiarily liable. The
main defense was that the defendant had
exercised the diligence of a good father of
a family to prevent the damage. The lower
court rendered judgment in favor of the
plaintiff. This Court held, in part, that this
case was governed by the Penal Code,
saying:
With this preliminary point out of the way,
there is no escaping the conclusion that
the provisions of the Penal Code govern.
The Penal Code in easily understandable
language authorizes the determination of
subsidiary liability. The Civil Code
negatives its application by providing that
civil obligations arising from crimes or
misdemeanors shall be governed by the
provisions of the Penal Code. The
conviction of the motorman was a
misdemeanor falling under article 604 of
the Penal Code. The act of the motorman
was not a wrongful or negligent act or
omission not punishable by law.
Accordingly, the civil obligation connected
up with the Penal Code and not with article
1903 of the Civil Code. In other words, the
Penal Code affirms its jurisdiction while
the Civil Code negatives its jurisdiction.
This is a case of criminal negligence out of
which civil liability arises and not a case of
civil negligence.
xxx xxx xxx
Our deduction, therefore, is that the case
relates to the Penal Code and not to the
Civil Code. Indeed, as pointed out by the
trial judge, any different ruling would
permit the master to escape scot-free by
simply alleging and proving that the
master had exercised all diligence in the
selection and training of its servants to
prevent the damage. That would be a
good defense to a strictly civil action, but
might or might not be to a civil action either
as a part of or predicated on conviction for
a crime or misdemeanor. (By way of
parenthesis, it may be said further that the
statements here made are offered to meet
the argument advanced during our
deliberations to the effect that article 0902
of the Civil Code should be disregarded
and codal articles 1093 and 1903 applied.)
It is not clear how the above case could
support the defendant's proposition,
because the Court of Appeals based its
decision in the present case on the
defendant's primary responsibility under
article 1903 of the Civil Code and not on
his subsidiary liability arising from
Fontanilla's criminal negligence. In other
words, the case of City of Manila vs.
Manila Electric Co., supra, is predicated
on an entirely different theory, which is the
subsidiary liability of an employer arising
from a criminal act of his employee,
whereas the foundation of the decision of
the Court of Appeals in the present case is
the employer's primary liability under
article 1903 of the Civil Code. We have
already seen that this is a proper and
independent remedy.
Arambulo vs. Manila Electric Co. (55 Phil.,
75), is another case invoked by the
defendant. A motorman in the employ of
the Manila Electric Company had been
convicted o homicide by simple
negligence and sentenced, among other
things, to pay the heirs of the deceased
the sum of P1,000. An action was then
brought to enforce the subsidiary liability
of the defendant as employer under the
Penal Code. The defendant attempted to
show that it had exercised the diligence of
a good father of a family in selecting the
motorman, and therefore claimed
exemption from civil liability. But this Court
held:
In view of the foregoing considerations, we
are of opinion and so hold, (1) that the
exemption from civil liability established in
article 1903 of the Civil Code for all who
have acted with the diligence of a good
father of a family, is not applicable to the
subsidiary civil liability provided in article
20 of the Penal Code.
The above case is also extraneous to the
theory of the defendant in the instant case,
because the action there had for its
purpose the enforcement of the
defendant's subsidiary liability under the
Penal Code, while in the case at bar, the
plaintiff's cause of action is based on the
defendant's primary and direct
responsibility under article 1903 of the
Civil Code. In fact, the above case
destroys the defendant's contention
because that decision illustrates the
principle that the employer's primary
responsibility under article 1903 of the
Civil Code is different in character from his
subsidiary liability under the Penal Code.
In trying to apply the two cases just
referred to, counsel for the defendant has
failed to recognize the distinction between
civil liability arising from a crime, which is
governed by the Penal Code, and the
responsibility for cuasi-delito or culpa
aquiliana under the Civil Code, and has
likewise failed to give the importance to
the latter type of civil action.
The defendant-petitioner also
cites Francisco vs. Onrubia (46 Phil., 327).
That case need not be set forth. Suffice it
to say that the question involved was also
civil liability arising from a crime. Hence, it
is as inapplicable as the two cases above
discussed.
The foregoing authorities clearly
demonstrate the separate individuality
of cuasi-delitos or culpa aquiliana under
the Civil Code. Specifically they show that
there is a distinction between civil liability
arising from criminal negligence (governed
by the Penal Code) and responsibility for
fault or negligence under articles 1902 to
1910 of the Civil Code, and that the same
negligent act may produce either a civil
liability arising from a crime under the
Penal Code, or a separate responsibility
for fault or negligence under articles 1902
to 1910 of the Civil Code. Still more
concretely, the authorities above cited
render it inescapable to conclude that the
employer — in this case the
defendant-petitioner — is primarily and
directly liable under article 1903 of the
Civil Code.
The legal provisions, authors, and cases
already invoked should ordinarily be
sufficient to dispose of this case. But
inasmuch as we are announcing doctrines
that have been little understood in the past,
it might not be inappropriate to indicate
their foundations.
Firstly, the Revised Penal Code in article
365 punishes not only reckless but also
simple negligence. If we were to hold that
articles 1902 to 1910 of the Civil Code
refer only to fault or negligence not
punished by law, according to the literal
import of article 1093 of the Civil Code, the
legal institution of culpa aquiliana would
have very little scope and application in
actual life. Death or injury to persons and
damage to property through any degree of
negligence — even the slightest — would
have to be indemnified only through the
principle of civil liability arising from a
crime. In such a state of affairs, what
sphere would remain
for cuasi-delito or culpa aquiliana? We are
loath to impute to the lawmaker any
intention to bring about a situation so
absurd and anomalous. Nor are we, in the
interpretation of the laws, disposed to
uphold the letter that killeth rather than the
spirit that giveth life. We will not use the
literal meaning of the law to smother and
render almost lifeless a principle of such
ancient origin and such full-grown
development as culpa
aquiliana or cuasi-delito, which is
conserved and made enduring in articles
1902 to 1910 of the Spanish Civil Code.
Secondly, to find the accused guilty in a
criminal case, proof of guilt beyond
reasonable doubt is required, while in a
civil case, preponderance of evidence is
sufficient to make the defendant pay in
damages. There are numerous cases of
criminal negligence which can not be
shown beyond reasonable doubt, but can
be proved by a preponderance of
evidence. In such cases, the defendant
can and should be made responsible in a
civil action under articles 1902 to 1910 of
the Civil Code. Otherwise, there would be
many instances of unvindicated civil
wrongs. Ubi jus ibi remedium.
Thirdly, to hold that there is only one way
to make defendant's liability effective, and
that is, to sue the driver and exhaust his
(the latter's) property first, would be
tantamount to compelling the plaintiff to
follow a devious and cumbersome method
of obtaining relief. True, there is such a
remedy under our laws, but there is also a
more expeditious way, which is based on
the primary and direct responsibility of the
defendant under article 1903 of the Civil
Code. Our view of the law is more likely to
facilitate remedy for civil wrongs, because
the procedure indicated by the defendant
is wasteful and productive of delay, it
being a matter of common knowledge that
professional drivers of taxis and similar
public conveyance usually do not have
sufficient means with which to pay
damages. Why, then, should the plaintiff
be required in all cases to go through this
roundabout, unnecessary, and probably
useless procedure? In construing the laws,
courts have endeavored to shorten and
facilitate the pathways of right and justice.
At this juncture, it should be said that the
primary and direct responsibility of
employers and their presumed negligence
are principles calculated to protect society.
Workmen and employees should be
carefully chosen and supervised in order
to avoid injury to the public. It is the
masters or employers who principally reap
the profits resulting from the services of
these servants and employees. It is but
right that they should guarantee the latter's
careful conduct for the personnel and
patrimonial safety of others. As Theilhard
has said, "they should reproach
themselves, at least, some for their
weakness, others for their poor selection
and all for their negligence." And
according to Manresa, "It is much more
equitable and just that such responsibility
should fall upon the principal or director
who could have chosen a careful and
prudent employee, and not upon the
injured person who could not exercise
such selection and who used such
employee because of his confidence in the
principal or director." (Vol. 12, p. 622, 2nd
Ed.) Many jurists also base this primary
responsibility of the employer on the
principle of representation of the principal
by the agent. Thus, Oyuelos says in the
work already cited (Vol. 7, p. 747) that
before third persons the employer and
employee "vienen a ser como una sola
personalidad, por refundicion de la del
dependiente en la de quien le emplea y
utiliza." ("become as one personality by
the merging of the person of the employee
in that of him who employs and utilizes
him.") All these observations acquire a
peculiar force and significance when it
comes to motor accidents, and there is
need of stressing and accentuating the
responsibility of owners of motor vehicles.
Fourthly, because of the broad sweep of
the provisions of both the Penal Code and
the Civil Code on this subject, which has
given rise to the overlapping or
concurrence of spheres already discussed,
and for lack of understanding of the
character and efficacy of the action
for culpa aquiliana, there has grown up a
common practice to seek damages only
by virtue of the civil responsibility arising
from a crime, forgetting that there is
another remedy, which is by invoking
articles 1902-1910 of the Civil Code.
Although this habitual method is allowed
by our laws, it has nevertheless rendered
practically useless and nugatory the more
expeditious and effective remedy based
on culpa aquiliana or culpa
extra-contractual. In the present case, we
are asked to help perpetuate this usual
course. But we believe it is high time we
pointed out to the harm done by such
practice and to restore the principle of
responsibility for fault or negligence under
articles 1902 et seq. of the Civil Code to its
full rigor. It is high time we caused the
stream of quasi-delict or culpa aquiliana to
flow on its own natural channel, so that its
waters may no longer be diverted into that
of a crime under the Penal Code. This will,
it is believed, make for the better
safeguarding of private rights because it
re-establishes an ancient and additional
remedy, and for the further reason that an
independent civil action, not depending on
the issues, limitations and results of a
criminal prosecution, and entirely directed
by the party wronged or his counsel, is
more likely to secure adequate and
efficacious redress.
In view of the foregoing, the judgment of
the Court of Appeals should be and is
hereby affirmed, with costs against the
defendant-petitioner.
Yulo, C.J., Moran, Ozaeta and Paras,
JJ., concur.
G.R. No. L-47851 October 3, 1986
JUAN F. NAKPIL & SONS, and JUAN F.
NAKPIL, petitioners,
vs.
THE COURT OF APPEALS, UNITED
CONSTRUCTION COMPANY, INC.,
JUAN J. CARLOS, and the PHILIPPINE
BAR ASSOCIATION, respondents.
G.R. No. L-47863 October 3, 1986
THE UNITED CONSTRUCTION CO.,
INC., petitioner,
vs.
COURT OF APPEALS, ET AL.,
respondents.
G.R. No. L-47896 October 3, 1986
PHILIPPINE BAR ASSOCIATION, ET
AL., petitioners,
vs.
COURT OF APPEALS, ET AL.,
respondents.
PARAS, J.:
These are petitions for review on
certiorari of the November 28, 1977
decision of the Court of Appeals in
CA-G.R. No. 51771-R modifying the
decision of the Court of First Instance
of Manila, Branch V, in Civil Case No.
74958 dated September 21, 1971 as
modified by the Order of the lower
court dated December 8, 1971. The
Court of Appeals in modifying the
decision of the lower court included an
award of an additional amount of
P200,000.00 to the Philippine Bar
Association to be paid jointly and
severally by the defendant United
Construction Co. and by the third-party
defendants Juan F. Nakpil and Sons
and Juan F. Nakpil.
The dispositive portion of the modified
decision of the lower court reads:
WHEREFORE, judgment is hereby
rendered:
(a) Ordering defendant United
Construction Co., Inc. and third-party
defendants (except Roman Ozaeta) to
pay the plaintiff, jointly and severally,
the sum of P989,335.68 with interest at
the legal rate from November 29, 1968,
the date of the filing of the complaint
until full payment;
(b) Dismissing the complaint with
respect to defendant Juan J. Carlos;
(c) Dismissing the third-party
complaint;
(d) Dismissing the defendant's and
third-party defendants' counterclaims
for lack of merit;
(e) Ordering defendant United
Construction Co., Inc. and third-party
defendants (except Roman Ozaeta) to
pay the costs in equal shares.
SO ORDERED. (Record on Appeal p.
521; Rollo, L- 47851, p. 169).
The dispositive portion of the decision
of the Court of Appeals reads:
WHEREFORE, the judgment appealed
from is modified to include an award of
P200,000.00 in favor of
plaintiff-appellant Philippine Bar
Association, with interest at the legal
rate from November 29, 1968 until full
payment to be paid jointly and
severally by defendant United
Construction Co., Inc. and third party
defendants (except Roman Ozaeta). In
all other respects, the judgment dated
September 21, 1971 as modified in the
December 8, 1971 Order of the lower
court is hereby affirmed with COSTS to
be paid by the defendant and third
party defendant (except Roman Ozaeta)
in equal shares.
SO ORDERED.
Petitioners Juan F. Nakpil & Sons in
L-47851 and United Construction Co.,
Inc. and Juan J. Carlos in L-47863 seek
the reversal of the decision of the Court
of Appeals, among other things, for
exoneration from liability while
petitioner Philippine Bar Association in
L-47896 seeks the modification of
aforesaid decision to obtain an award
of P1,830,000.00 for the loss of the PBA
building plus four (4) times such
amount as damages resulting in
increased cost of the building,
P100,000.00 as exemplary damages;
and P100,000.00 as attorney's fees.
These petitions arising from the same
case filed in the Court of First Instance
of Manila were consolidated by this
Court in the resolution of May 10, 1978
requiring the respective respondents to
comment. (Rollo, L-47851, p. 172).
The facts as found by the lower court
(Decision, C.C. No. 74958; Record on
Appeal, pp. 269-348; pp. 520-521; Rollo,
L-47851, p. 169) and affirmed by the
Court of Appeals are as follows:
The plaintiff, Philippine Bar
Association, a civic-non-profit
association, incorporated under the
Corporation Law, decided to construct
an office building on its 840 square
meters lot located at the comer of
Aduana and Arzobispo Streets,
Intramuros, Manila. The construction
was undertaken by the United
Construction, Inc. on an
"administration" basis, on the
suggestion of Juan J. Carlos, the
president and general manager of said
corporation. The proposal was
approved by plaintiff's board of
directors and signed by its president
Roman Ozaeta, a third-party defendant
in this case. The plans and
specifications for the building were
prepared by the other third-party
defendants Juan F. Nakpil & Sons. The
building was completed in June, 1966.
In the early morning of August 2, 1968
an unusually strong earthquake hit
Manila and its environs and the
building in question sustained major
damage. The front columns of the
building buckled, causing the building
to tilt forward dangerously. The tenants
vacated the building in view of its
precarious condition. As a temporary
remedial measure, the building was
shored up by United Construction, Inc.
at the cost of P13,661.28.
On November 29, 1968, the plaintiff
commenced this action for the
recovery of damages arising from the
partial collapse of the building against
United Construction, Inc. and its
President and General Manager Juan J.
Carlos as defendants. Plaintiff alleges
that the collapse of the building was
accused by defects in the construction,
the failure of the contractors to follow
plans and specifications and violations
by the defendants of the terms of the
contract.
Defendants in turn filed a third-party
complaint against the architects who
prepared the plans and specifications,
alleging in essence that the collapse of
the building was due to the defects in
the said plans and specifications.
Roman Ozaeta, the then president of
the plaintiff Bar Association was
included as a third-party defendant for
damages for having included Juan J.
Carlos, President of the United
Construction Co., Inc. as party
defendant.
On March 3, 1969, the plaintiff and
third-party defendants Juan F. Nakpil &
Sons and Juan F. Nakpil presented a
written stipulation which reads:
1. That in relation to defendants'
answer with counterclaims and third-
party complaints and the third-party
defendants Nakpil & Sons' answer
thereto, the plaintiff need not amend its
complaint by including the said Juan F.
Nakpil & Sons and Juan F. Nakpil
personally as parties defendant.
2. That in the event (unexpected by the
undersigned) that the Court should find
after the trial that the above-named
defendants Juan J. Carlos and United
Construction Co., Inc. are free from any
blame and liability for the collapse of
the PBA Building, and should further
find that the collapse of said building
was due to defects and/or inadequacy
of the plans, designs, and
specifications p by the third-party
defendants, or in the event that the
Court may find Juan F. Nakpil and Sons
and/or Juan F. Nakpil contributorily
negligent or in any way jointly and
solidarily liable with the defendants,
judgment may be rendered in whole or
in part. as the case may be, against
Juan F. Nakpil & Sons and/or Juan F.
Nakpil in favor of the plaintiff to all
intents and purposes as if plaintiff's
complaint has been duly amended by
including the said Juan F. Nakpil &
Sons and Juan F. Nakpil as parties
defendant and by alleging causes of
action against them including, among
others, the defects or inadequacy of
the plans, designs, and specifications
prepared by them and/or failure in the
performance of their contract with
plaintiff.
3. Both parties hereby jointly petition
this Honorable Court to approve this
stipulation. (Record on Appeal, pp.
274-275; Rollo, L-47851,p.169).
Upon the issues being joined, a
pre-trial was conducted on March 7,
1969, during which among others, the
parties agreed to refer the technical
issues involved in the case to a
Commissioner. Mr. Andres O. Hizon,
who was ultimately appointed by the
trial court, assumed his office as
Commissioner, charged with the duty
to try the following issues:
1. Whether the damage sustained by
the PBA building during the August 2,
1968 earthquake had been caused,
directly or indirectly, by:
(a) The inadequacies or defects in the
plans and specifications prepared by
third-party defendants;
(b) The deviations, if any, made by the
defendants from said plans and
specifications and how said deviations
contributed to the damage sustained;
(c) The alleged failure of defendants to
observe the requisite quality of
materials and workmanship in the
construction of the building;
(d) The alleged failure to exercise the
requisite degree of supervision
expected of the architect, the
contractor and/or the owner of the
building;
(e) An act of God or a fortuitous event;
and
(f) Any other cause not herein above
specified.
2. If the cause of the damage suffered
by the building arose from a
combination of the above-enumerated
factors, the degree or proportion in
which each individual factor
contributed to the damage sustained;
3. Whether the building is now a total
loss and should be completely
demolished or whether it may still be
repaired and restored to a tenantable
condition. In the latter case, the
determination of the cost of such
restoration or repair, and the value of
any remaining construction, such as
the foundation, which may still be
utilized or availed of (Record on Appeal,
pp. 275-276; Rollo, L-47851, p. 169).
Thus, the issues of this case were
divided into technical issues and
non-technical issues. As aforestated
the technical issues were referred to
the Commissioner. The non-technical
issues were tried by the Court.
Meanwhile, plaintiff moved twice for the
demolition of the building on the
ground that it may topple down in case
of a strong earthquake. The motions
were opposed by the defendants and
the matter was referred to the
Commissioner. Finally, on April 30,
1979 the building was authorized to be
demolished at the expense of the
plaintiff, but not another earthquake of
high intensity on April 7, 1970 followed
by other strong earthquakes on April 9,
and 12, 1970, caused further damage to
the property. The actual demolition was
undertaken by the buyer of the
damaged building. (Record on Appeal,
pp. 278-280; Ibid.)
After the protracted hearings, the
Commissioner eventually submitted
his report on September 25, 1970 with
the findings that while the damage
sustained by the PBA building was
caused directly by the August 2, 1968
earthquake whose magnitude was
estimated at 7.3 they were also caused
by the defects in the plans and
specifications prepared by the
third-party defendants' architects,
deviations from said plans and
specifications by the defendant
contractors and failure of the latter to
observe the requisite workmanship in
the construction of the building and of
the contractors, architects and even
the owners to exercise the requisite
degree of supervision in the
construction of subject building.
All the parties registered their
objections to aforesaid findings which
in turn were answered by the
Commissioner.
The trial court agreed with the findings
of the Commissioner except as to the
holding that the owner is charged with
full nine supervision of the
construction. The Court sees no legal
or contractual basis for such
conclusion. (Record on Appeal, pp.
309-328; Ibid).
Thus, on September 21, 1971, the lower
court rendered the assailed decision
which was modified by the Intermediate
Appellate Court on November 28, 1977.
All the parties herein appealed from the
decision of the Intermediate Appellate
Court. Hence, these petitions.
On May 11, 1978, the United Architects
of the Philippines, the Association of
Civil Engineers, and the Philippine
Institute of Architects filed with the
Court a motion to intervene as amicus
curiae. They proposed to present a
position paper on the liability of
architects when a building collapses
and to submit likewise a critical
analysis with computations on the
divergent views on the design and
plans as submitted by the experts
procured by the parties. The motion
having been granted, the amicus
curiae were granted a period of 60 days
within which to submit their position.
After the parties had all filed their
comments, We gave due course to the
petitions in Our Resolution of July 21,
1978.
The position papers of the amicus
curiae (submitted on November 24,
1978) were duly noted.
The amicus curiae gave the opinion
that the plans and specifications of the
Nakpils were not defective. But the
Commissioner, when asked by Us to
comment, reiterated his conclusion
that the defects in the plans and
specifications indeed existed.
Using the same authorities availed of
by the amicus curiae such as the
Manila Code (Ord. No. 4131) and the
1966 Asep Code, the Commissioner
added that even if it can be proved that
the defects in the construction alone
(and not in the plans and design)
caused the damage to the building, still
the deficiency in the original design
and jack of specific provisions against
torsion in the original plans and the
overload on the ground floor columns
(found by an the experts including the
original designer) certainly contributed
to the damage which occurred. (Ibid, p.
174).
In their respective briefs petitioners,
among others, raised the following
assignments of errors: Philippine Bar
Association claimed that the measure
of damages should not be limited to
P1,100,000.00 as estimated cost of
repairs or to the period of six (6)
months for loss of rentals while United
Construction Co., Inc. and the Nakpils
claimed that it was an act of God that
caused the failure of the building which
should exempt them from
responsibility and not the defective
construction, poor workmanship,
deviations from plans and
specifications and other imperfections
in the case of United Construction Co.,
Inc. or the deficiencies in the design,
plans and specifications prepared by
petitioners in the case of the Nakpils.
Both UCCI and the Nakpils object to the
payment of the additional amount of
P200,000.00 imposed by the Court of
Appeals. UCCI also claimed that it
should be reimbursed the expenses of
shoring the building in the amount of
P13,661.28 while the Nakpils opposed
the payment of damages jointly and
solidarity with UCCI.
The pivotal issue in this case is
whether or not an act of God-an
unusually strong earthquake-which
caused the failure of the building,
exempts from liability, parties who are
otherwise liable because of their
negligence.
The applicable law governing the rights
and liabilities of the parties herein is
Article 1723 of the New Civil Code,
which provides:
Art. 1723. The engineer or architect
who drew up the plans and
specifications for a building is liable for
damages if within fifteen years from the
completion of the structure the same
should collapse by reason of a defect
in those plans and specifications, or
due to the defects in the ground. The
contractor is likewise responsible for
the damage if the edifice fags within the
same period on account of defects in
the construction or the use of materials
of inferior quality furnished by him, or
due to any violation of the terms of the
contract. If the engineer or architect
supervises the construction, he shall
be solidarily liable with the contractor.
Acceptance of the building, after
completion, does not imply waiver of
any of the causes of action by reason
of any defect mentioned in the
preceding paragraph.
The action must be brought within ten
years following the collapse of the
building.
On the other hand, the general rule is
that no person shall be responsible for
events which could not be foreseen or
which though foreseen, were inevitable
(Article 1174, New Civil Code).
An act of God has been defined as an
accident, due directly and exclusively
to natural causes without human
intervention, which by no amount of
foresight, pains or care, reasonably to
have been expected, could have been
prevented. (1 Corpus Juris 1174).
There is no dispute that the earthquake
of August 2, 1968 is a fortuitous event
or an act of God.
To exempt the obligor from liability
under Article 1174 of the Civil Code, for
a breach of an obligation due to an "act
of God," the following must concur: (a)
the cause of the breach of the
obligation must be independent of the
will of the debtor; (b) the event must be
either unforseeable or unavoidable; (c)
the event must be such as to render it
impossible for the debtor to fulfill his
obligation in a normal manner; and (d)
the debtor must be free from any
participation in, or aggravation of the
injury to the creditor. (Vasquez v. Court
of Appeals, 138 SCRA 553; Estrada v.
Consolacion, 71 SCRA 423; Austria v.
Court of Appeals, 39 SCRA 527;
Republic of the Phil. v. Luzon
Stevedoring Corp., 21 SCRA 279;
Lasam v. Smith, 45 Phil. 657).
Thus, if upon the happening of a
fortuitous event or an act of God, there
concurs a corresponding fraud,
negligence, delay or violation or
contravention in any manner of the
tenor of the obligation as provided for
in Article 1170 of the Civil Code, which
results in loss or damage, the obligor
cannot escape liability.
The principle embodied in the act of
God doctrine strictly requires that the
act must be one occasioned
exclusively by the violence of nature
and all human agencies are to be
excluded from creating or entering into
the cause of the mischief. When the
effect, the cause of which is to be
considered, is found to be in part the
result of the participation of man,
whether it be from active intervention
or neglect, or failure to act, the whole
occurrence is thereby humanized, as it
were, and removed from the rules
applicable to the acts of God. (1 Corpus
Juris, pp. 1174-1175).
Thus it has been held that when the
negligence of a person concurs with an
act of God in producing a loss, such
person is not exempt from liability by
showing that the immediate cause of
the damage was the act of God. To be
exempt from liability for loss because
of an act of God, he must be free from
any previous negligence or misconduct
by which that loss or damage may have
been occasioned. (Fish & Elective Co. v.
Phil. Motors, 55 Phil. 129; Tucker v.
Milan, 49 O.G. 4379; Limpangco & Sons
v. Yangco Steamship Co., 34 Phil. 594,
604; Lasam v. Smith, 45 Phil. 657).
The negligence of the defendant and
the third-party defendants petitioners
was established beyond dispute both
in the lower court and in the
Intermediate Appellate Court.
Defendant United Construction Co., Inc.
was found to have made substantial
deviations from the plans and
specifications. and to have failed to
observe the requisite workmanship in
the construction as well as to exercise
the requisite degree of supervision;
while the third-party defendants were
found to have inadequacies or defects
in the plans and specifications
prepared by them. As correctly
assessed by both courts, the defects in
the construction and in the plans and
specifications were the proximate
causes that rendered the PBA building
unable to withstand the earthquake of
August 2, 1968. For this reason the
defendant and third-party defendants
cannot claim exemption from liability.
(Decision, Court of Appeals, pp. 30-31).
It is well settled that the findings of
facts of the Court of Appeals are
conclusive on the parties and on this
court (cases cited in Tolentino vs. de
Jesus, 56 SCRA 67; Cesar vs.
Sandiganbayan, January 17, 1985, 134
SCRA 105, 121), unless (1) the
conclusion is a finding grounded
entirely on speculation, surmise and
conjectures; (2) the inference made is
manifestly mistaken; (3) there is grave
abuse of discretion; (4) the judgment is
based on misapprehension of facts; (5)
the findings of fact are conflicting , (6)
the Court of Appeals went beyond the
issues of the case and its findings are
contrary to the admissions of both
appellant and appellees (Ramos vs.
Pepsi-Cola Bottling Co., February 8,
1967, 19 SCRA 289, 291-292; Roque vs.
Buan, Oct. 31, 1967, 21 SCRA 648, 651);
(7) the findings of facts of the Court of
Appeals are contrary to those of the
trial court; (8) said findings of facts are
conclusions without citation of specific
evidence on which they are based; (9)
the facts set forth in the petition as well
as in the petitioner's main and reply
briefs are not disputed by the
respondents (Garcia vs. CA, June 30,
1970, 33 SCRA 622; Alsua-Bett vs.
Court of Appeals, July 30, 1979, 92
SCRA 322, 366); (10) the finding of fact
of the Court of Appeals is premised on
the supposed absence of evidence and
is contradicted by evidence on record
(Salazar vs. Gutierrez, May 29, 1970, 33
SCRA 243, 247; Cited in G.R. No.
66497-98, Sacay v. Sandiganbayan,
July 10, 1986).
It is evident that the case at bar does
not fall under any of the exceptions
above-mentioned. On the contrary, the
records show that the lower court
spared no effort in arriving at the
correct appreciation of facts by the
referral of technical issues to a
Commissioner chosen by the parties
whose findings and conclusions
remained convincingly unrebutted by
the intervenors/amicus curiae who
were allowed to intervene in the
Supreme Court.
In any event, the relevant and logical
observations of the trial court as
affirmed by the Court of Appeals that
"while it is not possible to state with
certainty that the building would not
have collapsed were those defects not
present, the fact remains that several
buildings in the same area withstood
the earthquake to which the building of
the plaintiff was similarly subjected,"
cannot be ignored.
The next issue to be resolved is the
amount of damages to be awarded to
the PBA for the partial collapse (and
eventual complete collapse) of its
building.
The Court of Appeals affirmed the
finding of the trial court based on the
report of the Commissioner that the
total amount required to repair the PBA
building and to restore it to tenantable
condition was P900,000.00 inasmuch
as it was not initially a total loss.
However, while the trial court awarded
the PBA said amount as damages, plus
unrealized rental income for one-half
year, the Court of Appeals modified the
amount by awarding in favor of PBA an
additional sum of P200,000.00
representing the damage suffered by
the PBA building as a result of another
earthquake that occurred on April 7,
1970 (L-47896, Vol. I, p. 92).
The PBA in its brief insists that the
proper award should be P1,830,000.00
representing the total value of the
building (L-47896, PBA's No. 1
Assignment of Error, p. 19), while both
the NAKPILS and UNITED question the
additional award of P200,000.00 in
favor of the PBA (L- 47851, NAKPIL's
Brief as Petitioner, p. 6, UNITED's Brief
as Petitioner, p. 25). The PBA further
urges that the unrealized rental income
awarded to it should not be limited to a
period of one-half year but should be
computed on a continuing basis at the
rate of P178,671.76 a year until the
judgment for the principal amount shall
have been satisfied L- 47896, PBA's No.
11 Assignment of Errors, p. 19).
The collapse of the PBA building as a
result of the August 2, 1968 earthquake
was only partial and it is undisputed
that the building could then still be
repaired and restored to its tenantable
condition. The PBA, however, in view
of its lack of needed funding, was
unable, thru no fault of its own, to have
the building repaired. UNITED, on the
other hand, spent P13,661.28 to shore
up the building after the August 2, 1968
earthquake (L-47896, CA Decision, p.
46). Because of the earthquake on April
7, 1970, the trial court after the needed
consultations, authorized the total
demolition of the building (L-47896, Vol.
1, pp. 53-54).
There should be no question that the
NAKPILS and UNITED are liable for the
damage resulting from the partial and
eventual collapse of the PBA building
as a result of the earthquakes.
We quote with approval the following
from the erudite decision penned by
Justice Hugo E. Gutierrez (now an
Associate Justice of the Supreme
Court) while still an Associate Justice
of the Court of Appeals:
There is no question that an
earthquake and other forces of nature
such as cyclones, drought, floods,
lightning, and perils of the sea are acts
of God. It does not necessarily follow,
however, that specific losses and
suffering resulting from the occurrence
of these natural force are also acts of
God. We are not convinced on the
basis of the evidence on record that
from the thousands of structures in
Manila, God singled out the blameless
PBA building in Intramuros and around
six or seven other buildings in various
parts of the city for collapse or severe
damage and that God alone was
responsible for the damages and
losses thus suffered.
The record is replete with evidence of
defects and deficiencies in the designs
and plans, defective construction, poor
workmanship, deviation from plans and
specifications and other imperfections.
These deficiencies are attributable to
negligent men and not to a perfect God.
The act-of-God arguments of the
defendants- appellants and third party
defendants-appellants presented in
their briefs are premised on legal
generalizations or speculations and on
theological fatalism both of which
ignore the plain facts. The lengthy
discussion of United on ordinary
earthquakes and unusually strong
earthquakes and on ordinary fortuitous
events and extraordinary fortuitous
events leads to its argument that the
August 2, 1968 earthquake was of such
an overwhelming and destructive
character that by its own force and
independent of the particular
negligence alleged, the injury would
have been produced. If we follow this
line of speculative reasoning, we will
be forced to conclude that under such
a situation scores of buildings in the
vicinity and in other parts of Manila
would have toppled down. Following
the same line of reasoning, Nakpil and
Sons alleges that the designs were
adequate in accordance with
pre-August 2, 1968 knowledge and
appear inadequate only in the light of
engineering information acquired after
the earthquake. If this were so,
hundreds of ancient buildings which
survived the earthquake better than the
two-year old PBA building must have
been designed and constructed by
architects and contractors whose
knowledge and foresight were
unexplainably auspicious and
prophetic. Fortunately, the facts on
record allow a more down to earth
explanation of the collapse. The failure
of the PBA building, as a unique and
distinct construction with no reference
or comparison to other buildings, to
weather the severe earthquake forces
was traced to design deficiencies and
defective construction, factors which
are neither mysterious nor esoteric.
The theological allusion of appellant
United that God acts in mysterious
ways His wonders to perform
impresses us to be inappropriate. The
evidence reveals defects and
deficiencies in design and construction.
There is no mystery about these acts of
negligence. The collapse of the PBA
building was no wonder performed by
God. It was a result of the
imperfections in the work of the
architects and the people in the
construction company. More relevant
to our mind is the lesson from the
parable of the wise man in the Sermon
on the Mount "which built his house
upon a rock; and the rain descended
and the floods came and the winds
blew and beat upon that house; and it
fen not; for it was founded upon a rock"
and of the "foolish upon the sand. And
the rain descended and man which
built his house the floods came, and
the winds blew, and beat upon that
house; and it fell and great was the fall
of it. (St. Matthew 7: 24-27)." The
requirement that a building should
withstand rains, floods, winds,
earthquakes, and natural forces is
precisely the reason why we have
professional experts like architects,
and engineers. Designs and
constructions vary under varying
circumstances and conditions but the
requirement to design and build well
does not change.
The findings of the lower Court on the
cause of the collapse are more rational
and accurate. Instead of laying the
blame solely on the motions and forces
generated by the earthquake, it also
examined the ability of the PBA
building, as designed and constructed,
to withstand and successfully weather
those forces.
The evidence sufficiently supports a
conclusion that the negligence and
fault of both United and Nakpil and
Sons, not a mysterious act of an
inscrutable God, were responsible for
the damages. The Report of the
Commissioner, Plaintiff's Objections to
the Report, Third Party Defendants'
Objections to the Report, Defendants'
Objections to the Report,
Commissioner's Answer to the various
Objections, Plaintiffs' Reply to the
Commissioner's Answer, Defendants'
Reply to the Commissioner's Answer,
Counter-Reply to Defendants' Reply,
and Third-Party Defendants' Reply to
the Commissioner's Report not to
mention the exhibits and the
testimonies show that the main
arguments raised on appeal were
already raised during the trial and fully
considered by the lower Court. A
reiteration of these same arguments on
appeal fails to convince us that we
should reverse or disturb the lower
Court's factual findings and its
conclusions drawn from the facts,
among them:
The Commissioner also found merit in
the allegations of the defendants as to
the physical evidence before and after
the earthquake showing the
inadequacy of design, to wit:
Physical evidence before the
earthquake providing (sic) inadequacy
of design;
1. inadequate design was the cause of
the failure of the building.
2. Sun-baffles on the two sides and in
front of the building;
a. Increase the inertia forces that move
the building laterally toward the Manila
Fire Department.
b. Create another stiffness imbalance.
3. The embedded 4" diameter cast iron
down spout on all exterior columns
reduces the cross-sectional area of
each of the columns and the strength
thereof.
4. Two front corners, A7 and D7
columns were very much less
reinforced.
Physical Evidence After the Earthquake,
Proving Inadequacy of design;
1. Column A7 suffered the severest
fracture and maximum sagging. Also
D7.
2. There are more damages in the front
part of the building than towards the
rear, not only in columns but also in
slabs.
3. Building leaned and sagged more on
the front part of the building.
4. Floors showed maximum sagging on
the sides and toward the front corner
parts of the building.
5. There was a lateral displacement of
the building of about 8", Maximum
sagging occurs at the column A7 where
the floor is lower by 80 cm. than the
highest slab level.
6. Slab at the corner column D7 sagged
by 38 cm.
The Commissioner concluded that
there were deficiencies or defects in
the design, plans and specifications of
the PBA building which involved
appreciable risks with respect to the
accidental forces which may result
from earthquake shocks. He conceded,
however, that the fact that those
deficiencies or defects may have arisen
from an obsolete or not too
conservative code or even a code that
does not require a design for
earthquake forces mitigates in a large
measure the responsibility or liability of
the architect and engineer designer.
The Third-party defendants, who are
the most concerned with this portion of
the Commissioner's report, voiced
opposition to the same on the grounds
that (a) the finding is based on a basic
erroneous conception as to the design
concept of the building, to wit, that the
design is essentially that of a heavy
rectangular box on stilts with shear
wan at one end; (b) the finding that
there were defects and a deficiency in
the design of the building would at best
be based on an approximation and,
therefore, rightly belonged to the realm
of speculation, rather than of certainty
and could very possibly be outright
error; (c) the Commissioner has failed
to back up or support his finding with
extensive, complex and highly
specialized computations and analyzes
which he himself emphasizes are
necessary in the determination of such
a highly technical question; and (d) the
Commissioner has analyzed the design
of the PBA building not in the light of
existing and available earthquake
engineering knowledge at the time of
the preparation of the design, but in the
light of recent and current standards.
The Commissioner answered the said
objections alleging that third-party
defendants' objections were based on
estimates or exhibits not presented
during the hearing that the resort to
engineering references posterior to the
date of the preparation of the plans was
induced by the third-party defendants
themselves who submitted
computations of the third-party
defendants are erroneous.
The issue presently considered is
admittedly a technical one of the
highest degree. It involves questions
not within the ordinary competence of
the bench and the bar to resolve by
themselves. Counsel for the third-party
defendants has aptly remarked that
"engineering, although dealing in
mathematics, is not an exact science
and that the present knowledge as to
the nature of earthquakes and the
behaviour of forces generated by them
still leaves much to be desired; so
much so "that the experts of the
different parties, who are all engineers,
cannot agree on what equation to use,
as to what earthquake co-efficients are,
on the codes to be used and even as to
the type of structure that the PBA
building (is) was (p. 29, Memo, of third-
party defendants before the
Commissioner).
The difficulty expected by the Court if
tills technical matter were to be tried
and inquired into by the Court itself,
coupled with the intrinsic nature of the
questions involved therein, constituted
the reason for the reference of the said
issues to a Commissioner whose
qualifications and experience have
eminently qualified him for the task,
and whose competence had not been
questioned by the parties until he
submitted his report. Within the
pardonable limit of the Court's ability to
comprehend the meaning of the
Commissioner's report on this issue,
and the objections voiced to the same,
the Court sees no compelling reasons
to disturb the findings of the
Commissioner that there were defects
and deficiencies in the design, plans
and specifications prepared by
third-party defendants, and that said
defects and deficiencies involved
appreciable risks with respect to the
accidental forces which may result
from earthquake shocks.
(2) (a) The deviations, if any, made by
the defendants from the plans and
specifications, and how said deviations
contributed to the damage sustained
by the building.
(b) The alleged failure of defendants to
observe the requisite quality of
materials and workmanship in the
construction of the building.
These two issues, being interrelated
with each other, will be discussed
together.
The findings of the Commissioner on
these issues were as follows:
We now turn to the construction of the
PBA Building and the alleged
deficiencies or defects in the
construction and violations or
deviations from the plans and
specifications. All these may be
summarized as follows:
a. Summary of alleged defects as
reported by Engineer Mario M.
Bundalian.
(1) Wrongful and defective placing of
reinforcing bars.
(2) Absence of effective and desirable
integration of the 3 bars in the cluster.
(3) Oversize coarse aggregates: 1-1/4
to 2" were used. Specification requires
no larger than 1 inch.
(4) Reinforcement assembly is not
concentric with the column,
eccentricity being 3" off when on one
face the main bars are only 1 1/2' from
the surface.
(5) Prevalence of honeycombs,
(6) Contraband construction joints,
(7) Absence, or omission, or over
spacing of spiral hoops,
(8) Deliberate severance of spirals into
semi-circles in noted on Col. A-5,
ground floor,
(9) Defective construction joints in
Columns A-3, C-7, D-7 and D-4, ground
floor,
(10) Undergraduate concrete is evident,
(11) Big cavity in core of Column 2A-4,
second floor,
(12) Columns buckled at different
planes. Columns buckled worst where
there are no spirals or where spirals
are cut. Columns suffered worst
displacement where the eccentricity of
the columnar reinforcement assembly
is more acute.
b. Summary of alleged defects as
reported by Engr. Antonio Avecilla.
Columns are first (or ground) floor,
unless otherwise stated.
(1) Column D4 — Spacing of spiral is
changed from 2" to 5" on centers,
(2) Column D5 — No spiral up to a
height of 22" from the ground floor,
(3) Column D6 — Spacing of spiral over
4 l/2,
(4) Column D7 — Lack of lateral ties,
(5) Column C7 — Absence of spiral to a
height of 20" from the ground level,
Spirals are at 2" from the exterior
column face and 6" from the inner
column face,
(6) Column B6 — Lack of spiral on 2
feet below the floor beams,
(7) Column B5 — Lack of spirals at a
distance of 26' below the beam,
(8) Column B7 — Spirals not tied to
vertical reinforcing bars, Spirals are
uneven 2" to 4",
(9) Column A3 — Lack of lateral ties,
(10) Column A4 — Spirals cut off and
welded to two separate clustered
vertical bars,
(11) Column A4 — (second floor
Column is completely hollow to a
height of 30"
(12) Column A5 — Spirals were cut
from the floor level to the bottom of the
spandrel beam to a height of 6 feet,
(13) Column A6 — No spirals up to a
height of 30' above the ground floor
level,
(14) Column A7— Lack of lateralties or
spirals,
c. Summary of alleged defects as
reported by the experts of the
Third-Party defendants.
Ground floor columns.
(1) Column A4 — Spirals are cut,
(2) Column A5 — Spirals are cut,
(3) Column A6 — At lower 18" spirals
are absent,
(4) Column A7 — Ties are too far apart,
(5) Column B5 — At upper fourth of
column spirals are either absent or
improperly spliced,
(6) Column B6 — At upper 2 feet spirals
are absent,
(7) Column B7 — At upper fourth of
column spirals missing or improperly
spliced.
(8) Column C7— Spirals are absent at
lowest 18"
(9) Column D5 — At lowest 2 feet
spirals are absent,
(10) Column D6 — Spirals are too far
apart and apparently improperly
spliced,
(11) Column D7 — Lateral ties are too
far apart, spaced 16" on centers.
There is merit in many of these
allegations. The explanations given by
the engineering experts for the
defendants are either contrary to
general principles of engineering
design for reinforced concrete or not
applicable to the requirements for
ductility and strength of reinforced
concrete in earthquake-resistant
design and construction.
We shall first classify and consider
defects which may have appreciable
bearing or relation to' the
earthquake-resistant property of the
building.
As heretofore mentioned, details which
insure ductility at or near the
connections between columns and
girders are desirable in earthquake
resistant design and construction. The
omission of spirals and ties or hoops at
the bottom and/or tops of columns
contributed greatly to the loss of
earthquake-resistant strength. The
plans and specifications required that
these spirals and ties be carried from
the floor level to the bottom
reinforcement of the deeper beam (p. 1,
Specifications, p. 970, Reference 11).
There were several clear evidences
where this was not done especially in
some of the ground floor columns
which failed.
There were also unmistakable
evidences that the spacings of the
spirals and ties in the columns were in
many cases greater than those called
for in the plans and specifications
resulting again in loss of
earthquake-resistant strength. The
assertion of the engineering experts for
the defendants that the improper
spacings and the cutting of the spirals
did not result in loss of strength in the
column cannot be maintained and is
certainly contrary to the general
principles of column design and
construction. And even granting that
there be no loss in strength at the yield
point (an assumption which is very
doubtful) the cutting or improper
spacings of spirals will certainly result
in the loss of the plastic range or
ductility in the column and it is
precisely this plastic range or ductility
which is desirable and needed for
earthquake-resistant strength.
There is no excuse for the cavity or
hollow portion in the column A4,
second floor, and although this column
did not fail, this is certainly an evidence
on the part of the contractor of poor
construction.
The effect of eccentricities in the
columns which were measured at
about 2 1/2 inches maximum may be
approximated in relation to column
loads and column and beam moments.
The main effect of eccentricity is to
change the beam or girder span. The
effect on the measured eccentricity of 2
inches, therefore, is to increase or
diminish the column load by a
maximum of about 1% and to increase
or diminish the column or beam
movements by about a maximum of 2%.
While these can certainly be absorbed
within the factor of safety, they
nevertheless diminish said factor of
safety.
The cutting of the spirals in column A5,
ground floor is the subject of great
contention between the parties and
deserves special consideration.
The proper placing of the main
reinforcements and spirals in column
A5, ground floor, is the responsibility
of the general contractor which is the
UCCI. The burden of proof, therefore,
that this cutting was done by others is
upon the defendants. Other than a
strong allegation and assertion that it
is the plumber or his men who may
have done the cutting (and this was
flatly denied by the plumber) no
conclusive proof was presented. The
engineering experts for the defendants
asserted that they could have no
motivation for cutting the bar because
they can simply replace the spirals by
wrapping around a new set of spirals.
This is not quite correct. There is
evidence to show that the pouring of
concrete for columns was sometimes
done through the beam and girder
reinforcements which were already in
place as in the case of column A4
second floor. If the reinforcement for
the girder and column is to
subsequently wrap around the spirals,
this would not do for the elasticity of
steel would prevent the making of tight
column spirals and loose or improper
spirals would result. The proper way is
to produce correct spirals down from
the top of the main column bars, a
procedure which can not be done if
either the beam or girder reinforcement
is already in place. The engineering
experts for the defendants strongly
assert and apparently believe that the
cutting of the spirals did not materially
diminish the strength of the column.
This belief together with the difficulty
of slipping the spirals on the top of the
column once the beam reinforcement is
in place may be a sufficient motivation
for the cutting of the spirals
themselves. The defendants, therefore,
should be held responsible for the
consequences arising from the loss of
strength or ductility in column A5
which may have contributed to the
damages sustained by the building.
The lack of proper length of splicing of
spirals was also proven in the visible
spirals of the columns where spalling
of the concrete cover had taken place.
This lack of proper splicing contributed
in a small measure to the loss of
strength.
The effects of all the other proven and
visible defects although nor can
certainly be accumulated so that they
can contribute to an appreciable loss in
earthquake-resistant strength. The
engineering experts for the defendants
submitted an estimate on some of
these defects in the amount of a few
percent. If accumulated, therefore,
including the effect of eccentricity in
the column the loss in strength due to
these minor defects may run to as
much as ten percent.
To recapitulate: the omission or lack of
spirals and ties at the bottom and/or at
the top of some of the ground floor
columns contributed greatly to the
collapse of the PBA building since it is
at these points where the greater part
of the failure occurred. The liability for
the cutting of the spirals in column A5,
ground floor, in the considered opinion
of the Commissioner rests on the
shoulders of the defendants and the
loss of strength in this column
contributed to the damage which
occurred.
It is reasonable to conclude, therefore,
that the proven defects, deficiencies
and violations of the plans and
specifications of the PBA building
contributed to the damages which
resulted during the earthquake of
August 2, 1968 and the vice of these
defects and deficiencies is that they
not only increase but also aggravate
the weakness mentioned in the design
of the structure. In other words, these
defects and deficiencies not only tend
to add but also to multiply the effects of
the shortcomings in the design of the
building. We may say, therefore, that
the defects and deficiencies in the
construction contributed greatly to the
damage which occurred.
Since the execution and supervision of
the construction work in the hands of
the contractor is direct and positive,
the presence of existence of all the
major defects and deficiencies noted
and proven manifests an element of
negligence which may amount to
imprudence in the construction work.
(pp. 42-49, Commissioners Report).
As the parties most directly concerned
with this portion of the Commissioner's
report, the defendants voiced their
objections to the same on the grounds
that the Commissioner should have
specified the defects found by him to
be "meritorious"; that the
Commissioner failed to indicate the
number of cases where the spirals and
ties were not carried from the floor
level to the bottom reinforcement of the
deeper beam, or where the spacing of
the spirals and ties in the columns were
greater than that called for in the
specifications; that the hollow in
column A4, second floor, the
eccentricities in the columns, the lack
of proper length of splicing of spirals,
and the cut in the spirals in column A5,
ground floor, did not aggravate or
contribute to the damage suffered by
the building; that the defects in the
construction were within the tolerable
margin of safety; and that the cutting of
the spirals in column A5, ground floor,
was done by the plumber or his men,
and not by the defendants.
Answering the said objections, the
Commissioner stated that, since many
of the defects were minor only the
totality of the defects was considered.
As regards the objection as to failure to
state the number of cases where the
spirals and ties were not carried from
the floor level to the bottom
reinforcement, the Commissioner
specified groundfloor columns B-6 and
C-5 the first one without spirals for 03
inches at the top, and in the latter, there
were no spirals for 10 inches at the
bottom. The Commissioner likewise
specified the first storey columns
where the spacings were greater than
that called for in the specifications to
be columns B-5, B-6, C-7, C-6, C-5, D-5
and B-7. The objection to the failure of
the Commissioner to specify the
number of columns where there was
lack of proper length of splicing of
spirals, the Commissioner mentioned
groundfloor columns B-6 and B-5
where all the splices were less than
1-1/2 turns and were not welded,
resulting in some loss of strength
which could be critical near the ends of
the columns. He answered the
supposition of the defendants that the
spirals and the ties must have been
looted, by calling attention to the fact
that the missing spirals and ties were
only in two out of the 25 columns,
which rendered said supposition to be
improbable.
The Commissioner conceded that the
hollow in column A-4, second floor, did
not aggravate or contribute to the
damage, but averred that it is
"evidence of poor construction." On
the claim that the eccentricity could be
absorbed within the factor of safety,
the Commissioner answered that, while
the same may be true, it also
contributed to or aggravated the
damage suffered by the building.
The objection regarding the cutting of
the spirals in Column A-5, groundfloor,
was answered by the Commissioner by
reiterating the observation in his report
that irrespective of who did the cutting
of the spirals, the defendants should be
held liable for the same as the general
contractor of the building. The
Commissioner further stated that the
loss of strength of the cut spirals and
inelastic deflections of the supposed
lattice work defeated the purpose of the
spiral containment in the column and
resulted in the loss of strength, as
evidenced by the actual failure of this
column.
Again, the Court concurs in the
findings of the Commissioner on these
issues and fails to find any sufficient
cause to disregard or modify the same.
As found by the Commissioner, the
"deviations made by the defendants
from the plans and specifications
caused indirectly the damage
sustained and that those deviations not
only added but also aggravated the
damage caused by the defects in the
plans and specifications prepared by
third-party defendants. (Rollo, Vol. I, pp.
128-142)
The afore-mentioned facts clearly
indicate the wanton negligence of both
the defendant and the third-party
defendants in effecting the plans,
designs, specifications, and
construction of the PBA building and
We hold such negligence as equivalent
to bad faith in the performance of their
respective tasks.
Relative thereto, the ruling of the
Supreme Court in Tucker v. Milan (49
O.G. 4379, 4380) which may be in point
in this case reads:
One who negligently creates a
dangerous condition cannot escape
liability for the natural and probable
consequences thereof, although the
act of a third person, or an act of God
for which he is not responsible,
intervenes to precipitate the loss.
As already discussed, the destruction
was not purely an act of God. Truth to
tell hundreds of ancient buildings in
the vicinity were hardly affected by the
earthquake. Only one thing spells out
the fatal difference; gross negligence
and evident bad faith, without which
the damage would not have occurred.
WHEREFORE, the decision appealed
from is hereby MODIFIED and
considering the special and
environmental circumstances of this
case, We deem it reasonable to render
a decision imposing, as We do hereby
impose, upon the defendant and the
third-party defendants (with the
exception of Roman Ozaeta)
a solidary (Art. 1723, Civil
Code, Supra, p. 10) indemnity in favor
of the Philippine Bar Association of
FIVE MILLION (P5,000,000.00) Pesos to
cover all damages (with the exception
of attorney's fees) occasioned by the
loss of the building (including interest
charges and lost rentals) and an
additional ONE HUNDRED THOUSAND
(P100,000.00) Pesos as and for
attorney's fees, the total sum being
payable upon the finality of this
decision. Upon failure to pay on such
finality, twelve (12%) per cent interest
per annum shall be imposed upon
afore-mentioned amounts from finality
until paid. Solidary costs against the
defendant and third-party defendants
(except Roman Ozaeta).
SO ORDERED.
G.R. No. L-27283 July 29, 1977
SOLEDAD F.
BENGSON, plaintiff-appellant,
vs.
MARIANO M. CHAN, UNIVERSAL
CONSTRUCTION SUPPLY and
LEONCIO CHAN, both of San Fernando,
La Union; MUTUAL SECURITY
INSURANCE CORPORATION and
KRAUSE A. IGNACIO of
Manila, defendants-appellees.
Jesus Z. Valenzuela and San Jose, Albino
& Associates for appellant.
Bengzon, Villegas & Zarraga for appellees
Mariano Chan and Leoncio Chan.
Jose C. Blanco for appellee Mutual
Security Insurance Corporation.
AQUINO, J.:
This is a case involving arbitration. On
June 21, 1966 Soledad F. Bengson and
Mariano M. Chan entered into a contract
for the construction of a six-story building
on Bengson's lot located at Rizal Avenue,
San Fernando, La Union. In that contract
Soledad F. Bengson found herself to pay
Chan, the contractor, the sum of P352,000
for the materials, labor and construction
expenses.
It was stipulated inter alia that the
construction would start on July 5, 1965;
that the first and second stories, together
with the theater, should be completed and
available for use within five months from
July 5, 1965, and that the construction
should be finished within twelve calendar
months from that date in conformity with
the plans and specifications signed by the
parties. The contract contains the
following arbitration clause:
15. Any and all questions, disputes or
differences arising between the parties
hereto relative to the construction of the
BUILDING shall be determined by
arbitration of two persons, each chosen by
the parties themselves. The determination
of said arbitration shall be final, conclusive
and binding upon both parties hereto,
unless they choose to go to court, in which
case the determination by arbitration is a
condition precedent for taking any court
action. The expenses of arbitration shall
be borne by both parties equally.
On May 24, 1966 Soledad F. Bengson
filed an action for damages against
Mariano M. Chan and the sureties on his
performance bond. She alleged that
Mariano M. Chan violated the contract by
not constructing the first and second
stories within the stipulated five- month
period; that because the contractor
admitted at a conference on May 8, 1966
that he was unable to continue or
complete the construction, Soledad F.
Bengson terminated the contract; that she
suffered damages amounting to P85,000
as a consequence of Chan's failure to
construct the commercial building, and
that Chan did not comply with clauses 7
and 8 of the contract in not attending to his
work and in not submitting periodic reports
of the work done as a basis for the
payment of the laborers' wages. The
damages claimed totalled P183,800.
Mariano M. Chan and his sureties,
Leoncio Chan (the owner of the Universal
Construction Supply) and Mutual Security
Insurance Corporation, alleged in their
answer that the contractor stopped the
construction use Soledad F. Bengson
refused to pay for ninety percent of the
work already accomplished; that the
construction actually started in February,
1966 because of the changes requested
by Bengson; that the demolition of the old
building was effected from July to
December, 1965, and that the stipulation
for the construction of the first and second
stories within five months was novated b
the parties.
The contractor and his sureties further
alleged that Soledad F. Bengson had paid
him P74,750 but refused to pay on May 8,
1966 the additional sum of P31,450 as the
balance of ninety percent of the work
already accomplished worth P118,000;
that by reason of Bengson's failure to pay
the balance, Chan notified her that he
would stop the construction, and that he
actually stopped the construction on May
30, 1966 when he was served with a copy
of the complaint.
Mariano M. Chan filed counterclaims for
P45,223.23 as the balance due on the
contract; P15,000 as the value of the
materials in the construction yard; P5,000
as reimbursement of the expenses for the
demolition of the old building, P5,000 as
the value of his construction equipment
under Bengson's control and P35,000 as
damages.
On November 16, 1966 the defendants
filed an amended answer wherein they
alleged as an additional affirmative
defense that the complaint states no
cause of action because Soledad F.
Bengson did not submit the controversy
for arbitration as required in the
aforequoted paragraph 15 of the
construction contract.
After holding a hearing, the trial court in its
order of November 24, 1966 sustained
that new defense and dismissed the
complaint. Bengson appealed.
Appellant Bengson's five assignments of
errors may be reduced to the issues of
whether the trial court erred (1) in allowing
the defendants to plead a new affirmative
defense in their amended answer and (2)
in holding that the cause of action in
plaintiff's complaint are embraced in the
requirement for arbitration as a condition
precedent to a court action.
(1) We hold that there is no merit in
appellant Bengson's contention that the
defendants waived the defense of lack of
cause of action. It is true that the
defendants did not interpose as a defense
in their original answer Bengson's failure
to resort to arbitration before going to court
or the defense that her complaint does not
state a cause of action. The omission did
not constitute a waiver of that defense
because section 2, Rule 9 of the Rules of
Court explicitly provides that "defenses
and objections not pleaded either in a
motion to dismiss or in the answer are
deemed waived; except the failure to state
a cause of action which may be alleged in
a later pleading, if one is permitted".
(2) Appellant Bengson's other contention
that her causes of action do not involve
disputes relative to the construction of the
building and, consequently, should not be
submitted for arbitration, is not well-taken.
The trial court sensibly said that "all the
causes of action alleged in the plaintiff's
amended complaint are based upon the
supposed violations committed by the
defendants of the 'Contract for the
Construction of a Building"' and that "the
provisions of paragraph 15 hereof leave
very little room for doubt that the said
causes of action are embraced within the
phrase 'any and all questions, disputes or
differences between the parties hereto
relative to the construction of the building',
which must be determined by arbitration of
two persons and such determination by
the arbitrators shall be 'final, conclusive
and binding upon both parties' unless they
go to court, in which case the
determination by arbitration is ' a condition
precedent for taking any court action'."
Appellant Bengson argues that paragraph
15 refers to disputes as to "the technical
process of putting up the building",
meaning whether there was an adherence
to the plans and specifications, and that
her causes of action for damages do not
involve questions as to the construction of
the building but refer to disputes "based
on violation of the contract for
construction".
She points out that the contract for the
construction of the building and the
construction of the building are different
concepts, just as the Constitution and the
formation of the government under the
Constitution are different concepts; that a
dispute relating to the construction
contract is not necessarily a dispute
relative to the construction of the building;
that the parties did not have any dispute
prior to the filing of the complaint, and that
it was only after the filing of the case that a
dispute arose between them.
Appellant Bengson alternatively argues
that if arbitration is proper, then the trial
court in conformity with section 6 of the
Arbitration Law, Republic Act No. 876,
should have required the parties to
proceed to arbitration.
On the other hand, the defendants argue
that the broad and inclusive terms of
paragraph 15 embrace all breaches of the
contract regarding submission to
arbitration of the contractor's request for
extensions shows that arbitration is not
restricted to disputes relative to "the
technical process of putting up the
building".
We hold that the terms of paragraph 15
clearly express the intention of the parties
that all disputes between them should first
be arbitrated before court action can be
taken by the aggrieved party.
Bengson's interpretation of paragraph 15
as being limited to controversies with
respect "to the joining together of stones,
steel, wood and other material to put up a
building" has a sophistical flavor. Her
superfine distinction between the contract
for the construction of the building and the
construction of the building is specious but
not convincing.
However, although the causes of action in
Bengson's complaint are covered by
paragraph 15, her failure to resort to
arbitration does not warrant the dismissal
of her complaint. We agree with her
alternative contention that arbitration may
be resorted to during the pendency of the
case. The Arbitration Law provides:
SEC. 6. Hearing by court. — A party
aggrieved by the failure, neglect or refusal
of another to perform under an agreement
in writing providing for arbitration may
petition the court for an order directing that
such arbitration proceed in the manner
provided for in such agreement. Five days
notice in writing of the hearing of such
application shall be served either
personally or by registered mail upon the
party in default. The court shall hear the
parties, and upon being satisfied that the
making of the agreement or such failure to
comply therewith is not in issue, shall
make an order directing the parties to
proceed to arbitration in accordance with
the terms of the agreement. If the making
of the agreement or default be in issue the
court shall proceed to summarily hear
such issue. If the finding be that no
agreement in writing providing for
arbitration was made, or that there is no
default in the proceeding thereunder, the
proceeding shall be dismissed. If the
finding be that a written provision for
arbitration was made and there is a default
in proceeding thereunder, an order shall
be made summarily directing the parties to
proceed with arbitration in accordance
with the terms thereof.
The court shall decide all motions,
petitions or applications filed under the
provisions of this Act, within ten days after
such motions, petitions, or applications
have been heard by it.
SEC. 7. Stay of civil action. — If any suit or
proceeding be brought upon an issue
arising out of an agreement providing for
the arbitration thereof, the court in which
such quit or proceeding is pending, upon
being satisfied that the issue involved in
such suit or proceeding is referable to
arbitration, shall stay the action or
proceeding until an arbitration has been
had in accordance with the terms of the
agreement: Provided, That the applicant
for the stay is not in default in proceeding
with such arbitration.
Within the meaning of section 6, the failure
of Soledad F. Bengson to resort to
arbitration may be regarded as a refusal to
comply with the stipulation for arbitration.
And defendants p interposition of the
defense that arbitration is a condition
precedent to the institution of a court
action may be interpreted as a petition for
an order that arbitration should proceed as
contemplated in section 15.
Therefore, instead of dismissing the case,
the proceedings therein should be
suspended and the parties should be
directed to go through the motions of
arbitration at least within a sixty-day period.
With the consent of the parties, the trial
court may appoint a third arbitrator to
prevent a deadlock between the two
arbitrators. In the event that the disputes
between the parties could not be settled
definitively by arbitration, then the hearing
of the instant case should be resumed.
WHEREFORE, the trial court's order of
dismissal is reversed and set aside. If the
parties cannot reach an amicable
settlement at this late hour, then the trial
court should give them at least sixty days
from notice within which to settle their
disputes by arbitration and, if no
settlement is finalized within that period, it
should hold a pre-trial and try the case. No
costs.
SO ORDERED.
G.R. No. L-24190 July 13,
1926
GEORGE L. PARKS, plaintiff-appellant,
vs.
PROVINCE OF TARLAC,
MUNICIPALITY OF TARLAC,
CONCEPCION CIRER, and JAMES HILL,
her husband, defendants-appellees.
Jos. N. Wolfson for appellant.
Provincial Fiscal Lopez de Jesus for the
Province and Municipality of Tarlac.
No appearance for the other appellees.
AVANCEÑA, C. J.:
On October 18, 1910, Concepcion Cirer
and James Hill, the owners of parcel of
land No. 2 referred to in the complaint,
donated it perpetually to the municipality
of Tarlac, Province of Tarlac, under certain
conditions specified in the public
document in which they made this
donation. The donation was accepted by
Mr. Santiago de Jesus in the same
document on behalf of the municipal
council of Tarlac of which he was the
municipal president. The parcel thus
donated was later registered in the name
of the donee, the municipality of Tarlac.
On January 15, 1921, Concepcion Cirer
and James Hill sold this parcel to the
herein plaintiff George L. Parks. On
August 24, 1923, the municipality of Tarlac
transferred the parcel to the Province of
Tarlac which, by reason of this transfer,
applied for and obtained the registration
thereof in its name, the corresponding
certificate of title having been issued to it.
The plaintiff, George L. Parks, alleging
that the conditions of the donation had not
been complied with and invoking the sale
of this parcel of land made by Concepcion
Cirer and James Hill in his favor, brought
this action against the Province of Tarlac,
the municipality of Tarlac, Concepcion
Cirer and James Hill and prayed that he
be declared the absolute owner entitled to
the possession of this parcel, that the
transfer of the same by the municipality of
Tarlac to the Province of Tarlac be
annulled, and the transfer certificate
issued to the Province of Tarlac cancelled.
The lower court dismissed the complaint.
The plaintiff has no right of action. If he
has any, it is only by virtue of the sale of
this parcel made by Concepcion Cirer and
James Hill in his favor on January 15,
1921, but that sale cannot have any effect.
This parcel having been donated by
Concepcion Cirer and James Hill to the
municipality of Tarlac, which donation was
accepted by the latter, the title to the
property was transferred to the
municipality of Tarlac. It is true that the
donation might have been revoked for the
causes, if any, provided by the law, but the
fact is that it was not revoked when
Concepcion Cirer and James Hill made
the sale of this parcel to the plaintiff. Even
supposing that causes existed for the
revocation of this donation, still, it was
necessary, in order to consider it revoked,
either that the revocation had been
consented to by the donee, the
municipality of Tarlac, or that it had been
judicially decreed. None of these
circumstances existed when Concepcion
Cirer and James Hill sold this parcel to the
plaintiff. Consequently, when the sale was
made Concepcion Cirer and James Hill
were no longer the owners of this parcel
and could not have sold it to the plaintiff,
nor could the latter have acquired it from
them.
But the appellant contends that a condition
precedent having been imposed in the
donation and the same not having been
complied with, the donation never became
effective. We find no merit in this
contention. The appellant refers to the
condition imposed that one of the parcels
donated was to be used absolutely and
exclusively for the erection of a central
school and the other for a public park, the
work to commence in both cases within
the period of six months from the date of
the ratification by the partes of the
document evidencing the donation. It is
true that this condition has not been
complied with. The allegation, however,
that it is a condition precedent is
erroneous. The characteristic of a
condition precedent is that the acquisition
of the right is not effected while said
condition is not complied with or is not
deemed complied with. Meanwhile nothing
is acquired and there is only an
expectancy of right. Consequently, when a
condition is imposed, the compliance of
which cannot be effected except when the
right is deemed acquired, such condition
cannot be a condition precedent. In the
present case the condition that a public
school be erected and a public park made
of the donated land, work on the same to
commence within six months from the
date of the ratification of the donation by
the parties, could not be complied with
except after giving effect to the donation.
The donee could not do any work on the
donated land if the donation had not really
been effected, because it would be an
invasion of another's title, for the land
would have continued to belong to the
donor so long as the condition imposed
was not complied with.
The appellant also contends that, in any
event, the condition not having been
complied with, even supposing that it was
not a condition precedent but subsequent,
the non-compliance thereof is sufficient
cause for the revocation of the donation.
This is correct. But the period for bringing
an action for the revocation of the
donation has prescribed. That this action
is prescriptible, there is no doubt. There is
no legal provision which excludes this
class of action from the statute of
limitations. And not only this, — the law
itself recognizes the prescriptibility of the
action for the revocation of a donation,
providing a special period of five years for
the revocation by the subsequent birth of
children (art. 646, Civil Code), and one
year for the revocation by reason of
ingratitude. If no special period is provided
for the prescription of the action for
revocation for noncompliance of the
conditions of the donation (art. 647, Civil
Code), it is because in this respect the
donation is considered onerous and is
governed by the law of contracts and the
general rules of prescription. Under the
law in force (sec. 43, Code of Civ. Proc.)
the period of prescription of this class of
action is ten years. The action for the
revocation of the donation for this cause
arose on April 19, 1911, that is six months
after the ratification of the instrument of
donation of October 18, 1910. The
complaint in this action was presented
July 5, 1924, more than ten years after this
cause accrued.
By virtue of the foregoing, the judgment
appealed from is affirmed, with the costs
against the appellant. So ordered.
G.R. No. L-5003 June 27,
1953
NAZARIO
TRILLANA, administrator-appellee,
vs.
QUEZON COLLEGE,
INC., claimant-appellant.
Singson, Barnes, Yap and Blanco for
appellant.
Delgado, Flores & Macapagal for
appellee.
PARAS, J.:
Damasa Crisostomo sent the following
letter to the Board of Trustees of the
Quezon College:
June 1, 1948
The BOARD OF TRUSTEES
Quezon College
Manila
Gentlemen:
Please enter my subscription to dalawang
daan (200) shares of your capital stock
with a par value of P100 each. Enclosed
you will find (Babayaran kong lahat
pagkatapos na ako ay makapag-pahuli ng
isda) pesos as my initial payment and the
balance payable in accordance with law
and the rules and regulations of the
Quezon College. I hereby agree to
shoulder the expenses connected with
said shares of stock. I further submit
myself to all lawful demands, decisions or
directives of the Board of Trustees of the
Quezon College and all its duly constituted
officers or authorities (ang nasa itaas ay
binasa at ipinaliwanag sa akin sa wikang
tagalog na aking nalalaman).
Very respectfully,
(Sgd.) DAMASA CRISOSTOMO
Signature of subscriber
Nilagdaan sa aming harapan:
JOSE CRISOSTOMO
EDUARDO CRISOSTOMO
Damasa Crisostomo died on October 26,
1948. As no payment appears to have
been made on the subscription mentioned
in the foregoing letter, the Quezon College,
Inc. presented a claim before the Court of
First Instance of Bulacan in her testate
proceeding, for the collection of the sum of
P20,000, representing the value of the
subscription to the capital stock of the
Quezon College, Inc. This claim was
opposed by the administrator of the estate,
and the Court of First Instance of Bulacan,
after hearing issued an order dismissing
the claim of the Quezon College, Inc. on
the ground that the subscription in
question was neither registered in nor
authorized by the Securities and
Exchange Commission. From this order
the Quezon College, Inc. has appealed.
It is not necessary for us to discuss at
length appellant's various assignments of
error relating to the propriety of the ground
relief upon by the trial court, since, as
pointed out in the brief for the
administrator and appellee, there are other
decisive considerations which, though not
touched by the lower court, amply
sustained the appealed order.
It appears that the application sent by
Damasa Crisostomo to the Quezon
College, Inc. was written on a general form
indicating that an applicant will enclose an
amount as initial payment and will pay the
balance in accordance with law and the
regulations of the College. On the other
hand, in the letter actually sent by Damasa
Crisostomo, the latter (who requested that
her subscription for 200 shares be entered)
not only did not enclose any initial
payment but stated that "babayaran kong
lahat pagkatapos na ako ay
makapagpahuli ng isda." There is nothing
in the record to show that the Quezon
College, Inc. accepted the term of
payment suggested by Damasa
Crisostomo, or that if there was any
acceptance the same came to her
knowledge during her lifetime. As the
application of Damasa Crisostomo is
obviously at variance with the terms
evidenced in the form letter issued by the
Quezon College, Inc., there was absolute
necessity on the part of the College to
express its agreement to Damasa's offer
in order to bind the latter. Conversely, said
acceptance was essential, because it
would be unfair to immediately obligate
the Quezon College, Inc. under Damasa's
promise to pay the price of the
subscription after she had caused fish to
be caught. In other words, the relation
between Damasa Crisostomo and the
Quezon College, Inc. had only thus
reached the preliminary stage whereby the
latter offered its stock for subscription on
the terms stated in the form letter, and
Damasa applied for subscription fixing her
own plan of payment, — a relation, in the
absence as in the present case of
acceptance by the Quezon College, Inc. of
the counter offer of Damasa Crisostomo,
that had not ripened into an enforceable
contract.
Indeed, the need for express acceptance
on the part of the Quezon College, Inc.
becomes the more imperative, in view of
the proposal of Damasa Crisostomo to
pay the value of the subscription after she
has harvested fish, a condition obviously
dependent upon her sole will and,
therefore, facultative in nature, rendering
the obligation void, under article 1115 of
the old Civil Code which provides as
follows: "If the fulfillment of the condition
should depend upon the exclusive will of
the debtor, the conditional obligation shall
be void. If it should depend upon chance,
or upon the will of a third person, the
obligation shall produce all its effects in
accordance with the provisions of this
code." It cannot be argued that the
condition solely is void, because it would
have served to create the obligation to pay,
unlike a case, exemplified by Osmeña vs.
Rama (14 Phil., 99), wherein only the
potestative condition was held void
because it referred merely to the fulfillment
of an already existing indebtedness.
In the case of Taylor vs. Uy Tieng Piao, et
al. (43 Phil., 873, 879), this Court already
held that "a condition, facultative as to the
debtor, is obnoxious to the first sentence
contained in article 1115 and renders the
whole obligation void."
Wherefore, the appealed order is affirmed,
and it is so ordered with costs against
appellant.
G.R. No. L-45843 June 30,
1939
REYNALDO LABAYEN and TEODORO
LABAYEN, plaintiffs-appellants,
vs.
TALISAY-SILAY
CO., defendant-appellee.
Vicente J. Francisco for appellants.
Nolan and Manaloto and Jose Nava for
appellee.
IMPERIAL, J.:
The plaintiffs take this appeal from the
order of the Court of First Instance of
Occidental Negros, dated June 12, 1937,
sustaining the demurrer to the amended
complaint, filed on May 4, 1937, and
granting ten days to the plaintiffs to amend
the said pleading, with notice that should
they fail to do so within the said period, the
same will be dismissed, with costs.
The amended complaint alleges as first
cause of action the following: that the
plaintiffs on or before August 27, 1919
until the year 1928, were the undivided
owners of the hacienda known as Dos
Hermanos, situated in the municipality of
Talisay, Occidental Negros, consisting of
lots Nos. 1229 and 1327 of the cadastre of
the said municipality, described in original
certificates of title Nos. 9982 and 9286;
that on August 27, 1929, the plaintiffs and
the defendant entered into a milling
contract the pertinent pacts and conditions
of which read:
xxx xxx xxx
PACTS TO WHICH THE CENTRAL BIND
ITSELF
THIRD: That it shall construct and shall
thereafter make or cause to be made
everything needed for the conservation in
good condition, and shall operate during
the period of this agreement, without any
expense on the part of the planter or
planters, a fixed railway, of steam or motor,
or both, for the use of the plantation or
plantations in the transportation of sugar
cane, sugar, fertilizer and goods which the
planter may need for his land, for his use,
for that of his family and that of his
employees, and shall make the principal
line or a branch thereof, as the case may
be, to reach a point of the plantation to be
hereafter described which shall be not be
more than one mile from the boundaries of
the said plantation, as the configuration of
the land, its curves and grades will permit;
it shall provide the said railway with
locomotives or motors and wagons in
sufficient number to expedite the
transportation of sugar cane, sugar,
fertilizer and goods aforementioned, and it
shall likewise construct a branch of the
railway connecting the principal line,
factory and warehouses and the
aforementioned pier, and it shall also
conveniently equip with switches or
otherwise the yard of the factory near the
sugar mill. All the steam locomotives shall
be provided with spark arresters. The
railway shall consist of a line or way
conveniently and properly designated so
that, as far as possible, all the planters
may deprive equal benefits therefrom; the
right of way for the principal line of the
railway shall be three and one-half (3½)
meters wide on each side measuring from
the center of the line, and the branches,
deviations, and curves shall be more if
necessary.
xxx xxx xxx
EIGHTH. It shall receive all the sugar cane
planted by the planter or planters, well cut
off, completely clear of leaves,
conveniently loaded on the wagons of the
Central at those points along the line of its
railway or branches thereof, as the case
may be, on such days and time as the
Committee of Planters may agree upon,
taking into account the crops of the
planters and the kind of sugar cane to be
milled, and shall transport the said sugar
cane to the factory free of charge.
The Central shall have the right to refuse
the sugar cane which is unclean, sour or
burned. In case of delivery of sugar cane
not sufficiently clean or cut off, but which
otherwise complies with the other required
conditions, the Central shall make a
certain per cent reduction from its weight
subject to the determination of the Central
and the Committee of Planters; and in
case of disagreement on this matter, the
Central shall clean or take off the leaves of
the sugar cane in two wagons to
determine the exact amount to be
deducted from the weight of all the sugar
cane in question, and the expenses
occasioned by said cleaning shall be
charged against the delinquent planter.
The burned sugar cane, after twenty-four
(24) hours from the time of burning, shall
be accepted by the Central only upon
special agreement between the Central
and the Committee of Planters, who shall
fix the conditions whereby the same
should be milled and the sugar divided.
 xxx xxx xxx
TENTH. It shall grind, crush, and mill the
said sugar cane, through the proper
procedure of fabrication, shall convert the
sugar — which it guarantees to extract in
its mills on an average of not less than
ninety-two per cent (92%) for each sugar
crop — in centrifugal sugar of high grades,
generally known as sugar A and B, and it
shall guarantee an average of ninety-six
(96) grades in said sugar class A; and it
shall guarantee an average polarization of
ninety-three (93) grades in said sugar
class B.
The Committee of Planters and the
Central, upon agreement, shall determine
the class or classes of sugar to be made
by the factory.
OBLIGATIONS OF THE PLANTER
FIRST. That during a period of thirty (30)
years, from the time he is notified by the
Central that it is ready to receive him, he
shall deliver to said Central, properly cut
and clear of leaves, all the sugar cane
planted, cultivated and produced upon his
said lands and haciendas.
That the planter who signs this contract,
states and guarantees to the Central that
he is the absolute owner of the following
parcel of land, situated in the Municipality
of Talisay, Province of Negros Occidental,
described in this contract as "the
plantation" or "the plantations" known as
lots Nos. (1229) one thousand two
hundred twenty-nine and (1327) one
thousand three hundred twenty-seven of
the Talisay Cadastre, Province of Negros
Occidental, P.I.
The delivery of the sugar cane shall be
made on the wagons of the railway of the
Central at the places and time agreed
upon by the Manager of the Central and
the Committee of Planters.
that pursuant to the said contract the
plaintiffs planted on the hacienda Dos
Hermanos during the agricultural year
1920-1921 thirty-five lacsas of sugar cane
to be milled by the defendant; that in the
following agricultural year, 1921-1922, the
plaintiffs also planted 3,000 lacsas of
sugar cane on the same hacienda, also to
be milled and converted into centrifugal
sugar by the defendant; that the defendant,
in violation of the milling contract, did not
construct the railway until a convenient
place on the hacienda Dos Hermanos, as
a result of which the sugar cane produced
during the said agricultural years were not
brought to and milled by the defendant's
central; that for this reason the plaintiffs
suffered a loss amounting to P28,620 for
the recovery of which they brought civil
case No. 3789 of the Court of First
Instance of Occidental Negros; that in said
case judgment was rendered absolving
the defendant and sentencing the plaintiffs,
upon the defendant's counterclaim, to pay
the latter the sum of P12,114; that the said
judgment was appealed to this court (G.R.
No. 29298) and here affirmed
(Labayen vs. Talisay-Silay Milling Co., 52
Phil., 440); that on the execution of the
judgment in favor of the defendant in said
case and on foreclosure of the mortgage
of the hacienda Dos Hermanos, the sheriff
sold the same at public auction and
adjudicated it in favor of the defendant;
that immediately after it became the owner
of the hacienda, the defendant
constructed the railway which, at the trial
of the case, it had maintained was
impossible to construct due to the curves
and grades found on the hacienda,
thereby showing that the defense which it
put up to this effect was false and
fraudulent; that the judgments of the Court
of First Instance of Occidental Negros and
of the Supreme Court rendered in the said
case were obtained by the defendant
through fraud; consisting in the false
testimony given by the witnesses who
testified in the case; that said witnesses
falsely testified that the railway could not
be constructed on the hacienda Dos
Hermanos because the curves and grades
existing thereon made it materially
impossible, knowing that said statements
were untrue and false; that as a result of
the judgments fraudulently obtained by the
defendant, the plaintiffs have suffered
damages in the sum of P70,000. As
second cause of action of the amended
complaint the following facts were alleged:
that in the milling contract, through the
false representations of the officers of the
defendant, the latter induced the plaintiffs
to empower it to obtain a loan from any
institution and to secure it by the mortgage
of the hacienda Dos Hermanos, promising
to give the plaintiffs a bonus after the loan
had been paid and the mortgage released;
that the plaintiffs have been informed, and
so allege in their amended complaint, that
the defendant, armed with said power,
obtained a loan from a bank which it
guaranteed by the hacienda Dos
Hermanos and that, notwithstanding the
payment and release of the mortgage, the
defendant has refused and still refuses to
pay them the offered bonus to be later
determined at the trial. On the strength of
the facts alleged in the two causes of
action, the plaintiffs asked that judgment
be entered in their favor: declaring null and
void the judgment rendered by the Court
of First Instance of Occidental Negros as
well as that rendered by this court
affirming the former; that the defendant be
sentenced to pay the sum of P70,000; that
the hacienda Dos Hermanos be ordered
returned to the plaintiffs, without prejudice
to the payment by the latter to the
defendant of the indebtedness in its favor;
that the defendant be ordered to pay to the
plaintiffs the bonus to which they are
entitled, plus the costs.
The defendant interposed a demurrer to
the amended complaint and alleged, with
respect to the first cause of action, that the
allegations thereof do not constitute a
cause of action in favor of the plaintiffs and
against the defendant, and that according
to the facts alleged, the question raised
was already res judicata as it has been
decided in a former case; and with respect
to the second cause of action, it alleged
likewise that the allegations thereof do not
constitute a cause of action in favor of the
plaintiffs.
In their sole assignment of error, the
plaintiffs-appellants contend that the court
erred in sustaining the demurrer
interposed to the amended complaint, and
in support of the assigned error, they
argue that there is no res judicata; that the
nullity of judgments should not be resolved
by the general rule regarding fraud in
procedure, but by the rule of equity; that
the perjury of the witnesses who testified
in the first case and the other findings
made by the court are not a bar to the
declaration of nullity of the decision
rendered in the former case; and that the
allegations contained in the second cause
of action constitute a cause of action.
As to the first cause of action of the
amended complaint, the only question to
decide is whether or not the fraud invoked
by the appellants was raised, controverted
and decided by the court in the first case.
If it was, it is res judicata and cannot serve
as a ground to annul both the decision of
the trial court and that of this court
affirming it. According to the allegations of
the amended complaint the fraud
consisted in the perjury committed by the
witnesses for the defendant who stated
that the railway was not constructed on the
hacienda Dos Hermanos because on the
land were found curves and grades which
made its construction materially
impossible. This was the special defense
put up by the defendant in that case and
was the question submitted to the court
and the latter resolved it in favor of the
defendant. It therefore, appears that the
facts upon which the plaintiffs base the
fraud now invoked by them have been
already submitted and resolved in the first
case, and the court, after hearing the
parties, held that they were true, hence, it
rendered judgment in favor of the
defendant. An action to annul a judgment,
upon the ground of fraud, will not lie
unless the fraud be extrinsic or collateral
and the facts upon which it is based have
not been controverted or resolved in the
case where the judgment sought to be
annulled was rendered
(Anuran vs. Aquino Ortiz, 38 Phil., 29;
Javier vs. Paredes and Gregorio, 52 Phil.,
910). That the testimony upon which a account, we are of the opinion that the
judgment has been based was false or court did not err in sustaining the demurrer
perjured is no ground to assail said interposed to the second cause of action
judgment, unless the fraud refers to the because it is evident that the allegations
jurisdiction. (Scotten vs. Rosenblum, 231 thereof are, at least, vague and uncertain
Fed., 357; U.S. vs. Chung Shee, 71 Fed., and the defendant is entitled to have the
277; Giffen vs. Christ's Church, 48 Cal. A., appellants amend their amended
151; 191 P., 718; Pratt vs. Griffin, 223 Ill., complaint so as to make the allegations
349; 79 N.E. 102.) The testimony which is thereof more categorical, intelligible and
stigmatized as false and perjured was specific, to the end that it set out a real
considered by the court before rendering cause of action to which the defendant, in
its decision, and it came to the conclusion turn, may interpose an answer with such
that it was true and believable, for which special defenses as it may have in its
reason it made the same the basis for its favor.
holding that the defendant did not
construct the railway because the land of In view of the foregoing, the appealed
the hacienda was very rugged and the order is affirmed, with the costs of this
curves and grades made the construction instance to the plaintiffs-appellants. So
thereof impossible. After that holding by ordered.
the court it is not now proper to question
the veracity of said testimony in a
collateral proceeding, otherwise there
would be no end to controversies
submitted and decided by the court.
Unless the fraud goes directly to the
jurisdiction of the court, the facts in which
it consists must be extrinsic or collateral in
order that fraud may be a ground to annul
a judgment, which has already become
final. For these reasons, we conclude that
the contention of the plaintiffs-appellants,
THIRD DIVISION
upon the questions, is unsound.

The second cause of action of the

amended complaint is made to consist in [G.R. No. 108346. July 11, 2001]
that the appellants received the
information that the defendant, making
use of the power which they conferred
upon it, mortgaged the hacienda Dos Spouses MARIANO Z. VELARDE and
Hermanos to a bank, and after discharging AVELINA D.
said mortgage by paying the loan, it VELARDE, petitioners, vs. COURT
refused to pay them the bonus which it OF APPEALS, DAVID A.
had promised. It has not been alleged that RAYMUNDO and GEORGE
the appellants personally knew the RAYMUNDO, respondents.
execution of the mortgage; all that is
affirmed is that they had received an DECISION
information and they made the allegation
upon such information; neither has it been PANGANIBAN, J.:
alleged mortgage has been formally
executed and registered according to law, A substantial breach of a reciprocal
wherefore, it appears that, the mortgage, obligation, like failure to pay the price in the
as thus alleged, is not valid from the legal manner prescribed by the contract, entitles the
standpoint. Taking this allegations into injured party to rescind the
obligation. Rescission abrogates the contract
from its inception and requires a mutual
restitution of benefits received.
The Case
Before us is a Petition for Review on
Certiorari[1] questioning the Decision[2] of the
Court of Appeals (CA) in CA-GR CV No.
32991 dated October 9, 1992, as well as its
Resolution[3]dated December 29, 1992
denying petitioners motion for
reconsideration.[4]
The dispositive portion of the assailed
Decision reads:
WHEREFORE, the Order dated May 15, 1991
is hereby ANNULLED and SET ASIDE and
the Decision dated November 14, 1990
dismissing the [C]omplaint is
REINSTATED. The bonds posted by
plaintiffs-appellees and defendants-appellants
are hereby RELEASED.[5]
The Facts
The factual antecedents of the case, as
found by the CA, are as follows:
x x x. David Raymundo [herein private
respondent] is the absolute and registered
owner of a parcel of land, together with the
house and other improvements thereon,
located at 1918 Kamias St., Dasmarias Village,
Makati and covered by TCT No.
142177. Defendant George Raymundo [herein
private respondent] is Davids father who
negotiated with plaintiffs Avelina and
Mariano Velarde [herein petitioners] for the
sale of said property, which was, however,
under lease (Exh. 6, p. 232, Record of Civil
Case No. 15952).
On August 8, 1986, a Deed of Sale with
Assumption of Mortgage (Exh. A; Exh. 1, pp.
11-12, Record) was executed by defendant
David Raymundo, as vendor, in favor of
plaintiff Avelina Velarde, as vendee, with the
following terms and conditions:
xxxxxxxxx
That for and in consideration of the amount of
EIGHT HUNDRED THOUSAND PESOS
(P800,000.00), Philippine currency, receipt of
which in full is hereby acknowledged by the
VENDOR from the VENDEE, to his entire
and complete satisfaction, by these presents
the VENDOR hereby SELLS, CEDES,
TRANSFERS, CONVEYS AND
DELIVERS, freely and voluntarily, with full
warranty of a legal and valid title as provided
by law, unto the VENDEE, her heirs,
successors and assigns, the parcel of land
mentioned and described above, together with
the house and other improvements thereon.
That the aforesaid parcel of land, together
with the house and other improvements
thereon, were mortgaged by the VENDOR to
the BANK OF THE PHILIPPINE ISLANDS,
Makati, Metro Manila, to secure the payment
of a loan of ONE MILLION EIGHT
HUNDRED THOUSAND PESOS
(P1,800,000.00), Philippine currency, as
evidenced by a Real Estate Mortgage signed
and executed by the VENDOR in favor of the
said Bank of the Philippine Islands, on______
and which Real Estate Mortgage was ratified
before Notary Public for Makati, _______, as
Doc. No. ____, Page No. ___, Book No. ___,
Series of 1986 of his Notarial Register.
That as part of the consideration of this sale,
the VENDEE hereby assumes to pay the
mortgage obligations on the property herein
sold in the amount of ONE MILLION EIGHT
HUNDRED THOUSAND PESOS
(P1,800,000.00), Philippine currency, in favor
of Bank of the Philippine Islands, in the name
of the VENDOR, and further agrees to strictly
and faithfully comply with all the terms and
conditions appearing in the Real Estate
Mortgage signed and executed by the
VENDOR in favor of BPI, including interests
and other charges for late payment levied by
the Bank, as if the same were originally signed
and executed by the VENDEE.
It is further agreed and understood by the
parties herein that the capital gains tax and
documentary stamps on the sale shall be for
the account of the VENDOR; whereas, the
registration fees and transfer tax thereon shall
be for the account of the VENDEE. (Exh. A,
pp. 11-12, Record).
On the same date, and as part of the
above-document, plaintiff Avelina Velarde,
with the consent of her husband, Mariano,
executed an Undertaking (Exh. C, pp. 13-14,
Record), the pertinent portions of which read,
as follows:
xxxxxxxxx
Whereas, as per Deed of Sale with
Assumption of Mortgage, I paid Mr. David A.
Raymundo the sum of EIGHT HUNDRED
THOUSAND PESOS (P800,000.00),
Philippine currency, and assume the mortgage
obligations on the property with the Bank of
the Philippine Islands in the amount of ONE
MILLION EIGHT HUNDRED THOUSAND
PESOS (P1,800,000.00), Philippine currency,
in accordance with the terms and conditions of
the Deed of Real Estate Mortgage dated
_________, signed and executed by Mr.
David A. Raymundo with the said Bank,
acknowledged before Notary Public for
Makati, _____, as Doc. No. ___, Page No. ___,
Book No. __, Series of 1986 of his Notarial
Register.
WHEREAS, while my application for the
assumption of the mortgage obligations on the
property is not yet approved by the mortgagee
Bank, I have agreed to pay the mortgage
obligations on the property with the Bank in
the name of Mr. David A. Raymundo, in
accordance with the terms and conditions of
the said Deed of Real Estate Mortgage,
including all interests and other charges for
late payment.
WHEREAS, this undertaking is being
executed in favor of Mr. David A. Raymundo,
for purposes of attesting and confirming our
private understanding concerning the said
mortgage obligations to be assumed.
NOW, THEREFORE, for and in consideration
of the foregoing premises, and the assumption
of the mortgage obligations of ONE
MILLION EIGHT HUNDRED THOUSAND
PESOS (P1,800,000.00), Philippine currency,
with the Bank of the Philippine islands, I, Mrs.
Avelina D. Velarde, with the consent of my
husband, Mariano Z. Velarde, do hereby bind
and obligate myself, my heirs, successors and
assigns, to strictly and faithfully comply with
the following terms and conditions:
1. That until such time as my assumption of
the mortgage obligations on the property
purchased is approved by the mortgagee bank,
the Bank of the Philippine Islands, I shall
continue to pay the said loan in accordance
with the terms and conditions of the Deed of
Real Estate Mortgage in the name of Mr.
David A. Raymundo, the original Mortgagor.
2. That, in the event I violate any of the terms
and conditions of the said Deed of Real Estate
Mortgage, I hereby agree that my
downpayment of P800,000.00, plus all
payments made with the Bank of the
Philippine Islands on the mortgage loan, shall
be forfeited in favor of Mr. David A.
Raymundo, as and by way of liquidated
damages, without necessity of notice or any
judicial declaration to that effect, and Mr.
David A Raymundo shall resume total and
complete ownership and possession of the
property sold by way of Deed of Sale with
Assumption of Mortgage, and the same shall
be deemed automatically cancelled and be of
no further force or effect, in the same manner
as if (the) same had never been executed or
entered into.
3. That I am executing this Undertaking for
purposes of binding myself, my heirs,
successors and assigns, to strictly and
faithfully comply with the terms and
conditions of the mortgage obligations with
the Bank of the Philippine Islands, and the
covenants, stipulations and provisions of this
Undertaking.
That, David A. Raymundo, the vendor of the
property mentioned and identified above,
[does] hereby confirm and agree to the
undertakings of the Vendee pertinent to the
assumption of the mortgage obligations by the
Vendee with the Bank of the Philippine
Islands. (Exh. C, pp. 13-14, Record).
This undertaking was signed by Avelina and
Mariano Velarde and David Raymundo.
It appears that the negotiated terms for the
payment of the balance of P1.8 million was
from the proceeds of a loan that plaintiffs
were to secure from a bank with defendants
help. Defendants had a standing approved
credit line with the Bank of the Philippine
Islands (BPI). The parties agreed to avail of
this, subject to BPIs approval of an application
for assumption of mortgage by
plaintiffs. Pending BPIs approval o[f] the
application, plaintiffs were to continue paying
the monthly interests of the loan secured by a
real estate mortgage.
Pursuant to said agreements, plaintiffs paid
BPI the monthly interest on the loan secured
by the aforementioned mortgage for three (3)
months as follows: September 19, 1986
at P27,225.00; October 20, 1986
at P23,000.00; and November 19, 1986
at P23,925.00 (Exh. E, H & J, pp. 15, 17 and
18, Record).
On December 15, 1986, plaintiffs were
advised that the Application for Assumption
of Mortgage with BPI was not approved (Exh.
J, p. 133, Record). This prompted plaintiffs
not to make any further payment.
On January 5, 1987, defendants, thru counsel,
wrote plaintiffs informing the latter that their
non-payment to the mortgage bank
constitute[d] non-performance of their
obligation (Exh. 3, p. 220, Record).
In a Letter dated January 7, 1987, plaintiffs,
thru counsel, responded, as follows:
This is to advise you, therefore, that our client
is willing to pay the balance in cash not later
than January 21, 1987 provided: (a) you
deliver actual possession of the property to her
not later than January 15, 1987 for her
immediate occupancy; (b) you cause the
release of title and mortgage from the Bank of
P.I. and make the title available and free from
any liens and encumbrances; and (c) you
execute an absolute deed of sale in her favor
free from any liens or encumbrances not later
than January 21, 1987. (Exhs. K, 4, p. 223,
Record).
On January 8, 1987, defendants sent plaintiffs
a notarial notice of cancellation/rescission of
the intended sale of the subject property
allegedly due to the latters failure to comply
with the terms and conditions of the Deed of
Sale with Assumption of Mortgage and the
Undertaking (Exh. 5, pp. 225-226, Record).[6]
Consequently, petitioners filed on
February 9, 1987 a Complaint against private
respondents for specific performance, nullity
of cancellation, writ of possession and
damages. This was docketed as Civil Case No.
15952 at the Regional Trial Court of Makati,
Branch 149. The case was tried and heard by
then Judge Consuelo Ynares-Santiago (now an
associate justice of this Court), who dismissed
the Complaint in a Decision dated November
14, 1990.[7] Thereafter, petitioners filed a
Motion for Reconsideration.[8]
Meanwhile, then Judge Ynares-Santiago
was promoted to the Court of Appeals and
Judge Salvador S. A. Abad Santos was
assigned to the sala she vacated. In an Order
dated May 15, 1991,[9] Judge Abad Santos
granted petitioners Motion for
Reconsideration and directed the parties to
proceed with the sale. He instructed
petitioners to pay the balance of P1.8 million
to private respondents who, in turn, were
ordered to execute a deed of absolute sale and
to surrender possession of the disputed
property to petitioners.
Private respondents appealed to the CA.
Ruling of the Court of Appeals
The CA set aside the Order of Judge
Abad Santos and reinstated then Judge
Ynares-Santiagos earlier Decision dismissing
petitioners Complaint. Upholding the validity
of the rescission made by private respondents,
the CA explained its ruling in this wise:
In the Deed of Sale with Assumption of
Mortgage, it was stipulated that as part of the
consideration of this sale, the VENDEE
(Velarde) would assume to pay the mortgage
obligation on the subject property in the
amount of P1.8 million in favor of BPI in the
name of the Vendor (Raymundo). Since the
price to be paid by the Vendee Velarde
includes the downpayment of P800,000.00
and the balance of P1.8 million, and the
balance of P1.8 million cannot be paid in cash,
Vendee Velarde, as part of the consideration
of the sale, had to assume the mortgage
obligation on the subject property. In other
words, the assumption of the mortgage
obligation is part of the obligation of Velarde,
as vendee, under the contract. Velarde further
agreed to strictly and faithfully comply with
all the terms and conditions appearing in the
Real Estate Mortgage signed and executed by
the VENDOR in favor of BPI x x x as if the
same were originally signed and executed by
the Vendee. (p.2, thereof, p.12, Record). This
was reiterated by Velarde in the document
entitled Undertaking wherein the latter agreed
to continue paying said loan in accordance
with the terms and conditions of the Deed of
Real Estate Mortgage in the name of
Raymundo. Moreover, it was stipulated that in
the event of violation by Velarde of any terms
and conditions of said deed of real estate
mortgage, the downpayment of P800,000.00
plus all payments made with BPI or the
mortgage loan would be forfeited and the
[D]eed of [S]ale with [A]ssumption of
[M]ortgage would thereby be cancelled
automatically and of no force and effect (pars.
2 & 3, thereof, pp. 13-14, Record).
From these 2 documents, it is therefore clear
that part of the consideration of the sale was
the assumption by Velarde of the mortgage
obligation of Raymundo in the amount of P1.8
million. This would mean that Velarde had to
make payments to BPI under the [D]eed of
[R]eal [E]state [M]ortgage in the name of
Raymundo. The application with BPI for the
approval of the assumption of mortgage would
mean that, in case of approval, payment of the
mortgage obligation will now be in the name
of Velarde. And in the event said application
is disapproved, Velarde had to pay in
full. This is alleged and admitted in Paragraph
5 of the Complaint. Mariano Velarde likewise
admitted this fact during the hearing on
September 15, 1997 (p. 47, t.s.n., September
15, 1987; see also pp. 16-26, t.s.n., October 8,
1989). This being the case, the non-payment
of the mortgage obligation would result in a
violation of the contract. And, upon Velardes
failure to pay the agreed price, the[n]
Raymundo may choose either of two (2)
actions - (1) demand fulfillment of the
contract, or (2) demand its rescission (Article
1191, Civil Code).
The disapproval by BPI of the application for
assumption of mortgage cannot be used as an
excuse for Velardes non-payment of the
balance of the purchase price. As borne out by
the evidence, Velarde had to pay in full in
case of BPIs disapproval of the application for
assumption of mortgage. What Velarde should
have done was to pay the balance of P1.8
million. Instead, Velarde sent Raymundo a
letter dated January 7, 1987 (Exh. K, 4) which
was strongly given weight by the lower court
in reversing the decision rendered by then
Judge Ynares-Santiago. In said letter, Velarde
registered their willingness to pay the balance
in cash but enumerated 3 new conditions
which, to the mind of this Court, would
constitute a new undertaking or new
agreement which is subject to the consent or
approval of Raymundo. These 3 conditions
were not among those previously agreed upon
by Velarde and Raymundo. These are mere
offers or, at most, an attempt to novate. But
then again, there can be no novation because
there was no agreement of all the parties to the
new contract (Garcia, Jr. vs. Court of Appeals,
191 SCRA 493).
It was likewise agreed that in case of violation
of the mortgage obligation, the Deed of Sale
with Assumption of Mortgage would be
deemed automatically cancelled and of no
further force and effect, as if the same had
never been executed or entered into. While it
is true that even if the contract expressly
provided for automatic rescission upon failure
to pay the price, the vendee may still pay, he
may do so only for as long as no demand for
rescission of the contract has been made upon
him either judicially or by a notarial act
(Article 1592, Civil Code). In the case at bar,
Raymundo sent Velarde a notarial notice
dated January 8, 1987 of
cancellation/rescission of the contract due to
the latters failure to comply with their
obligation. The rescission was justified in
view of Velardes failure to pay the price
(balance) which is substantial and
fundamental as to defeat the object of the
parties in making the agreement. As adverted
to above, the agreement of the parties
involved a reciprocal obligation wherein the
obligation of one is a resolutory condition of
the obligation of the other, the non-fulfillment
of which entitles the other party to rescind the
contract (Songcuan vs. IAC, 191 SCRA
28). Thus, the non-payment of the mortgage
obligation by appellees Velarde would create
a right to demand payment or to rescind the
contract, or to criminal prosecution (Edca
Publishing & Distribution Corporation vs.
Santos, 184 SCRA 614). Upon appellees
failure, therefore, to pay the balance, the
contract was properly rescinded (Ruiz vs. IAC,
184 SCRA 720). Consequently, appellees
Velarde having violated the contract, they
have lost their right to its enforcement and
hence, cannot avail of the action for specific
performance (Voysaw vs. Interphil
Promotions, Inc., 148 SCRA 635).[10]
Hence, this appeal.[11]
The Issues
Petitioners, in their
Memorandum,[12] interpose the following
assignment of errors:
I.
The Court of Appeals erred in holding
that the non-payment of the mortgage
obligation resulted in a breach of the
contract.
II.
The Court of Appeals erred in holding
that the rescission (resolution) of the
contract by private respondents was
justified.
III.
The Court of Appeals erred in holding
that petitioners January 7, 1987 letter
gave three new conditions constituting
mere offers or an attempt to novate
necessitating a new agreement between
the parties.
The Courts Ruling
The Petition is partially meritorious.
First Issue:
Breach of Contract
Petitioners aver that their nonpayment of
private respondents mortgage obligation did
not constitute a breach of contract, considering
that their request to assume the obligation had
been disapproved by the mortgagee
bank. Accordingly, payment of the monthly
amortizations ceased to be their obligation and,
instead, it devolved upon private respondents
again.
However, petitioners did not merely stop
paying the mortgage obligations; they also
failed to pay the balance of the purchase
price. As admitted by both parties, their
agreement mandated that petitioners should
pay the purchase price balance of P1.8 million
to private respondents in case the request to
assume the mortgage would be
disapproved. Thus, on December 15, 1986,
when petitioners received notice of the banks
disapproval of their application to assume
respondents mortgage, they should have paid
the balance of the P1.8 million loan.
Instead of doing so, petitioners sent a
letter to private respondents offering to make
such payment only upon the fulfillment of
certain conditions not originally agreed upon
in the contract of sale. Such conditional offer
to pay cannot take the place of actual payment
as would discharge the obligation of a buyer
under a contract of sale.
In a contract of sale, the seller obligates
itself to transfer the ownership of and deliver a
determinate thing, and the buyer to pay
therefor a price certain in money or its
equivalent.[13] Private respondents had already
performed their obligation through the
execution of the Deed of Sale, which
effectively transferred ownership of the
property to petitioner through constructive
delivery.Prior physical delivery or possession
is not legally required, and the execution of
the Deed of Sale is deemed equivalent to
delivery.[14]
Petitioners, on the other hand, did not
perform their correlative obligation of paying
the contract price in the manner agreed
upon. Worse, they wanted private respondents
to perform obligations beyond those stipulated
in the contract before fulfilling their own
obligation to pay the full purchase price.
Second Issue
Validity of the Rescission
Petitioners likewise claim that the
rescission of the contract by private
respondents was not justified, inasmuch as the
former had signified their willingness to pay
the balance of the purchase price only a little
over a month from the time they were notified
of the disapproval of their application for
assumption of mortgage. Petitioners also aver
that the breach of the contract was not
substantial as would warrant a right to rescind the same in accordance with
rescission. They cite several cases[15] in which
this Court declared that rescission of a
contract would not be permitted for a slight or
casual breach. Finally, they argue that they
have substantially performed their obligation
in good faith, considering that they have
already made the initial payment of P800,000
and three (3) monthly mortgage payments.
As pointed out earlier, the breach
committed by petitioners was not so much
their nonpayment of the mortgage obligations,
as their nonperformance of their reciprocal
obligation to pay the purchase price under the
contract of sale. Private respondents right to
rescind the contract finds basis in Article 1191
of the Civil Code, which explicitly provides as
follows:
Art. 1191. -- The power to rescind obligations
is implied in reciprocal ones, in case one of
the obligors should not comply with what is
incumbent upon him.
The injured party may choose between
fulfillment and the rescission of the obligation,
with the payment of damages in either
case. He may also seek rescission even after
he has chosen fulfillment, if the latter should
become impossible.
The right of rescission of a party to an
obligation under Article 1191 of the Civil
Code is predicated on a breach of faith by the
other party who violates the reciprocity
between them.[16] The breach contemplated in
the said provision is the obligors failure to
comply with an existing obligation.[17] When
the obligor cannot comply with what is
incumbent upon it, the obligee may seek
rescission and, in the absence of any just cause
for the court to determine the period of
compliance, the court shall decree the
rescission.[18]
In the present case, private respondents
validly exercised their right to rescind the
contract, because of the failure of petitioners
to comply with their obligation to pay the
balance of the purchase price. Indubitably, the
latter violated the very essence of reciprocity
in the contract of sale, a violation that
consequently gave rise to private respondents
law.
True, petitioners expressed their
willingness to pay the balance of the purchase
price one month after it became due; however,
this was not equivalent to actual payment as
would constitute a faithful compliance of their
reciprocal obligation. Moreover, the offer to
pay was conditioned on the performance by
private respondents of additional burdens that
had not been agreed upon in the original
contract. Thus, it cannot be said that the
breach committed by petitioners was merely
slight or casual as would preclude the exercise
of the right to rescind.
Misplaced is petitioners reliance on the
cases[19] they cited because the factual
circumstances in those cases are not analogous
to those in the present one. In Song Fo there
was, on the part of the buyer, only a delay of
twenty (20) days to pay for the goods
delivered. Moreover, the buyers offer to pay
was unconditional and was accepted by the
seller. In Zepeda, the breach involved a mere
one-week delay in paying the balance
of P1,000, which was actually paid. In Tan,
the alleged breach was private respondents
delay of only a few days, which was for the
purpose of clearing the title to the property;
there was no reference whatsoever to the
nonpayment of the contract price.
In the instant case, the breach committed
did not merely consist of a slight delay in
payment or an irregularity; such breach would
not normally defeat the intention of the parties
to the contract. Here, petitioners not only
failed to pay the P1.8 million balance, but they
also imposed upon private respondents new
obligations as preconditions to the
performance of their own obligation. In effect,
the qualified offer to pay was a repudiation of
an existing obligation, which was legally due
and demandable under the contract of
sale. Hence, private respondents were left with
the legal option of seeking rescission to
protect their own interest.
Mutual Restitution
Required in Rescission
As discussed earlier, the breach
committed by petitioners was the
nonperformance of a reciprocal obligation, not
a violation of the terms and conditions of the
mortgage contract. Therefore, the automatic
rescission and forfeiture of payment clauses
stipulated in the contract does not
apply. Instead, Civil Code provisions shall
govern and regulate the resolution of this
controversy.
Considering that the rescission of the
contract is based on Article 1191 of the Civil
Code, mutual restitution is required to bring
back the parties to their original situation prior
to the inception of the contract. Accordingly,
the initial payment of P800,000 and the
corresponding mortgage payments in the
amounts of P27,225, P23,000 and P23,925
(totaling P874,150.00) advanced by
petitioners should be returned by private
respondents, lest the latter unjustly enrich
themselves at the expense of the former.
Rescission creates the obligation to
return the object of the contract. It can be
carried out only when the one who demands
rescission can return whatever he may be
obliged to restore.[20] To rescind is to declare a
contract void at its inception and to put an end
to it as though it never was. It is not merely to
terminate it and release the parties from
further obligations to each other, but to
abrogate it from the beginning and restore the
parties to their relative positions as if no
contract has been made.[21]
Third Issue
Attempt to Novate
In view of the foregoing discussion, the
Court finds it no longer necessary to discuss
the third issue raised by petitioners. Suffice it
to say that the three conditions appearing on
the January 7, 1987 letter of petitioners to
private respondents were not part of the
original contract. By that time, it was already
incumbent upon the former to pay the balance
of the sale price. They had no right to demand
preconditions to the fulfillment of their
obligation, which had become due.
WHEREFORE, the assailed Decision is
hereby AFFIRMED with
the MODIFICATION that private respondents
are ordered to return to petitioners the amount
of P874,150, which the latter paid as a
consequence of the rescinded contract, with
legal interest thereon from January 8, 1987,
the date of rescission. No pronouncement as to
costs.
SO ORDERED.
G.R. No. L-16570 March 9,
1922
SMITH, BELL & CO.,
LTD., plaintiff-appellant,
vs.
VICENTE SOTELO
MATTI, defendant-appellant.
Ross and Lawrence and Ewald E. Selph
for plaintiff-appellant.
Ramon Sotelo for defendant-appellant.
ROMUALDEZ, J.:
In August, 1918, the plaintiff corporation
and the defendant, Mr. Vicente Sotelo,
entered into contracts whereby the former
obligated itself to sell, and the latter to
purchase from it, two steel tanks, for the
total price of twenty-one thousand pesos
(P21,000), the same to be shipped from
New York and delivered at Manila "within
three or four months;" two expellers at the
price of twenty five thousand pesos
(P25,000) each, which were to be shipped
from San Francisco in the month of
September, 1918, or as soon as possible;
and two electric motors at the price of two
thousand pesos (P2,000) each, as to the
delivery of which stipulation was made,
couched in these words: "Approximate
delivery within ninety days. — This is not
guaranteed."
The tanks arrived at Manila on the 27th of
April, 1919: the expellers on the 26th of
October, 1918; and the motors on the 27th
of February, 1919.
The plaintiff corporation notified the
defendant, Mr. Sotelo, of the arrival of
these goods, but Mr. Sotelo refused to
receive them and to pay the prices
stipulated.
The plaintiff brought suit against the
defendant, based on four separate causes
of action, alleging, among other facts, that
it immediately notified the defendant of the
arrival of the goods, and asked
instructions from him as to the delivery
thereof, and that the defendant refused to
receive any of them and to pay their price.
The plaintiff, further, alleged that the
expellers and the motors were in good
condition. (Amended complaint, pages
16-30, Bill of Exceptions.)
In their answer, the defendant, Mr. Sotelo,
and the intervenor, the Manila Oil Refining
and By-Products Co., Inc., denied the
plaintiff's allegations as to the shipment of
these goods and their arrival at Manila, the
notification to the defendant, Mr. Sotelo,
the latter's refusal to receive them and pay
their price, and the good condition of the
expellers and the motors, alleging as
special defense that Mr. Sotelo had made
the contracts in question as manager of
the intervenor, the Manila Oil Refining and
By-Products Co., Inc which fact was
known to the plaintiff, and that "it was only
in May, 1919, that it notified the intervenor
that said tanks had arrived, the motors and
the expellers having arrived incomplete
and long after the date stipulated." As a
counterclaim or set-off, they also allege
that, as a consequence of the plaintiff's
delay in making delivery of the goods,
which the intervenor intended to use in the
manufacture of cocoanut oil, the
intervenor suffered damages in the sums
of one hundred sixteen thousand seven
hundred eighty-three pesos and
ninety-one centavos (P116,783.91) for the
nondelivery of the tanks, and twenty-one
thousand two hundred and fifty pesos
(P21,250) on account of the expellers and
the motors not having arrived in due time.
The case having been tried, the court
below absolved the defendants from the
complaint insofar as the tanks and the
electric motors were concerned, but
rendered judgment against them, ordering
them to "receive the aforesaid expellers
and pay the plaintiff the sum of fifty
thousand pesos (P50,00), the price of the
said goods, with legal interest thereon
from July 26, 1919, and costs."
Both parties appeal from this judgment,
each assigning several errors in the
findings of the lower court.
The principal point at issue in this case is
whether or not, under the contracts
entered into and the circumstances
established in the record, the plaintiff has
fulfilled, in due time, its obligation to bring
the goods in question to Manila. If it has,
then it is entitled to the relief prayed for;
otherwise, it must be held guilty of delay
and liable for the consequences thereof.
To solve this question, it is necessary to
determine what period was fixed for the
delivery of the goods.
As regards the tanks, the contracts A and
B (pages 61 and 62 of the record) are
similar, and in both of them we find this
clause:
To be delivered within 3 or 4 months —
The promise or indication of shipment
carries with it absolutely no obligation on
our part — Government regulations,
railroad embargoes, lack of vessel space,
the exigencies of the requirement of the
United States Government, or a number of
causes may act to entirely vitiate the
indication of shipment as stated. In other
words, the order is accepted on the basis
of shipment at Mill's convenience, time of
shipment being merely an indication of
what we hope to accomplish.
In the contract Exhibit C (page 63 of the
record), with reference to the expellers,
the following stipulation appears:
The following articles, hereinbelow more
particularly described, to be shipped at
San Francisco within the month of
September /18, or as soon as possible. —
Two Anderson oil expellers . . . .
And in the contract relative to the motors
(Exhibit D, page 64, rec.) the following
appears:
Approximate delivery within ninety days.
— This is not guaranteed. — This sale is
subject to our being able to obtain Priority
Certificate, subject to the United States
Government requirements and also
subject to confirmation of manufactures.
In all these contracts, there is a final
clause as follows:
The sellers are not responsible for delays
caused by fires, riots on land or on the sea,
strikes or other causes known as "Force
Majeure" entirely beyond the control of the
sellers or their representatives.
Under these stipulations, it cannot be said
that any definite date was fixed for the
delivery of the goods. As to the tanks, the
agreement was that the delivery was to be
made "within 3 or 4 months," but that
period was subject to the contingencies
referred to in a subsequent clause. With
regard to the expellers, the contract says
"within the month of September, 1918,"
but to this is added "or as soon as
possible." And with reference to the
motors, the contract contains this
expression, "Approximate delivery within
ninety days," but right after this, it is noted
that "this is not guaranteed."
The oral evidence falls short of fixing such
period.
From the record it appears that these
contracts were executed at the time of the
world war when there existed rigid
restrictions on the export from the United
States of articles like the machinery in
question, and maritime, as well as railroad,
transportation was difficult, which fact was
known to the parties; hence clauses were
inserted in the contracts, regarding
"Government regulations, railroad
embargoes, lack of vessel space, the
exigencies of the requirements of the
United States Government," in connection
with the tanks and "Priority Certificate,
subject to the United State Government
requirements," with respect to the motors.
At the time of the execution of the
contracts, the parties were not unmindful
of the contingency of the United States
Government not allowing the export of the
goods, nor of the fact that the other
foreseen circumstances therein stated
might prevent it.
Considering these contracts in the light of
the civil law, we cannot but conclude that
the term which the parties attempted to fix
is so uncertain that one cannot tell just
whether, as a matter of fact, those articles
could be brought to Manila or not. If that is
the case, as we think it is, the obligations
must be regarded as conditional.
Obligations for the performance of which a
day certain has been fixed shall be
demandable only when the day arrives.
A day certain is understood to be one
which must necessarily arrive, even
though its date be unknown.
If the uncertainty should consist in the
arrival or non-arrival of the day, the
obligation is conditional and shall be
governed by the rules of the next
preceding section. (referring to pure and
conditional obligations). (Art. 1125, Civ.
Code.)
And as the export of the machinery in
question was, as stated in the contract,
contingent upon the sellers obtaining
certificate of priority and permission of the
United States Government, subject to the
rules and regulations, as well as to railroad
embargoes, then the delivery was subject
to a condition the fulfillment of which
depended not only upon the effort of the
herein plaintiff, but upon the will of third
persons who could in no way be
compelled to fulfill the condition. In cases
like this, which are not expressly provided
for, but impliedly covered, by the Civil
Code, the obligor will be deemed to have
sufficiently performed his part of the
obligation, if he has done all that was in his
power, even if the condition has not been
fulfilled in reality.
In such cases, the decisions prior to the
Civil Code have held that the obligee
having done all that was in his power, was
entitled to enforce performance of the
obligation. This performance, which is
fictitious — not real — is not expressly
authorized by the Code, which limits itself
only to declare valid those conditions and
the obligation thereby affected; but it is
neither disallowed, and the Code being
thus silent, the old view can be maintained
as a doctrine. (Manresa's commentaries
on the Civil Code [1907], vol. 8, page 132.)
The decisions referred to by Mr. Manresa
are those rendered by the supreme court
of Spain on November 19, 1896, and
February 23, 1871.
In the former it is held:
First. That when the fulfillment of the
conditions does not depend on the will of
the obligor, but on that of a third person
who can in no way be compelled to carry it
out, and it is found by the lower court that
the obligor has done all in his power to
comply with the obligation, the judgment of
the said court, ordering the other party to
comply with his part of the contract, is not
contrary to the law of contracts, or to Law
1, Tit. I, Book 10, of the "Novísima
Recopilación," or Law 12, Tit. 11, of
Partida 5, when in the said finding of the
lower court, no law or precedent is alleged
to have been violated. (Jurisprudencia
Civil published by the directors of
the Revista General de Legislacion y
Jurisprudencia [1866], vol. 14, page 656.)
In the second decision, the following
doctrine is laid down:
Second. That when the fulfillment of the
condition does not depend on the will of
the obligor, but on that of a third person,
who can in no way be compelled to carry it
out, the obligor's part of the contract is
complied withalf Belisario not having
exercised his right of repurchase reserved
in the sale of Basilio Borja mentioned in
paragraph (13) hereof, the affidavit of
Basilio Borja for the consolidacion de
dominio was presented for record in the
registry of deeds and recorded in the
registry on the same date.
(32) The Maximo Belisario left a widow,
the opponent Adelina Ferrer and three
minor children, Vitaliana, Eugenio, and
Aureno Belisario as his only heirs.
(33) That in the execution and sales
thereunder, in which C. H. McClure
appears as the judgment creditor, he was
represented by the opponent Peter W.
Addison, who prepared and had charge of
publication of the notices of the various
sales and that in none of the sales was the
notice published more than twice in a
newspaper.
The claims of the opponent-appellant
Addison have been very fully and ably
argued by his counsel but may, we think,
be disposed of in comparatively few words.
As will be seen from the foregoing
statement of facts, he rest his title (1) on
the sales under the executions issued in
cases Nos. 435, 450, 454, and 499 of the
court of the justice of the peace of
Dagupan with the priority of inscription of
the last two sales in the registry of deeds,
and (2) on a purchase from the Director of
Lands after the land in question had been
forfeited to the Government for
non-payment of taxes under Act No. 1791.
The sheriff's sales under the execution
mentioned are fatally defective for what of
sufficient publication of the notice of sale.
Section 454 of the Code of civil Procedure
reads in part as follows:
SEC. 454. Before the sale of property on
execution, notice thereof must be given,
as follows:
1. In case of perishable property, by
posing written notice of the time and place
of the sale in three public places of the
municipality or city where the sale is to
take place, for such time as may be
reasonable, considering the character and
condition of the property;
2. * * * * * * *
3. In cases of real property, by posting a
similar notice particularly describing the
property, for twenty days in three public
places of the municipality or city where the
property is situated, and also where the
property is to be sold, and publishing a
copy thereof once a week, for the same
period, in some newspaper published or
having general circulation in the province,
if there be one. If there are newspaper
published in the province in both the
Spanish and English languages, then a
like publication for a like period shall be
made in one newspaper published in the
Spanish language, and in one published in
the English language: Provided,
however, That such publication in a
newspaper will not be required when the
assessed valuation of the property does
not exceed four hundred pesos;
4. * * * * * * *
Examining the record, we find that in
cases Nos. 435 and 450 the sales took
place on October 14, 1916; the notice first
published gave the date of the sale as
October 15th, but upon discovering that
October 15th was a Sunday, the date was
changed to October 14th. The correct
notice was published twice in a local
newspaper, the first publication was made
on October 7th and the second and last on
October 14th, the date of the sale itself.
The newspaper is a weekly periodical
published every Saturday afternoon.
In case No. 454 there were only two
publications of the notice in a newspaper,
the first publication being made only
fourteen days before the date of the sale.
In case No. 499, there were also only two
publications, the first of which was made
thirteen days before the sale. In the last
case the sale was advertised for the hours
of from 8:30 in the morning until 4:30 in the
afternoon, in violation of section 457 of the
Code of Civil Procedure. In cases Nos.
435 and 450 the hours advertised were
from 9:00 in the morning until 4.30 in the
afternoon. In all of the cases the notices of
the sale were prepared by the judgment
creditor or his agent, who also took
charged of the publication of such notices.
In the case of Campomanes vs. Bartolome
and Germann & Co. (38 Phil., 808), this
court held that if a sheriff sells without the
notice prescribe by the Code of Civil
Procedure induced thereto by the
judgment creditor and the purchaser at the
sale is the judgment creditor, the sale is
absolutely void and not title passes. This
must now be regarded as the settled
doctrine in this jurisdiction whatever the
rule may be elsewhere.
It appears affirmatively from the evidence
in the present case that there is a
newspaper published in the province
where the sale in question took place and
that the assessed valuation of the property
disposed of at each sale exceeded P400.
Comparing the requirements of section
454, supra, with what was actually done, it
is self-evident that notices of the sales
mentioned were not given as prescribed
by the statute and taking into
consideration that in connection with these
sales the appellant Addison was either the
judgment creditor or else occupied a
position analogous to that of a judgment
creditor, the sales must be held invalid.
The conveyance or reconveyance of the
land from the Director of Lands is equally
invalid. The provisions of Act No. 1791
pertinent to the purchase or repurchase of
land confiscated for non-payment of taxes
are found in section 19 of the Act and
read:
. . . In case such redemption be not made
within the time above specified the
Government of the Philippine Islands shall
have an absolute, indefeasible title to said
real property. Upon the expiration of the
said ninety days, if redemption be not
made, the provincial treasurer shall
immediately notify the Director of Lands of
the forfeiture and furnish him with a
description of the property, and said
Director of Lands shall have full control
and custody thereof to lease or sell the
same or any portion thereof in the same
manner as other public lands are leased or
sold: Provided, That the original owner, or
his legal representative, shall have the
right to repurchase the entire amount of
his said real property, at any time before a
sale or contract of sale has been made by
the director of Lands to a third party, by
paying therefore the whole sum due
thereon at the time of ejectment together
with a penalty of ten per centum . . . .
The appellant Addison repurchased under
the final proviso of the section quoted and
was allowed to do so as the successor in
interest of the original owner under the
execution sale above discussed. As we
have seen, he acquired no rights under
these sales, was therefore not the
successor of the original owner and could
only have obtained a valid conveyance of
such titles as the Government might have
by following the procedure prescribed by
the Public Land Act for the sale of public
lands. he is entitled to reimbursement for
the money paid for the redemption of the
land, with interest, but has acquired no title
through the redemption.
The question of the priority of the record of
the sheriff's sales over that of the sale
from Belisario to Borja is extensively
argued in the briefs, but from our point of
view is of no importance; void sheriff's or
execution sales cannot be validated
through inscription in the Mortgage Law
registry.
The opposition of Adelina Ferrer must also
be overruled. She maintained that the land
in question was community property of the
marriage of Eulalio Belisario and Paula Ira:
that upon the death of Paula Ira inealed
from is modified, and the defendant Mr.
Vicente Sotelo Matti, sentenced to accept
and receive from the plaintiff the tanks, the
expellers and the motors in question, and
to pay the plaintiff the sum of ninety-six
thousand pesos (P96,000), with legal
interest thereon from July 17, 1919, the
date of the filing of the complaint, until fully
paid, and the costs of both instances. So
ordered.
FIRST DIVISION
[G.R. No. 60210. March 27, 1984.]
ARTURO P. SANTOS and ADELINA
Y. SANTOS, Petitioners, v. THE
COURT OF APPEALS and AURORA
 GUTIERREZ, Respondents.
Romulo T. Santos, for Petitioners.
Payawal, Jimenez & Associates
for respondent Aurora Gutierrez.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND
CONTRACTS; LEASE;
MONTH-TO-MONTH CONTRACT OF
LEASE, A LEASE WITH DEFINITE
PERIOD; CASE AT BAR. — Petitioners,
in their "Answer with Counterclaim"
admit that they are "the legitimate
tenants and/or lessees of the subject
apartment with the present rental
rate of P250.00 a month on a
month-to-month contract of lease."
The aforequoted provision of the
agreement on occupancy of the
apartment cannot but mean as
providing for a definite period of the
lease.
2. ID.; ID.; ID.; ID.; EJECTMENT OF
LESSEE PROPER AFTER THE
EXPIRATION OF THE PERIOD OF
LEASE; CASE AT BAR. — Judicial
ejectment under Paragraph 1 of
Article 1673 of the Civil Code lies
when the lease is for a definite period
or when the fixed or definite period
agreed upon has expired. It is an
exception to Section 4 of Presidential
Decree No. 20. The lease in the case
at bar having a definite period, it
follows that private respondent’s
right to judicially eject petitioners
from the premises may be enforced.
As aptly stated by respondent Court
of Appeals," [e]ven on the strength
alone of the Rantael ruling, the
petitioners can be lawfully ejected,
regardless of the motive or intent of
the
lessor-private Respondent."cralaw
virtua1aw library
3. ID.; ID.; ID.; PRESIDENTIAL
DECREE 1517 REFERS TO
PREEMPTIVE RIGHT OF THE LESSEE
ONLY IF A TENANT HAS BUILT HIS
HOME ON THE LAND OF THE LESSOR;
NOT APPLICABLE IN CASE AT BAR. —
"P.D. 1517, in referring to the
preemptive or redemptive right of the
lessee speaks only of urban land
under lease on which a tenant has
built his home and in which he has
resided for ten years or more. If both
land and building belong to the lessor,
the right referred to hereinabove
does not apply."cralaw virtua1aw
library
MELENCIO-HERRERA, J., dissenting
and concurring:chanrob1es virtual
1aw library
1. CIVIL LAW; OBLIGATIONS AND
CONTRACTS; LEASE; PERIOD NOT
DEFINITE WHERE
MONTH-TO-MONTH BASIS OF LEASE
DETERMINED PURSUANT TO ARTICLE
1687 OF CIVIL CODE. — In paragraph
2 of their Answer with Counterclaim,
petitioners stated that they are "the
legitimate tenants and/or lessees of
the subject apartment with the
present rental rate of P250.00 a
month on a month-to-month contract
of lease." In paragraph 11 of their
Special and Affirmative Defenses,
however, they also averred that they
principally rely on their verbal
month-to-month contract. Upon the
facts, the lease involved herein is not
for a definite period, the period being
determined, not by any agreement of
the parties, but pursuant to Article
1687 of the Civil Code, which
provides that if the period for the
lease has not been fixed, it is
understood to be . . . from month to
month, if it (the rent agreed upon) is
monthly.
2. ID.; ID.; ID.; ID.; EXPIRATION OF
PERIOD NOT A GROUND FOR
EJECTMENT; CASE AT BAR. — The
subject lease is not for a definite
period because the month-to-month
basis of the verbal contract has been
determined pursuant to Article 1687
of the Civil Code. Consequently, the
subject lease falls squarely within the
purview of Article 1673 of the Civil
Code, the effects of which were
suspended by Section 6 of Batas
Pambansa Blg. 25 (formerly Section 4
of P.D. 20). Construing the foregoing
provisions together, it results that
even if a month-to-month lease
under Article 1687 of the Civil Code
expires, it cannot be a ground for
ejectment in view of the suspension
of Article 1673 (1) by Batas
Pambansa Blg. 25.
3. ID.; ID.; ID.; ID.; RANTAEL
DOCTRINE NOT APPLICABLE IN CASE
AT BAR. — The Rantael doctrine is not
invocable because of the striking
difference that the lease in that case
was embodied in a written
"Agreement on Occupancy of
Apartment" by which terms, "the
lessee agreed to use and live in the
apartment on a month-to-month
basis, beginning today." Hence, our
ruling therein that a lease contract on
a month-to-month basis provides a
definite period and may be
terminated at the end of any month.
That was a conventional lease as
contrasted to the legal lease herein.
In the case at bar, as found by the
Court of First Instance, there was no
formal agreement between private
respondent and petitioners, "it
appearing that the former merely
acquiesced to the latter’s continued
occupation of the property in
question" after private respondent
had purchased the premises from the
previous owner. The subject lease,
therefore, cannot be said to be a
lease for a definite period,
determined as that period is by Article
1687 of the Civil Code, for, otherwise,
there would hardly be any occasion
for the application of Section 6 of
Batas Pambansa Blg. 25. As a matter
of fact, the Rantael case specifically
states that judicial ejectment would
not lie even though the periods fixed
under Article 1687 may have expired.
4. ID.; ID.; ID.; EJECTMENT IN CASE
AT BAR PROPER ON TWO GROUNDS.
— I concur in the ejectment of
petitioners for, as held in Baens v.
Court of Appeals, et als., (G.R. No.
57091, November 23, 1983), even if
the month to month arrangement is
on a verbal basis, the lease is
considered terminated at the end of
the month, if statutory grounds to
eject under Section 5 of Batas
Pambansa Blg. 25 exist. In this case
two such grounds are present,
particularly, (1) arrears in the
payment of rentals (Sec. 5[b], B.P.
Blg. 25) as found by the City Court,
which held petitioners "culpably
delinquent" ; and (2) the need of the
lessor to make necessary repairs,
there being already an order of
condemnation by appropriate
administrative authorities (Sec. 5[e]
B.P. Blg. 25), which petitioners admit
having received.
DECISION
RELOVA, J.:
Appeal by certiorari from the decision
of the then Court of Appeals in
CA-G.R. No. SP-13056, affirming the
one rendered by the then Court of
First Instance of Manila, Branch XVI,
in Civil Case No. 138472.
Records show that herein private
respondent Aurora Gutierrez
instituted an unlawful detainer case in
the then City Court of Manila against
herein petitioners Arturo P. Santos
and Adelina Y. Santos on grounds
that she needs the premises for her
personal use and the necessity of
repairs thereon, and that the
petitioners were delinquent in the
payment of rentals.
In their Answer with
Counterclaim, Petitioners, among
others, admitted that they are "the
legitimate tenants and/or lessees of
the subject apartment with the
present rental rate of P250.00 a
month on a month-to-month contract
of lease." (p. 62, Rollo)
After trial, the City Court rendered
judgment —
"Premises considered, this Court
hereby renders judgment for the
plaintiff and against the defendants
and hereby orders the defendants
and all persons claiming under them
to vacate the premises in question
known as No. 1836 Cavite St., Sta.
Cruz, Manila and surrender its
possession to the plaintiff.
"The defendants are further ordered
to pay the plaintiff P2,500.00 as
rentals for the period December 1978
through September 1979, and,
further to pay the plaintiff rentals at
the rate of P250.00 per month from
October 1979 until such time as
possession of the premises in
question shall have been restored to
the plaintiff minus whatever amount
may have been already received by
the plaintiff from deposits made in
Court. The defendants are further
ordered to pay the plaintiff P1,000.00
as and for attorney’s fees plus costs
of suit. All claims by the defendants
against the plaintiff are dismissed, for
lack of merit." (p. 74, Rollo).
Petitioners appealed the foregoing
judgment to the then Court of First
Instance which found the same "in
accordance with both the evidence
and the law" and affirmed the
decision. Thereafter, petitioners went
to the Court of Appeals on a petition
for review and the latter, on January
29, 1982, rendered judgment as
follows:chanrobles lawlibrary :
rednad
"PREMISES CONSIDERED, there
being substantial evidence to support
the decision under review, the instant
petition is hereby DENIED DUE
COURSE and is resultantly hereby
DISMISSED." (p. 22, Rollo)
Hence, this petition for review
on certiorari, the Santoses
submitting that (1) they were never
delinquent in the payment of rentals
only the collector failed to get the
money and since the whereabouts of
private respondent was unknown,
they were forced to deposit them to
the bank; (2) the mere sending of a
notice to vacate by registered mail
which the postal clerk refused to
deliver to them for the reason of
wrong name cannot be considered
sufficient compliance with the
jurisdictional requirement of notice;
(3) they have been leasing the
apartment for 28 years and are
therefore entitled to preferential right
to purchase their unit under
Presidential Decree No. 1517; (4)
there is no real need of the premises
by private respondent; (5) it was an
error to order their ejectment without
complying with the mandatory
requirements of Batas Pambansa Blg.
25 and the ruling in Rantael v. Llave,
97 SCRA 453; (6) respondent court
erred in stating that a contract of
lease of residential apartment
involving a rental of P250.00 a month
may be terminated at the end of the
month without default on the part of
the lessee; (7) there was improper
change of theory on appeal on the
part of private respondent; and, (8)
there was error in affirming the
decision of the lower court.
We find no merit in the petition.
1. Petitioners, in their "Answer with
Counterclaim" (Annex "B", Petition,
page 62, Rollo) admit that they are
"the legitimate tenants and/or
lessees of the subject apartment with
the present rental rate of P250.00 a
month on a month-to-month contract
of lease." (Emphasis supplied)
The aforequoted provision of the
agreement on occupancy of the
apartment cannot but mean as
providing for a definite period of the
lease. The parties expressly agreed
that upon proper notice, one may
terminate the agreement. As stated
in Rantael v. Court of Appeals, 97
SCRA 453, 459 —
". . . The contractual relations
between petitioner Rantael and
respondent Llave ceased after the
expiration of the first thirty days
reckoned from August 1, 1974 but
continued for the next thirty-day
period and expired after the last day
thereof, repeating the same cycle for
the succeeding thirty-day periods,
until the said respondent Llave
exercised her express prerogative
under the agreement to terminate the
same."cralaw virtua1aw library
2. Paragraph 1 of Article 1673 of the
Civil Code is an exception to Section 4
of Presidential Decree No. 20. Said
Section 1 of Article 1673 provides —
"Art. 1673. The lessor may judicially
eject the lessee for any of the
following causes:chanrob1es virtual
1aw library
(1) When the period agreed upon, or
that which is fixed for the duration of
lease under article 1682 and 1687,
has expired;"
Thus, judicial ejectment lies when the
lease is for a definite period or when
the fixed or definite period agreed
upon has expired. The lease in the
case at bar having a definite period, it
follows that private respondent’s
right to judicially eject petitioners
from the premises may be enforced.
As aptly stated by respondent Court
of Appeals," [e]ven on the strength
alone of the Rantael ruling, the
petitioners can be lawfully ejected,
regardless of the motive or intent of
the lessor-private Respondent. We
thus see no point in discussing the
other issues raised except to state
that P.D. No. 1517, in referring to the
pre-emptive or redemptive right of a
lease speaks only of urban land under
lease on which a tenant has built his
home and in which he has resided for
ten years or more. If both land and
the building belong to the lessor, the
right referred to hereinabove does
not apply." (p. 22, Rollo).
ACCORDINGLY, judgment is hereby
rendered DISMISSING the instant
petition for review and AFFIRMING
the decision of respondent Court of
Appeals. With costs.
SO ORDERED.
Plana, Escolin and Gutierrez, Jr., JJ.,
concur.

De la Fuente, J., took no part.
Separate Opinions
MELENCIO-HERRERA, J., dissenting
and concurring:chanrob1es virtual
1aw library
Private respondent Aurora Gutierrez,
an apartment owner, instituted an
Unlawful Detainer suit against
petitioners-lessees, the Santos
spouses, on the grounds of personal
use, need for repairs of the leased
premises, and delinquency in
payment of rentals by petitioners.
In paragraph 2 of their Answer with
Counterclaim, petitioners stated that
they are "the legitimate tenants
and/or lessees of the subject
apartment with the present rental
rate of P250.00 a month on a
month-to-month contract of lease."
In paragraph 11 of their Special and
Affirmative Defenses, however, they
also averred that they principally rely
on their verbal month-to-month
contract.
The judgment of the City Court
ordering petitioners to vacate was
affirmed by the Court of First Instance
as well as by respondent Appellate
Court, the latter on a petition for
review.
The present appeal
by Certiorari seeks a reversal of the
ejectment separately adjudged by
those three Courts.
The majority opinion sustains the
judgment of respondent Appellate
Court on the principal ground that the
lease is for a definite period and,
therefore, outside the pale of
Presidential Decree No. 20, and
relying on our ruling in Rantael v.
Court of Appeals, Et Al., 97 SCRA 453
(1980).
I believe, however, that, upon the
facts, the lease involved herein is not
for a definite period, the period being
determined, not by any agreement of
the parties, but pursuant to Article
1687 of the Civil Code, which
provides:jgc:chanrobles.com.ph
"If the period for the lease has not
been fixed, it is understood to be . . .
from month to month, if it (the rent
agreed upon) is monthly."cralaw
virtua1aw library
Consequently, the subject lease falls
squarely within the purview of Article
1673 of the Civil Code, the effects of
which were suspended by Section 6 of
Batas Pambansa Blg. 25 (formerly
Section 4 of P.D. 20), reading
thus:jgc:chanrobles.com.ph
"SEC. 6. Application of the Civil Code
and Rules of Court of the Philippines.
— Except when the lease is for a
definite period, the provisions of
paragraph (1) of Article 1673 of the
Civil Code of the Philippines insofar as
they refer to residential units covered
by this Act shall be suspended during
the effectivity of this Act, but other
provisions of the Civil Code and the
Rules of Court on lease contracts,
insofar as they are not in conflict with
the provisions of this Act, shall
apply."cralaw virtua1aw library
The related provision, paragraph (1)
of Article 1673 of the Civil Code,
provides:chanrobles lawlibrary :
rednad
"ART. 1673. The lessor may judicially
eject the lessee for any of the
following causes:chanrob1es virtual
1aw library

(1) When the period agreed upon, or
that which is fixed for the duration of
leases under articles 1682 and 1687,
has expired;"
Construing the foregoing provisions
together, it results that even if a
month-to-month lease under Article
1687 of the Civil Code expires, it
cannot be a ground for ejectment in
view of the suspension of Article
1673(1) by Batas Pambansa Blg. 25.
As we have succinctly held in the
following
cases:jgc:chanrobles.com.ph
"Construing Sec. 4 of Presidential
Decree No. 20 in relation to Art. 1673
par. 1 and Art. 1687 of the Civil Code,
it is clear and explicit that Presidential
Decree No. 20 suspends paragraph (1)
of Article 1673. Hence, the petitioner
cannot be ejected at the expiration of
the period provided under Article
1687 of the Civil Code." (Salaria v.
Buenviaje, 81 SCRA 722, 727 (1978).
x x x had purchased the premises from the
". . . The only ground, therefore,
apparently available to plaintiffs to
justify their action is the fact that the
duration of the lease as fixed by
Article 1687 has already expired, or
expires each month and may be
terminated at the end of said month.
But this is excepted as ground for
ejectment by Sec. 4 of Republic Act
No. 6359. Under said section, the
provision of the first paragraph of
Article 1673 is suspended when the
period of the lease has not been
agreed upon but has been only fixed
in accordance with Article 1687 and
said period has expired. . . . It should
be noted that in the opposition to
such motion, Presidential Decree No.
20 which suspends court actions for
ejectment for leases covered by the
same was relied upon by private
respondents." (Gutierrez v. Cantada,
90 SCRA 1, pp. 4-5 (1979).
The Rantael doctrine is not invocable
because of the striking difference that
the lease in that case was embodied
in a written "Agreement on
Occupancy of Apartment" by which
terms, "the lessee agreed to use and
live in the apartment on a
month-to-month basis, beginning
today." Hence, our ruling therein that
a lease contract on a
month-to-month basis provides a
definite period and may be
terminated at the end of any month.
That was a conventional lease as
contrasted to the legal lease herein.
In the case at bar, as found by the
Court of First Instance, there was no
formal agreement between private
respondent and petitioners, "it
appearing that the former merely
acquiesced to the latter’s continued
occupation of the property in
question" after private respondent
previous owner. The subject lease,
therefore, cannot be said to be a
lease for a definite period,
determined as that period is by Article
1687 of the Civil Code, for, otherwise,
there would hardly be any occasion
for the application of Section 6 of
Batas Pambansa Blg. 25. As a matter
of fact, the Rantael case specifically
states that judicial ejectment would
not lie even though the periods fixed
under Article 1687 may have
expired.chanrobles virtual lawlibrary
"In accordance with the foregoing,
(par. [1] of Article 1673) section 4 of
Presidential Decree No. 20 should be
understood to mean that, as a
general rule, the lessor may not
judicially eject the lessee upon the
expiration of the period determined in
accordance with the provisions of
Articles 1682 and 1687 of the Civil
Code . . . (Article 1687 provides that
`[i]f the period for the lease has not
been fixed, it is understood to be from
year to year, if the rent agreed upon
is annual; from month to month, if it
is monthly; from week to week, if the
rent is weekly; and from day to day, if
the rent is to be paid daily,’ and
further provides that the courts may
fix a longer term for the lease after
the lessee has occupied the premises
for certain periods of time). Thus,
judicial ejectment would not lie even
though the periods fixed under the
said Articles may have expired."
(Rantael v. Hon. CA, Et Al., 97 SCRA
453, 460 (1980).
Be that as it may, I concur in the
ejectment of petitioners for, as held in
Baens v. Court of Appeals, et als.,
(G.R. No. 57091, November 23,
1983), even if the month to month
arrangement is on a verbal basis, the
lease is considered terminated at the
end of the month, if statutory
grounds to eject under Section 5 of
Batas Pambansa Blg. 25 exist. In this
case two such grounds are present,
particularly, (1) arrears in the
payment of rentals (Sec. 5[b], B.P.
Blg. 25) as found by the City Court,
which held petitioners "culpably
delinquent" ; and (2) the need of the
lessor to make necessary repairs,
there being already an order of
condemnation by appropriate
administrative authorities (Sec. 5[e]
B.P. Blg. 25), which petitioners admit
having received.
G.R. No. L-8093 October 29, 1955
DOMINADOR NICOLAS and OLIMPIA
MATIAS, plaintiffs-appellants,
vs.
VICENTA MATIAS, AMADO CORNEJO,
JR., JOSE POLICARPIO, and MATILDE
MANUEL, defendants-appellees.
Jose R. Jacinto for appellants.
Roy, Kong and Paraso for appellees.
CONCEPCION, J.:
By an instrument dated June 29, 1944,
Vicenta Matias Vda. de Cornejo, and her
son, Amado Cornejo, Jr., mortgaged to the
spouses Dominador Nicolas and Olimpia
Matias, four (4) parcels of land, situated in
San Roque, municipality of Gapan,
Province of Nueva Ecija, to guarantee the
payment of the sum of P30,000—then lent
by the mortgagees to the mortgagors and
received by the latter, in Japanese military
notes—one (1) year after the expiration of
five (5) years from said date
("pagbabayaran isang [1] taon pagkatapos
ng limang [5] taon simula sa fecha ng
kasulatang ito"), with interest thereon, at
the rate of six per cent (6%) per annum.
On July 15, 1944, said mortgagors offered
to pay the debt, with interest for five (5)
years, but the mortgagees rejected the
offer. Whereupon, in August, 1944, the
mortgagors deposited judicially the sum of
P39,000—representing the principal
(P30,000), plus interest for five (5) years,
at the stipulated rate—and instituted Civil
Case No. 156 of the Court of First
Instance of Nueva Ecija, entitled "Vicenta
Matias, et al. vs. Dominador Nicolas, et
al.," for the purpose of compelling the
mortgagees to accept said amount and to
discharge the mortgage. Although holding
that the mortgagees were not justified in
rejecting the tender of payment made by
the mortgagors, said court rendered
judgment, on August 12, 1946, declaring
the consignation invalid for failure of the
mortgagors to give previous notice thereof,
and sentencing the mortgagors to pay the
mortgagees the sum of P2,000—as the
equivalent in Philippine currency, pursuant
to the Ballantyne schedule, of P30,000 in
Japanese military notes—with interest, at
the legal rate, from June 29, 1944. On
appeal from this judgment, the Court of
Appeals, CA—G. R. No. 554-R (L-1195),
in a decision promulgated on September
16, 1947, held the consignation valid and
the obligation guaranteed by the mortgage
fully discharged. The mortgagees,
however, brought the case, for review by
writ of certiorari, to this Court, which, in a
decision promulgated on May 29,
1951 * (G. R. No. L-1743), held that the
mortgagors could not, without the
mortgagees' consent, accelerate the date
of maturity of the obligation in question,
which is payable after the fifth year from
June 29, 1944; that the mortgagees
cannot be compelled to accept payment
prior to the expiration of said fifth year; and
that the judicial consignation made by the
mortgagors is, consequently, invalid,
except as regards the amount
corresponding to the interest for one (1)
year from June 29, 1944. The dispositive
part of our aforementioned decision reads:
Hence we must of necessity declare, that
the offer and consignation were not valid,
except for the satisfaction of the interest
for the year 1944 which was then due. The
appealed decision will thus be modified.
Although the defendants have asked for
judgment against the plaintiffs "in the sixth
year from 1944" for the amount of the note
plus interest, we must decline to render
such judgment now, firstly because at the
time the case was instituted the mortgage
was not yet payable, and secondly
because there is the moratorium law.
Anyway they will be at liberty to collect that
mortgage plus interest when the
moratorium is lifted, and in that foreclosure
proceedings the amount of recovery shall
be determined. Let judgment be entered
accordingly.
Soon thereafter, or on August 22, 1951,
the mortgagees instituted the present
action for foreclosure of said mortgage.
The only issue raised in the lower court
was whether the sum of P30,000, lent by
the mortgagees in Japanese war notes,
should be paid by the mortgagors in
Philippine currency, peso for peso, or in
accordance with the Ballantyne schedule.
The lower court chose the latter alternative
and, accordingly, rendered judgment
"ordering defendants to pay plaintiffs the
amount of P2,000, Philippine currency,
with interest at six per cent (6%) a year,
from June 29, 1945, up to the date when it
is actually paid." The case is not before us
on appeal taken by the mortgagees.
In Cruz vs. Del Rosario (G. R. No. L-4859)
decided on July 24, 1951, it was held:
In passing upon the petitioner's first
assignment of error, which was the only
one that deserved consideration, and
dismissing the petition for certiorari, we
have cited in our minute resolution the
cases already decided by this Court as
applicable to the present, not because
they are similar in fact and law to this case
as the attorneys for the petitioner
erroneously believe, but because the
doctrine laid down in those cases is
squarely applicable to the present. That
is, if according to the stipulation of the
parties, the money to be paid by the
debtor to the creditor, or by the
vendor with pacto to the creditor to
redeem the property mortgaged, or
sold, shall be due and payable after
liberation as agreed upon by the parties in
the present case, it shall be paid in legal
tender or Philippine currency at par value
or at the rate of one Philippine peso for
each peso in Japanese military notes; but
if it shall be due and payable before
liberation it shall be paid after the
liberation in Philippine currency in
accordance with the Ballantyne schedule.
Besides, according to the facts found by
the Court of Appeals which we cannot
disturb in the present case, in fixing the
amount of P5,000 to be paid by a vendor
with pacto de retro to the vendee or by the
debtor to his creditor after liberation, the
parties had stipulated that the debtor or
vendor, who had received P70,000 in
Japanese military notes, shall pay the said
sum of P5,000 Philippine currency within a
certain period after liberation. (Emphasis
supplied.)
This ruling was reiterated in Arevalo vs.
Barreto (89 Phil., 633) decided on July 31,
1951, in the following language:
After a consideration of the question
raised in the second assignment of error of
the appellant, we are of the opinion, and
so hold, that the lower court erred in
evaluating the repurchase price of the
property sold and the value of the
promissory note, at P516.70 Philippine
currency. The parties have stipulated or
agreed that the right to repurchase the
property for P12,000 Philippine currency
"shall not commence from January 1,
1947, and shall end on January 10, 1948,"
and the promissory note for P4,000
Philippine currency "shall be paid on or
after October 31, 1946." As the said
amounts were to become due after
liberation, they shall be paid in Philippine
currency according to a long line of
decision rendered by this Court. Besides,
in the present case, the agreement of the
parties was, not only that said amounts be
paid after liberation, but they had
stipulated that of the 60,000 pesos in
Japanese military notes, the vendee shall
pay P12,000 in Philippine currency for the
repurchase of the property, and of the
20,000 in Japanese military notes
received by the plaintiff from the defendant
as a loan, the former shall pay the latter
P4,000 in Philippine currency, after
liberation. (Emphasis supplied.)
To the same effect was the conclusion
reached in the case of
Wilson vs. Berkenkotter (49 Off. Gaz., p.
1401), in which we said:
In several cases involving the application
of the Ballantyne schedule, this Court has
held that said schedule is applicable to
obligations contracted during the
Japanese occupation where said
obligations, are made payable on demand
or during said Japanese occupation, but
not after the war or at a specified date or
period which may indicate that the parties
were speculating on the continuation or
cessation of the war at time of payment. If
the obligation on the part of Wilson to pay
Berkenkotter the amount paid by the latter
to wipe out their debt to the Bank was
created during the occupation, then
created before the war, particularly on
date when plaintiff and defendant signed
the promissory note in favor of the Bank,
then the Ballantyne schedule may not be
applied.(Emphasis supplied.)
The foregoing view has been consistently
applied by this Court in a number of other
cases, among which the following may be
mentioned: Ilusorio vs. Busuego, 84 Phil.,
630; Roño vs. Gomez, 46 Off. Gaz., Supp.
No. 11, 339; Gomez vs. Tabia, 47 Off.
Gaz., 641, Ponce De Leon vs. Syjuco, 90
Phil., 311; Garcia vs. De los Santos, 49
Off. Gaz., 4830. What is more, the strong
dissents written in some of the cases cited
indicated that adherence to said view was
affected upon thorough consideration of
the different aspects thereof, that said
doctrine is not in the nature of stare
decisis and that the issue is now close as
regards this Court.
It is thus settled that the contracting
parties are free to stipulate on the
currency in which their respective
obligations shall be settled, and that
whenever, pursuant to the terms of an
agreement, an obligation assumed during
the Japanese occupation is not payable
until after liberation of the Philippines, the
parties to the agreement are deemed to
have intended that the amount stated in
the contract be paid in such currency as
may be legal tender at the time when the
obligation becomes due. This is, precisely,
the situation obtaining in the case at bar.
The deed of mortgage in question
provides that the obligation of the
mortgagees shall be paid one
year after the expiration of five (5) years
form June 29, 1944, which is the date of
said instrument. In other words, the
obligation is not payable until June 29,
1949. Indeed, in the decision of this Court
in case G. R. No. L-1743, we reversed the
decision of the Court of Appeals
sustaining the theory of the mortgagors,
upon the ground that the latter were not
entitled to accelerate, without the consent
of the mortgagees, the date of the maturity
of the obligation; that the mortgagees
could not be compelled, and were under
no obligation, to accept the tender of
payment made on July 15, 1944 (except
as to the interest for one [1] year) despite
the fact that said tender included the
interest for five (5) years from June 29,
1944; and that, consequently, the
consignation effected simultaneously with
the institution of civil case No. 156 of the
Court of First Instance of Nueva Ecija in
August, 1944, was null and void, with the
exception abovementioned.
In other words, said decision of this Court
was implicitly held, and the doctrine laid
down in the cases above referred to, leave
us no choice but to declare, as we do, that
the obligation involved in the present case
must be satisfied, peso for peso, in
Philippine currency.
Wherefore, the defendants-appellees are
hereby sentenced to pay to the
plaintiffs-appellants, either directly or
through the Clerk of the lower court, within
ninety (90) days from the date on which
this decision shall become final, the sum
of P30,000, in Philippine currency, with
interest thereon at the rate of six per
centum (6%) of a year, from June 29,
1945. In default of such payment, let the
mortgage in question be foreclosed in the
manner provided by law and the rules of
court.
With costs against the
defendants-appellees. So ordered.
EN BANC
[G.R. No. L-1525. July 27, 1949.]
MODESTO SORIANO, Petitioner, v.
CAROLINA ABALOS, MERCEDES
ABALOS, ENCARNACION ABALOS,
PABLO MANUEL, on his behalf and
as guardian ad-litem of Romulo
and Florencio, both surnamed
Manuel, Respondents.
Primicias, Abad, Mencias &
Castillo for Petitioner.
Fernandez, Unson & Patajo
for Respondents.
SYLLABUS
1. PURCHASE AND SALE;
CONVENTIONAL REDEMPTION;
STIPULATED PERIOD "AT ANY TIME"
WITHIN WHICH TO REPURCHASE. —
In conventional redemption when the
contracting parties stipulated that the
vendors may repurchase the property
"at any time they have the money,"
there is a time expressly made, which
is "any time." It being, however, an
unlimited or indefinite time, under the
second paragraph of article 1508 of
the Civil Code, it cannot exceed ten
years.
2. OBLIGATIONS AND CONTRACTS;
PAYMENT OF JUDGMENT DEBT DUE
DURING JAPANESE OCCUPATION;
JAPANESE WAR NOTES’ VALUE
EQUIVALENT TO PHILIPPINE
CURRENCY UNDER BALLANTINE
SCALE OF VALUES. — Petitioner is not
liable to pay now in Philippine
currency the same number of pesos
in Japanese war notes to which he
was sentenced in December 1944. He
is liable only to pay the equivalent
which may be determined by means
of the Ballantine scale of values, as
held in Hilado v. De la Costa, G.R. No.
L-150.
DECISION
MORAN, C.J. :
This is an appeal by certiorari from a
decision of the Court of Appeals. The
facts are as follows:chanrob1es
virtual 1aw library
On March 17, 1938, respondents
Juliana Abalos and Carolina Abalos
sold the parcel of land described in
the complaint to Felipe Maneclang
and Modesto Soriano at the price of
P750, with option to repurchase the
same "at anytime they have the
money." Offer to repurchase was
made in December, 1941, which
could not be carried out because of
the war. Felipe Maneclang, in the
meantime, ceded all his rights to
petitioner Modesto Soriano, and in
May, 1944, offer to repurchase was
again made, but Modesto Soriano
rejected the offer. Wherefore,
vendors consigned the price of P750
with the court and filed a complaint
for repurchase.
Juliana Abalos died and was
substituted in this case by her heirs
Romulo and Florencio, surnamed
Manuel. It turned out that the
property did not belong to the
vendors Carolina and Juliana Abalos
alone, but also to their sisters, the
intervenors and respondents
Mercedes and Encarnacion Abalos.
The Court of First Instance of
Pangasinan rendered judgment
ordering Modesto Soriano to execute
a deed of reconveyance in favor, not
only of Carolina Abalos and the heirs
of Juliana Abalos, but also of the
intervenors Mercedes and
Encarnacion Abalos; authorizing
Modesto Soriano to collect and
receive as price for the reconveyance
the sum of P750 consigned with the
court; and sentencing Modesto
Soriano to pay the respondents the
sum of P3,200 as the value of the
fruits of the land in 1944 obtained by
Modesto Soriano. This judgment was
affirmed in toto by the Court of
Appeals.
Petitioner Modesto Soriano now
maintains in this Court that
respondents no longer had any right
to repurchase the property because,
there being no express agreement as
to the time within which the
repurchase could be made, that time
should be, under the first paragraph,
article 1508 of the Civil Code, four
years which in this case expired on
March 17, 1942.
The stipulation, however, is that the
vendors may repurchase the property
"at any time they have the money."
There is, therefore, a time expressly
stipulated, which is "any time." It
being, however, an unlimited or
indefinite time, under the second
paragraph of article 1508 of the Civil
Code, it cannot exceed ten years. This
is the ruling laid down in the cases of
heirs of Jumero v. Lizares, 17 Phil.,
112; Bandong v. Austria, 31 Phil.,
479; and Gonzaga v. Go, No. 47061
(40 Off. Gaz. [7th Supp. ], 71).
In the first case, heirs of Jumero v.
Lizares, 17 Phil., 112, Chief Justice
Arellano said.." . . even admitting that
it was stipulated that the right to
repurchase or redeem should last for
an indefinite time, such period is
restricted to ten years, under
paragraph 2 of article 1508 of the
Civil Code, . . ." (p. 120). In the case
of Bandong v. Austria, 31 Phil., 479,
the vendors were given the right to
repurchase "in the month of March of
any year after the date of the
contract." In other words, the
vendors were given the right to
repurchase again at anytime or any
year. And this Court held that the
repurchase could be made within a
period of not more than ten years.
And in the case of Gonzaga v. Go, G.R.
No. 47061, the vendors were given
the right to repurchase "en cualquier
tiempo devolviendo la cantidad de
P250 y los gastos que ocasione el
contrato." And this Court held that
"en cualquier tiempo" meant not
more than ten years.
We conclude, therefore, that in the
instant case, the vendors had ten
years within which to repurchase the
property and that period did not
expire until March 17, 1948. The offer
to repurchase was made in May,
1944.
It is also maintained by petitioner
that the damages awarded to
respondents were based erroneously
on a value equal with that of Japanese
war notes as were due in December,
1944. We believe that this contention
is well taken. Petitioner is not liable to
pay now in Philippine currency the
same number of pesos in Japanese
war notes to which he was sentenced
in December, 1944. He is liable only
to pay the equivalent which may be
determined by means of the
Ballantine scale of values, as held in
Bilado v. De la Costa, G.R. No. L-150.
According to that scale the value of
Japanese military notes in relation to
the peso in Philippine currency on
December 1, 1944, was 90 to 1.
Consequently, instead of the sum of
P3,200, petitioner should
sentenced to pay yearly P35.55 as
damages beginning May, 1944 until
the property is finally delivered to
respondents.
For all the foregoing, the judgment of
the Court of Appeals is affirmed with
the only modification that the
petitioner is sentenced to pay
respondents, counting from May,
1944 until the property is delivered to
respondents, as damages, the
amount of P35.55 yearly, plus costs.
If the price consigned in court was
destroyed, petitioner must bear the
loss.
Ozaeta, Paras, Feria, Bengzon,
Tuason and Montemayor, JJ.,
concur.
Separate Opinions
MORAN, C.J. :chanrob1es virtual 1aw
library
Mr. Justice Pablo voted for this
decision.
PERFECTO, J.,
concurring:chanrob1es virtual 1aw
library
We concur in this decision, with the
statement that the so-called
Ballantine system has the force and
effect of law. The veto of the
President of the United States to the
corresponding act of our Congress
has absolutely no effect, because the
subject matter of the law in question
is not among those which, under the
Independence Act, are subject to the
approval of the President of the
United States of America.
be
G.R. No. L-12611 August 7,
1918
FELIPE AGONCILLO, and his wife,
MARCELA MARIÑO, plaintiff-appellees,
vs.
CRISANTO JAVIER, administrator of
the estate of the late Anastasio Alano.
FLORENCIO ALANO and JOSE
ALANO, defendants-appellants.
Basilio Aromin for appellants.
Felipe Agoncillo for appellees.
FISHER, J.:
On the twenty-seventh day of February,
1904, Anastasio Alano, Jose Alano, and
Florencio Alano executed in favor of the
plaintiff, Da. Marcela Mariño, a document
of the following tenor:
We, the undersigned, Jose Alano and
Florencio Alano (on our own behalf), and
Anastasio Alano (on behalf of his children
Leonila, Anastasio and Leocadio), the
former and the latter testamentary heirs of
the Rev. Anastasio C. Cruz, deceased,
hereby solemnly promise under oath:
1. We will pay to Da. Marcela Mariño
within one year from this date together
with interest thereon at the rate of 12 per
cent per annum, the sum of P2,730.50,
Philippine currency, this being the present
amount of indebtedness incurred in favor
of that lady on the 20th of April 1897, by
our testator, the Rev. Anastasio C. Cruz;
2. To secure the payment of this debt we
mortgage to the said Da. Marcela Mariño
the house and lot bequeathed to us by the
deceased, situated in this town, on calle
Evangelista, formerly Asturias, recorded in
the register of deeds on the twenty-second
of April, 1895, under number 730;
3. In case of insolvency on our part, we
cede by virtue of these presents the said
house and lot to Da. Marcela Mariño,
transferring to her all our rights to the
ownership and possession of the lot; and if
the said property upon appraisal at the
time of the maturity of this obligation
should not be of sufficient value to cover
the total amount of this indebtedness, I,
Anastasio Alano, also mortgage to the
said lady my four parcels of land situated
in the barrio of San Isidro, to secure the
balance, if any; the title deeds of said
property, as well as the title deeds of the
said house and lot are this day delivered
to Sr. Vicente Ilustre, general
attorney-in-fact of Da. Marcela Mariño.
In witness whereof we have signed these
presents in Batangas, this twenty-seventh
day of February, 1904.
(Sgd.) JOSE ALANO.
(Sgd.) ANASTASIO ALANO.
(Sgd.) FLORENCIO ALANO.
No part of the interest or of the principal
due upon this undertaking has been paid,
except the sum of P200 paid in the year
1908 by the late Anastasio Alano.
In 1912, Anastasio Alano died intestate. At
the instance of one of his creditors,
proceedings upon the administration of his
estate were had in the Court of First
Instance of Batangas. By order dated
August 8, 1914, the court appointed an
administrator and a committee to hear
claims. Notices were published, as
required, in a newspaper of general
circulation, to inform the creditors of the
time and place at which they might appear
to present their claims against the estate
of the deceased (Exhibit No. 1). The time
designated in the notice for the
presentation of claims expired on March
24, 1915. It appears that no claims
whatever were presented to the committee,
and it having been shown to the court, by
the statement of the administrator, that the
claim of the creditor at whose instance the
administration proceeding was
commenced, had been settled by the heirs,
the administrator was discharged and the
proceeding terminated by order dated
November 8, 1915.
On April 27, 1916, at the instance of the
plaintiff, Da. Marcela Mariño, and upon the
statement, made on her behalf, that she
was a creditor of the deceased and that
her claim was secured by mortgage upon
real estate belonging to the said deceased,
the court reopened the intestate
proceeding, and appointed one Javier to
be administrator of the estate. No request
was made for a renewal of the commission
of the committee on claims. The
appellants Jose and Florencio Alano
objected to the appointment of Javier, but
their objection was overruled by the court.
On March 17, 1916, the plaintiffs filed the
complaint in this action against Javier, as
administrator of the estate of Anastasio
Alano and against Florencio Alano and
Jose Alano personally. The action is
based upon the execution of the document
of February 27, 1904, above set forth,
which is transcribed literally in the
complaint. It is averred that defendants
have paid no part of the indebtedness
therein acknowledged, with the exception
of the P200 paid on account in 1908. It is
further averred that on April 22, 1910, the
debtors promised in writing that they
would pay the debt in 1911, but that they
had failed to do so. The prayer of the
complaint is that, unless defendants pay
the debt for the recovery of which the
action was brought, they be required to
convey to plaintiffs the house and lot
described in paragraph two of the said
document; that this property be appraised;
and that if its value is found to be less than
the amount of the debt, with the accrued
interest at the stipulated rate, judgment be
rendered in favor of the plaintiffs for the
balance. No relief is requested with
respect to the undertaking of Anastasio
Alano expressed in the third paragraph of
the document in suit, as guarantor for the
payment of the difference, if any, between
the value of the said house and lot and the
total amount of the indebtedness.
The defendants answered denying
generally the facts alleged in the complaint,
and setting up, as special defenses that (1)
any cause of action which plaintiff might
have had against the estate of Anastasio
Alano has been barred by failure of the
plaintiff to present her claim to the
committee on claims for allowance; (2)
that the document upon which plaintiff
relies does not constitute a valid mortgage;
and (3) that as to all of the defendants, the
action is barred by the general statute of
limitations.
The findings of the trial court upon the
evidence were substantially as follows:
1. That the document set forth in
paragraph two of plaintiffs' complaint was
executed by the deceased, Anastasio
Alano, and by the defendants Javier and
Jose Alano, as alleged;
2. That one year after the execution of the
document, plaintiffs made a demand upon
Anastasio Alano, deceased, and the other
two defendants herein, to comply with the
terms of the agreement by the execution
of the conveyance of the house and lot,
but that they requested an extension of
time for the payment of the debt, which
was granted them;
3. That on March 27, 1908, the defendants
paid P200 on account of the debt.
Upon these findings the court below gave
judgment for plaintiffs, and from that
judgment the defendants have appealed
to his court upon the law and the facts.
The question raised by the appellants
require us to analyze the document upon
which this action is based, and to
determine its legal effect. Appellants
contend that the contract evidenced by
that instrument is merely a loan coupled
with an ineffectual attempt to create a
mortgage to effect the payment of debt.
The court below regarded it as a
conveyance of the house and lot
described in the contract, which took effect
upon the failure of the debtors to pay the
debt.
The principal undertaking evidenced by
the document is, obviously, the payment
of money. The attempt to create a
mortgage upon the house and lot
described in the second clause of the
contract is, of course, invalid, as it is
admitted that the so-called mortgage was
never recorded. Equally inefficacious, and
for the same reasons, is the purported
mortgage by Anastasio Alano of his land in
the barrio of San Isidro described in the
third paragraph of the document.
(Compañia General de
Tabacos vs. Jeanjaquet, 12 Phil. Rep.,
195.)
The agreement to convey the house and
lot at an appraised valuation in the event
of failure to pay the debt in money a t its
maturity is, however, in our opinion,
perfectly valid. It is simply an undertaking
that if the debt is not paid in money, it will
be paid in another way. As we read the
contract, the agreement is not open to the
objection that the stipulation is a pacto
comisorio. It is not an attempt to permit the
creditor to declare a forfeiture of the
security upon the failure of the debtor to
pay the debt at maturity. It is simply
provided that if the debt is not paid in
money it shall be paid in another specific
was by the transfer of property at a
valuation. Of course, such an agreement,
unrecorded, creates no right in rem; but as
between the parties it is perfectly valid,
and specific performance of its terms may
be enforced, unless prevented by the
creation of superior rights in favor of third
persons.
The contract now under consideration is
not susceptible of the interpretation that
the title to the house and lot in question
was to be transferred to the creditor ipso
facto upon the mere failure of the debtors
to pay the debt at its maturity. The
obligations assumed by the debtors were
alternative, and they had the right to elect
which they would perform (Civil Code, art.
1132). The conduct of the parties (Civil
Code, art. 1782) shows that it was not
their understanding that the right to
discharge the obligation by the payment of
money was lost to the debtors by their
failure to pay the debt at its maturity. The
plaintiff accepted a partial payment from
Anastasio Alano in 1908, several years
after the debt matured. The prayer of the
complaint is that the defendants be
required to execute a conveyance of the
house and lot, after its appraisal, "unless
the defendants pay the plaintiff the debt
which is the subject of this action."
It is quite clear, therefore, that under the
terms of the contract, as we read it, and as
the parties themselves have interpreted it,
the liability of the defendants as to the
conveyance of the house and lot is
subsidiary and conditional, being
dependent upon their failure to pay the
debt in money. It must follow, therefore,
that if the action to recover the debt has
prescribed, the action to compel a
conveyance of the house and lot is
likewise barred, as the agreement to make
such conveyance was not an independent
principal undertaking, but merely a
subsidiary alternative pact relating to the
method by which the debt might be paid.
The undertaking to pay the debt,
acknowledged by the contract in suit, is
indisputably conjoint (mancomunada). The
concurrence of two or more debtors does
not in itself create a solidary liability.
Obligations in solido arise only when it is
expressly stipulated that they shall have
this character (Civil Code, art. 1137). That
being so, the debt must be regarded as
divided into as many equal parts as there
are debtors, each part constituting a debt
distinct from the others. (Civil Code, art.
1138.) The result of this principle is that
the extinction of the debt of one of the
various debtors does not necessarily
affect the debts of the others.
It is contended on behalf of the
administrator of the estate of Anastasio
Alano that the failure of the plaintiff to
present her claim for allowance to the
committee on claims is a bar to her action
so far as this defendant is concerned. We
are of the opinion that this objection is
well-taken. Section 695 of the Code of
Civil Procedure expressly requires that a
claim of this kind be presented for
allowance to the committee, and declares
that the failure to do so operates to
extinguish the claim. The operation of this
statute and the absolute nature of the bar
which it interposes against the subsequent
assertion of claims not presented in
accordance with its requirements have
frequently been considered by this court,
and the doctrines announced need not be
here repeated. (Estate of De Dios, 24 Phil.
Rep., 573; Santos vs. Manarang, 27 Phil.
Rep., 209). While it is true that under
certain circumstances and within the
statutory limits (sec. 690 of the Code of
Civil Procedure) the probate court may
renew the commission of the committee
on claims, and permit the presentation of
belated demands, in no case may a claim
proper to be allowed by the committee,
such as is the one now under
consideration, be enforced by an original
action against the executor or
administrator of the state. Our opinion is,
therefore, that the objection to the action
interposed on behalf of the administrator
of the estate of Anastasio Alano was
well-taken and that the court erred in
rejecting it.
This conclusion makes it unnecessary to
consider the effect of the payment made
by Anastasio Alano in 1908 as regards the
interruption of the period of prescription
with respect to him. In this connection,
however, we feel constrained to remark
that a careful reading of the document
makes it extremely doubtful whether
Anastasio Alano was ever personally
bound by its terms. It will be noted that he
purports to have signed it only as the
representative of his children, Leonina,
Anastasio, and Leocadio, who are not
parties to this suit.
With respect to the defendants Florencio
and Jose Alano, their original liability
admits of no dispute and the only question
open for consideration is that presented by
their plea of prescription. The debt
matured February 27, 1905, and as the
complaint was not filed within ten years
from that date (Code of Civil Procedure,
sec. 43), it is obvious that the plea of
prescription is well-taken, unless the
running of the statute was interrupted.
While it appears that some verbal and
written demands for payment were made
upon these defendants, it has been
recently decided, upon mature
consideration, that an extrajudicial
demand is not sufficient, under the law as
it now stands, to stop the running of the
statute. (Pelaez vs. Abreu, 26 Phil. Rep.,
415). There must be either (1) a partial
payment, (2) a written acknowledgment or
(3) a written promise to pay the debt. It is
not contended that there has been any
written acknowledgment or promise on the
part of the defendants Jose and Florencio
Alano, or either of them — plaintiff relies
solely upon the payment made in 1908 by
Anastasio Alano. But there is not the
slightest foundation in the evidence for the
belief that the payment made by Anastasio
was for the benefit of Jose or Florencio or
that it was authorized by either of them.
Bearing in mind the express declaration of
article 1138 of the Civil Code that joint
(mancomunada) obligations are, as regard
each of the debtors, to be reputed
as separate debts with respect to each of
the debtors, it follows of necessity that a
payment or acknowledgment by one of
such joint debtors will not stop the running
of the period of prescription as to the
others. That such is the law may be
demonstrated by ample authority.
In his commentaries on article 1138 and
1139 of the Civil Code, Manresa says that
one of the effects of the rule established
by the code that the debt is to be regarded
as "divided into as many parts . . . as there
are debtors" is that "the interruption of
prescription by the claim of a creditor
addressed to a single debtor or by an
acknowledgment made by one of the
debtors in favor of one or more of the
creditors is not to be understood as
prejudicial to or in favor of the other
debtors or creditors." (Manresa,
Commentaries on the Civil Code, vol. 8, p.
182.)
The same doctrine is recognized in the
Italian Civil Law, as stated by Giorgi in his
work on Obligations as follows:
The obligation appears to be one, when as
a matter of fact it is an aggregate of as
many separate and independent
obligations as there are creditors and
debtors. Each creditor cannot demand
more than his part; each debtor cannot be
required to pay more than his share.
Prescription, novation, merger, and any
other cause of modification or extinction
does not extinguish or modify the
obligation except with respect to the
creditor or debtor affected, without
extending its operation to any other part of
the debt or of the credit. The obligation is,
in a word, pro rata, or in partes viriles.
(Giorgi on Obligations, vol. 1, p. 83,
Spanish translation.)
The same view is taken by the French law
writers. In the article on obligations in
Dalloz' Encyclopedia (Jurisprudence
Generale) vol. 33, p. 297, the author says:
The conjoint (pro rata) obligation is divided
by operation of law among the
non-solidary co-debtors. It is as though
there were many debts as there are
persons bound. Hence it follows that if one
of the debtors is insolvent the loss falls
upon the creditor and not upon the other
debtors, and that if prescription is
interrupted with respect to one of the
debtors, it is not interrupted with respect to
the others.
In the State of Louisiana, whose Civil
Code, like ours, is largely taken from the
Code of Napoleon, the Supreme Court
has established the same doctrine on the
subject of the interruption of prescription.
In the case of Buard vs. Lemee, Syndic
(12 Robinson's Reports, 243), the
Supreme Court of Louisiana said:
It results . . . that when the
acknowledgment of a debt is made by a
joint debtor, such acknowledgment does
not interrupt the prescription with regard to
the others. Each is bound for his virile
share of the debt; and, therefore, each is
at liberty to act for himself, and the effect
of his acts cannot be extended to the
benefit or prejudice of his co-debtors; so
true is this that the law has never intended
that a suit brought against one of the
several debtors should interrupt
prescription with regard to all, unless they
be debtors in solido.
This doctrine was recognized and applied
by the Supreme Court of Louisiana in the
subsequent cases of Succession of
Cornelius Voorhies (21 La. Ann., 659) and
Smith vs. Coon (22 La. Ann., 445).
There is no presumption that one conjoint
( pro-rata) debtor is authorized to perform
any act having the effect of stopping the
running of the statute of limitations as to
the others. When the act relied upon is
performed by some person other than the
debtor, the burden rests upon the plaintiff
to show that it was expressly authorized.
(17 R.C.L., 911 and the cases there cited.)
In this case there is no such evidence. The
statement in the letter of Da. Maria Lontok,
to whom the P200 payment was made, is
that it was a payment made on account of
"the debt of Anastasio Alano." (Plaintiffs'
Exhibit D.) Da. Maria Lontok in her
testimony does not attempt to say that the
payment was made for the account of any
one but Anastasio Alano, from whom she
received it. The statement that Florencio
Alano was with Anastasio at the time is not
in itself sufficient to constitute proof that
the payment was made for his benefit.
(Lichauco vs. Limjuco and Gonzalo, 19
Phil. Rep., 12.)
Plaintiff argues that the undertaking to
convey the house and lot constitutes an
indivisible obligation, and that even where
the promise is not in solidum, the
concurrence of two or more debtors in an
obligation whose performance is
indivisible creates such a relation between
them that the interruption of prescription
as to one of necessity interrupts it as to all.
The distinction is one which is
well-established, although the authorities
cited do not fully support plaintiffs'
contentions, but in this particular case the
question is academic, for the undertaking
is in the alternative to pay a sum of money
— an essentially divisible obligation — or
to convey the house. As the alternative
indivisible obligation is imposed only in the
event that the debtors fail to pay the
money, it is subject to a suspensive
condition, and the prescription of the
obligation whose non-performance
constitutes the condition effectively
prevents the condition from taking place.
We are, therefore, constrained to hold with
defendants and to reverse the decision of
the lower court. We do this most regretfully,
as the evidence in this case shows that
plaintiff has been extremely lenient with
defendants and has refrained from
pressing her claim against them when it
fell due, and for a long period of years
thereafter, purely out of consideration for
them. The defense of prescription
interposed, particularly as regards Jose
and Florencio Alano, is an indefensible
from the standpoint of fair dealing and
honesty as it is unassailable from the
standpoint of legal technicality. However,
the law, as we see it, is clear and it is our
duty to enforce it.
The judgment of the lower court is
reversed and the action is dismissed as to
all the defendants. No costs will be
allowed. So ordered.
Torres, Johnson, Street and Avanceña,
JJ., concur.
Malcolm, J., dissents.
RESOLUTION
September 20, 1918.
FISHER, J.:
Plaintiff seeks a consideration of the
decision of this court rendered herein.
With respect to plaintiff's contention
concerning the action against the estate of
Anastasio Alano, we have nothing to add
to what was said in the former decision. As
regards the defendants, Florencio Alano
and Jose Alano, the principal argument
advanced by plaintiff is that those
defendants, as testamentary heirs of the
late Anastasio C. Cruz, are liable, in
solidum, for the debt in suit, which is
evidenced by the document signed by
these defendants on February 27, 1904,
set forth at length in our decision. Plaintiff
argues that he obligation being solidary,
by reason of its hereditary origin
(Fabie vs. Yulo, 24 Phil. Rep., 240) the
running of the statute of limitations was
interrupted with respect to all the debtors,
by the payment of P200 made by the late
Anastasio Alano in 1908. The whole
argument rests upon article 1084 of the
Civil Code and the statement contained in
the document of February 27, 1904, that
the Alano brothers are the "testamentary
heirs" of the original debtor, and the
assumption that the latter died, and that
his inheritance was accepted, before the
present Code of Civil Procedure was
enacted. There is nothing in the record to
indicate, even remotely, when the
Reverend Cruz died. If he died after the
new Code took effect, the acceptance of
his inheritance did not impose upon his
testamentary heirs any personal obligation
to respond to the payment of the debts of
the deceased. (Pavia vs. De la Rosa, 8
Phil. Rep., 70.) There having been neither
allegation nor proof with respect to the
date of the death of the original debtor, we
cannot presume, to the prejudice of the
defendants, that he died and that his
succession was opened under the old
regime.
But even had it been proved that the late
Reverend Cruz died before Act No. 190
took effect, and that the debt, by reason of
its hereditary origin, imposed upon the five
Alano brothers the solidary obligation of
paying it, as the evidence does not show
that the payment made by Anastasio
Alano in 1908 was authorized by any one
of the solidary debtors, it cannot have the
effect of interrupting the prescription. It
must be kept in mind that Anastasio Alano
was in no sense a solidary debtor of the
plaintiff, either with respect to the origin of
the obligation or by his participation in the
execution of the document by which the
indebtedness was acknowledged. it is
unquestionable that payment made by any
one of the several solidary debtors
interrupts the running of the statute of
limitations with respect to the others, and
that a third person may make a payment
without the knowledge and even against
the will of the debtor, but payments so
made by a stranger to the debt do not
interrupt the operation of the statute of
limitations.
The general rule is that an
acknowledgment or new promise to pay
must, in order to take a case out of the
statute, be made by the person to be
charged or by some person legally
authorized by him so to act. (17 Ruling
Case Law, p. 911.)
In the case of a part payment by a
stranger, or by a person not authorized to
represent the debtor, it is obvious that
there is no ground for assuming any
admission of an existing liability on his part
or for inferring a new promise by him to
pay the balance of the debt. (17 Ruling
Case Law, p. 935.)
Furthermore, it is to be observed that in
accordance with the express terms of
article 50 of the Code of Civil Procedure,
payment in order to have the effect of
interrupting the running of the statute,
must be made by the person to be
charged.
Independently of these considerations, it is
obvious that this action was not brought as
though based upon an obligation which
had accrued under the provisions of the
Civil Code, formerly in force, relating to the
acceptance of an estate without benefit of
inventory. The action has been brought
solely and exclusively for the enforcement
of the obligation created by the execution
of the document of credit of 1904. This is
the reason, no doubt, why plaintiff made
no effort to prove the date of the death of
Reverend Cruz; whether his heirs
accepted the inheritance with or without
the benefit of inventory; if they were all
adults at the time of the death of the
testator; whether they inherited in equal
parts or in some proportion. It is natural
that she should have made no effort to
produce evidence upon these points, as
there is nothing in the allegations of the
complaint to support its admission. If the
defendants had replied admitting the facts
alleged, it is evident that it would have
been necessary to decide the case in
accordance with the law in force in 1904,
considering the execution of the document
in question as the act from which the
obligation in suit originated, although it
appears from the document that
the consideration for its execution was the
debt of a third person.
When the plaintiff deliberately adopts a
certain theory with respect to the basis of
his right of action, and the case is tried and
decided in the court below and in this court
upon that theory, plaintiff will not be
permitted to change the theory of his
action upon a motion for rehearing.
(Molina vs. Somes, 24 Phil. Rep., 49.) To
do so would be to deprive the defendant of
an opportunity to defend. The defendant
naturally produces evidence relating to the
evidence offered on behalf of plaintiff. If
the issue of the liability of Florencio and
Jose Alano upon the theory now advanced
by plaintiff had been presented in the court
below, it is possible that these defendants
might have been able to prove that their
testator died after the enactment of the
new code or, if he died before, that they
were minors at that time; that the
inheritance was accepted by their
guardian without the intervention of the
family council (Civil Code, art. 992), or that
it was expressly accepted with benefit of
inventory, and that the value of the
property inherited is less than the amount
of the debt (Civil Code, art. 1023), or that
the effect of the execution of the document
of 1904 was a novation of the obligation by
which the latter was converted into a
simple joint indebtedness. The defendants
Florencio and Jose Alano having had no
opportunity to invoke any of these
defenses, which might have been
available to them, it would be unjust to
give judgment against them upon the
theory of their obligation now invoked by
plaintiff. The motion for a rehearing is
denied.