SECOND DIVISION

[G.R. No. 116100. February 9, 1996]

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and MARIA CRISTINA SANTOS, petitioners, vs. COURT OF APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL TRIAL COURT OF PASIG, METRO MANILA, BRANCH 181,respondents. DECISION REGALADO, J.: This petition for review on certiorari assails the decision of respondent Court of Appeals in CA-G.R. CV No. 29115, promulgated on November 10, 1993, which affirmed with modification the decision of the trial court, as well as its resolution dated July 8, 1994 denying petitioners motion for reconsideration. [1] On August 26, 1982, Civil Case No. 47466 for the grant of an easement of right of way was filed by Pacifico Mabasa against Cristino Custodio, Brigida R. Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina C. Santos before the Regional Trial Court of Pasig and assigned to Branch 22 thereof. [2] The generative facts of the case, as synthesized by the trial court and adopted by the Court of Appeals, are as follows: Perusing the record, this Court finds that the original plaintiff Pacifico Mabasa died during the pendency of this case and was substituted by Ofelia Mabasa, his surviving spouse [and children]. The plaintiff owns a parcel of land with a two-door apartment erected thereon situated at Interior P. Burgos St., Palingon, Tipas, Taguig, Metro Manila. The plaintiff was able to acquire said property through a contract of sale with spouses Mamerto Rayos and Teodora Quintero as vendors last September 1981. Said property may be described to be surrounded by other immovables pertaining to defendants herein. Taking P. Burgos Street as the point of reference, on the left side, going to plaintiffs property, the row of houses will be as follows: That of defendants Cristino and Brigido Custodio, then that of Lito and Maria Cristina Santos and then that of Ofelia Mabasa. On the right side (is) that of defendant Rosalina Morato and then a Septic Tank (Exhibit D). As an access to P. Burgos Street from plaintiffs property, there are two possible passageways. The first passageway is approximately one meter wide and is about 20 meters distan(t) from Mabasas residence to P. Burgos Street. Such path is passing in between the previously mentioned row of houses. The second passageway is about 3 meters in width and length from plaintiff Mabasas residence to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide path through the septic tank and with 5-6 meters in length has to be traversed.

When said property was purchased by Mabasa, there were tenants occupying the premises and who were acknowledged by plaintiff Mabasa as tenants. However, sometime in February, 1982. one of said tenants vacated the apartment and when plaintiff Mabasa went to see the premises, he saw that there had been built an adobe fence in the first passageway making it narrower in width. Said adobe fence was first constructed by defendants Santoses along their property which is also along the first passageway. Defendant Morato constructed her adobe fence and even extended said fence in such a way that the entire passageway was enclosed (Exhibit 1-Santoses and Custodios, Exh. D for plaintiff, Exhs. 1-C, 1-D and I -E) And it was then that the remaining tenants of said apartment vacated the area. Defendant Ma. Cristina Santos testified that she constructed said fence because there was an incident when her daughter was dragged by a bicycle pedalled by a son of one of the tenants in said apartment along the first passageway. She also mentioned some other inconveniences of having (at) the front of her house a pathway such as when some of the tenants were drunk and would bang their doors and windows. Some of their footwear were even lost. x x x[3] (Italics in original text; corrections in parentheses supplied) On February 27, 1990, a decision was rendered by the trial court, with this dispositive part: Accordingly, judgment is hereby rendered as follows: 1) Ordering defendants Custodios and Santoses to give plaintiff permanent access - ingress and egress, to the public street; 2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight Thousand Pesos (P8,000) as indemnity for the permanent use of the passageway. The parties to shoulder their respective litigation expenses.[4] Not satisfied therewith, therein plaintiff represented by his heirs, herein private respondents, went to the Court of Appeals raising the sole issue of whether or not the lower court erred in not awarding damages in their favor. On November 10, 1993, as earlier stated, the Court of Appeals rendered its decision affirming the judgment of the trial court with modification, the decretal portion of which disposes as follows: WHEREFORE, the appealed decision of the lower court is hereby AFFIRMED WITH MODIFICATION only insofar as the herein grant of damages to plaintiffs-appellants. The Court hereby orders defendants-appellees to pay plaintiffs-appellants the sum of Sixty Five Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000) Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary Damages. The rest of the appealed decision is affirmed to all respects.[5] On July 8, 1994, the Court of Appeals denied petitioners motion for reconsideration. Petitioners then took the present recourse to us, raising two issues, namely, whether or not the grant of right of way to herein private respondents is proper, and whether or not the award of damages is in order.
[6]

With respect to the first issue, herein petitioners are already barred from raising the same. Petitioners did not appeal from the decision of the court a quogranting private respondents the right of way, hence they are presumed to be satisfied with the adjudication therein. With the finality of the judgment of the trial court as to petitioners, the issue of propriety of the grant of right of way has already been laid to rest. For failure to appeal the decision of the trial court to the Court of Appeals, petitioners cannot obtain any affirmative relief other than those granted in the decision of the trial court. That decision of the court below has become final as against them and can no longer be reviewed, much less reversed, by this Court. The rule in this jurisdiction is that whenever an appeal is taken in a civil case, an appellee who has not himself appealed may not obtain from the appellate court any affirmative relief other than what was granted in the decision of the lower court. The appellee can only advance any argument that he may deem necessary to defeat the appellants claim or to uphold the decision that is being disputed, and he can assign errors in his brief if such is required to strengthen the views expressed by the court a quo. These assigned errors, in turn, may be considered by the appellate court solely to maintain the appealed decision on other grounds, but not for the purpose of reversing or modifying the judgment in the appellees favor and giving him other affirmative reliefs. [7] However, with respect to the second issue, we agree with petitioners that the Court of Appeals erred in awarding damages in favor of private respondents. The award of damages has no substantial legal basis. A reading of the decision of the Court of Appeals will show that the award of damages was based solely on the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when the tenants vacated the leased premises by reason of the closure of the passageway. However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong.[8] There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria.[9] in order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing it. [10] The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering) [11]

Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In such cases, the consequences must be borne by the injured person alone. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. [12] In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria.[13] If, as may happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum absque injuria.[14] In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff.[15] The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals, good customs or public policy. The law recognizes in the owner the right to enjoy and dispose of a thing, without other limitations than those established by law. [16] It is within the right of petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code provides that (e)very owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon. At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of way existing in favor of private respondents, either by law or by contract. The fact that private respondents had no existing right over the said passageway is confirmed by the very decision of the trial court granting a compulsory right of way in their favor after payment of just compensation. It was only that decision which gave private respondents the right to use the said passageway after payment of the compensation and imposed a corresponding duty on petitioners not to interfere in the exercise of said right. Hence, prior to said decision, petitioners had an absolute right over their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the employment and exercise of said right. To repeat, whatever injury or damage may have been sustained by private respondents by reason of the rightful use of the said land by petitioners is damnum absque injuria.[17] A person has a right to the natural use and enjoyment of his own property, according to his pleasure, for all the purposes to which such property is usually applied. As a general rule, therefore, there is no cause of action for acts done by one person upon his own property in a lawful and proper manner, although such acts

incidentally cause damage or an unavoidable loss to another, as such damage or loss is damnum absque injuria.[18] When the owner of property makes use thereof in the general and ordinary manner in which the property is used, such as fencing or enclosing the same as in this case, nobody can complain of having been injured, because the inconvenience arising from said use can be considered as a mere consequence of community life.[19] The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie,[20] although the act may result in damage to another, for no legal right has been invaded[21] One may use any lawful means to accomplish a lawful purpose and though the means adopted may cause damage to another, no cause of action arises in the latters favor. Any injury or damage occasioned thereby is damnum absque injuria. The courts can give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful end by lawful means. [22] WHEREFORE, under the compulsion of the foregoing premises, the appealed decision of respondent Court of Appeals is hereby REVERSED and SET ASIDE and the judgment of the trial court is correspondingly REINSTATED. SO ORDERED. Romero and Puno, JJ., concur. Mendoza, J., took no part.

[1]

Penned by Justice Lourdes K. Tayao-Jaguros, with Justices Vicente V. Mendoza and Jesus M. Elbinias, concurring.
[2] [3] [4] [5] [6] [7]

Original Record, 1. Rollo, 28-29. Ibid., 38. Ibid., 31. Ibid., 34.

See Lumibao vs. Intermediate Appellate Court, et al., G.R. No. 64677, September 13, 1990, 189 SCRA 469; SMI Fish Industries, Inc., et al. vs. National Labor Relations Commission, et al., G.R. Nos. 96952- 56, September 2, 1992, 213 SCRA 444; Heirs of Juan Oclarit, et al. vs. Court of Appeals, et al., G.R. No. 96644, June 17, 1994,233 SCRA 239.
[8] [9]

22 Am Jur 2d, Damages, Sec. 4,35-36. Ibid., 113

[10]

1 Am Jur 2d, Actions, Sec. 65, 595; see The Board of Liquidators vs. Kalaw, et al., L18805, August 14, 1967,20 SCRA 987.
[11]

Plummer vs. Abbott Laboratories (DC RI), 568, F Supp. 920, CCH Prod Liab Rep 9878.

[12] [13]

Ibid., 598. 177 NE 421, 76 ALR 676;

Comstock vs. Wilson, 257 NY 231 Haldeman vs. Bruckhart, 45, 45 Pa 514.
[14] [15] [16]

U.S. - Premier Malt Roducts Co. vs. Kasser, 23 F. (2d)98. Jurado, D.P., Personal and Family Law, 1984 ed., 41.

Jovellanos, et al. vs. Court of Appeals, et al., G.R. No. 100728, June 1992,210 SCRA 126.
[17]

See Escano, et al. vs. Court of Appeals, et al., L-47207, September 25 1980, 100 SCRA 197; Ilocos Norte Electric Co. vs. Court of Appeals, et al., G.R. No. 53401, November 6, 1989, 179 SCRA 5; Albenson Enterprises Corporation, et al. vs. Court of Appeals, et al., G.R No. 88694, January 11, 1993, 217 SCRA 16.
[18] [19]

1 C.J.S., Actions, Sec. 15, 1007-1008.

Tolentino, A.M., Commentaries and juris-prudence on the Civil Code of the Philippines, Vol. 11(1987), 59, citing 8 Salvat 614.
[20] [21] [22]

Coyne vs. Mississippi & R.R. Boom Co., 72 533, 75 NW 748. White vs. Kincaid, 149 NC 415, 63 SE 109; Fahn vs. Reichart, 8 Wis 255.

OKeefee vs. Local 463, United Asso. P. & G. 277 NY 300, 14 NE 2d 77, 117 ALR 817.

Republic of the Philippines SUPREME COURT Manila

SECOND DIVISION G.R. No. L-28782 September 12, 1974 AUYONG HIAN (HONG WHUA HANG), Petitioner, vs. COURT OF TAX APPEALS, COLLECTOR OF CUSTOMS, COMMISSIONER OF CUSTOMS, CONSOLIDATED INDUSTRIES OF THE PHILIPPINES, INC. (CTIP), and LUZON STEVEDORING CORPORATIONS, Respondents. ZALDIVAR, J.: This is the fifth time that a case involving the 600 hogsheads of Virginia leaf tobacco is before this Court. The first case was the case of "Cesar Climaco, et al., vs. Hon. Manuel Barcelona," G.R. No. L-19597, July 31, 1962 1, hereinafter referred to as the Barcelona case; the second, the case of Collector of Customs, et al., vs. Hon. Francisco Arca, et al.," G.R. No. L21839, July 17, 1964 2, hereinafter referred to as the Arca case; the third, the case of "Auyong Hian vs. Judge Gaudencio Cloribel, et al.," G.R. No. L-24704, July 10, 1967 3hereinafter referred to as the Cloribel case; and the fourth, "Auyong Hian vs. Court of Tax Appeals, et al.," G.R. No. L-25181, January 11, 1967 4, which was an appeal from the resolution of the Court of Tax Appeals in CTA Case No. 1560, dismissing Auyong Hian's petition for review of the decision of the Commissioner of Customs that affirmed the decision of the Collector of Customs upon the ground of lack of jurisdiction, and which will be hereinafter referred to as the "First CTA Case".chanroblesvirtualawlibrary chanrobles virtual law library The instant case, the fifth, is a petition for review of the decision of the Court of Tax Appeals in its CTA Case No. 1560, dated January 31, 1968, finding without merit petitioner's appeal from the decision of the Commissioner of Customs that affirmed the decision of the Collector of Customs of Manila which ordered the seizure and forfeiture of the 600 hogsheads of Virginia Leaf tobacco imported by petitioner from the United States. The instant case may well be called the "Second CTA Case".chanroblesvirtualawlibrary chanrobles virtual law library The antecedent facts, and the proceedings that spawned the instant case, briefly stated, are as follows: chanrobles virtual law library On June 29, 1953, the import Control Commission approved petitioner Auyong Hian's application for four no dollar remittance licenses to import Virginia leaf tobacco with an aggregate value of two million dollars, of which approval petitioner was advised on the following day, June 30, 1953-the day when the effectivity of the Import Control Law (Republic Act No. 650)

expired. In October, 1961, the Office of the President approved the use of the aforesaid licenses, and petitioner paid the license fees on November 2, 1961. On December 30, 1961 600 hogsheads of Virginia leaf tobacco arrived in the Port of Manila aboard the "SS Fernstate", consigned to petitioner.chanroblesvirtualawlibrary chanrobles virtual law library Inasmuch as the Collector of Customs in Manila, apparently doubting the legality of the importation, refused to release the shipment of said Virginia leaf tobacco, petitioner filed in the Court of First Instance of Manila an action for mandamus (Civil Case No. 49639), to compel the Collector of Customs and the Commissioner of Customs to release the tobacco to petitioner. On March 19, 1962 Judge Barcelona issued an order to release the tobacco shipment to petitioner. The Collector of Customs and the Commissioner of Customs then filed with the Supreme Court a petition for certiorari to annul the order of release. This was the Barcelona case. On July 31, 1962 this Court, in its decision, ruled that the Court of First Instance of Manila had no jurisdiction to issue the (questioned) order releasing the tobacco shipment; and this Court incidentally declared that the importation of the tobacco, notwithstanding the alleged approval of the importation by the President of the Philippines, was illegal upon the ground that the importation was made long after the expiration of the effectivity of the Import Control Law, and that the importation contravened the government policy as declared in Republic Acts Nos. 698 and 1194. 5 chanrobles virtual law library On November 8, 1962, the Collector of Customs instituted seizure proceedings against the 600 hogsheads of tobacco, and issued a warrant of seizure and detention, in Seizure Identification Case No. 6669. On April 23, 1960 the Collector of Customs rendered a decision declaring the tobacco forfeited to the government, and ordering the sale thereof at public auction on June 10, 1963. Petitioner received copy of the decision on May 7, 1963. From this decision petitioner filed, on May 21, 1963, his notice of appeal to the Commissioner of Customs. On December 7, 1964, the Commissioner of Customs affirmed the decision of the. Collector of Customs.chanroblesvirtualawlibrary chanrobles virtual law library On January 8, 1965 petitioner filed in the Court of Tax Appeals, in CTA Case No. 1560, a petition for review by way of appeal from the decision of the Commissioner of Customs. On June 22, 1965 the Court of Tax Appeals dismissed the petition upon the ground that it had no jurisdiction to entertain the appeal because the Supreme Court had already decided in the Barcelona and Area cases that the importation in question was illegal. From this resolution Auyong Hian appealed to the Supreme Court. This was the "First CTA Case" that We have earlier adverted to, This Court, on January 11, 1967 6remanded the case to the Court of Tax Appeals for further

proceedings, and for decision, on matters that this Court had refrained from deciding.chanroblesvirtualawlibrary chanrobles virtual law library After the case has been remanded to the Court of Tax Appeals, petitioner filed in said court an amended petition for review to include the Consolidated Tobacco Industries of the Philippines (hereinafter referred to as CTIP) and the Luzon Stevedoring Corporation, as partiesrespondents.chanroblesvirtualawlibrary chanrobles virtual law library After hearing, respondent Court of Tax Appeals, in its decision dated January 31, 1968, found the appeal to be without merit and dismissed the same, with costs against petitioner. This is the decision that is now sought to be reviewed in the instant petition for review before this Court.chanroblesvirtualawlibrary chanrobles virtual law library While this case was pending decision, the Solicitor General, on February 22, 1972, filed a "motion for leave", praying that pending final determination of the case, respondents Collector of Customs and Commissioner of Customs be authorized to refund to the CTIP the storage charges of the tobacco in question pursuant to Section 2605-c of the Tariff and Customs Code. In a resolution dated February 28, 1972 this Court deferred action on the petition of the Solicitor General until the case is considered on the merits.chanroblesvirtualawlibrary chanrobles virtual law library In the present appeal, petitioner Auyong Hian assigns twelve (12) errors allegedly committed by the Court of Tax Appeals in its decision of January 31, 1968 dismissing the appeal from the decision of the Commissioner of Customs. The points raised in the assignment of errors boil down to the question of whether or not the Court of Tax Appeals had correctly sustained the decision of the Commissioner of Customs which affirmed the decision of the Collector of Customs in connection with the seizure, forfeiture and the sale of the 600 hogsheads of Virginia leaf tobacco that were imported into the country at the instance of petitioner Auyong Hian. It must be recalled that in the Barcelona and Arca cases, supra, this Court had categorically held that the importation of the 600 hogsheads of Virginia leaf tobacco was illegal. It was for this reason that the Court of Tax Appeals, in its resolution of June 22, 1965, in CTA Case No. 1560 (First CTA Case), dismissed the appeal of Auyong Hian from the decision of the Commissioner of Customs. But this Court, in the first CTA Case held that the Court of Tax Appeals, had jurisdiction to pass upon the appeal of Auyong Hian from the decision of the Commissioner of Customs because the appeal involved matters related to the administrative proceedings in connection with the seizure, forfeiture and sale of the tobacco in question. Here is what this Court said:

... It appears to Us that the Court of Tax Appeals had overlooked the fact that the appeal of Auyong Hian from the decision of the Commissioner of Customs had raised not only the question of the legality of the importation but also other matters which called for a ruling by the Court of Tax Appeals in the exercise of its appellate jurisdiction - especially the question of whether the tobacco thus imported were goods the importation of which was relatively prohibited or absolutely prohibited, and also the question regarding the disposal of the tobacco that was thus seized. The declaration by this Court, in the Barcelona and Arca cases, supra, that the importation of the tobacco in question was illegal was not intended to stop the course of the administrative proceedings in relation to the importation of said tobacco. Let it be noted that when the Barcelona case was decided on July 31, 1962 the seizure proceedings against the 600 hogsheads of tobacco in question had not yet been instituted by the Collector of Customs. It was not until November 8, 1962 when Seizure Identification No. 6669 was instituted. ... And so this Court, in the First CTA case, declared the Court of Tax Appeals as possessed of jurisdiction to pass upon the questions raised by Auyong Hian in his appeal from the decision of the Commissioner of Customs regarding administrative matters relating to the seizure proceedings of the 600 hogsheads of tobacco in question.chanroblesvirtualawlibrary chanrobles virtual law library (1) Auyong Hian claims that he was not given a chance to be heard in the seizure proceedings. He claims that he filed a motion for postponement of the hearing scheduled for November 26, 1962 based on some valid reasons, that said motion for postponement was not acted upon by the hearing officer, or if it was acted upon at all the hearing officer did not notify him of the action taken on said motion, and that he was not notified about the subsequent hearing because he was declared in default by the hearing officer. Auyong Hian maintains that there can not be a declaration of default in purely administrative proceedings. In short, it is the contention of Auyong Hian that in the seizure proceedings of the 600 hogsheads of tobacco in question he was not afforded the benefits of due process of law.chanroblesvirtualawlibrary chanrobles virtual law library It is a settled doctrine that due process is applicable to administrative proceedings (Asprec vs. Itchon, et al., L-21685, April 30, 1966, 16 SCRA 921, 925; Cornejo vs. Gabriel, 41 Phil. 188, 193); that the essence of due process is the requirement of notice and hearing (Algabre vs. Court of Appeals, L-24458-64, July 31, 1969, 26 SCRA 1130, 1140); that the presence of a party at a trial is not always of the essence of due process, and all that due process requires is an opportunity to be heard (Asprec vs.

Itchon, et al., supra).chanroblesvirtualawlibrary chanrobles virtual law library In this connection, the Court of Tax Appeals made the following findings: The records show that petitioner was given a notice of hearing in Seizure Identification No. 6669 (re the 600 hogsheads of Virginia leaf tobacco); that on the date of hearing petitioner filed a motion for indefinite postponement, which was not acted upon or resolved by the proper Customs officials; that upon failure of petitioner to appear on the date of hearing, the hearing officer declared petitioner in default; and that the hearing was conducted thereafter in the absence of petitioner. (Decision CTA Case No. 1560; Record, pp. 32-33). Petitioner's having filed a motion for postponement, even if the motion is not entirely groundless, confers on him no right either to assume that the motion for postponement would be granted or to be absent at, and shy away from, the hearing. Petitioner was consequently guilty of carelessness and neglect when he failed to appear at the trial. He cannot rightfully claim that the hearing officer was guilty of abuse of discretion in refusing to grant the postponement (Sarreal vs. Hon. Tan, et al., 92 Phil. 689, 692). And after a party has been declared in default, he is not entitled to notice of the order placing him in default; neither is he entitled to notice of proceedings subsequent to default (Lim Toco v. Go Fay, 80 Phil. 166, 168). Petitioner, therefore, has no cause to complain that he was not afforded a chance to be heard or that he was denied his day in court.chanroblesvirtualawlibrary chanrobles virtual law library The contention of petitioner that in administrative proceedings a party can not be declared in default is untenable. If a respondent in an administrative proceeding cannot be declared in default when he fails to appear, as required, the continuance of an administrative proceeding would be dependent on the will and caprice of said party to the proceedings, and would render helpless the officer or board conducting an administrative proceeding. We hold that if the party duly summoned, or duly notified, to appear at an administrative investigation, refuses to appear, he may be declared in default, and the investigation may proceed without his presence.chanroblesvirtualawlibrary chanrobles virtual law library Petitioner's first assignment of error is not only not sustained by the facts. It is furthermore negated by the pronouncements of this Court which has already passed directly on the issue of whether or not petitioner Auyong Hian was deprived of due process of law in the seizure proceedings. In the Arca case, respondent therein claimed that the decision in the seizure

proceedings was arbitrary because the hearing officer and the Collector of Customs declared Auyong Hian in default without notifying him of the action taken on his motion to postpone the seizure proceedings.chanroblesvirtualawlibrary chanrobles virtual law library This Court rejected the contention saying: The record shows that Auyong Hian received on November 21, 1963 notice of hearing on the seizure proceedings scheduled for November 26, 1962. It is true that he filed a motion to postpone the hearing, but it was for an indefinite period of time and only in the morning of the date of hearing. He did not bother to find out what action the Collector of Customs would take on his motion. Continuation of the seizure proceedings was made on December 6, and December 10, 1962, yet Auyong Hian did not take the trouble to find out about its status. The facts, therefore, show that Auyong Hian was not deprived of due process of law, but that he is guilty of abandonment or gross negligence in the protection of his rights, for which he alone is to blame. This pronouncement, though found only in the opinion, cannot be accurately called, as contended by petitioner, an obiter dictum just because it was not incorporated in the dispositive portion of the decision. This Court has already remarked that the dispositive part does not always constitute a judgment and that the judicial pronouncements in the body of the decision must be considered. (Millare, et al. vs. Millare, et al., 106 Phil. 298-299.) An obiter dictum has been defined as an opinion expressed by a court upon some question of law which is not necessary to the decision of the case before it (Bouvier's Law Dictionary, third revision, Vol. I, p. 863). Although the question of whether petitioner Auyong Hian was deprived of due process in the seizure proceedings was not the precise issue in the Arca case, for this Court itself said that the legal question posed in that case was: Who has a better right to the tobacco in question, petitioner Collector of Customs who has ordered the seizure and declared the forfeiture thereof as a result of Manila Seizure Identification No. 6669, or respondent Tomas Cloma in whose favor a writ of attachment was issued by the Court of First Instance of Manila covering said shipment in Civil Case No. 53874, brought by Cloma against Auyong Hian for services rendered to the latter? (Collector of Customs v. Area, L-21389, July 17, 1964, 11 SCRA 529, 534-535). Yet, the pronouncement made by this Court upon said question cannot be said to be totally extraneous, and was not necessary, to the adjudication of the case before it, for to arrive at the conclusion that the Collector of Customs had a better right, by virtue of the seizure proceedings, that had

already been terminated before Cloma's action was brought, the validity and legality of the seizure proceedings, and necessarily the issue of the deprivation of due process, had to be passed upon. With respect to a court of last resort, all that is needed to render its decision authoritative is that there was an application of the judicial mind to the precise question adjudged, and that the point was investigated with care and considered in its fullest extent (Alexander v. Worthington, 5 Md. 488, cited in Bouvier's Law Dictionary, third revision, Vol. 1, p. 864). A perusal of the decision in the Arca case shows that the precise question of deprivation of due process was extensively and explicitly discussed with a view to settle it, and consequently the pronouncement on said point cannot be considered a dictum. 2. Petitioner anchors the alleged invalidity of the seizure proceedings on his having been deprived his day in court. This basis has been shown to be untenable. Petitioner, however, tried to emasculate respondents' argument by asserting that the declaration of the illegality of the tobacco importation was incidentally made; hence it has no binding force.chanroblesvirtualawlibrary chanrobles virtual law library An analysis of the Barcelona case shows that even if the pronouncement therein made regarding the illegality of the importation was incidentally made, it did not and could not mean that the pronouncement was extraneous to the subject matter and that it was, therefore, unauthoritative.chanroblesvirtualawlibrary chanrobles virtual law library The Barcelona case was a petition for certiorari to set aside a writ of preliminary mandatory injunction. issued by the Hon. Judge Manuel P. Bareelona in Civil Case No. 49639 of the Court of First Instance of Manila, ordering the respondents therein, Cesar Climaco and Teotimo Roja, to allow entry of the 600 hogsheads of Virginia leaf tobacco imported under authority of licenses Nos. 17166, 17169, 17196, and 17199 issued by the defunct Import Control Commission on May 8, 1953 under the provisions of Republic Act No. 650. Respondents therein opposed the issuance of the writ of preliminary injunction, alleging among other things that the Court of First Instance had no jurisdiction to order the release of the importation on the ground that the importer Auyong Hian was not entitled as a matter of right and equity to import the tobacco, for the licenses, under which the importation was made, were issued under a law that ceased to exist eight years before the importation, and that the importation was a violation of Rep. Act No. 1194 at the time of importation; and that the imported tobacco, being under customs custody, could not be ordered released by the Court of First Instance which had no jurisdiction to review the actuations of

customs authorities in any case involving the seizure, detention or release of any property.chanroblesvirtualawlibrary chanrobles virtual law library One of the reasons given by the respondent court therein for granting the writ of preliminary mandatory injunction was that the importation was legal on the ground that the President had issued the licenses in accordance with the supposed opinions of the Secretary of Justice Nos. 32 and 145, series of 1961.chanroblesvirtualawlibrary chanrobles virtual law library Although the principal question therein was the court's jurisdiction and the primary relief prayed for by petitioners was to set aside the preliminary mandatory injunction dated March 20, 1962, the resolution thereof hinged on another question, which was, to quote the Court: The question that is, therefore squarely presented for the decision of this Court is whether, under the facts and circumstances above indicated, the petitioner has the clear legal right to make the importation in question and the respondents the clear legal duty to allow entry and release of said importation. The above question in turn depended on whether the importation was legally made.chanroblesvirtualawlibrary chanrobles virtual law library This Court in the dispositive portion of its decision in said case ruled for the reasons therein given that: ... We are constrained to declare, as we hereby declare, that the importation in question has been illegally made ... And We, therefore, hereby grant the petition and set aside the order of the court below on March 19, 1962 and the writ of preliminary injunction issued in accordance therewith .... Said ruling regarding the illegality of the importation, contained in the dispositive portion cannot be said, as claimed by petitioner, unauthoritative and not binding. Said declaration of illegality was reiterated in the Arca case thus: There is no question that the importation of the tobacco leaf in question was illegal, having been made in clear violation of the policy contained in Republic Acts Nos. 698 and 1194. (Collector of Customs v. Arca, L-21389, July 17, 1964, 11 SCRA 529, 535.) chanrobles virtual law library 3. Petitioner's insistence that the tobacco importation was valid and legal together with the grounds asserted to sustain the same is not tenable. This Court already had occasion to examine in the Barcelona case the import

licenses claimed to be valid by petitioner. To the petition in said case were appended copies of the licenses and the receipt evidencing payment of the fees thereon in November, 1961. The alleged reason that said licenses were valid because the President had issued them in accordance with the supposed opinions of the Secretary of Justice No. 32 and 145, series of 1961 was already passed upon. This Court said that: chanrobles virtual law library An examination of the licenses shows that the same were approved by the Import Control Commission on June 29, 1953. The following statement is contained in each of the licenses:chanrobles virtual law library This license is valid from date of issue until fully consummated, provided that this license must be presented to an Authorized Agent (Negotiating Bank) of the Central Bank, and Bank Credit established within thirty (30) days after date of release. It is not transferable/assignable without authority from the Import Control Commission and is subject to revocation for cause. Commodities covered by this license must be shipped from the country of origin before the expiry date of the license, and are subject to Sec. 13 of Republic Act No. 650.chanroblesvirtualawlibrary chanrobles virtual law library The following provision of Republic Act No. 650 is to be noted: chanrobles virtual law library Sec. 8. Unless extended in accordance with the rules and regulations, import licenses issued under this Act and which are not used within thirty days after the issue by the opening of a letter of credit or a similar transaction shall be null and void. Import licenses are nontransferable.chanroblesvirtualawlibrary chanrobles virtual law library The petitioner has not shown that steps were ever taken to open the corresponding letters of credit amounting to $500,000 to cover the payment of the Virginia leaf tobacco to he imported, as required by the above-quoted provision of the law. Neither is it shown that immediately, or within a reasonable time after the approval of the licenses and their issuance, steps were taken to order the tobacco to be shipped to the Philippines. Certainly this was not done because the licenses were not fully completed until November 2, 1961, when the corresponding fees chargeable on the licenses were paid to the Office of the President. (Climaco vs. Barcelona, L-19597, July 31, 1962, 5 SCRA 850-851.) and after discussing why the decision in Commissioner of Customs v. Auyong Hian, G.R. No. L-11719, April 29, 1959 could not be applied to the said case, this Court concluded that:

The importation [of the tobacco] in question, therefore, is a gross violation of the policy contained in Republic Acts Nos. 698 and 1194, limiting the Virginia leaf tobacco importation only to such amounts as could not be met with by the local production of Virginia leaf tobacco, hence clearly illegal.chanroblesvirtualawlibrary chanrobles virtual law library The supposed approval of the licenses by the President has been alleged as a ground for the validity of the importation. The President may not extend the life of licenses issued under Republic Act No. 650; he cannot make the illegal importation valid; he has no legal authority to do so and his act would be clearly violative of the express provisions of Republic Act 1194. (Climaco v. Bareelona, L-19597, July 31, 1962, 5 SCRA 846, 848, 850, 853.) In the Arca case, this Court again said: There is no question that the importation was illegal having been made in clear violation of the policy contained in Republic Acts Nos. 698 and 1194. To this effect is the decision of this Court in Climaco vs. Judge Barcelona, et al., G.R. No. L-19597, July 31, 1962. (Collector of Customs vs. Arca, No. L21389, July 17, 1964, 11 SCRA 529, 535.) Petitioner's claim that the Government is estopped to deny the validity of the license cannot be seriously defended. Time and again, this Court has ruled that the doctrine of estoppel is not applicable against the Government suing in its capacity as sovereign or asserting governmental rights; the Government is never estopped by mistake or errors on the part of its agents. (Republic v. Go Bon Lee, L-11499, April 29, 1961, 1 SCRA 1166, 1170; Republic vs. Philippine Rabbit Bus Lines, Inc., L-26862, March 30, 1970, 32 SCRA 211, 218; Luciano vs. Estrella, L-31622, August 31, 1970, 34 SCRA 769, 776.) Moreover, estoppel cannot give validity to an act that is prohibited by law or is against public policy. (Republic v. Go Bon Lee, supra.) chanrobles virtual law library The tobacco importation in question was, therefore, subject to seizure and forfeiture in accordance with Section 2530 of the Tariff and Customs Code and the Collector of Customs had the power to order the seizure in accordance with the provisions of Section 2205 of the Tariff and Customs Code, as has already been ruled by this Court in the Arca case.chanroblesvirtualawlibrary chanrobles virtual law library But the Court of Tax Appeals, insists petitioner, should have decided whether the importation was absolutely prohibited or merely prohibited, on the ground that in this Court's decision in the Court of Tax Appeals case, it was said that "the question of whether the tobacco thus imported were goods the

importation of which was relatively prohibited or absolutely prohibited" "called for a ruling of the Court of Tax Appeals in the exercise of its appellate jurisdiction." (19 SCRA 10, 22). Petitioner also claims that the respondent Court of Tax Appeals erred when it did not hold that the importation was at worst, only relatively prohibited. In the decision of the Court of Tax Appeals sought to be reviewed, it appears that the Tax Court discussed the classification of articles subject to forfeiture under the Customs Law, and the rights of the importer to the delivery of the imported article under Sections 2301 and 2307 of the same Code, and it concluded that the failure to declare the tobacco imported as merely qualifiedly prohibited did not affect the substantive rights of petitioner. Said the Tax Court: There is no evidence of record to show that petitioner herein exercised or attempted to exercise any of the rights afforded an importer under Sections 2301 and 2307 of the Tariff and Customs Code. ... At any rate, even if he sought the release of said tobacco by filing a bond for its appraised value or by paying the redemption price, it is evident that the same could not have been granted because the delivery of said tobacco to him would be contrary to law. ... It is quite plain that the failure of respondents to declare said tobacco as an article which merely qualifiedly prohibited has not adversely affected the substantive right of petitioner. (Decision-CTA Case No. 1560, Record, pp. 47-48.) The Court of Tax Appeals did not commit a reversible error on this point. There is no question, as this Court has declared, that the importation made in December, 1961, of tobacco leaf in question was illegal. The same was made in clear violation of the policy enunciated in Republic Act No. 698, approved May 9, 1952 limiting the importation of foreign leaf tobacco, and also of its amendatory Act, Republic Act No. 1194, approved August 25, 1954. These' statutes not only limit the importation of Virginia leaf tobacco but also provide that the "Virginia-type leaf tobacco authorized to be imported therein shall be allocated and distributed by the Monetary Board of the Central Bank among legitimate manufacturers of Virginia-type cigarettes; that the licenses for such importation shall be issued ... by the Central Bank ... that the leaf-tobacco imported without the necessary license issued under said Act shall be forfeited to the Government" (Sec. 2). Said importation is also subject to forfeiture under Sec. 2530 of the Tariff and Customs Code.chanroblesvirtualawlibrary chanrobles virtual law library The substantive right of petitioner is not affected, as declared by the Tax Court, by the failure to declare whether the importation was absolutely or qualifiedly prohibited.chanroblesvirtualawlibrary chanrobles virtual law library

Although the illegally imported subject tobacco may not be absolutely prohibited, but only qualifiedly prohibited under Sec. 102 (K) of the Tariff and Customs Code, for it may be imported subject to certain conditions, it is nonetheless prohibited and is a contraband (Comm. of Customs vs. CTA & Dichoco, L-33471, Jan. 31, 1972), and the legal effects of the importation of qualifiedly prohibited articles are the same as those of absolutely prohibited articles (Geotina vs. Court of Tax Appeals, No. L-33500, August 30, 1971, 40 SCRA 362, 379, 383; Comm. of Customs vs. CTA & Dichoco, supra).chanroblesvirtualawlibrary chanrobles virtual law library Under Sec. 2301 of the Tariff and Customs Code, upon making any seizure, the Collector of Customs shall issue a warrant for the detention of property; and if the owner or importer desires to secure the release of the property for legitimate use, the Collector may surrender it upon the filing of a sufficient bond, in an amount to be fixed by him, conditioned for the payment of the appraised value of the article and/or any fine, expenses and costs which may be adjudged in the case, provided, the articles the importation of which is prohibited by law shall not be released under bond. Pursuant, thereto, the importer of the subject tobacco, the importation of which is prohibited by law, has no right that the tobacco be released to him even if he puts up a bond to be determined by the Collector of Customs.chanroblesvirtualawlibrary chanrobles virtual law library Sec. 2307 of the Tariff and Customs Code, which authorizes in a seizure case the settlement of the case by payment of fine or the redemption of forfeited property, also provides that: Redemption of forfeited property shall not be allowed in any case where the importation is absolutely prohibited or where the surrender of the property to the persons offering to redeem the same would be contrary to law . (Emphasis supplied.) Petitioner Auyong Hian would, accordingly, not even be entitled to redeem, even if he wanted to, the forfeited tobacco, for the surrender to him of said tobacco would be contrary to law, because petitioner could not really be legally entitled to import it inasmuch as he was not a legitimate manufacturer of Virginia-type cigarettes, among whom alone shall be allocated and distributed by the Monetary Board of the Central Bank the Virginia-type leaf tobacco authorized to be imported. (Sec. 2, Rep. Act No. 1194.) chanrobles virtual law library What has been said above would have applied even if petitioner had attempted to exercise the right of redemption under Sec. 2307 of the Tariff

and Customs Code. The fact, however, as found by the Court of Tax Appeals is There is no evidence or record to show that petitioner herein exercised or attempted to exercise any of the rights afforded an importer under Section 2307 of the Tariff and Customs Code. All that he sought was the release of tobacco in question upon payment of the duties and taxes due thereon because of his insistence that the importation was made in accordance with law. 4. What has been said in the third assignment of error suffices to dispose of the fourth and fifth assignments. Therein it was shown that pursuant to the provisions of Republic Acts Nos. 650 and 1194, petitioner was disqualified to import the Virginia-leaf tobacco, he not being a legitimate manufacturer of this type of cigarette, and under the provisions of Secs. 2301 and 2307 of the Tariff and Customs Code, the tobacco could not be delivered to him, even if he had made attempts to put up a bond. Neither could the tobacco be legally delivered to him even if he had attempted to redeem it. Hence, the alleged error committed by the Court of Tax Appeals in finding that petitioner did not attempt to exercise any of the rights afforded an importer under Section 2307 of the Tariff and Customs Code, even if sustained, would not affect the outcome of the instant petition.chanroblesvirtualawlibrary chanrobles virtual law library 5. Petitioner's contention that the sale to the CTIP was invalid cannot be upheld.chanroblesvirtualawlibrary chanrobles virtual law library It has been shown in the previous discussion that the decision of the Collector of Customs in ordering the forfeiture and sale of the subject tobacco was correct and legal. Seized property, other than contraband, pursuant to Sections 2601 and 2602 of the Tariff and Customs Code, shall be sold, or otherwise disposed of, upon the order of the Collector of the port where the property in question is found. The property shall be sold at public auction after ten days notice conspicuously posted at the port and such other advertisements as may appear to the Collector to be advisable in the particular case (Sec. 2603). If the article seized, however, is perishable, the Collector may proceed to advertise and sell the same at auction upon notice as he shall deem to be reasonable (Sec. 2607).chanroblesvirtualawlibrary chanrobles virtual law library Implementing his decision dated May 9, 1963, to have the seized tobacco sold to buyers who could meet certain qualifications and conditions, and after having created a Committee to implement the decision, the Collector of Customs issued a notice of sale (Exhibit 6 - Customs), setting the public

auction sale "at June 10, 1963 at 9:00 A.M. and every morning thereafter until terminated." which notice of sale was given the requisite publication at least ten days before the auction sale (before June 10, 1963) in accordance with Section 2603 of the Tariff and Customs Code. The sale, therefore, could not have been invalid, for lack of public notice.chanroblesvirtualawlibrary chanrobles virtual law library Two prospective bidders - the respondent CTIP and the Philippine Associated Resources - registered with the Special Bidding Committee - but only the CTIP was found to be a qualified bidder.chanroblesvirtualawlibrary chanrobles virtual law library On June 10, 1963, the date set for the public auction sale, the Collector of Customs was served the writ of preliminary injunction issued by Judge Francisco Arca in Civil Case No. 53824 directing the former to desist from holding the auction sale. This writ was served upon him at 8:55 A.M. (pp. 270-272, 329, 360 t.s.n., Brief for Respondent CTIP, p. 48), but before the writ was served, the CTIP had submitted its bid at around 8:00 A.M. ( Ibid., p. 48), and these facts were not impugned by petitioner (See Petitioner's Reply Brief, pp. 26-27). At any rate, even if the bid were submitted after the Collector had been served with the writ of preliminary injunction, his act would not constitute a violation of the writ for the submission and reception of a bid could not constitute a consummated sale. But on June 17, 1963 the Supreme Court issued a preliminary injunction in L-21389 (Arca case) prohibiting Judge Arca from executing or enforcing the writ of preliminary injunction issued by him against the petitioner in Civil Case No. 53874 (11 SCRA 529, 532-533).chanroblesvirtualawlibrary chanrobles virtual law library On June 26, 1963, the bid of the CTIP was finally approved and the tobacco was awarded to it. This took place before 5:00 p.m. However, at 5:38 p.m. of the same day another restraining order from the Supreme Court in the Arca case directed the Collector to desist temporarily from continuing with the public auction of the tobacco until July 3, 1963. Before the Collector received the restraining order, CTIP had already paid P500,000 on account of its approved and accepted bid of P1,500,000.00 and had filed the required surety bond of P1,000,000 to guarantee the exportation of the locally grown tobacco. It is clear, therefore, that at the time the bid of the CTIP was approved and at the time payment was made, there was no restraining order either of the CFI or of the Supreme Court enjoining the sale.chanroblesvirtualawlibrary chanrobles virtual law library But even assuming arguendo that at the time the sale was made there was already a restraining order enjoining it, the sale would still not be null and

void. A restraining order like injunction operates upon a person as it is granted in exercise of equity jurisdiction, and an injunction has no in rem effect to invalidate an act done in contempt of an order of the court except where by statutory authorization the decree is so framed as to act in rem on property. (Town of Fond Du Lac v. City of Fond Du Lac, 22 Wis. 2d 525,126 NW 2d 206). In 42 Am. Jur. 2d, pp. 1144-1145, we read: Where an injunction is granted and the decree operates in personam, an act done in violation of injunction is not a nullity. On the contrary, the act is ordinarily valid and legally effective, except as to the person who obtained the injunction and those claiming under him, and as to them, the act is valid unless and until they attack it in a proper manner. If an injunction prohibits the defendant from transferring property, but he transfers the property in violation of the injunction, and the transfer is made to an innocent third person, the transferee obtains good title and the injunction. does not affect his rights. Neither may petitioner's contention that the continuation of the sale for more than three days, i.e. from June 10 to June 26, 1963 would render the sale void, because it is violative of Section 2607 of the Tariff and Customs Code, be sustained. Said section in part provides: Section 2607. Disposition of article liable to deterioration . - Perishable articles shall not be deposited in a bonded warehouse; and, if not immediately entered for export or for transportation from the vessel or aircraft in which imported or entered for consumption and the duties and taxes paid thereon, such articles may be sold at auction, after such public notice, not exceeding three days, as the necessities of the case permit. The three days mentioned in said section refers to the period of public notice, not to continuation of the sale as contended by petitioner.chanroblesvirtualawlibrary chanrobles virtual law library Untenable also is petitioner's contention that the Collector had no right to have the tobacco sold because the Bureau of Customs was not yet the owner of the tobacco at the time of the sale. This contention loses sight of the fact that the Collector of Customs when sitting in forfeiture proceedings, constitutes a tribunal upon which the law confers jurisdiction to determine all questions touching the forfeiture and further disposition of the illegally imported merchandise. (Commissioner of Customs v. Cloribel, L-20266, Jan. 31, 1967, 19 SCRA 234; Auyong Hian vs. Court of Tax Appeals, L-25181, January 11, 1967, 19 SCRA 10). The Tariff and Customs Code requires the Collector, upon making any seizure to issue a warrant for the detention of the property (Section 2301); to make in writing, after hearing, a declaration

of forfeiture (Section 2312), and to sell or otherwise dispose of the property under customs custody (Sec. 2602). The forfeiture constitutes a statutory transfer of the right of property. Title is vested in the government by administrative forfeiture, although such title may not be absolute, but resoluble subject to the right of redemption on the part of the owner of the forfeited merchandise (Sec. 1388 Administrative Code). The consequence of this forfeiture was already declared by this Court in the Arca case when it said: It is to be noted that the seizure proceedings had already been terminated and the tobacco shipment declared forfeited to the Government, thereby ceasing to be the property of Auyong Hian .... The seizure proceedings were taken by the Collector of Customs in the exercise of its jurisdiction of the customs law (Secs. 2205 and 2530, Tariff and Customs Code) ... (11 SCRA 529, 537). And this Court continued: Auyong Hian, therefore, had lost all his rights to the shipment, not only because we declared the licenses void and the shipment illegal in the case of Climaco vs. Barcelona, G.R. No. L-19597, but also because the seizure proceedings have been found to be regular and had deprived Auyong Hian of his rights to the shipment as importer; at least while the order of seizure has not been set aside. (11 SCRA 529, 538.) Petitioner, however, insists that the Collector could not sell the forfeited tobacco after he lost jurisdiction thereof upon the perfection of the appeal on May 21, 1963 to the Commissioner of Customs. Petitioner seems to imply that the sale, if any, should have been made by, or at least with, the approval of the Commissioner of Customs. This is what happened. When the Collector of Customs approved, on June 26, 1963, the offer of the CTIP, his action was backed by prior approval of the Commissioner of Customs. To this effect we read in the appealed decision, thus: Apparently, to preclude any doubt as to the regularity of the sale, the Collector of Customs, on June 11, 1963, sought the advice of the Secretary of Finance, and the latter referred the matter to the Secretary of Justice, who, at that time, was the Chairman of the Cabinet Committee on Public Bidding of Tobacco. In an indorsement (rated June 24, 1963, signed by the Secretary of Justice and all the members of the said Cabinet Committee, the sale was approved. The indorsement of the Cabinet Committee was transmitted to the Secretary of Finance and the Commissioner of Customs, who informed the Collector of Customs of such approval (See Exhs. "E", "F" and "G", CTIP, pp. 205-211, CTA Records), When, therefore, the Collector of

Customs approved on June 26, 1963, the recommendation 'of the Special Bidding Committee to accept the offer of Consolidated Tobacco Industries of the Philippines, his action had the prior approval of the Commissioner of Customs, the Secretary of Finance and the Cabinet Committee. (Brief for Petitioner, pp. 140-141.) Neither can the inadequate consideration, even if true, invalidate the sale to the CTIP.chanroblesvirtualawlibrary chanrobles virtual law library The other factor which, according to petitioner, militates against the validity of the sale is the measly sum of P1,500,000 paid by the CTIP for the tobacco which had a value, according to petitioner, of P7,000,000. What is really the value of the imported tobacco? According to the Tax Court, the records show that when the tobacco arrived in the Philippines, petitioner filed and Affidavit and Pro Forma Invoice giving the invoice value of the tobacco as $103,453 and an appraised value, for tax purposes, of P227,675. Petitioner contends that this declaration was merely its invoice value and does not include the other expenses incurred in the importation. Because of these different declarations, the Tax Court confessed it was at a loss as to which of petitioner's declaration was to be believed. When it suits petitioner's purpose he claims that the tobacco was worth P227,675.00. For other purposes the value was P7,000,000. If the claim of petitioner that the tobacco was really worth P7,000,000.00, then there will be another cause for forfeiture which would be petitioner's filing a false declaration under section 2530 (m) of the Tariff and Customs Code.chanroblesvirtualawlibrary chanrobles virtual law library We cannot say that the appraisal of the value of the tobacco was incorrect. According to the Tax Court, the Collector of Customs took precautionary measures to insure a correct appraisal of the tobacco. The appraisal was made by a competent appraiser of the Bureau of Customs, and both the Commissioner of Customs and the Secretary of Finance, who exercise supervisory authority over the Collector of Customs and who were consulted on the matter, approved the sale, or at least, interposed no objection to the sale. Anent this matter it has been said that an appraisal made by the Commissioner of Customs under Section 1377 of the Revised Administrative Code is presumed to be correct, unless the contrary is proven by the importer. (Lazaro vs. Commissioner of Customs, L-22511 and L-22343, May 16, 1966, 17 SCRA 36, 41 and cases cited therein.) chanrobles virtual law library But, assuming arguendo, that the consideration paid for the forfeited tobacco was inadequate, such inadequate consideration is not a ground for

the invalidity of a contract. Anent this matter Article 1355 of the Civil Code provides: Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract, unless there has been fraud, mistake or undue influence. Petitioner has not shown that the instant sale is a case exempted by law from the operation of Art. 1355; neither has petitioner shown that there was fraud, mistake or undue influence in the sale. Hence, this Court cannot but conclude with the Court of Tax Appeals that "In these circumstances, we find no reason to invalidate the sale of said tobacco to Consolidated Tobacco Industries of the Philippines." chanrobles virtual law library The Court of Tax Appeals is claimed to have erred also in holding that the subject tobacco was deteriorating. We note, that the imported tobacco has a very unique nature. According to petitioner, it is highly perishable, but in spite of the lapse of several years, it has not deteriorated. In Civil Case No. 49639 of the Court of First Instance of Manila, petitioner herein averred that the Virginia leaf tobacco imported is highly perishable in nature so that delay in the release thereof would cause him irreparable injury (Climaco v. Barcelona, L-19597, July 31, 1962, 5 SCRA 846, 848). In his "petition to release tobacco under bond" dated March 14, 1967, filed with respondent court, he alleged that: 16. That considering the time that has elapsed since the arrival in Manila of the 600 hogsheads of Virginia leaf tobacco same may be deteriorated unless sooner disposed of ... Now he claims that the tobacco has not deteriorated.chanroblesvirtualawlibrary chanrobles virtual law library But let us give petitioner the benefit of the doubt. We do not see, however, how the deterioration or not of the tobacco will affect the outcome of this petition. Hence, it is unnecessary to deal on it further.chanroblesvirtualawlibrary chanrobles virtual law library Petitioner's contention that the Court of Tax Appeals erred in holding that he had no legal personality to question the legality of the sale, should be sustained. Even if petitioner had lost all his rights to the tobacco shipment after the same has been seized and forfeited, such loss of right was still subject to a contingency - that is, "at least while the order of seizure has not been set aside." It is unwarranted to conclude that the loss of his rights to the tobacco while the seizure has not been set aside carried with it the loss

of his legal personality to question the legality of the sale. The Tariff and Customs Code itself expressly gives to any person aggrieved by the decision or action of the Collector of Customs in any case of seizure, the right to have the decision reviewed by the Commissioner of Customs (Section 2313), and from the decision of the latter, he has a right to appeal to the Court of Tax Appeals (Section 2402), and from the latter's decision to the Supreme Court.chanroblesvirtualawlibrary chanrobles virtual law library Neither can it be accurately said that petitioner has no right to have the contract of sale to the CTIP annulled, on the ground that he was not a party bound either principally or subsidiarily by the contract. (Art. 1397 Civil Code.) Petitioner seeks the declaration of the nullity of the sale not as a party to the sale, but because he had an interest that was affected by the sale. This Court has held that a person who is not a party obliged principally or subsidiarily in a contract may exercise an action for nullity of the contract if he is prejudiced in his rights with respect to one of the contracting parties, and can show the detriment which would positively result to him from the contract in which he had no intervention. (Ibaez v. Hongkong and Shanghai Bank, 22 Phil. 572, 584-585; Teves vs. People's Homesite and Housing Corporation, et al., L-21498, June 27, 1968, 23 SCRA 1141, 1147-1148). It would be stating the obvious that in the instant case the petitioner will suffer detriment as a consequence of the sale, in case it is not set aside.chanroblesvirtualawlibrary chanrobles virtual law library As a matter of fact, this Court has recognized the personality of petitioner to question the legality of the sale when in the Court of Appeals case, L-25181, this Court remanded the case to the Court of Tax Appeals to decide the validity of the administrative proceedings and the question regarding the disposal and sale of the tobacco that was seized. It was therein implied that petitioner had personality to question the sale.chanroblesvirtualawlibrary chanrobles virtual law library The error assigned regarding the amount of warehousing charges that had accumulated is immaterial to the decision of the instant case, and whether the Court of Tax Appeals did commit the error or not, will not affect the result of the case. This point, therefore, need not be commented on.chanroblesvirtualawlibrary chanrobles virtual law library This Court recognizes that petitioner has the right to take all legal steps to enforce his legal and/or equitable rights to the tobacco in question. One who makes use of his own legal right does no injury. Qui jure suo utitur mullum damnum facit. If damage results from a person's exercising his legal rights, it is damnum absque injuria. The consequent delay in the delivery of the tobacco is an incident to said exercise of his rights. But, again, whatever

might be petitioner's motive in this regard will hardly affect the outcome of this case.chanroblesvirtualawlibrary chanrobles virtual law library 6. The property, subject of litigation is not by that fact a line, in custodia legis. "When property is lawfully taken, by virtue of legal process, it is in the custody of the law, and not otherwise." (Gilman v. Williams, Wis. 334, 76 Am. Dec. 219.) chanrobles virtual law library In the case of Millare et all, vs. Millare et al., 106 Phil. 203, 299, a motion for contempt was filed in this Court by appellant charging respondents with having committed contempt by selling or otherwise disposing the land in question pending the appeal. This Court held that there being no attachment, injunction or receivership issued with respect to the land, and in view of the conclusion reached on the merits of the case, there was no reason to declare the respondents guilty of contempt. This ruling is in point in the instant case. At the time the CTIP took possession of the tobacco and disposed it on September 12, 1967, there was no existing order of the Court of Tax Appeals restraining such possession and disposition. By specific order of the Court of Tax Appeals, it declared that the restraining order previously issued by it was of no further effect on September 12, 1967 due to appellants' failure to post the bond required.chanroblesvirtualawlibrary chanrobles virtual law library It has been shown above, furthermore, that petitioner herein was not entitled to the tobacco, consequently he had no right to the proceeds of the sale, and to have the proceeds thereof deposited. 7. Regarding the "Motion for Leave" filed by the Solicitor General's Office praying authority to refund the storage charges of the subject tobacco to the CTIP, this Court notes that the same is not in issue in the instant case, and, therefore, abstains from making any resolution regarding the matter. The claim of the CTIP for refund must be prosecuted administratively. WHEREFORE, the instant petition for review is dismissed, and the decision of the Court of Tax Appeals, appealed from is affirmed.chanroblesvirtualawlibrary chanrobles virtual law library It is so ordered. Fernando, Barredo, Antonio, Fernandez and Aquino, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-15908 June 30, 1961

BASILAN LUMBER COMPANY, petitioner, vs. CAGAYAN TIMBER EXPORT COMPANY, PEOPLE'S SURETY & INSURANCE CO., and THE COURT OF APPEALS (Third Division), respondents. Ross, Selph and Carrascoso for petitioner. Altavas Liboro and Daza for respondent People's Surety & Insurance Company. Manuel V. San Jose and Luis G. Enriquez for respondent Cagayan Timber Export Company. LABRADOR, J.: Appeal from a decision of the Court of Appeals, reversing a judgment of the Court of First Instance of Manila in favor of plaintiff and dismissing the complaint. In a nutshell, the question at issue is: In an action for breach of contract of sale of logs, caused by the failure of the supplier to furnish the agreed quantity, as a result of which the exporter of the logs became liable for demurrage and dead freight, may the exporter be allowed to recover the amount of demurrage and dead freight even if the same has not been actually paid for by the exporter? Stated otherwise, in an action for damages resulting from a breach of contract to supply, may the exporter recover from a supplier the amount of damages for which it would be held liable under its contract with a Japanese buyer even if such damages have not yet been demanded from and paid by it, and before said exporter actually paid the same? The facts of the case are not disputed, and may be briefly stated as follows: The plaintiff Basilan Lumber Company entered into a contract with the defendant Cagayan Timber Export Company, whereby the latter agreed to deliver to the former 1,200,000 board feet of exportable logs not later than May 31, 1951. This contract is dated April 25, 1951. Subsequently, in an agreement dated July 3, 1951, the logs to be delivered were reduced to 500,000 board feet and the delivery thereof was to be made not later than July 15, 1951. But in another agreement of August 22, 1951, the contract was again amended, increasing the amount to be delivered to 740,000 board feet of logs to be delivered on or about September 1,1951. In this contract, it was further agreed that a minimum of 50,000 board feet per gang per hatch per weather working day would be loaded.

The plaintiff sold the logs to a Japanese buyer, who had entered into a contract with the plaintiff through the East Asiatic Company, which acted as intermediary. The logs were to be loaded on the "Kanatsu Maru" which was chartered by the Japanese buyer and which arrived in the Philippines on September 9, 1951, at the place agreed upon for loading. It stayed in port for a total of 8 days, but was able to load only 483,672 board feet supplied by defendant. There were four hatches in the vessel, hence the loading was to have lasted two and a half days, more or less. However, it actually took 7 days to load because no sufficient logs were available at the place where the loading was to take place and because of the poor stevedoring service. Hence the demurrage amounted, as per decision of the Court of First Instance, to $4,141.16. As to dead freight, which corresponds to the freight of the logs which were not delivered shipside, the same amounted to $5,673.43. So, the total amount of demurrage and dead freight is $9,814.59, or P19,629.18. This is the amount awarded in the Court of First Instance. Legal interest on the said amount and attorney's fees amounting to P2,000 were also granted. On appeal to the Court of Appeals, the judgment of the Court of First Instance was reversed. The reasons of the said appellate court in reversing the judgment, are as follows: Because the damages in question are yet to be suffered and are not actual, they may fall under the general category of prospective damages. We are not unaware of American decisions to the effect that, in estimating the pecuniary loss sustained by a party as a result of another's tort or breach of contract, the former's right of recovery must be for all damages resulting therefrom, whether past, present, and prospective (15 American Jurisprudence, 416), and that prospective damages may be allowed upon proof that they are reasonably certain occur (Watt vs. Nevada etc., 23 Nev. 154, 44 P. 423, 46 P. 52, 726, 62 Am. St. Rep. 772), but in this jurisdiction the rule is that no recovery of damages can be had without satisfactory proof of the real existence of such damages (Articles 1106 and 1107 of the Old Civil Code; Articles 2200 and 2201, New Civil Code; Sanz vs. Levin, 6:299; Rubio vs. Rivera, 41:39), and that the true measure of damages for the breach of a contract is what the plaintiff has lost by the breach (De la Cruz vs. Seminario, etc., 18:830). The rule in this matter is tersely stated by Manresa as follows: '. . . el resarcimiento de danos y perjuicios . . . exije la existencia real del dano (8 Manresa, 4th Ed., pages 144-145). In this Court, the appellant argues that the demurrage and dead freight due the buyer in Japan had already been paid by the East Asiatic Company, Ltd., through which the Basilan Lumber Company sold the logs. The receipts evidencing such payment had been submitted as Exhibits "I-1", "J" and "K", in accordance with debit notes (Exhs. "G" and "H" Deposition). It is further argued that in accordance with the decisions of United States courts, it is enough that there is proof or reasonable certainty that substantial future damages will result in order that a recovery for damages can be had; that the

majority of the provisions of the Uniform Sales Law had been adopted in the Civil Code, so that the decisions of American courts in the matter of damages should be applied. It is also argued that the contract between the plaintiff and the defendant contains the following terms: In case of non-compliance by the SELLER with the amended contract conditions, the SELLER hereby agrees to indemnify the BUYER for whatever damages the BUYER would be held liable to their buyers in Japan as a Consequence thereof, . . . (Exhibit "O"). All other terms and conditions enumerated in the original agreement of April 21, 1951, and amendments thereto dated June 18th and July 3rd 1951, remain unchanged." (Exhibit "D"). . . . any claims arising out of default or failure of the SELLER to comply with loading capacity of the vessel shall be for account of the SELLER. (Exhibit "F") (See Petitioner's brief, page 11.) from which, the intention of the parties to make the seller liable to plaintiff for the valid claims of Japanese buyers, is evident. Our answer to the foregoing arguments of counsel for petitioner is the express provisions of Article 2199 of the Civil Code of the Philippines to the effect that damages must be "duly proved." This new provision, which did not exist in the Civil Code of Spain, denies the grant of speculative damages, damages not actually proved to have existed and to have been caused to the party claiming the same. In the case at bar the evidence shows that actual damage was caused to the agent through which petitioner sold the logs to a Japanese buyer, as said agent had already paid the same to the latter. However, there is no proof that respondent had already paid the agent said damages, or that it had already been required to pay the same, and while these have not happened the damage to the petitioner may not, under the above-cited article of the Civil Code, be deemed to have actually been caused to him. As regards the express terms of the agreement holding the seller liable for the damages it may cause the buyer, the same are merely declaratory of the obligation assumed, not an obligation which the obligee may demand in compliance with upon breach of the terms of the contract and even before actual payment of damages by the one who breached the agreement, because the obligee has not yet actually suffered the damage or paid the same to the person to whom damage was caused. It is only when the obligee actually suffers the damage, that compliance, with the obligation may be demanded. WHEREFORE, the judgment sought to be reversed is hereby affirmed. Without costs.

Bengzon, C.J., Concepcion, Reyes, J.B.L., Barrera, Paredes and Natividad, JJ., concur. Padilla and Dizon, JJ., took no part.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. L-16439

July 20, 1961

ANTONIO GELUZ, petitioner, vs. THE HON. COURT OF APPEALS and OSCAR LAZO, respondents. Mariano H. de Joya for petitioner. A.P. Salvador for respondents. REYES, J.B.L., J.: This petition for certiorari brings up for review question whether the husband of a woman, who voluntarily procured her abortion, could recover damages from physician who caused the same. The litigation was commenced in the Court of First Instance of Manila by respondent Oscar Lazo, the of Nita Villanueva, against petitioner Antonio Geluz, a physician. Convinced of the merits of the complaint upon the evidence adduced, the trial court rendered judgment favor of plaintiff Lazo and against defendant Geluz, ordering the latter to pay P3,000.00 as damages, P700.00 attorney's fees and the costs of the suit. On appeal, Court of Appeals, in a special division of five, sustained the award by a majority vote of three justices as against two, who rendered a separate dissenting opinion. The facts are set forth in the majority opinion as follows: Nita Villanueva came to know the defendant (Antonio Geluz) for the first time in 1948 through her aunt Paula Yambot. In 1950 she became pregnant by her present husband before they were legally married. Desiring to conceal her pregnancy from her parent, and acting on the advice of her aunt, she had herself aborted by the defendant. After her marriage with the plaintiff, she again became pregnant. As she was then employed in the Commission on Elections and her pregnancy proved to be inconvenient, she had herself aborted again by the defendant in October 1953. Less than two years later, she again became pregnant. On February 21, 1955, accompanied by her sister Purificacion and the latter's daughter Lucida, she again repaired to the defendant's clinic on Carriedo and P. Gomez streets in Manila, where the three met the defendant and his wife. Nita was again aborted, of a two-month old foetus, in consideration of the sum of fifty pesos, Philippine currency. The plaintiff was at this time in the province of Cagayan, campaigning for his election to the provincial board; he did not know of, nor gave his consent, to the abortion. It is the third and last abortion that constitutes plaintiff's basis in filing this action and award of damages. Upon application of the defendant Geluz we granted certiorari.

The Court of Appeals and the trial court predicated the award of damages in the sum of P3,000.06 upon the provisions of the initial paragraph of Article 2206 of the Civil Code of the Philippines. This we believe to be error, for the said article, in fixing a minimum award of P3,000.00 for the death of a person, does not cover the case of an unborn foetus that is not endowed with personality. Under the system of our Civil Code, "la criatura abortiva no alcanza la categoria de persona natural y en consscuencia es un ser no nacido a la vida del Derecho" (Casso-Cervera, "Diccionario de Derecho Privado", Vol. 1, p. 49), being incapable of having rights and obligations. Since an action for pecuniary damages on account of personal injury or death pertains primarily to the one injured, it is easy to see that if no action for such damages could be instituted on behalf of the unborn child on account of the injuries it received, no such right of action could derivatively accrue to its parents or heirs. In fact, even if a cause of action did accrue on behalf of the unborn child, the same was extinguished by its prenatal death, since no transmission to anyone can take place from on that lacked juridical personality (or juridical capacity as distinguished from capacity to act). It is no answer to invoke the provisional personality of a conceived child ( conceptus pro nato habetur) under Article 40 of the Civil Code, because that same article expressly limits such provisional personality by imposing the condition that the child should be subsequently born alive: "provided it be born later with the condition specified in the following article". In the present case, there is no dispute that the child was dead when separated from its mother's womb. The prevailing American jurisprudence is to the same effect; and it is generally held that recovery can not had for the death of an unborn child (Stafford vs. Roadway Transit Co., 70 F. Supp. 555; Dietrich vs. Northampton, 52 Am. Rep. 242; and numerous cases collated in the editorial note, 10 ALR, (2d) 639). This is not to say that the parents are not entitled to collect any damages at all. But such damages must be those inflicted directly upon them, as distinguished from the injury or violation of the rights of the deceased, his right to life and physical integrity. Because the parents can not expect either help, support or services from an unborn child, they would normally be limited to moral damages for the illegal arrest of the normal development of the spes hominis that was the foetus, i.e., on account of distress and anguish attendant to its loss, and the disappointment of their parental expectations (Civ. Code Art. 2217), as well as to exemplary damages, if the circumstances should warrant them (Art. 2230). But in the case before us, both the trial court and the Court of Appeals have not found any basis for an award of moral damages, evidently because the appellee's indifference to the previous abortions of his wife, also caused by the appellant herein, clearly indicates that he was unconcerned with the frustration of his parental hopes and affections. The lower court expressly found, and the majority opinion of the Court of Appeals did not contradict it, that the appellee was aware of the second abortion; and the probabilities are that he was likewise aware of the first. Yet despite the suspicious repetition of the event, he appeared to have taken no steps to investigate or pinpoint the causes thereof, and secure the punishment of the responsible practitioner. Even after learning of the third abortion, the appellee does not

seem to have taken interest in the administrative and criminal cases against the appellant. His only concern appears to have been directed at obtaining from the doctor a large money payment, since he sued for P50,000.00 damages and P3,000.00 attorney's fees, an "indemnity" claim that, under the circumstances of record, was clearly exaggerated. The dissenting Justices of the Court of Appeals have aptly remarked that: It seems to us that the normal reaction of a husband who righteously feels outraged by the abortion which his wife has deliberately sought at the hands of a physician would be highminded rather than mercenary; and that his primary concern would be to see to it that the medical profession was purged of an unworthy member rather than turn his wife's indiscretion to personal profit, and with that idea in mind to press either the administrative or the criminal cases he had filed, or both, instead of abandoning them in favor of a civil action for damages of which not only he, but also his wife, would be the beneficiaries. It is unquestionable that the appellant's act in provoking the abortion of appellee's wife, without medical necessity to warrant it, was a criminal and morally reprehensible act, that can not be too severely condemned; and the consent of the woman or that of her husband does not excuse it. But the immorality or illegality of the act does not justify an award of damage that, under the circumstances on record, have no factual or legal basis. The decision appealed from is reversed, and the complaint ordered dismissed. Without costs. Let a copy of this decision be furnished to the Department of Justice and the Board of Medical Examiners for their information and such investigation and action against the appellee Antonio Geluz as the facts may warrant. Bengzon, C.J., Padilla, Labrador, Barrera, Paredes, Dizon and Natividad, JJ., concur. Concepcion, J., took no part. De Leon, J., took no part.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-11037 December 29, 1960

EDGARDO CARIAGA, ET AL., plaintiffs-appellants, vs. LAGUNA TAYABAS BUS COMPANY, defendant-appellant. MANILA RAILROAD COMPANY, defendant-appellee. Ozaeta, Lichauco and Picazo for defendant and appellant. E.A. Fernandez and L.H. Fernandez for plaintiffs and appellants. Gov't. Corp. Counsel A. Padilla and Atty. F.A. Umali for appellee.

DIZON, J.: At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna Tayabas Bus Co. hereinafter referred to as the LTB driven by Alfredo Moncada, left its station at Azcarraga St., Manila, for Lilio, Laguna, with Edgardo Cariaga, a fourth-year medical student of the University of Santo Tomas, as one of its passengers. At about 3:00 p.m., as the bus reached that part of the poblacion of Bay, Laguna, where the national highway crossed a railroad track, it bumped against the engine of a train then passing by with such terrific force that the first six wheels of the latter were derailed, the engine and the front part of the body of the bus was wrecked, the driver of the bus died instantly, while many of its passengers, Edgardo among them, were severely injured. Edgardo was first confined at the San Pablo City Hospital from 5:00 p.m., June 18, 1952, to 8:25 a.m., June 20 of the same year when he was taken to the De los Santos Clinic, Quezon City. He left that clinic on October 14 to be transferred to the University of Santo Tomas Hospital where he stayed up to November 15. On this last date he was taken back to the De los Santos Clinic where he stayed until January 15, 1953. He was unconscious during the first 35 days after the accident; at the De los Santos Clinic Dr. Gustilo removed the fractured bones which lacerated the right frontal lobe of his brain and at the University of Santo Tomas Hospital Dr. Gustilo performed another operation to cover a big hole on the right frontal part of the head with a tantalum plate. The LTB paid the sum of P16,964.45 for all the hospital, medical and miscellaneous expenses incurred from June 18, 1952 to April, 1953. From January 15, 1953 up to April of the same year Edgardo stayed in a private house in Quezon, City, the LTB having agreed to give him a subsistence allowance of P10.00 daily during his convalescence, having spent in this connection the total sum of P775.30 in addition to the amount already referred to. On April 24, 1953 the present action was filed to recover for Edgardo Cariaga, from the LTB and the MRR Co., and total sum of P312,000.00 as actual, compensatory, moral and exemplary damages, and for his parents, the sum of P18,00.00 in the same concepts. The LTB disclaimed liability claiming that the accident was due to the negligence of its co-defendant, the Manila Railroad Company, for not providing a crossing bar at the point where the national highway crossed the railway track, and for this reason filed the corresponding cross-claim against the latter company to recover the total sum of P18,194.75 representing the expenses paid to Edgardo Cariaga. The Manila Railroad Company, in turn, denied liability upon the complaint and cross-claim alleging that it was the reckless negligence of the bus driver that caused the accident. The lower court held that it was the negligence of the bus driver that caused the accident and, as a result, rendered judgment sentencing the LTB to pay Edgardo Cariaga the sum of P10,490.00 as compensatory damages, with interest at the legal rate from the filing of the complaint, and dismissing the cross-claim against the Manila Railroad Company. From this decision the Cariagas and the LTB appealed.

The Cariagas claim that the trial court erred: in awarding only P10,490.00 as compensatory damages to Edgardo; in not awarding them actual and moral damages, and in not sentencing appellant LTB to pay attorney's fees. On the other hand, the LTB's principal contention in this appeal is that the trial court should have held that the collision was due to the fault of both the locomotive driver and the bus driver and erred, as a consequence, in not holding the Manila Railroad Company liable upon the cross-claim filed against it. We shall first dispose of the appeal of the bus company. Its first contention is that the driver of the train locomotive, like the bus driver, violated the law, first, in sounding the whistle only when the collision was about to take place instead of at a distance at least 300 meters from the crossing, and second, in not ringing the locomotive bell at all. Both contentions are without merits. After considering the evidence presented by both parties the lower court expressly found: . . . While the train was approximately 300 meters from the crossing, the engineer sounded two long and two short whistles and upon reaching a point about 100 meters from the highway, he sounded a long whistle which lasted up to the time the train was about to cross it. The bus proceeded on its way without slackening its speed and it bumped against the train engine, causing the first six wheels of the latter to be derailed.

. . . that the train whistle had been sounded several times before it reached the crossing. All witnesses for the plaintiffs and the defendants are uniform in stating that they heard the train whistle sometime before the impact and considering that some of them were in the bus at the time, the driver thereof must have heard it because he was seated on the left front part of the bus and it was his duty and concern to observe such fact in connection with the safe operation of the vehicle. The other L.T.B. bus which arrived ahead at the crossing, heeded the warning by stopping and allowing the train to pass and so nothing happened to said vehicle. On the other hand, the driver of the bus No. 133 totally ignored the whistle and noise produced by the approaching train and instead he tried to make the bus pass the crossing before the train by not stopping a few meters from the railway track and in proceeding ahead. The above findings of the lower court are predicated mainly upon the testimony of Gregorio Ilusondo, a witness for the Manila Railroad Company. Notwithstanding the efforts exerted by the LTB to assail his credibility, we do not find in the record any fact or circumstance sufficient to discredit his testimony. We have, therefore, no other alternative but to accept the findings of the trial court to the effect, firstly, that the whistle of locomotive was sounded four times two long and two short "as the train was approximately 300 meters from the crossing"; secondly, that another LTB bus which

arrived at the crossing ahead of the one where Edgardo Cariaga was a passenger, paid heed to the warning and stopped before the "crossing", while as the LTB itself now admits (Brief p. 5) the driver of the bus in question totally disregarded the warning. But to charge the MRR Co. with contributory negligence, the LTB claims that the engineer of the locomotive failed to ring the bell altogether, in violation of the section 91 of Article 1459, incorporated in the charter of the said MRR Co. This contention as is obvious is the very foundation of the cross-claim interposed by the LTB against its co-defendant. The former, therefore, had the burden of proving it affirmatively because a violation of law is never presumed. The record discloses that this burden has not been satisfactorily discharged. The Cariagas, as appellants, claim that the award of P10,000.00 compensatory damages to Eduardo is inadequate considering the nature and the after effects of the physical injuries suffered by him. After a careful consideration of the evidence on this point we find their contentions to be well-founded. From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a result of the injuries suffered by Edgardo, his right forehead was fractured necessitating the removal of practically all of the right frontal lobe of his brain. From the testimony of Dr. Jose A. Fernandez, a psychiatrist, it may be gathered that, because of the physical injuries suffered by Edgardo, his mentality has been so reduced that he can no longer finish his studies as a medical student; that he has become completely misfit for any kind of work; that he can hardly walk around without someone helping him, and has to use a brace on his left leg and feet. Upon the whole evidence on the matter, the lower court found that the removal of the right frontal lobe of the brain of Edgardo reduced his intelligence by about 50%; that due to the replacement of the right frontal bone of his head with a tantalum plate Edgardo has to lead a quite and retired life because "if the tantalum plate is pressed in or dented it would cause his death." The impression one gathers from this evidence is that, as a result of the physical injuries suffered by Edgardo Cariaga, he is now in a helpless condition, virtually an invalid, both physically and mentally. Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of contract but who acted in good faith, is liable shall be those that are the natural and probable consequences of the breach and which the parties had forseen or could have reasonably forseen at the time the obligation was constituted, provided such damages, according to Art. 2199 of the same Code, have been duly proved. Upon this premise it claims that only the actual damages suffered by Edgardo Cariaga consisting of medical, hospital and other expenses in the total sum of P17,719.75 are within this category. We are of the opinion, however, that the income which Edgardo Cariaga could earn if he should finish the medical course and pass the corresponding board examinations must be deemed to be within the same category

because they could have reasonably been foreseen by the parties at the time he boarded the bus No. 133 owned and operated by the LTB. At that time he was already a fourth-year student in medicine in a reputable university. While his scholastic may not be first rate (Exhibits 4, 4-A to 4-C), it is, nevertheless, sufficient to justify the assumption that he could have passed the board test in due time. As regards the income that he could possibly earn as a medical practitioner, it appears that, according to Dr. Amado Doria, a witness for the LTB, the amount of P300.00 could easily be expected as the minimum monthly income of Edgardo had he finished his studies. Upon consideration of all the facts mentioned heretofore this Court is of the opinion, and so holds, that the compensatory damages awarded to Edgardo Cariaga should be increased to P25,000.00. Edgardo Cariaga's claim for moral damages and attorney's fees was denied by the trial court, the pertinent portion of its decision reading as follows: Plaintiffs' claim for moral damages cannot also be granted. Article 2219 of the Civil Code enumerates the instances when moral damages may be covered and the case under consideration does not fall under any one of them. The present action cannot come under paragraph 2 of said article because it is not one of the quasi-delict and cannot be considered as such because of the pre-existing contractual relation between the Laguna Tayabas Bus Company and Edgardo Cariaga. Neither could defendant Laguna Tayabas Bus Company be held liable to pay moral damages to Edgardo Cariaga under Article 2220 of the Civil Code on account of breach of its contract of carriage because said defendant did not act fraudulently or in bad faith in connection therewith. Defendant Laguna Tayabas Bus Company had exercised due diligence in the selection and supervision of its employees like the drivers of its buses in connection with the discharge of their duties and so it must be considered an obligor in good faith. The plaintiff Edgardo Cariaga is also not entitled to recover for attorney's fees, because this case does not fall under any of the instances enumerated in Article 2208 of the Civil Code. We agree with the trial court and, to the reason given above, we add those given by this Court in Cachero vs. Manila Yellow Taxicab Co., Inc.(101 Phil., 523, 530, 533): A mere perusal of plaintiff's complaint will show that this action against the defendant is predicated on an alleged breach of contract of carriage, i.e., the failure of the defendants to bring him "safely and without mishaps" to his destination, and it is to be noted that the chauffeur of defendant's taxicab that plaintiff used when he received the injuries involved herein, Gregorio Mira, has not even made a party defendant to this case.

Considering, therefore, the nature of plaintiff's action in this case, is he entitled to compensation for moral damages? Article 2219 of the Civil Code says the following: Art. 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

Of course enumerated in the just quoted Article 2219 only the first two may have any bearing on the case at bar. We find, however, with regard to the first that the defendant herein has not committed in connection with this case any "criminal offense resulting in physical injuries". The one that committed the offense against the plaintiff is Gregorio Mira, and that is why he has been already prosecuted and punished therefor. Altho (a) owners and managers of an establishment and enterprise are responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions; (b) employers are likewise liable for damages caused by their employees and household helpers acting within the scope of their assigned task (Article 218 of the Civil Code); and (c) employers and corporations engaged in any kind of industry are subsidiary civilly liable for felonies committed by their employees in the discharge of their duties (Art. 103, Revised Penal Code), plaintiff herein does not maintain this action under the provisions of any of the articles of the codes just mentioned and against all the persons who might be liable for the damages caused, but as a result of an admitted breach of contract of carriage and against the defendant employer alone. We, therefore, hold that

the case at bar does not come within the exception of paragraph 1, Article 2219 of the Civil Code. The present complaint is not based either on a "quasi-delict causing physical injuries" (Art. 2219, par. 2 of the Civil Code). From the report of the Code Commission on the new Civil Code. We copy the following: A question of nomenclature confronted the Commission. After a careful deliberation, it was agreed to use the term "quasi-delict" for those obligations which do not arise from law, contracts, quasi-contracts, or criminal offenses. They are known in Spanish legal treaties as " culpa aquiliana", "culpaextra-contractual" or "cuasi-delitos". The phrase "culpa-extra-contractual" or its translation "extra-contractual-fault" was eliminated because it did not exclude quasi-contractual or penal obligations. "Aquilian fault" might have been selected, but it was thought inadvisable to refer to so ancient a law as the "Lex Aquilia". So "quasi-delict" was chosen, which more nearly corresponds to the Roman Law classification of the obligations and is in harmony with the nature of this kind of liability. The Commission also thought of the possibility of adopting the word "tort" from Anglo-American law. But "tort" under that system is much broader than the Spanish-Philippine concept of obligations arising from non-contractual negligence. "Tort" in Anglo-American jurisprudence includes not only negligence, but also intentional criminal act, such as assault and battery, false imprisonment and deceit. In the general plan of the Philippine legal system, intentional and malicious acts are governed by the Penal Code, although certain exceptions are made in the Project. (Report of the Code Commission, pp. 161-162). In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We established the distinction between obligation derived from negligence and obligation as a result of a breach of contract. Thus, we said: It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially in the legal viewpoint from the presumptive responsibility for the negligence of its servants, imposed by Article 1903 of the Civil Code (Art. 2180 of the new), which can be rebutted by proof of the exercise of due care in their selection of supervision. Article 1903 is not applicable to obligations arising EX CONTRACTU, but only to extracontractual obligations or to use the technical form of expression, that article relates only to CULPA AQUILIANA' and not to CULPA CONTRACTUAL.lawphil.net

The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil., 359; 46 Off. Gaz., No. 5, p. 2023); Lilius, et al. vs. Manila Railroad, 59 Phil., 758) and others, wherein moral damages were awarded to the plaintiffs, are not applicable to the case at bar because said decision were rendered before the effectivity of the new Civil Code (August 30, 1950) and for the further reason that the complaints filed therein were based on different causes of action. In view of the foregoing the sum of P2,000 was awarded as moral damages by the trial court has to be eliminated, for under the law it is not a compensation awardable in a case like the one at bar. What has been said heretofore relative to the moral damages claimed by Edgardo Cariaga obviously applies with greater force to a similar claim (4th assignment of error) made by his parents. The claim made by said spouses for actual and compensatory damages is likewise without merits. As held by the trial court, in so far as the LTB is concerned, the present action is based upon a breach of contract of carriage to which said spouses were not a party, and neither can they premise their claim upon the negligence or quasi-delict of the LTB for the simple reason that they were not themselves injured as a result of the collision between the LTB bus and train owned by the Manila Railroad Company. Wherefore, modified as above indicated, the appealed judgement is hereby affirmed in all other respects, with costs against appellant LTB. Paras, C.J., Bengzon, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Gutierrez David, and Paredes, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC DECISION October 19, 1909 G.R. No. 4606 JUAN RODRIGUEZ, plaintiff-appellant, vs. FINDLAY & CO., defendant-appellant. Basilio R. Mapa for appellant. Kinney and Lawrence and John W. Sleeper for appellee. MORELAND, J.:

The complaint asks damages for breach of a written contract between plaintiff and defendant for the delivery of the machinery, complete, for a ship in process of construction belonging to the plaintiff. The defendant, in its answer, denies the allegation of the complaint, generally, and sets up as a counterclaim the balance due from plaintiff on the purchase price of the machinery aforesaid, and asks for an affirmative judgment against the plaintiff accordingly. The defendant secured in the court below an affirmative judgment against the plaintiff for the sum of P9,216.60, with interest thereon, at the rate of 6 per cent per annum, from February 28, 1907. The plaintiff made a motion for a new trial upon the grounds that the evidence does not justify the decision of the court and that the decision is contrary to law. This motion was denied, and the plaintiff duly excepted and perfected his appeal. On the 19th of September, 1907, the plaintiff was the owner of a freight ship called the Constancia, then in course of construction in plaintiffs shops in the city of Manila. The vessel was designed for the coastwise trade in the Philippine Islands. On that date, and for some time prior thereto, one William Swann was the consulting engineer of the defendant, in charge of its machinery department. Swann was at that time an engineer and naval architect and had been working as an engineer substantially all his life. On that date mentioned he was, and for some time theretofore had been, a naval architect, a member of the institute of Engineers and Shipbuilders of Scotland, and a member of the Institute of Naval Architects of Great Britain. The plaintiff was acquainted with Swann and knew him to be an engineer and naval architect of long experience. On the date referred to Rogaciano Rodriguez, acting for and on behalf of the plaintiff and as his agent, made a written contract with Swann, acting for and on behalf of the defendant and as its agent, wherein and whereby the plaintiff agreed to purchase of the defendant, and the defendant agreed to sell and deliver to the plaintiff, certain machinery, complete, for the ship Constancia already referred to. Prior to the making of the contract on the date referred to, and during the negotiations leading to the contract and in connection with them, Swann, the agent of the defendant, visited the shipyard of the plaintiff and inspected the steamship Constancia, then being constructed. This he did several different times. The inspections were made for the purpose of determining the kind and nature of the machinery which would be suitable to the ship referred to. Neither the plaintiff nor his agent, Rogaciano Rodriguez, was a marine or other engineer and they knew little or nothing about the kind of machinery which should be placed in the ship they were building. They relied entirely

upon the recommendations, knowledge, and experience of the engineer Swann. The plaintiff had in mind and stated to Swann, among other things, the speed which it was necessary that the Constancia should have in order to be available as a coastwise vessel, and left the kind, nature, and construction of the machinery to the greater knowledge and experience of Swann. This is particularly true of the propeller placed in that vessel, the questions relative to which are the main issues of this case. The contract, so far as its interpretation is disputed, reads as follows: One brass propeller of 8 diameter and suitable pitch for an expected speed of ship about 9 knots. xxxxxxxxx The whole to be suitable for a wooden ship of 150 ft. long by 24 ft. beam and 14 ft. depth, as per plan supplied by Sr. Rodriguez. Before the contract was entered into, the plaintiff delivered to Swann, as the defendants agent, a plan of the hull of said vessel. Thereafter Swann delivered to the plaintiff a plan of the entire vessel, showing the machinery placed therein. the plans in question showed length and breadth of the hull, its general outline and the number of feet of water which it drew. These plans also showed location and outline of the sternpost and rudderpost of said ship. In the process of manufacturing the propeller the defendant thought it discovered that the propeller described in the contract would not give the speed required by the contract and notified the plaintiff to that effect, and at the same time asked permission to put in its place a propeller 10 feet in diameter. This the plaintiff declined to permit. The machinery, so purchased, was delivered, except certain items which were required to be upon all vessels by the rules of the customs officials of the city of Manila and about which there is little or no dispute. Certain other articles of small value, necessary for the completion of the machinery, seem not to have been delivered, but concerning these there is very little dispute between the parties. The machinery was duly installed in the vessel upon its delivery. Upon the trial of the ship, after the installation of its machinery, it was found that all of the machinery worked well except the propeller. This, instead of giving the ship a speed of about 9 knots an hour, gave a speed of less than 7 knots an hour. the failure of the propeller to give the required speed to the vessel is substantially the only point in controversy in this case. The contention of the plaintiff is that, under the terms of the contract, the defendant was obliged to furnish a propeller 8 feet in diameter which would

give the Constancia a speed of 9 knots an hour, and that, failing in that, the contract was broken and the defendant should be held liable for all damages resulting. The defendant contends that the machinery was to be according to the specifications in the contract and that, if these specifications were complied with, it does not matter what may be the actual speed of the vessel. It claims that it had nothing to do with the construction of the steamship or the placing therein of the machinery. The defendant also claims that, under the terms of the contract, there was no guaranty of speed, and that, if the propeller was 8 feet in diameter and of brass, it would fulfill the terms of the contract even though the speed of the vessel should not exceed a knot an hour. The contract, by its words, expressly requires that the defendant must furnish a propeller which shall give to the steamship Constancia a speed of about 9 knots per hour. The language of the contract is so plain, and the negotiations leading up to the execution of the contract point in one direction so clearly, that there ought to be little need of discussion. But the parties have insisted so strongly upon the justice of their several contentions that a detailed discussion is considered advisable. The language is without ambiguity. The defendant agrees therein to furnish One brass of 8 diameter and suitable pitch for an expected speed of ship about 9 knots; and The whole to be suitable for a wooden ship 150 ft. long by 24 ft. beam and 14 ft. depth, as per plan supplied by Sr. Rodriguez. The ship for which the machinery, including the propeller, was designed, is specifically described in the contract and is identified without question. That ship is the Constancia, a coastwise vessel 150 ft. long, 24 ft. wide and 14 ft. deep. These are the measurements contained in the contract. This was the only ship for which the plaintiff needed machinery. It was the only ship he was constructing. during the course of the negotiations the defendants agent, Swann, its engineer and naval architect, in company with the plaintiff or the plaintiffs agent, several times visited the yard wherein the ship was being built and examined it for the purpose of making the contract for the machinery. During these different visits the kind of machinery, its purpose and value were discussed by the parties. This is conceded. Plans of the hull and the interior of the vessel were exchanged by the parties at various times, either before or after the making of the contract. The plaintiff, in particular, delivered to the defendant, prior to the execution of the contract,

a plan of the hull of the vessel, with its measurements. Later the defendant delivered to the plaintiff a plan, in considerable detail, showing the vessel with the machinery figured as having been already placed in it. Swann was a naval architect and marine engineer of long experience, which fact was known to the plaintiff and his agent, and the general details relative to the kind and character of the machinery were left to the defendant. The thing mainly insisted upon by the plaintiff was the result that should be produced. The plaintiff himself testifies, and this is undisputed by the defendant, that he relied upon Swann in these particulars, especially in reference to the propeller and the pitch which it should have; and, by reason of the reliance, the pitch in feet and inches which the propeller should have when placed in the ship was not stated in the contract. Instead, the plaintiff placed in the contract what the propeller should do, rather than what it should be. The diameter of the propeller was fixed by the structure of the vessel and could not exceed 8 feet or 8 feet. The pitch which the propeller should have in order to give 9 knots an hour to the steamship was left to the greater knowledge and experience of the defendants agent, Swann. The plaintiff placed the condition only that it should produce a certain result when attached to the ship Constancia. The words of the contract clearly demand, upon the part of the defendant, that it furnish a propeller with a pitch proper to give the steamship Constancia a speed of about 9 knots per hour. Language for that purpose could scarcely be made plainer than language used. The defendant contends that the machinery was to be according to the specifications in the contract and that if these specifications were complied with, it does not matter what may be the actual speed of the vessel. The trouble with this contention is that one of the specifications of contract is speed, namely, a speed of 9 knots per hour, and the specification of the contract can not be complied with unless a speed of 9 knots an hour, or thereabouts, is given. Simply because the specific pitch in feet and inches is not stated in the contract does not mean that there is no specification upon that point. The contract provides that the defendants shall supply to the plaintiff, among other things, one brass propeller 8 feet in diameter with suitable pitch for an expected speed of ship about 9 knots. The words suitable has reference to two objects the antecedent subject, pitch of the propeller, and the subsequent object, ship; and the meaning of the word requires that the subject, pitch of the propeller, shall have qualities which will harmonize so perfectly with the qualities of the object, ship, that a certain and specified results, viz, a speed of 9 knots, shall be produced. The word suitable, referring to the vessel in which the propeller is to be placed as well as to the propeller itself, the pitch

of the propeller must, therefore, be suitable to that vessel, and it is not suitable to that vessel under the terms of the contract, unless with the other machinery mentioned in the contract it gives to that vessel a speed of about 9 knots an hour. Therefore, the specifications contained in the contract are not complied with until the vessel shall have received from the machinery installed a speed of about 9 knots an hour. The word suitable is perfectly definite and clear in its meaning and its reference is undoubted. The defendant, in the contract, not only agrees to furnish a propeller 8 feet in diameter and of brass, but also agrees to furnish a propeller with certain other characteristics, among them being a pitch suitable to produce a certain speed in a certain vessel. If the pitch of the propeller was suitable to do that, it would do it. The failure of the propeller to give a speed anything like 9 knots an hour indicates clearly and beyond question that the pitch of the propeller was not suitable for the purposes specified in the contract. The contention of the defendant is, further, that the pitch of the propeller as furnished, viz, 15 feet, was suitable to give a speed of more than 9 knots an hour; and in its argument it quotes the expert, Swann, who testifies, in relation to the pitch of the propeller, that with the pitch of 15 feet the propeller would have a speed of a little over 11 knots per hour. The defect in this contention is that a propeller has no such quality as speed; that the thing Swann figures out as 11 knots an hour is not speed but pitch. A propeller has, aside from the material of its construction, three qualities diameter, area, and pitch. A propeller has no such quality as speed. The pitch of the propeller is described by Swann and Gilchrist as the distance which it would travel if it were turned one revolution in substance which, although yielding sufficiently to permit the passage of the propeller, would admit of no slip. In other words, if a propeller, were immersed in wax and then given a turn amounting to one revolution, the pitch of the propeller would be the distance which it would travel through the wax in that one revolution. The expert Swann says that the way to determine the speed of a propeller is to take the pitch, multiply it by the revolutions, which would give me the distance the propeller would advance in any one minute; then multiply that by sixty, which would give me the amount in one hour; then divide by 6,080, which is the number of feet in a knot, and that would give me the number of knots per hour which the propeller would advance; and then says that the speed of the propeller would be more than 11 knots. The mere fact that Swann multiplies the pitch of the propeller by a number of figures, and then divides that product by other figures, does not change

pitch into speed. It remains pitch still. In other words, the 11 knots per hour which Swann refers to as the speed of the propeller is the distance which the propeller, unattached to any vessel, would travel, in wax in one hour if it was turned at the rate of 84 revolutions per minute. But this is the acknowledged definition of pitch, not speed. It is manifestly absurd to contend that the propeller can have a speed independent of the vessel to which it may be attached. Speed is a quality of the vessel itself and not a quality of the propeller. To be sure the propeller, operated by the engine, is able to give speed to the vessel, but in and of itself it has no such quality. It is apparent, therefore, that the contention of the defendant that the propeller was so constructed as to have a speed of 11 knots an hour is absurd. In other words, the contention of the defendant is that a guaranty in a contract to give a ship a speed of 20 knots an hour is complied with if there is furnished to that ship a propeller with a pitch, which, multiplied by certain figures and divided by others, would produce twenty somethings at the conclusions of the calculation, and this absolutely regardless of whether the ship on which the propeller is to be placed is a war ship or a pleasure yacht, whether it is 100 or 1,000 feet long, 10 feet or 100 feet wide, whether it draws 5 feet or 60 feet of water and wholly regardless of the form of the vessels hull. It is recognized by all authorities upon the construction of steamships that the most important point to be considered in propulsive efficiency is the shape of the vessels hull. In respect of speed this is one of the greatest problems and one of the most perplexing with which marine engineers have to deal. The defendant, by its contention, avoids all the trouble of figuring out this difficult problem by simply giving a speed to itspropeller. It was a condition, and not a theory which confronted the plaintiff when he purchased the machinery in question, including the propeller. He had a vessel which was designed for the coastwise trade and, in order to be useful and efficient in that connection, it was necessary that it should have a speed of about 9 knots an hour. All of this the defendant knew. Speed being so important in a vessel carrying freight in competition with other vessel having a speed of 9 knots an hour, the parties placed in the contract a specification by which this vessel should received machinery of such a character that it would be able to compete with other vessels in a similar occupation. These specifications required that the vessel should have a speed at about 9 knots per hour and that machinery furnished for the vessel should be arranged to that end, particularly the propeller. The defendant not only asserts that it furnished a propeller with a speed of more than 9 knots an hour, but also contends that the reason why the

vessel did not have a speed of 9 knots an hour, but also contends that the reason why the vessel did not have a speed of 9 knots an hour after the installation of the machinery was because the propeller was, by the construction of the vessel, forced to work in a position where it could not display its properties adequately. To this end, it asserts, through it expert witness Swann, that the propeller was, so to speak, too close to both the stern and the rudder posts, so that the propeller could not receive the water or throw it away from it in the manner wanted; that is, in a line with the boats keel more or less. It could not do anything else because it was practically watertight, so to speak, that is, to all intents and purposes, watertight between these two large chocks of timber, the rudder and stern posts, and hence could not throw the water off or receive the water from forward in the manner it should, and hence would throw it sideways; that is the effect. The propeller could not get a chance to work. The expert then goes on to assert that the pitch had nothing to do with it, that the diameter of the propeller had nothing to do with it, that the diameter of the propeller had nothing to do with it, and that the sole and only reason why the vessel did not receive a speed of 9 knots an hour from the propeller furnished was because of the sternpost and the rudderpost. It should be noted, however, that, before the contract was signed, the defendant, and it agent, Swann, were furnished with a plan or plans of the bull of the vessel, showing the sternpost and the rudderpost fully and fairly; that Swann had himself inspected the vessel several times at the yard where it was being built and knew all about the said sternpost and rudderpost and their relative locations. Yet, with that plan in his hand and with that knowledge in his head, he nevertheless, made a contract in which he agreed to furnish a propeller which would give a speed of 9 knots an hour to that very ship. It must also be remembered that the events proved the contentions of the expert Swann to be wholly unfounded when he claimed that the reason why the propeller would not work was because of its position between the sternpost and the rudderpost. The trial of the propeller furnished by the defendant having demonstrated that it was ineffective and that its pitch was too coarse and it area too great for the purposes specified in the contract, the plaintiff placed in the steamship another propeller in exactly the same position in the vessel as the other, i. e., between the sternpost rudderpost, with a diameter only 6 inches more than the diameter of the propeller furnished by the defendant, and the vessel immediately attained a speed of 9 knots, or thereabouts, per hour. It is thus apparent

that the expert Swann again made a serious mistake in claiming that the failure of speed was due solely to the place in which the propeller worked. The defendant also maintains that the plaintiff ought not to recover in this case because before the propeller was constructed the defendant notified him that a propeller 8 feet in diameter would not produce the results specified in the contract and that in order to attain those results it would be necessary to place in that ship a propeller 10 feet in diameter; that the plaintiff rejected this proposal and refused to accept a propeller of any dimensions different from that specified in the contract, and that, therefore, he brought his misfortune on his own head. In reply to this contention it is sufficient to state that, by reason of the construction of the vessel, which Swann knew perfectly before hand, the placing of a propeller 10 feet in diameter in the ship in question would necessitate cutting away a large portion of the rear part of the vessels hull. The plaintiff was perfectly justified in refusing to change the whole structure of the rare of his vessel in order to accommodate the defendant. His refusal was justified by subsequent events; for, later, as before stated, a propeller 8 feet in diameter, but of different pitch and area, was placed in the ship, without any change in the construction of the hull, and the vessel immediately attained a speed of 9 knots, or thereabouts, per hour. There seems to be no question that the expert witness for the plaintiff was entirely correct when he stated that the fault of the propeller furnished by the defendant was in its pitch and area. He testified that the pitch of the propeller was to coarse and the area was too great for the kind of vessel in which it was placed. It is thus apparent that the defendant failed to comply with the terms of the contract in respect to the propeller therein describe, and the plaintiff, in consequence, is entitled to recover appropriate damages by reason thereof. The damages recoverable of a manufacturer or dealer for the breach of warranty of machinery which he contracts to furnish or place in operation for a value of the machinery as warranted and as it proves to be, but include such consequential damages as are the direct, immediate, and probable result of the breach (30 Am. and Eng. Ency. of Law, p. 217, and cases there cited.) The loss of the buyers time and of that of his laborers resulting from he breach is recoverable where the circumstances of the sale were such as to have put the seller upon notice that such a loss would probably result from a breach.

Indemnity for losses and damages includes not only the amount of the loss which may have been suffered, but also that of the profit which the creditor may have failed to realize. (Art. 1106, Civil Code.) The losses and damages for which a creditor in good faith is liable are those foreseen, or which may have been foreseen, at the time of constituting the obligation, and which may be a necessary consequence of its nonfulfillment. (Art. 1107, Civil Code.) In an action against a manufacturer or dealer for a breach of warranty upon a sale of goods, which he knew at the time of the sale were intended to be used for a particular purpose, the measure damages is not limited to the difference in value of the goods as warranted, and as they prove to be, as in cases where like articles are sold as merchandise for general purposes; but profits lost and expenses incurred, because of the breach, may be recovered. (Swain vs. Schieffelin, 134 N.Y. 471; New York and Colorado Mining Syndicate and Company vs. Dubuque Street Railway Company, 64 Fed. Rep. 70.) It is apparent from the authorities above cited that the plaintiff is entitled to recover P375, the value of 30 tons of coal consumed in the trials necessarily made to determine whether or not the propeller had the qualities specified in the contract; also the sum of P707, the wages of employees and other necessary expenses incurred during said trials. The plaintiff not having presented competent proof as to the loss he sustained by reason of his ship being out of commission during the time intervening between the trial of the first propeller and the installation of the second, nothing can be awarded him as damages in relation thereto. He is, however, entitled to be allowed as damages the sum of P2,770.36, the amount paid by him for the first propeller, as its purchase price, the same being worthless to him for the purpose of which he bought it said propeller to be and remain the property of the defendant, with the right to retake the same if it has not already done so. The defendant failed to deliver to the plaintiff the following machinery and materials which it agreed to deliver under the contract, which said machinery and materials the plaintiff was obliged to purchase of other parties, paying therefor the following prices, which this court finds reasonable in amount, to wit: One brass cook with flange for the donkey feed, weight 57 pounds P114.00

One do. do. check valve for the engine, weight 67 pounds 124.00 One do. do. 3/4 inch blow-off for the boiler One cast brass elbow for the steam valve, weight 97 pounds 7.50 145.50

One new 1 1/4 inch tube with flange for the blow-off cock 7.00 of the donkey boiler One brass cook with flange, connections, and strainer for 166.00 the surface blow-off For turning the two covers of the high and low pressure cylinders, and placing new business with 5/8 x 9 inch studs and nuts Three cast-iron pistons, turned, with rod and spiral steel springs, brass covers and valves for the cylinders Four cast-iron seatings for the boiler Five 1/4 inch pet cocks for the donkey pump and two for the cylinder blow-off One 1/8 inch air-cock for the donkey pump 85.00 185.00 217.00 15.00 1.80

Two 1/2 inch test cocks with stuffing boxes for the steam 9.00 gauge on boiler Two straight 1/2-inch test cocks with stuffing box for the boiler and donkey boiler 9.00

One lubricator with a 3/8 x 1 1/2-inch male thread for the 3.40 donkey One 1-inch check valve with test cock and hand wheel for 26.25 the donkey boiler One 1 1/4-inch globe valve with flange and wheel for the steam winch Total 18.00 1,133.45

We find, therefore, that the defendant is entitled to recover in this action of the plaintiff the sum of P5,213.54, that being the difference between the balance remaining due from plaintiff to the defendant of the purchase price of said machinery, viz, P10,199.35, and the aggregate amount of the damages herein allowed to the plaintiff by reason of the breach of said contract by the defendant, as aforesaid, viz, P4,985.81, with interest on said P5,213.54 at the rate of 6 per cent per annum from February 28, 1907, and he is hereby given judgment for the amount.

The judgment of the lower court is, therefore, modified to the extent and in particulars above enumerated, and, as modified, affirmed, with costs against the defendant. Arellano, C. J., Torres, and Johnson, JJ., concur. Carson, J., dissents.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. Nos. L-33466-67 April 20, 1983 PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. MAMERTO NARVAEZ, defendant-appellant. The Solicitor General for plaintiff-appellee. Gonzalo B. Callanta (counsel de oficio) for defendant-appellant.

MAKASIAR, J.: This is an appeal from the decision of the Court of First Instance of South Cotabato, Branch I, in Criminal Cases Nos. 1815 and 1816 for murder which, after a joint trial, resulted in the conviction of the accused in a decision rendered on September 8, 1970, with the following pronouncement: Thus, we have a crime of MURDER qualified by treachery with the aggravating circumstance of evident premeditation offset by the mitigating circumstance of voluntary surrender. The proper penalty imposable, therefore, is RECLUSION PERPETUA (Arts. 248 and 64, Revised Penal Code). Accordingly, finding Mamerto Narvaez guilty beyond reasonable doubt of the crime of murder, (a) In Criminal Case No. 1815, he is hereby sentenced to RECLUSION PERPETUA, to indemnify the heirs of the deceased Davis Q. Fleischer in the sum of P 12,000.00 as compensatory damages, P 10,000.00 as moral damages, P 2,000.00 as attorney's fees, the offended party having been represented by a private prosecutor, and to pay the costs; (b) In Criminal Case No. 1816, he is hereby sentenced to RECLUSION PERPETUA, to indemnify the heirs of the deceased Flaviano Rubia in the sum of P12,000.00 as compensatory damages, P10,000.00 as moral damages, P2,000.00 as attorney's fees, the offended party having been represent by a private prosecutor, and to pay the costs (p. 48, rec.).

The facts are summarized in the People's brief, as follows: At about 2:30 in the afternoon of August 22, 1968, Graciano Juan, Jesus Verano and Cesar Ibanez together with the two deceased Davis Fleischer and Flaviano Rubia, were fencing the land of George Fleischer, father of deceased Davis Fleischer. The place was in the boundary of the highway and the hacienda owned by George Fleischer. This is located in the municipality of Maitum, South Cotabato. At the place of the fencing is the house and rice drier of appellant Mamerto Narvaez (pp. 179-182, t.s.n., Pieza II). At that time, appellant was taking his rest, but when he heard that the walls of his house were being chiselled, he arose and there he saw the fencing going on. If the fencing would go on, appellant would be prevented from getting into his house and the bodega of his ricemill. So he addressed the group, saying 'Pare, if possible you stop destroying my house and if possible we will talk it over what is good,' addressing the deceased Rubia, who is appellant's compadre. The deceased Fleischer, however, answered: 'No, gademit, proceed, go ahead.' Appellant apparently lost his equilibrium and he got his gun and shot Fleischer, hitting him. As Fleischer fell down, Rubia ran towards the jeep, and knowing there is a gun on the jeep, appellant fired at Rubia, likewise hitting him (pp. 127-133, t.s.n., Defense transcript). Both Fleischer and Rubia died as a result of the shotting' (pp. 9-14, t.s.n., Pieza I, pp. 8-9, Appellant's Brief, p.161, rec.). It appears, however, that this incident is intertwined with the long drawn out legal battle between the Fleischer and Co., Inc. of which deceased Fleischer was the secretarytreasurer and deceased Rubia the assistant manager, on the one hand, and the land settlers of Cotabato, among whom was appellant. From the available records of the related cases which had been brought to the Court of Appeals (CA-G.R. Nos. 28858-R and 50583-R) and to this Court on certiorari (G.R. No. L-26757 and L-45504), WE take judicial notice of the following antecedent facts: Appellant was among those persons from northern and central Luzon who went to Mindanao in 1937 and settled in Maitum, a former sitio of Kiamba and now a separate municipality of South Cotabato. He established his residence therein, built his house, cultivated the area, and was among those who petitioned then President Manuel L. Quezon to order the subdivision of the defunct Celebes Plantation and nearby Kalaong Plantation totalling about 2,000 hectares, for distribution among the settlers. Shortly thereafter, Fleischer and Company, headed by George W. Fleischer, an American landowner in Negros Oriental, filed sales application No. 21983 on June 3, 1937 over the same area formerly leased and later abandoned by Celebes Plantation Company, covering 1,017.2234 hectares.

Meanwhile, the subdivision was ordered and a public land surveyor did the actual survey in 1941 but the survey report was not submitted until 1946 because of the outbreak of the second world war. According to the survey, only 300 hectares Identified as Lots Nos. 22, 26 and 38, Ps. 176 Kiamba, were set aside for Sales Application No. 21983, while the rest were subdivided into sublots of 5 to 6 hectares each to be distributed among the settlers (pp. 32-33, G.R. No. L-45504). The 300 hectares set aside for the sales application of Fleischer and Company was declared open for disposition, appraised and advertised for public auction. At the public auction held in Manila on August 14, 1948, Fleischer and Company was the only bidder for P6,000.00. But because of protests from the settlers the corresponding award in its favor was held in abeyance, while an investigator was sent by the Director of Lands to Kiamba in the person of Atty. Jose T. Gozon Atty. Gozon came back after ten days with an amicable settlement signed by the representative of the settlers. This amicable settlement was later repudiated by the settlers, but the Director of Lands, acting upon the report of Atty. Gozon, approved the same and ordered the formal award of the land in question to Fleischer and Company. The settlers appealed to the Secretary of Agriculture and Natural Resources, who, however, affirmed the decision in favor of the company. On May 29, 1950, the settlers filed Civil Case No. 240 in the Court of First Instance of Cotabato which then consisted only of one sala, for the purpose of annulling the order of the Secretary of Agriculture and Natural Resources which affirmed the order of the Director of Lands awarding the contested land to the company. The settlers as plaintiffs, lost that case in view of the amicable settlement which they had repudiated as resulting from threats and intimidation, deceit, misrepresentation and fraudulent machination on the part of the company. They appealed to the Court of Appeals (CA-G.R. No. 28858-R) which likewise affirmed on August 16, 1965 the decision of the Court of First Instance in favor of the company. This resulted in the ouster of the settlers by an order of the Court of First Instance dated September 24, 1966, from the land which they had been occupying for about 30 years. Among those ejected was the appellant who, to avoid trouble, voluntarily dismantled his house, built in 1947 at a cost of around P20,000.00, and transferred to his other house which he built in 1962 or 1963 near the highway. The second house is not far from the site of the dismantled house. Its ground floor has a store operated by Mrs. June Talens who was renting a portion thereof. He also transferred his store from his former residence to the house near the highway. Aside from the store, he also had a rice mill located about 15 meters east of the house and a concrete pavement between the rice mill and the house, which is used for drying grains and copra. On November 14, 1966, appellant was among the settlers on whose behalf Jose V. Gamboa and other leaders filed Civil Case No. 755 in the Court of First Instance of Cotabato, Branch I. to obtain an injunction or annulment of the order of award with prayer for preliminary injunction. During the pendency of this case, appellant on February 21, 1967 entered into a contract of lease with the company whereby he

agreed to lease an area of approximately 100 to 140 square meters of Lot No. 38 from the company (Exh. 9, p. 1, Folder of Exhibits for Defense) for a consideration of P16.00 monthly. According to him, he signed the contract although the ownership of the land was still uncertain, in order to avoid trouble, until the question of ownership could be decided. He never paid the agreed rental, although he alleges that the milling job they did for Rubia was considered payment. On June 25, 1968, deceased Fleischer wrote him a letter with the following tenor: You have not paid six months rental to Fleischers & Co., Inc. for that portion of land in which your house and ricemill are located as per agreement executed on February 21, 1967. You have not paid as as even after repeated attempts of collection made by Mr. Flaviano Rubia and myself. In view of the obvious fact that you do not comply with the agreement, I have no alternative but to terminate our agreement on this date. I am giving you six months to remove your house, ricemill, bodega, and water pitcher pumps from the land of Fleischers & Co., Inc. This sixmonth period shall expire on December 31, 1966. In the event the above constructions have not been removed within the six- month period, the company shall cause their immediate demolition (Exhibit 10, p. 2, supra). On August 21, 1968, both deceased, together with their laborers, commenced fencing Lot 38 by putting bamboo posts along the property line parallel to the highway. Some posts were planted right on the concrete drier of appellant, thereby cutting diagonally across its center (pp. 227-228, t.s.n., Vol. 2), with the last post just adjacent to appellant's house (p. 231, t.s.n., supra). The fence, when finished, would have the effect of shutting off the accessibility to appellant's house and rice mill from the highway, since the door of the same opens to the Fleischers' side. The fencing continued on that fateful day of August 22, 1968, with the installation of four strands of barbed wire to the posts. At about 2:30 p.m. on the said day, appellant who was taking a nap after working on his farm all morning, was awakened by some noise as if the wall of his house was being chiselled. Getting up and looking out of the window, he found that one of the laborers of Fleischer was indeed chiselling the wall of his house with a crowbar (p. 129, t.s.n., Vol. 6), while deceased Rubia was nailing the barbed wire and deceased Fleischer was commanding his laborers. The jeep used by the deceased was parked on the highway. The rest of the incident is narrated in the People's Brief as above-quoted. Appellant surrendered to the police thereafter, bringing with him shotgun No. 1119576 and claiming he shot two persons (Exh. Pp. 31, Defense Exhibits). Appellant now questions the propriety of his conviction, assigning the following errors:

First Assignment of Error: That the lower court erred in convicting defendant-appellant despite the fact that he acted in defense of his person; and Second Assignment of Error: That the court a quo also erred in convicting defendant-appellant although he acted in defense of his rights (p. 20 of Appellant's Brief, p. 145, rec.). The act of killing of the two deceased by appellant is not disputed. Appellant admitted having shot them from the window of his house with the shotgun which he surrendered to the police authorities. He claims, however, that he did so in defense of his person and of his rights, and therefore he should be exempt from criminal liability. Defense of one's person or rights is treated as a justifying circumstance under Art. 11, par. 1 of the Revised Penal Code, but in order for it to be appreciated, the following requisites must occur: First. Unlawful aggression; Second. Reasonable necessity of the means employed to prevent or repel it; Third. Lack of sufficient provocation on the part of the person defending himself (Art. 11, par. 1, Revised Penal Code, as amended). The aggression referred to by appellant is the angry utterance by deceased Fleischer of the following words: "Hindi, sigue, gademit, avante", in answer to his request addressed to his compadre, the deceased Rubia, when he said, "Pare, hinto mona ninyo at pagusapan natin kung ano ang mabuti" (pp. 227-229, t.s.n., Vol. 6). This was in reaction to his having been awakened to see the wall of his house being chiselled. The verbal exchange took place while the two deceased were on the ground doing the fencing and the appellant was up in his house looking out of his window (pp. 225-227, supra). According to appellant, Fleischer's remarks caused this reaction in him: "As if, I lost my senses and unknowingly I took the gun on the bed and unknowingly also I shot Mr. Fleischer, without realizing it, I shot Mr. Fleischer" (p. 132, supra). As for the shooting of Rubia, appellant testified: When I shot Davis Fleischer, Flaviano Rubia was nailing and upon hearing the shot, Mr. Rubia looked at Mr. Fleischer and when Mr. Fleischer fell down, Mr. Rubia ran towards the jeep and knowing that there was a firearm in the jeep and thinking that if he will take that firearm he will kill me, I shot at him (p. 132, supra, Emphasis supplied). The foregoing statements of appellant were never controverted by the prosecution. They claim, however, that the deceased were in lawful exercise of their rights of

ownership over the land in question, when they did the fencing that sealed off appellant's access to the highway. A review of the circumstances prior to the shooting as borne by the evidence reveals that five persons, consisting of the deceased and their three laborers, were doing the fencing and chiselling of the walls of appellant's house. The fence they were putting up was made of bamboo posts to which were being nailed strands of barbed wire in several layers. Obviously, they were using tools which could be lethal weapons, such as nail and hammer, bolo or bamboo cutter, pliers, crowbar, and other necessary gadgets. Besides, it was not disputed that the jeep which they used in going to the place was parked just a few steps away, and in it there was a gun leaning near the steering wheel. When the appellant woke up to the sound of the chiselling on his walls, his first reaction was to look out of the window. Then he saw the damage being done to his house, compounded by the fact that his house and rice mill will be shut off from the highway by the fence once it is finished. He therefore appealed to his compadre, the deceased Rubia, to stop what they were doing and to talk things over with him. But deceased Fleischer answered angrily with 'gademit' and directed his men to proceed with what they were doing. The actuation of deceased Fleischer in angrily ordering the continuance of the fencing would have resulted in the further chiselling of the walls of appellant's house as well as the closure of the access to and from his house and rice mill-which were not only imminent but were actually in progress. There is no question, therefore, that there was aggression on the part of the victims: Fleischer was ordering, and Rubia was actually participating in the fencing. This was indeed aggression, not on the person of appellant, but on his property rights. The question is, was the aggression unlawful or lawful? Did the victims have a right to fence off the contested property, to destroy appellant's house and to shut off his ingress and egress to his residence and the highway? Article 30 of the Civil Code recognizes the right of every owner to enclose or fence his land or tenements. However, at the time of the incident on August 22, 1968, Civil Case no. 755 for annulment of the order of award to Fleischer and Company was still pending in the Court of First Instance of Cotabato. The parties could not have known that the case would be dismissed over a year after the incident on August 22, 1968, as it was dismissed on January 23, 1970 on ground of res judicata, in view of the dismissal in 1965 (by the Court of Appeals) of Civil Case No. 240 filed in 1950 for the annulment of the award to the company, between the same parties, which the company won by virtue of the compromise agreement in spite of the subsequent repudiation by the settlers of said compromise agreement; and that such 1970 dismissal also carried the dismissal of the supplemental petition filed by the Republic of the Philippines on November 28, 1968 to annul the sales patent and to cancel the corresponding certificate of title issued to the company, on the ground that the Director of Lands had no authority to conduct the sale

due to his failure to comply with the mandatory requirements for publication. The dismissal of the government's supplemental petition was premised on the ground that after its filing on November 28, 1968, nothing more was done by the petitioner Republic of the Philippines except to adopt all the evidence and arguments of plaintiffs with whom it joined as parties-plaintiffs. Hence, it is reasonable to believe that appellant was indeed hoping for a favorable judgment in Civil Case No. 755 filed on November 14, 1966 and his execution of the contract of lease on February 21, 1967 was just to avoid trouble. This was explained by him during cross-examination on January 21, 1970, thus: It happened this way: we talked it over with my Mrs. that we better rent the place because even though we do not know who really owns this portion to avoid trouble. To avoid trouble we better pay while waiting for the case because at that time, it was not known who is the right owner of the place. So we decided until things will clear up and determine who is really the owner, we decided to pay rentals (p. 169, t.s.n., Vol.6). In any case, Fleischer had given him up to December 31, 1968 (Exh.10, p. 2, Defense Exhibits) within which to vacate the land. He should have allowed appellant the peaceful enjoyment of his properties up to that time, instead of chiselling the walls of his house and closing appellant's entrance and exit to the highway. The following provisions of the Civil Code of the Philippines are in point: Art. 536. In no case may possession be acquired through force or intimidation as long as there is a possessor who objects thereto. He who believes that he has an action or a right to deprive another of the holding of a thing must invoke the aid of the competent court, if the holder should refuse to deliver the thing. Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed therein he shall be protected in or restored to said possession by the means established by the laws and the Rules of Court (Articles 536 and 539, Civil Code of the Philippines). Conformably to the foregoing provisions, the deceased had no right to destroy or cause damage to appellant's house, nor to close his accessibility to the highway while he was pleading with them to stop and talk things over with him. The assault on appellant's property, therefore, amounts to unlawful aggression as contemplated by law. Illegal aggression is equivalent to assault or at least threatened assault of immediate and imminent kind (People vs. Encomiendas, 46 SCRA 522).

In the case at bar, there was an actual physical invasion of appellant's property which he had the right to resist, pursuant to Art. 429 of the Civil Code of the Philippines which provides: Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property (Emphasis supplied). The reasonableness of the resistance is also a requirement of the justifying circumstance of self-defense or defense of one's rights under paragraph 1 of Article 11, Revised Penal Code. When the appellant fired his shotgun from his window, killing his two victims, his resistance was disproportionate to the attack. WE find, however, that the third element of defense of property is present, i.e., lack of sufficient provocation on the part of appellant who was defending his property. As a matter of fact, there was no provocation at all on his part, since he was asleep at first and was only awakened by the noise produced by the victims and their laborers. His plea for the deceased and their men to stop and talk things over with him was no provocation at all. Be that as it may, appellant's act in killing the deceased was not justifiable, since not all the elements for justification are present. He should therefore be held responsible for the death of his victims, but he could be credited with the special mitigating circumstance of incomplete defense, pursuant to paragraph 6, Article 13 of the Revised Penal Code. The crime committed is homicide on two counts. The qualifying circumstance of treachery cannot be appreciated in this case because of the presence of provocation on the part of the deceased. As WE held earlier in People vs. Manlapaz (55 SCRA 598), the element of a sudden unprovoked attack is therefore lacking. Moreover, in order to appreciate alevosia, "it must clearly appear that the method of assault adopted by the aggressor was deliberately chosen with a special view to the accomplishment of the act without risk to the assailant from any defense that the party assailed might have made. This cannot be said of a situation where the slayer acted instantaneously ..." (People vs. Caete, 44 Phil. 481). WE likewise find the aggravating (qualifying) circumstance of evident premeditation not sufficiently established. The only evidence presented to prove this circumstance was the testimony of Crisanto Ibaez, 37 years old, married, resident of Maitum, South Cotabato, and a laborer of Fleischer and Company, which may be summarized as follows:

On August 20, 1968 (two days before the incident) at about 7:00 A.M., he was drying corn near the house of Mr. and Mrs. Mamerto Narvaez at the crossing, Maitum, South Cotabato, when the accused and his wife talked to him. Mrs. Narvaez asked him to help them, as he was working in the hacienda. She further told him that if they fenced their house, there is a head that will be broken. Mamerto Narvaez added 'Noy, it is better that you will tell Mr. Fleischer because there will be nobody who will break his head but I will be the one.' He relayed this to Mr. Flaviano Rubia, but the latter told him not to believe as they were only Idle threats designed to get him out of the hacienda (pp. 297-303, t.s.n., Vol. 2). This single evidence is not sufficient to warrant appreciation of the aggravating circumstance of evident premeditation. As WE have consistently held, there must be "direct evidence of the planning or preparation to kill the victim, .... it is not enough that premeditation be suspected or surmised, but the criminal intent must be evidenced by notorious outward acts evincing the determination to commit the crime" (People vs. Ordioles, 42 SCRA 238). Besides, there must be a "showing" that the accused premeditated the killing; that the culprit clung to their (his) premeditated act; and that there was sufficient interval between the premeditation and the execution of the crime to allow them (him) to reflect upon the consequences of the act" (People vs. Gida, 102 SCRA 70). Moreover, the obvious bias of witness Crisanto Ibaez, as a laborer of the deceased Davis Fleischer, neutralizes his credibility. Since in the case at bar, there was no direct evidence of the planning or preparation to kill the victims nor that the accused premeditated the killing, and clung to his premeditated act, the trial court's conclusion as to the presence of such circumstance may not be endorsed. Evident premeditation is further negated by appellant pleading with the victims to stop the fencing and destroying his house and to talk things over just before the shooting. But the trial court has properly appreciated the presence of the mitigating circumstance of voluntary surrender, it appearing that appellant surrendered to the authorities soon after the shooting. Likewise, We find that passion and obfuscation attended the commission of the crime. The appellant awoke to find his house being damaged and its accessibility to the highway as well as of his rice mill bodega being closed. Not only was his house being unlawfully violated; his business was also in danger of closing down for lack of access to the highway. These circumstances, coming so near to the time when his first house was dismantled, thus forcing him to transfer to his only remaining house, must have so aggravated his obfuscation that he lost momentarily all reason causing him to reach for his shotgun and fire at the victims in defense of his rights. Considering the antecedent facts of this case, where appellant had thirty years earlier migrated to this so-called

"land of promise" with dreams and hopes of relative prosperity and tranquility, only to find his castle crumbling at the hands of the deceased, his dispassionate plea going unheeded-all these could be too much for any man-he should be credited with this mitigating circumstance. Consequently, appellant is guilty of two crimes of homicide only, the killing not being attended by any qualifying nor aggravating circumstance, but extenuated by the privileged mitigating circumstance of incomplete defense-in view of the presence of unlawful aggression on the part of the victims and lack of sufficient provocation on the part of the appellant-and by two generic mitigating circumstance of voluntary surrender and passion and obfuscation. Article 249 of the Revised Penal Code prescribes the penalty for homicide as reclusion temporal. Pursuant to Article 69, supra, the penalty lower by one or two degrees shall be imposed if the deed is not wholly excusable by reason of the lack of some of the conditions required to justify the same. Considering that the majority of the requirements for defense of property are present, the penalty may be lowered by two degrees, i.e., to prision correccional And under paragraph 5 of Article 64, the same may further be reduced by one degree, i.e., arresto mayor, because of the presence of two mitigating circumstances and no aggravating circumstance. The civil liability of the appellant should be modified. In the case of Zulueta vs. Pan American World Airways (43 SCRA 397), the award for moral damages was reduced because the plaintiff contributed to the gravity of defendant's reaction. In the case at bar, the victims not only contributed but they actually provoked the attack by damaging appellant's properties and business. Considering appellant's standing in the community, being married to a municipal councilor, the victims' actuations were apparently designed to humiliate him and destroy his reputation. The records disclose that his wife, councilor Feliza Narvaez, was also charged in these two cases and detained without bail despite the absence of evidence linking her to the killings. She was dropped as a defendant only upon motion of the prosecution dated October 31, 1968. (p. 14, CFI rec. of Crim. Case No. 1816), but acted upon on November 4, 1968 (p. 58, CFI rec. of Criminal Case No. 1815). Moreover, these cases arose out of an inordinate desire on the part of Fleischer and Company, despite its extensive landholdings in a Central Visayan province, to extend its accumulation of public lands to the resettlement areas of Cotabato. Since it had the capability-financial and otherwise-to carry out its land accumulation scheme, the lowly settlers, who uprooted their families from their native soil in Luzon to take advantage of the government's resettlement program, but had no sufficient means to fight the big landowners, were the ones prejudiced. Thus, the moral and material suffering of appellant and his family deserves leniency as to his civil liability. Furthermore, Article 39 of the Revised Penal Code requires a person convicted of prision correccional or arrests mayor and fine who has no property with which to meet his civil liabilities to serve a subsidiary imprisonment at the rate of one (1) day for each

P 2.50. However, the amendment introduced by Republic Act No. 5465 on April 21, 1969 made the provisions of Art. 39 applicable to fines only and not to reparation of the damage caused, indemnification of consequential damages and costs of proceedings. Considering that Republic Act 5465 is favorable to the accused who is not a habitual delinquent, it may be given retroactive effect pursuant to Article 22 of the Revised Penal Code. WHEREFORE, FINDING APPELLANT GUILTY BEYOND REASONABLE DOUBT OF ONLY TWO (2) HOMICIDES, MITIGATED BY THE PRIVILEGED EXTENUATING CIRCUMSTANCE OF INCOMPLETE SELF-DEFENSE AS WELL AS BY TWO (2) GENERIC MITIGATING CIRCUMSTANCES OF VOLUNTARY SURRENDER AND OBFUSCATION, WITHOUT ANY AGGRAVATING CIRCUMSTANCE, APPELLANT IS HEREBY SENTENCED TO SUFFER AN IMPRISONMENT OF FOUR (4) MONTHS OF ARRESTO MAYOR, TO INDEMNIFY EACH GROUP OF HEIRS OF DAVIS FLEISCHER AND OF FLAVIANO RUBIA IN THE SUM OF FOUR THOUSAND (P 4,000.00) PESOS, WITHOUT SUBSIDIARY IMPRISONMENT AND WITHOUT ANY AWARD FOR MORAL DAMAGES AND ATTORNEY'S FEES. CONSIDERING THAT APPELLANT HAS BEEN UNDER DETENTION FOR ALMOST FOURTEEN (14) YEARS NOW SINCE HIS VOLUNTARY SURRENDER ON AUGUST 22,1968, HIS IMMEDIATE RELEASE IS HEREBY ORDERED. NO COSTS. SO ORDERED. Fernando, C.J., Teehankee, Concepcion Jr., Guerrero, De Castro, Melencio-Herrera, Escolin Vasquez and Relova, JJ., concur. Aquino, J., is on leave. Plana, J., in the result.

Separate Opinions

ABAD SANTOS, J., dissenting: I dissent. The self-defense of the Revised Penal Code refers to unlawful aggression on persons, not property Plana, J., in the result.

GUTIERREZ, JR., J., dissenting: While I agree with the order to release the appellant, I am constrained to dissent in part. It is true that Art. 429, Civil Code of the Philippines, provides that the owner or legal possessor of a thing may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. It seems to me, however, that an attack on the person defending his property is an indispensable element where an accused pleads self-defense but what is basically defended is only property. Defense of property is not of such importance as the right to life and defense of property can only be invoked when it is coupled with some form of attack on the person of one entrusted with said property. The defense of property, whether complete or incomplete, to be available in prosecutions for murder or homicide must be coupled with an attack by the one getting the property on the person defending it. In the case now before Us, there is absolutely no evidence that an attack was attempted, much less made upon the person of appellant. The mere utterance "No, gademit proceed, go ahead" is not the unlawful aggression which entitles appellant to the pela of self-defense. I agree with the majority opinion that the crime is homicide but without any privileged mitigating circumstance. Therefore, since the appellant is guilty beyond reasonable doubt of two (2) homicides, mitigated by the two generic mitigating circumstances of voluntary surrender and obfuscation, without any aggravating circumstance, maximum the sentence the appellant should have served was prision mayor plus the indemnification to each group of heirs of Davis Fleischer and of Flamiano Rubia of the sum of Four Thousand (P4,000.00) Pesos, without subsidiary imprisonment, but without any award for moral damages and attorney's fees. Considering that appellant has been under detention for almost fourteen (14) years now since August 22, 1968, he has served the penalty and should be released.

Separate Opinions ABAD SANTOS, J., dissenting: I dissent. The self-defense of the Revised Penal Code refers to unlawful aggression on persons, not property Plana, J., in the result.

GUTIERREZ, JR., J., dissenting:

While I agree with the order to release the appellant, I am constrained to dissent in part. It is true that Art. 429, Civil Code of the Philippines, provides that the owner or legal possessor of a thing may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. It seems to me, however, that an attack on the person defending his property is an indispensable element where an accused pleads self-defense but what is basically defended is only property. Defense of property is not of such importance as the right to life and defense of property can only be invoked when it is coupled with some form of attack on the person of one entrusted with said property. The defense of property, whether complete or incomplete, to be available in prosecutions for murder or homicide must be coupled with an attack by the one getting the property on the person defending it. In the case now before Us, there is absolutely no evidence that an attack was attempted, much less made upon the person of appellant. The mere utterance "No, gademit proceed, go ahead" is not the unlawful aggression which entitles appellant to the pela of self-defense. I agree with the majority opinion that the crime is homicide but without any privileged mitigating circumstance. Therefore, since the appellant is guilty beyond reasonable doubt of two (2) homicides, mitigated by the two generic mitigating circumstances of voluntary surrender and obfuscation, without any aggravating circumstance, maximum the sentence the appellant should have served was prision mayor plus the indemnification to each group of heirs of Davis Fleischer and of Flamiano Rubia of the sum of Four Thousand (P4,000.00) Pesos, without subsidiary imprisonment, but without any award for moral damages and attorney's fees. Considering that appellant has been under detention for almost fourteen (14) years now since August 22, 1968, he has served the penalty and should be released.