Republic of the Philippines died.
The plaintiff received contusions which caused temporary unconsciousness and required medical
SUPREME COURT
Manila
EN BANC
G.R. No. L-12219 March 15, 1918
AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.
G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith, jr., the sum of
P31,000, as damages alleged to have been caused by an automobile driven by the defendant. From a
judgment of the Court of First Instance of the Province of La Union absolving the defendant from liability
the plaintiff has appealed.
The occurrence which gave rise to the institution of this action took place on December 12, 1912, on the
Carlatan Bridge, at San Fernando, La Union. It appears that upon the occasion in question the plaintiff
was riding on his pony over said bridge. Before he had gotten half way across, the defendant
approached from the opposite direction in an automobile, going at the rate of about ten or twelve miles
per hour. As the defendant neared the bridge he saw a horseman on it and blew his horn to give
warning of his approach. He continued his course and after he had taken the bridge he gave two more
successive blasts, as it appeared to him that the man on horseback before him was not observing the
rule of the road.
The plaintiff, it appears, saw the automobile coming and heard the warning signals. However, being
perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the pony closely up
against the railing on the right side of the bridge instead of going to the left. He says that the reason he
did this was that he thought he did not have sufficient time to get over to the other side. The bridge is
shown to have a length of about 75 meters and a width of 4.80 meters. As the automobile approached,
the defendant guided it toward his left, that being the proper side of the road for the machine. In so
doing the defendant assumed that the horseman would move to the other side. The pony had not as yet
exhibited fright, and the rider had made no sign for the automobile to stop. Seeing that the pony was
apparently quiet, the defendant, instead of veering to the right while yet some distance away or slowing
down, continued to approach directly toward the horse without diminution of speed. When he had gotten
quite near, there being then no possibility of the horse getting across to the other side, the defendant
quickly turned his car sufficiently to the right to escape hitting the horse alongside of the railing where it
as then standing; but in so doing the automobile passed in such close proximity to the animal that it
became frightened and turned its body across the bridge with its head toward the railing. In so doing, it
as struck on the hock of the left hind leg by the flange of the car and the limb was broken. The horse fell
and its rider was thrown off with some violence. From the evidence adduced in the case we believe that
when the accident occurred the free space where the pony stood between the automobile and the
railing of the bridge was probably less than one and one half meters. As a result of its injuries the horse
attention for several days.
The question presented for decision is whether or not the defendant in maneuvering his car in the
manner above described was guilty of negligence such as gives rise to a civil obligation to repair the
damage done; and we are of the opinion that he is so liable. As the defendant started across the bridge,
he had the right to assume that the horse and the rider would pass over to the proper side; but as he
moved toward the center of the bridge it was demonstrated to his eyes that this would not be done; and
he must in a moment have perceived that it was too late for the horse to cross with safety in front of the
moving vehicle. In the nature of things this change of situation occurred while the automobile was yet
some distance away; and from this moment it was not longer within the power of the plaintiff to escape
being run down by going to a place of greater safety. The control of the situation had then passed
entirely to the defendant; and it was his duty either to bring his car to an immediate stop or, seeing that
there were no other persons on the bridge, to take the other side and pass sufficiently far away from the
horse to avoid the danger of collision. Instead of doing this, the defendant ran straight on until he was
almost upon the horse. He was, we think, deceived into doing this by the fact that the horse had not yet
exhibited fright. But in view of the known nature of horses, there was an appreciable risk that, if the
animal in question was unacquainted with automobiles, he might get exited and jump under the
conditions which here confronted him. When the defendant exposed the horse and rider to this danger
he was, in our opinion, negligent in the eye of the law.
The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that person would have used in the
same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by reference to the personal judgment of the
actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent
in the man of ordinary intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in the
particular case. Abstract speculations cannot here be of much value but this much can be profitably
said: Reasonable men govern their conduct by the circumstances which are before them or known to
them. They are not, and are not supposed to be, omniscient of the future. Hence they can be expected
to take care only when there is something before them to suggest or warn of danger. Could a prudent
man, in the case under consideration, foresee harm as a result of the course actually pursued? If so, it
was the duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm,
followed by ignoring of the suggestion born of this prevision, is always necessary before negligence can
be held to exist. Stated in these terms, the proper criterion for determining the existence of negligence
in a given case is this: Conduct is said to be negligent when a prudent man in the position of the
tortfeasor would have foreseen that an effect harmful to another was sufficiently probable to warrant his
foregoing conduct or guarding against its consequences.
Applying this test to the conduct of the defendant in the present case we think that negligence is clearly
established. A prudent man, placed in the position of the defendant, would in our opinion, have
recognized that the course which he was pursuing was fraught with risk, and would therefore have
foreseen harm to the horse and the rider as reasonable consequence of that course. Under these
circumstances the law imposed on the defendant the duty to guard against the threatened harm.
It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent Arellano, C.J., Torres, Carson, Araullo, Avanceña, and Fisher, JJ., concur.
negligence in planting himself on the wrong side of the road. But as we have already stated, the Johnson, J., reserves his vote.
defendant was also negligent; and in such case the problem always is to discover which agent is
immediately and directly responsible. It will be noted that the negligent acts of the two parties were not
contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by
an appreciable interval. Under these circumstances the law is that the person who has the last fair
chance to avoid the impending harm and fails to do so is chargeable with the consequences, without
reference to the prior negligence of the other party.

The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should perhaps be
mentioned in this connection. This Court there held that while contributory negligence on the part of the
person injured did not constitute a bar to recovery, it could be received in evidence to reduce the
damages which would otherwise have been assessed wholly against the other party. The defendant
company had there employed the plaintiff, as a laborer, to assist in transporting iron rails from a barge in
Manila harbor to the company's yards located not far away. The rails were conveyed upon cars which
were hauled along a narrow track. At certain spot near the water's edge the track gave way by reason of
the combined effect of the weight of the car and the insecurity of the road bed. The car was in
consequence upset; the rails slid off; and the plaintiff's leg was caught and broken. It appeared in
evidence that the accident was due to the effects of the typhoon which had dislodged one of the
supports of the track. The court found that the defendant company was negligent in having failed to
repair the bed of the track and also that the plaintiff was, at the moment of the accident, guilty of
contributory negligence in walking at the side of the car instead of being in front or behind. It was held
that while the defendant was liable to the plaintiff by reason of its negligence in having failed to keep the
track in proper repair nevertheless the amount of the damages should be reduced on account of the
contributory negligence in the plaintiff. As will be seen the defendant's negligence in that case consisted
in an omission only. The liability of the company arose from its responsibility for the dangerous condition
of its track. In a case like the one now before us, where the defendant was actually present and
operating the automobile which caused the damage, we do not feel constrained to attempt to weigh the
negligence of the respective parties in order to apportion the damage according to the degree of their
relative fault. It is enough to say that the negligence of the defendant was in this case the immediate
and determining cause of the accident and that the antecedent negligence of the plaintiff was a more
remote factor in the case.

A point of minor importance in the case is indicated in the special defense pleaded in the defendant's
answer, to the effect that the subject matter of the action had been previously adjudicated in the court of
a justice of the peace. In this connection it appears that soon after the accident in question occurred,
the plaintiff caused criminal proceedings to be instituted before a justice of the peace charging the
defendant with the infliction of serious injuries (lesiones graves). At the preliminary investigation the
defendant was discharged by the magistrate and the proceedings were dismissed. Conceding that the
acquittal of the defendant at the trial upon the merits in a criminal prosecution for the offense mentioned
would be res adjudicata upon the question of his civil liability arising from negligence -- a point upon
which it is unnecessary to express an opinion -- the action of the justice of the peace in dismissing the
criminal proceeding upon the preliminary hearing can have no effect. (See U. S. vs. Banzuela and
Banzuela, 31 Phil. Rep., 564.)

From what has been said it results that the judgment of the lower court must be reversed, and judgment
is her rendered that the plaintiff recover of the defendant the sum of two hundred pesos (P200), with
costs of other instances. The sum here awarded is estimated to include the value of the horse, medical
expenses of the plaintiff, the loss or damage occasioned to articles of his apparel, and lawful interest on
the whole to the date of this recovery. The other damages claimed by the plaintiff are remote or
otherwise of such character as not to be recoverable. So ordered.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12986 March 31, 1966
THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS OF DOMINGA
ONG, petitioners-appellants,
vs.
CALTEX (PHIL.), INC., MATEO BOQUIREN and THE COURT OF APPEALS, respondents-appellees.
Ross, Selph, Carrascoso and Janda for the respondents.
Bernabe Africa, etc. for the petitioners.
MAKALINTAL., J.:
This case is before us on a petition for review of the decision of the Court of Appeals, which affirmed
that of the Court of First Instance of Manila dismissing petitioners' second amended complaint against
respondents.
The action is for damages under Articles 1902 and 1903 of the old Civil Code. It appears that in the
afternoon of March 18, 1948 a fire broke out at the Caltex service station at the corner of Antipolo street
and Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into the
underground storage, right at the opening of the receiving tank where the nozzle of the hose was
inserted. The fire spread to and burned several neighboring houses, including the personal properties
and effects inside them. Their owners, among them petitioners here, sued respondents Caltex (Phil.),
Inc. and Mateo Boquiren, the first as alleged owner of the station and the second as its agent in charge
of operation. Negligence on the part of both of them was attributed as the cause of the fire.
The trial court and the Court of Appeals found that petitioners failed to prove negligence and that
respondents had exercised due care in the premises and with respect to the supervision of their
employees.
The first question before Us refers to the admissibility of certain reports on the fire prepared by the
Manila Police and Fire Departments and by a certain Captain Tinio of the Armed Forces of the
Philippines. Portions of the first two reports are as follows:
1. Police Department report: —
Investigation disclosed that at about 4:00 P.M. March 18, 1948, while Leandro Flores
was transferring gasoline from a tank truck, plate No. T-5292 into the underground
tank of the Caltex Gasoline Station located at the corner of Rizal Avenue and Antipolo
Street, this City, an unknown Filipino lighted a cigarette and threw the burning match
stick near the main valve of the said underground tank. Due to the gasoline fumes,
fire suddenly blazed. Quick action of Leandro Flores in pulling off the gasoline hose
connecting the truck with the underground tank prevented a terrific explosion.
However, the flames scattered due to the hose from which the gasoline was spouting.
It burned the truck and the following accessorias and residences.
2. The Fire Department report: —
In connection with their allegation that the premises was (sic) subleased for the installation of a
coca-cola and cigarette stand, the complainants furnished this Office a copy of a photograph
taken during the fire and which is submitted herewith. it appears in this picture that there are in
the premises a coca-cola cooler and a rack which according to information gathered in the
neighborhood contained cigarettes and matches, installed between the gasoline pumps and
the underground tanks.
The report of Captain Tinio reproduced information given by a certain Benito Morales regarding the
history of the gasoline station and what the chief of the fire department had told him on the same
subject.
The foregoing reports were ruled out as "double hearsay" by the Court of Appeals and hence
inadmissible. This ruling is now assigned as error. It is contended: first, that said reports were admitted
by the trial court without objection on the part of respondents; secondly, that with respect to the police
report (Exhibit V-Africa) which appears signed by a Detective Zapanta allegedly "for Salvador
Capacillo," the latter was presented as witness but respondents waived their right to cross-examine him
although they had the opportunity to do so; and thirdly, that in any event the said reports are admissible
as an exception to the hearsay rule under section 35 of Rule 123, now Rule 130.
The first contention is not borne out by the record. The transcript of the hearing of September 17, 1953
(pp. 167-170) shows that the reports in question, when offered as evidence, were objected to by
counsel for each of respondents on the ground that they were hearsay and that they were "irrelevant,
immaterial and impertinent." Indeed, in the court's resolution only Exhibits J, K, K-5 and X-6 were
admitted without objection; the admission of the others, including the disputed ones, carried no such
explanation.
On the second point, although Detective Capacillo did take the witness stand, he was not examined and
he did not testify as to the facts mentioned in his alleged report (signed by Detective Zapanta). All he
said was that he was one of those who investigated "the location of the fire and, if possible, gather
witnesses as to the occurrence, and that he brought the report with him. There was nothing, therefore,
on which he need be cross-examined; and the contents of the report, as to which he did not testify, did
not thereby become competent evidence. And even if he had testified, his testimony would still have
been objectionable as far as information gathered by him from third persons was concerned.
Petitioners maintain, however, that the reports in themselves, that is, without further testimonial
evidence on their contents, fall within the scope of section 35, Rule 123, which provides that "entries in
official records made in the performance of his duty by a public officer of the Philippines, or by a person
in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein
stated."
There are three requisites for admissibility under the rule just mentioned: (a) that the entry was made by
a public officer, or by another person specially enjoined by law to do so; (b) that it was made by the
public officer in the performance of his duties, or by such other person in the performance of a duty
specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the
facts by him stated, which must have been acquired by him personally or through official information
(Moran, Comments on the Rules of Court, Vol. 3 [1957] p. 398).
Of the three requisites just stated, only the last need be considered here. Obviously the material facts
recited in the reports as to the cause and circumstances of the fire were not within the personal
knowledge of the officers who conducted the investigation. Was knowledge of such facts, however,
acquired by them through official information? As to some facts the sources thereof are not even
identified. Others are attributed to Leopoldo Medina, referred to as an employee at the gas station were
the fire occurred; to Leandro Flores, driver of the tank truck from which gasoline was being transferred
at the time to the underground tank of the station; and to respondent Mateo Boquiren, who could not,
according to Exhibit V-Africa, give any reason as to the origin of the fire. To qualify their statements as
"official information" acquired by the officers who prepared the reports, the persons who made the
statements not only must have personal knowledge of the facts stated but must have the duty to give
such statements for record.1
The reports in question do not constitute an exception to the hearsay rule; the facts stated therein were
not acquired by the reporting officers through official information, not having been given by the
informants pursuant to any duty to do so.
The next question is whether or not, without proof as to the cause and origin of the fire, the doctrine
of res ipsa loquitur should apply so as to presume negligence on the part of appellees. Both the trial
court and the appellate court refused to apply the doctrine in the instant case on the grounds that "as to
(its) applicability ... in the Philippines, there seems to he nothing definite," and that while the rules do not
prohibit its adoption in appropriate cases, "in the case at bar, however, we find no practical use for such
doctrine." The question deserves more than such summary dismissal. The doctrine has actually been
applied in this jurisdiction, in the case of Espiritu vs. Philippine Power and Development Co. (CA-G.R.
No. 3240-R, September 20, 1949), wherein the decision of the Court of Appeals was penned by Mr.
Justice J.B.L. Reyes now a member of the Supreme Court.
The facts of that case are stated in the decision as follows:
In the afternoon of May 5, 1946, while the plaintiff-appellee and other companions were
loading grass between the municipalities of Bay and Calauan, in the province of Laguna, with
clear weather and without any wind blowing, an electric transmission wire, installed and
maintained by the defendant Philippine Power and Development Co., Inc. alongside the road,
suddenly parted, and one of the broken ends hit the head of the plaintiff as he was about to
board the truck. As a result, plaintiff received the full shock of 4,400 volts carried by the wire
and was knocked unconscious to the ground. The electric charge coursed through his body
and caused extensive and serious multiple burns from skull to legs, leaving the bone exposed
in some parts and causing intense pain and wounds that were not completely healed when the
case was tried on June 18, 1947, over one year after the mishap.
The defendant therein disclaimed liability on the ground that the plaintiff had failed to show any specific
act of negligence, but the appellate court overruled the defense under the doctrine of res ipsa loquitur.
The court said:
The first point is directed against the sufficiency of plaintiff's evidence to place appellant on its
defense. While it is the rule, as contended by the appellant, that in case of noncontractual
negligence, or culpa aquiliana, the burden of proof is on the plaintiff to establish that the
proximate cause of his injury was the negligence of the defendant, it is also a recognized
principal that "where the thing which caused injury, without fault of the injured person, is under
the exclusive control of the defendant and the injury is such as in the ordinary course of things
does not occur if he having such control use proper care, it affords reasonable evidence, in the
absence of the explanation, that the injury arose from defendant's want of care."
And the burden of evidence is shifted to him to establish that he has observed due care and
diligence. (San Juan Light & Transit Co. v. Requena, 244, U.S. 89, 56 L. ed. 680.) This rule is
known by the name of res ipsa loquitur (the transaction speaks for itself), and is peculiarly
applicable to the case at bar, where it is unquestioned that the plaintiff had every right to be on
the highway, and the electric wire was under the sole control of defendant company. In the
ordinary course of events, electric wires do not part suddenly in fair weather and injure people,
unless they are subjected to unusual strain and stress or there are defects in their installation,
maintenance and supervision; just as barrels do not ordinarily roll out of the warehouse
windows to injure passersby, unless some one was negligent. (Byrne v. Boadle, 2 H & Co. 722;
159 Eng. Reprint 299, the leading case that established that rule). Consequently, in the
absence of contributory negligence (which is admittedly not present), the fact that the wire
snapped suffices to raise a reasonable presumption of negligence in its installation, care and
maintenance. Thereafter, as observed by Chief Baron Pollock, "if there are any facts
inconsistent with negligence, it is for the defendant to prove."
It is true of course that decisions of the Court of Appeals do not lay down doctrines binding on the
Supreme Court, but we do not consider this a reason for not applying the particular doctrine of res ipsa
loquitur in the case at bar. Gasoline is a highly combustible material, in the storage and sale of which
extreme care must be taken. On the other hand, fire is not considered a fortuitous event, as it arises
almost invariably from some act of man. A case strikingly similar to the one before Us is Jones vs. Shell
Petroleum Corporation, et al., 171 So. 447:
Arthur O. Jones is the owner of a building in the city of Hammon which in the year 1934 was
leased to the Shell Petroleum Corporation for a gasoline filling station. On October 8, 1934,
during the term of the lease, while gasoline was being transferred from the tank wagon, also
operated by the Shell Petroleum Corporation, to the underground tank of the station, a fire
started with resulting damages to the building owned by Jones. Alleging that the damages to
his building amounted to $516.95, Jones sued the Shell Petroleum Corporation for the
recovery of that amount. The judge of the district court, after hearing the testimony, concluded
that plaintiff was entitled to a recovery and rendered judgment in his favor for $427.82. The
Court of Appeals for the First Circuit reversed this judgment, on the ground the testimony failed
to show with reasonable certainty any negligence on the part of the Shell Petroleum
Corporation or any of its agents or employees. Plaintiff applied to this Court for a Writ of
Review which was granted, and the case is now before us for decision.1äwphï1.ñët
In resolving the issue of negligence, the Supreme Court of Louisiana held:
Plaintiff's petition contains two distinct charges of negligence — one relating to the cause of
the fire and the other relating to the spreading of the gasoline about the filling station.
Other than an expert to assess the damages caused plaintiff's building by the fire, no
witnesses were placed on the stand by the defendant.
 Taking up plaintiff's charge of negligence relating to the cause of the fire, we find it established
by the record that the filling station and the tank truck were under the control of the defendant
and operated by its agents or employees. We further find from the uncontradicted testimony of
plaintiff's witnesses that fire started in the underground tank attached to the filling station while
it was being filled from the tank truck and while both the tank and the truck were in charge of
and being operated by the agents or employees of the defendant, extended to the hose and
tank truck, and was communicated from the burning hose, tank truck, and escaping gasoline to
the building owned by the plaintiff.
Predicated on these circumstances and the further circumstance of defendant's failure to
explain the cause of the fire or to show its lack of knowledge of the cause, plaintiff has evoked
the doctrine of res ipsa loquitur. There are many cases in which the doctrine may be
successfully invoked and this, we think, is one of them.
Where the thing which caused the injury complained of is shown to be under the management
of defendant or his servants and the accident is such as in the ordinary course of things does
not happen if those who have its management or control use proper care, it affords reasonable
evidence, in absence of explanation by defendant, that the accident arose from want of care.
(45 C.J. #768, p. 1193).
This statement of the rule of res ipsa loquitur has been widely approved and adopted by the
courts of last resort. Some of the cases in this jurisdiction in which the doctrine has been
applied are the following, viz.: Maus v. Broderick, 51 La. Ann. 1153, 25 So. 977; Hebert v. Lake
Charles Ice, etc., Co., 111 La. 522, 35 So. 731, 64 L.R.A. 101, 100 Am. St. Rep. 505; Willis v.
Vicksburg, etc., R. Co., 115 La. 63, 38 So. 892; Bents v. Page, 115 La. 560, 39 So. 599.
The principle enunciated in the aforequoted case applies with equal force here. The gasoline station,
with all its appliances, equipment and employees, was under the control of appellees. A fire occurred
therein and spread to and burned the neighboring houses. The persons who knew or could have known
how the fire started were appellees and their employees, but they gave no explanation thereof
whatsoever. It is a fair and reasonable inference that the incident happened because of want of care.
In the report submitted by Captain Leoncio Mariano of the Manila Police Department (Exh. X-1 Africa)
the following appears:
Investigation of the basic complaint disclosed that the Caltex Gasoline Station complained of
occupies a lot approximately 10 m x 10 m at the southwest corner of Rizal Avenue and
Antipolo. The location is within a very busy business district near the Obrero Market, a railroad
crossing and very thickly populated neighborhood where a great number of people mill around
t extenuate his negligence. A decision of the Supreme Court of Texas, upon facts analogous to those of
until
gasoline
tever be theWactjvities of these peopleor lighting a cigarette cannot be excluded and this
constitute a secondary hazard to its operation which in turn endangers the entire neighborhood
to conflagration.
Furthermore, aside from precautions already taken by its operator the concrete walls south
and west adjoining the neighborhood are only 2-1/2 meters high at most and cannot avoid the
flames from leaping over it in case of fire.
Records show that there have been two cases of fire which caused not only material damages
but desperation and also panic in the neighborhood.
Although the soft drinks stand had been eliminated, this gasoline service station is also used
by its operator as a garage and repair shop for his fleet of taxicabs numbering ten or more,
adding another risk to the possible outbreak of fire at this already small but crowded gasoline
station.
The foregoing report, having been submitted by a police officer in the performance of his duties on the
basis of his own personal observation of the facts reported, may properly be considered as an
exception to the hearsay rule. These facts, descriptive of the location and objective circumstances
surrounding the operation of the gasoline station in question, strengthen the presumption of negligence
under the doctrine of res ipsa loquitur, since on their face they called for more stringent measures of
caution than those which would satisfy the standard of due diligence under ordinary circumstances.
There is no more eloquent demonstration of this than the statement of Leandro Flores before the police
investigator. Flores was the driver of the gasoline tank wagon who, alone and without assistance, was
transferring the contents thereof into the underground storage when the fire broke out. He said: "Before
loading the underground tank there were no people, but while the loading was going on, there were
people who went to drink coca-cola (at the coca-cola stand) which is about a meter from the hole
leading to the underground tank." He added that when the tank was almost filled he went to the tank
truck to close the valve, and while he had his back turned to the "manhole" he, heard someone shout
"fire."
Even then the fire possibly would not have spread to the neighboring houses were it not for another
negligent omission on the part of defendants, namely, their failure to provide a concrete wall high
enough to prevent the flames from leaping over it. As it was the concrete wall was only 2-1/2 meters
high, and beyond that height it consisted merely of galvanized iron sheets, which would predictably
crumple and melt when subjected to intense heat. Defendants' negligence, therefore, was not only with
respect to the cause of the fire but also with respect to the spread thereof to the neighboring houses.
There is an admission on the part of Boquiren in his amended answer to the second amended
complaint that "the fire was caused through the acts of a stranger who, without authority, or permission
of answering defendant, passed through the gasoline station and negligently threw a lighted match in
the premises." No evidence on this point was adduced, but assuming the allegation to be true —
certainly any unfavorable inference from the admission may be taken against Boquiren — it does not
the present case, states the rule which we find acceptable here. "It is the rule that those who distribute a
dangerous article or agent, owe a degree of protection to the public proportionate to and commensurate
with a danger involved ... we think it is the generally accepted rule as applied to torts that 'if the effects
of the actor's negligent conduct actively and continuously operate to bring about harm to another, the
fact that the active and substantially simultaneous operation of the effects of a third person's innocent,
tortious or criminal act is also a substantial factor in bringing about the harm, does not protect the actor
from liability.' (Restatement of the Law of Torts, vol. 2, p. 1184, #439). Stated in another way, "The
intention of an unforeseen and unexpected cause, is not sufficient to relieve a wrongdoer from
consequences of negligence, if such negligence directly and proximately cooperates with the
independent cause in the resulting injury." (MacAfee, et al. vs. Traver's Gas Corporation, 153 S.W. 2nd
442.)
The next issue is whether Caltex should be held liable for the damages caused to appellants. This issue
depends on whether Boquiren was an independent contractor, as held by the Court of Appeals, or an
agent of Caltex. This question, in the light of the facts not controverted, is one of law and hence may be
passed upon by this Court. These facts are: (1) Boquiren made an admission that he was an agent of
Caltex; (2) at the time of the fire Caltex owned the gasoline station and all the equipment therein; (3)
Caltex exercised control over Boquiren in the management of the state; (4) the delivery truck used in
delivering gasoline to the station had the name of CALTEX painted on it; and (5) the license to store
gasoline at the station was in the name of Caltex, which paid the license fees. (Exhibit T-Africa; Exhibit
U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-Africa).
In Boquiren's amended answer to the second amended complaint, he denied that he directed one of his
drivers to remove gasoline from the truck into the tank and alleged that the "alleged driver, if one there
was, was not in his employ, the driver being an employee of the Caltex (Phil.) Inc. and/or the owners of
the gasoline station." It is true that Boquiren later on amended his answer, and that among the changes
was one to the effect that he was not acting as agent of Caltex. But then again, in his motion to dismiss
appellants' second amended complaint the ground alleged was that it stated no cause of action since
under the allegations thereof he was merely acting as agent of Caltex, such that he could not have
incurred personal liability. A motion to dismiss on this ground is deemed to be an admission of the facts
alleged in the complaint.
Caltex admits that it owned the gasoline station as well as the equipment therein, but claims that the
business conducted at the service station in question was owned and operated by Boquiren. But Caltex
did not present any contract with Boquiren that would reveal the nature of their relationship at the time
of the fire. There must have been one in existence at that time. Instead, what was presented was a
license agreement manifestly tailored for purposes of this case, since it was entered into shortly before
the expiration of the one-year period it was intended to operate. This so-called license agreement
(Exhibit 5-Caltex) was executed on November 29, 1948, but made effective as of January 1, 1948 so as
to cover the date of the fire, namely, March 18, 1948. This retroactivity provision is quite significant, and
gives rise to the conclusion that it was designed precisely to free Caltex from any responsibility with
respect to the fire, as shown by the clause that Caltex "shall not be liable for any injury to person or
property while in the property herein licensed, it being understood and agreed that LICENSEE
(Boquiren) is not an employee, representative or agent of LICENSOR (Caltex)."
But even if the license agreement were to govern, Boquiren can hardly be considered an independent
contractor. Under that agreement Boquiren would pay Caltex the purely nominal sum of P1.00 for the
use of the premises and all the equipment therein. He could sell only Caltex Products. Maintenance of
the station and its equipment was subject to the approval, in other words control, of Caltex. Boquiren
could not assign or transfer his rights as licensee without the consent of Caltex. The license agreement
was supposed to be from January 1, 1948 to December 31, 1948, and thereafter until terminated by
Caltex upon two days prior written notice. Caltex could at any time cancel and terminate the agreement
in case Boquiren ceased to sell Caltex products, or did not conduct the business with due diligence, in
the judgment of Caltex. Termination of the contract was therefore a right granted only to Caltex but not
to Boquiren. These provisions of the contract show the extent of the control of Caltex over Boquiren.
The control was such that the latter was virtually an employee of the former.
Taking into consideration the fact that the operator owed his position to the company and the
latter could remove him or terminate his services at will; that the service station belonged to
the company and bore its tradename and the operator sold only the products of the company;
that the equipment used by the operator belonged to the company and were just loaned to the
operator and the company took charge of their repair and maintenance; that an employee of
the company supervised the operator and conducted periodic inspection of the company's
gasoline and service station; that the price of the products sold by the operator was fixed by
the company and not by the operator; and that the receipts signed by the operator indicated
that he was a mere agent, the finding of the Court of Appeals that the operator was an agent of
the company and not an independent contractor should not be disturbed.
To determine the nature of a contract courts do not have or are not bound to rely upon the
name or title given it by the contracting parties, should thereby a controversy as to what they
really had intended to enter into, but the way the contracting parties do or perform their
respective obligations stipulated or agreed upon may be shown and inquired into, and should
such performance conflict with the name or title given the contract by the parties, the former
must prevail over the latter. (Shell Company of the Philippines, Ltd. vs. Firemens' Insurance
Company of Newark, New Jersey, 100 Phil. 757).
The written contract was apparently drawn for the purpose of creating the apparent
relationship of employer and independent contractor, and of avoiding liability for the negligence
of the employees about the station; but the company was not satisfied to allow such
relationship to exist. The evidence shows that it immediately assumed control, and proceeded
to direct the method by which the work contracted for should be performed. By reserving the
right to terminate the contract at will, it retained the means of compelling submission to its
orders. Having elected to assume control and to direct the means and methods by which the
work has to be performed, it must be held liable for the negligence of those performing service
under its direction. We think the evidence was sufficient to sustain the verdict of the jury. (Gulf
Refining Company v. Rogers, 57 S.W. 2d, 183).
Caltex further argues that the gasoline stored in the station belonged to Boquiren. But no cash invoices
were presented to show that Boquiren had bought said gasoline from Caltex. Neither was there a sales
contract to prove the same.
As found by the trial court the Africas sustained a loss of P9,005.80, after deducting the amount of
P2,000.00 collected by them on the insurance of the house. The deduction is now challenged as
erroneous on the ground that Article 2207 of the New Civil Code, which provides for the subrogation of
the insurer to the rights of the insured, was not yet in effect when the loss took place. However,
regardless of the silence of the law on this point at that time, the amount that should be recovered be
measured by the damages actually suffered, otherwise the principle prohibiting unjust enrichment would
be violated. With respect to the claim of the heirs of Ong P7,500.00 was adjudged by the lower court on
the basis of the assessed value of the property destroyed, namely, P1,500.00, disregarding the
testimony of one of the Ong children that said property was worth P4,000.00. We agree that the court
erred, since it is of common knowledge that the assessment for taxation purposes is not an accurate
gauge of fair market value, and in this case should not prevail over positive evidence of such value. The
heirs of Ong are therefore entitled to P10,000.00.
Wherefore, the decision appealed from is reversed and respondents-appellees are held liable solidarily
to appellants, and ordered to pay them the aforesaid sum of P9,005.80 and P10,000.00, respectively,
with interest from the filing of the complaint, and costs.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-9308 December 23, 1914

JUAN BERNARDO, plaintiff-appellant,

vs.
M. B. LEGASPI, defendant-appellee.

Roman de Jesus for appellant.

No appearance for appellee.

MORELAND, J.:

This is an appeal from a judgment of the Court of First Instance of the city of Manila dismissing the
complaint on the merits filed in an action to recover damages for injuries sustained by plaintiff's
automobile by reason of defendant's negligence in causing a collision between his automobile and that
of plaintiff. The court in its judgment also dismissed a cross-complaint filed by the defendant, praying for
damages against the plaintiff on the ground that the injuries sustained by the defendant's automobile in
the collision referred to, as well as those to plaintiff's machine, were caused by the negligence of the
plaintiff in handling his automobile.

The court found upon the evidence that both the plaintiff and the defendant were negligent in handling
their automobiles and that said negligence was of such a character and extent on the part of both as to
prevent either from recovering.1awphil.net

Upon the facts, as they appear of record, the judgment must be affirmed, as the evidence clearly
supports the decision of the trial court. The law applicable to the facts also requires an affirmance of the
judgment appealed from. Where the plaintiff in a negligence action, by his own carelessness contributes
to the principal occurrence, that is, to the accident, as one of the determining causes thereof, he cannot
recover. This is equally true of the defendant; and as both of them, by their negligent acts, contributed to
the determining cause of the accident, neither can recover.

The judgment appealed from is affirmed, with costs against the appellant.itc-alf

Arellano, C.J., Torres, Johnson, Carson, Trent and Araullo, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-21438 September 28, 1966
AIR FRANCE, petitioner,
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.
Lichauco, Picazo and Agcaoili for petitioner.
Bengzon Villegas and Zarraga for respondent R. Carrascoso.
SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael Carrascoso
P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20 representing the
difference in fare between first class and tourist class for the portion of the trip Bangkok-Rome, these
various amounts with interest at the legal rate, from the date of the filing of the complaint until paid; plus
P3,000.00 for attorneys' fees; and the costs of suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket
from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects", with costs
against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air
Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From
Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of the
defendant airline forced plaintiff to vacate the "first class" seat that he was occupying because,
in the words of the witness Ernesto G. Cuento, there was a "white man", who, the Manager
alleged, had a "better right" to the seat. When asked to vacate his "first class" seat, the plaintiff,
as was to be expected, refused, and told defendant's Manager that his seat would be taken
over his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of
the Filipino passengers got nervous in the tourist class; when they found out that Mr.
Carrascoso was having a hot discussion with the white man [manager], they came all across to
Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p.
12, Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane.3
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent Court of
Appeals. Petitioner charges that respondent court failed to make complete findings of fact on all the
issues properly laid before it. We are asked to consider facts favorable to petitioner, and then, to
overturn the appellate court's decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of
record without expressing therein clearly and distinctly the facts and the law on which it is based". 5 This
is echoed in the statutory demand that a judgment determining the merits of the case shall state "clearly
and distinctly the facts and the law on which it is based"; 6 and that "Every decision of the Court of
Appeals shall contain complete findings of fact on all issues properly raised before it". 7
A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 The law, however,
solely insists that a decision state the "essential ultimate facts" upon which the court's conclusion is
drawn. 9 A court of justice is not hidebound to write in its decision every bit and piece of
evidence 10 presented by one party and the other upon the issues raised. Neither is it to be burdened
with the obligation "to specify in the sentence the facts" which a party "considered as proved". 11 This is
but a part of the mental process from which the Court draws the essential ultimate facts. A decision is
not to be so clogged with details such that prolixity, if not confusion, may result. So long as the decision
of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said
court to withhold therefrom "any specific finding of facts with respect to the evidence for the defense".
Because as this Court well observed, "There is no law that so requires". 12 Indeed, "the mere failure to
specify (in the decision) the contentions of the appellant and the reasons for refusing to believe them is
not sufficient to hold the same contrary to the requirements of the provisions of law and the
Constitution". It is in this setting that in Manigque, it was held that the mere fact that the findings "were
based entirely on the evidence for the prosecution without taking into consideration or even mentioning
the appellant's side in the controversy as shown by his own testimony", would not vitiate the
judgment. 13 If the court did not recite in the decision the testimony of each witness for, or each item of
evidence presented by, the defeated party, it does not mean that the court has overlooked such
testimony or such item of evidence. 14 At any rate, the legal presumptions are that official duty has been
regularly performed, and that all the matters within an issue in a case were laid before the court and
passed upon by it. 15
Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written
statement of the ultimate facts as found by the court ... and essential to support the decision and
judgment rendered thereon". 16They consist of the court's "conclusions" with respect to the
determinative facts in issue". 17 A question of law, upon the other hand, has been declared as "one
which does not call for an examination of the probative value of the evidence presented by the
parties." 18
2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the
Court of Appeals. 19 That judgment is conclusive as to the facts. It is not appropriately the business of
this Court to alter the facts or to review the questions of fact. 20
With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals
support its judgment.
3. Was Carrascoso entitled to the first class seat he claims?
It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class
ticket. But petitioner asserts that said ticket did not represent the true and complete intent and
agreement of the parties; that said respondent knew that he did not have confirmed reservations for first
class on any specific flight, although he had tourist class protection; that, accordingly, the issuance of a
first class ticket was no guarantee that he would have a first class ride, but that such would depend
upon the availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its brief before the Court
of Appeals under its third assignment of error, which reads: "The trial court erred in finding that plaintiff
had confirmed reservations for, and a right to, first class seats on the "definite" segments of his journey,
particularly that from Saigon to Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no
guarantee that the passenger to whom the same had been issued, would be accommodated in
the first-class compartment, for as in the case of plaintiff he had yet to make arrangements
upon arrival at every station for the necessary first-class reservation. We are not impressed by
such a reasoning. We cannot understand how a reputable firm like defendant airplane
company could have the indiscretion to give out tickets it never meant to honor at all. It
received the corresponding amount in payment of first-class tickets and yet it allowed the
passenger to be at the mercy of its employees. It is more in keeping with the ordinary course of
business that the company should know whether or riot the tickets it issues are to be honored
or not.22
Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus:
On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart
from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and defendant's
own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as follows:
Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx xxx xxx
Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that
although plaintiff paid for, and was issued a "first class" airplane ticket, the ticket was subject to
confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses. Oral
evidence cannot prevail over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1"
belie the testimony of said witnesses, and clearly show that the plaintiff was issued, and paid for, a first
class ticket without any reservation whatever.
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the
reservation for a "first class" accommodation for the plaintiff was confirmed. The court cannot believe
that after such confirmation defendant had a verbal understanding with plaintiff that the "first class"
ticket issued to him by defendant would be subject to confirmation in Hongkong. 23
We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount
refunded on Carrascoso's ticket, the decision of the Court of First Instance was affirmed by the Court of
Appeals in all other respects. We hold the view that such a judgment of affirmance has merged the
judgment of the lower court. 24Implicit in that affirmance is a determination by the Court of Appeals that
the proceeding in the Court of First Instance was free from prejudicial error and "all questions raised by
the assignments of error and all questions that might have been raised are to be regarded as finally
adjudicated against the appellant". So also, the judgment affirmed "must be regarded as free from all
error". 25 We reached this policy construction because nothing in the decision of the Court of Appeals on
this point would suggest that its findings of fact are in any way at war with those of the trial court. Nor
was said affirmance by the Court of Appeals upon a ground or grounds different from those which were
made the basis of the conclusions of the trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat, notwithstanding
the fact that seat availability in specific flights is therein confirmed, then an air passenger is placed in
the hollow of the hands of an airline. What security then can a passenger have? It will always be an
easy matter for an airline aided by its employees, to strike out the very stipulations in the ticket, and say
that there was a verbal agreement to the contrary. What if the passenger had a schedule to fulfill? We
have long learned that, as a rule, a written document speaks a uniform language; that spoken word
could be notoriously unreliable. If only to achieve stability in the relations between passenger and air
carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower courts refused
to believe the oral evidence intended to defeat the covenants in the ticket.
The foregoing are the considerations which point to the conclusion that there are facts upon which the
Court of Appeals predicated the finding that respondent Carrascoso had a first class ticket and was
entitled to a first class seat at Bangkok, which is a stopover in the Saigon to Beirut leg of the flight. 27 We
perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its position", as
charged by petitioner. 28 Nor do we subscribe to petitioner's accusation that respondent Carrascoso
"surreptitiously took a first class seat to provoke an issue". 29And this because, as petitioner states,
Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat and because from
Saigon I was told again to see the Manager". 30 Why, then, was he allowed to take a first class seat in
the plane at Bangkok, if he had no seat? Or, if another had a better right to the seat?
4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that
Carrascoso's action is planted upon breach of contract; that to authorize an award for moral damages
there must be an averment of fraud or bad faith;31 and that the decision of the Court of Appeals fails to
make a finding of bad faith. The pivotal allegations in the complaint bearing on this issue are:
3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a
valuable consideration, the latter acting as general agents for and in behalf of the defendant,
under which said contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff, First
Class passage on defendant's plane during the entire duration of plaintiff's tour of Europe with
Hongkong as starting point up to and until plaintiff's return trip to Manila, ... .
 4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to
Bangkok, defendant furnished to the plaintiff First Class accommodation but only after
protestations, arguments and/or insistence were made by the plaintiff with defendant's
employees.
5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff
only Tourist Class accommodations from Bangkok to Teheran and/or Casablanca, ... the
plaintiff has been compelled by defendant's employees to leave the First Class
accommodation berths at Bangkok after he was already seated.
6. That consequently, the plaintiff, desiring no repetition of the inconvenience and
embarrassments brought by defendant's breach of contract was forced to take a Pan American
World Airways plane on his return trip from Madrid to Manila.32
xxx xxx xxx
2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid,
plaintiff suffered inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental
anguish, serious anxiety, wounded feelings, social humiliation, and the like injury, resulting in moral
damages in the amount of P30,000.00. 33
xxx xxx xxx
The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a first
class passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was
breached when petitioner failed to furnish first class transportation at Bangkok; and Third, that there
was bad faith when petitioner's employee compelled Carrascoso to leave his first class accommodation
berth "after he was already, seated" and to take a seat in the tourist class, by reason of which he
suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish,
serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true that there
is no specific mention of the term bad faith in the complaint. But, the inference of bad faith is there, it
may be drawn from the facts and circumstances set forth therein. 34 The contract was averred to
establish the relation between the parties. But the stress of the action is put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed
petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in Bangkok,
Carrascoso was ousted by petitioner's manager who gave his seat to a white man; 35 and (b) evidence
of bad faith in the fulfillment of the contract was presented without objection on the part of the petitioner.
It is, therefore, unnecessary to inquire as to whether or not there is sufficient averment in the complaint
to justify an award for moral damages. Deficiency in the complaint, if any, was cured by the evidence.
An amendment thereof to conform to the evidence is not even required. 36 On the question of bad faith,
the Court of Appeals declared:
That the plaintiff was forced out of his seat in the first class compartment of the plane
belonging to the defendant Air France while at Bangkok, and was transferred to the tourist
class not only without his consent but against his will, has been sufficiently established by
plaintiff in his testimony before the court, corroborated by the corresponding entry made by the
purser of the plane in his notebook which notation reads as follows:
"First-class passenger was forced to go to the tourist class against his will, and that
the captain refused to intervene",
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The
captain of the plane who was asked by the manager of defendant company at Bangkok to
intervene even refused to do so. It is noteworthy that no one on behalf of defendant ever
contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to
present its manager at Bangkok to testify at the trial of the case, or yet to secure his
disposition; but defendant did neither. 37
The Court of appeals further stated —
Neither is there evidence as to whether or not a prior reservation was made by the white man.
Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him when all
the seats had already been taken, surely the plaintiff should not have been picked out as the
one to suffer the consequences and to be subjected to the humiliation and indignity of being
ejected from his seat in the presence of others. Instead of explaining to the white man the
improvidence committed by defendant's employees, the manager adopted the more drastic
step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are
strengthened in our belief that this probably was what happened there, by the testimony of
defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters
"O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for first class.
Likewise, Zenaida Faustino, another witness for defendant, who was the chief of the
Reservation Office of defendant, testified as follows:
"Q How does the person in the ticket-issuing office know what reservation the
passenger has arranged with you?
A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19,
1959)
In this connection, we quote with approval what the trial Judge has said on this point:
Why did the, using the words of witness Ernesto G. Cuento, "white man" have a
"better right" to the seat occupied by Mr. Carrascoso? The record is silent. The
defendant airline did not prove "any better", nay, any right on the part of the "white
man" to the "First class" seat that the plaintiff was occupying and for which he paid
and was issued a corresponding "first class" ticket.
If there was a justified reason for the action of the defendant's Manager in Bangkok,
the defendant could have easily proven it by having taken the testimony of the said
Manager by deposition, but defendant did not do so; the presumption is that evidence
willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules of Court];
and, under the circumstances, the Court is constrained to find, as it does find, that the
Manager of the defendant airline in Bangkok not merely asked but threatened the
plaintiff to throw him out of the plane if he did not give up his "first class" seat because
the said Manager wanted to accommodate, using the words of the witness Ernesto G.
Cuento, the "white man".38
 It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not
use the term "bad faith". But can it be doubted that the recital of facts therein points to bad
faith? The manager not only prevented Carrascoso from enjoying his right to a first class seat;
worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the
humiliation of having to go to the tourist class compartment - just to give way to another
passenger whose right thereto has not been established. Certainly, this is bad faith. Unless, of
course, bad faith has assumed a meaning different from what is understood in law. For, "bad
faith" contemplates a "state of mind affirmatively operating with furtive design or with some
motive of self-interest or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is the express finding of bad faith in the
judgment of the Court of First Instance, thus:
The evidence shows that the defendant violated its contract of transportation with
plaintiff in bad faith, with the aggravating circumstances that defendant's Manager in
Bangkok went to the extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the "first class" seat that he
was occupying to, again using the words of the witness Ernesto G. Cuento, a "white
man" whom he (defendant's Manager) wished to accommodate, and the defendant
has not proven that this "white man" had any "better right" to occupy the "first class"
seat that the plaintiff was occupying, duly paid for, and for which the corresponding
"first class" ticket was issued by the defendant to him.40
5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well
settled in law. 41 For the willful malevolent act of petitioner's manager, petitioner, his employer, must
answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.
In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions
of Article 2219 (10), Civil Code, moral damages are recoverable. 42
6. A contract to transport passengers is quite different in kind and degree from any other contractual
relation. 43 And this, because of the relation which an air-carrier sustains with the public. Its business is
mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The
contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees, naturally, could give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be treated by the carrier's
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected
against personal misconduct, injurious language, indignities and abuses from such employees. So it is,
that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an
action for damages against the carrier. 44
Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract
and a tort, giving a right of action for its agent in the presence of third persons to falsely notify her that
the check was worthless and demand payment under threat of ejection, though the language used was
not insulting and she was not ejected." 46 And this, because, although the relation of passenger and
carrier is "contractual both in origin and nature" nevertheless "the act that breaks the contract may be
also a tort". 47 And in another case, "Where a passenger on a railroad train, when the conductor came to
collect his fare tendered him the cash fare to a point where the train was scheduled not to stop, and told
him that as soon as the train reached such point he would pay the cash fare from that point to
destination, there was nothing in the conduct of the passenger which justified the conductor in using
insulting language to him, as by calling him a lunatic," 48 and the Supreme Court of South Carolina there
held the carrier liable for the mental suffering of said passenger.1awphîl.nèt
Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action
as we have said, is placed upon his wrongful expulsion. This is a violation of public duty by the
petitioner air carrier — a case of quasi-delict. Damages are proper.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —
Q You mentioned about an attendant. Who is that attendant and purser?
A When we left already — that was already in the trip — I could not help it. So one of the flight
attendants approached me and requested from me my ticket and I said, What for? and she
said, "We will note that you transferred to the tourist class". I said, "Nothing of that kind. That is
tantamount to accepting my transfer." And I also said, "You are not going to note anything there
because I am protesting to this transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg
room, I stood up and I went to the pantry that was next to me and the purser was there. He told
me, "I have recorded the incident in my notebook." He read it and translated it to me —
because it was recorded in French — "First class passenger was forced to go to the tourist
class against his will, and that the captain refused to intervene."
Mr. VALTE —
I move to strike out the last part of the testimony of the witness because the best evidence
would be the notes. Your Honor.
COURT —
I will allow that as part of his testimony. 49
Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook
reading "First class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene" is predicated upon evidence [Carrascoso's testimony above] which is incompetent.
We do not think so. The subject of inquiry is not the entry, but the ouster incident. Testimony on the
entry does not come within the proscription of the best evidence rule. Such testimony is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the
startling occurrence was still fresh and continued to be felt. The excitement had not as yet died down.
Statements then, in this environment, are admissible as part of the res gestae. 50 For, they grow "out of
the nervous excitement and mental and physical condition of the declarant". 51 The utterance of the
purser regarding his entry in the notebook was spontaneous, and related to the circumstances of the
ouster incident. Its trustworthiness has been guaranteed. 52 It thus escapes the operation of the hearsay
rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would
have been an easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really
true that no such entry was made, the deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant
exemplary damages — in contracts and quasi- contracts. The only condition is that defendant should
have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner." 53 The manner of
ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in
addition to moral damages.54

9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar
judgment for attorneys' fees. The least that can be said is that the courts below felt that it is but just and
equitable that attorneys' fees be given. 55 We do not intend to break faith with the tradition that discretion
well exercised — as it was here — should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals,
thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as
attorneys' fees. The task of fixing these amounts is primarily with the trial court. 56 The Court of Appeals
did not interfere with the same. The dictates of good sense suggest that we give our imprimatur thereto.
Because, the facts and circumstances point to the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We
accordingly vote to affirm the same. Costs against petitioner. So ordered.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro, JJ., concur.
Bengzon, J.P., J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-24101 September 30, 1970
MARIA TERESA Y. CUADRA, minor represented by her father ULISES P. CUADRA, ET
AL., plaintiffs-appellees,
vs.
ALFONSO MONFORT, defendant-appellant.
Rodolfo J. Herman for plaintiffs-appellees.
Luis G. Torres and Abraham E. Tionko for defendant-appellantMAKALINTAL, J.:
This is an action for damages based on quasi-delict, decided by the Court of First Instance of Negros
Occidental favorably to the plaintiffs and appealed by the defendant to the Court of Appeals, which
certified the same to us since the facts are not in issue.
Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were classmates in Grade Six at the Mabini
Elementary School in Bacolod City. On July 9, 1962 their teacher assigned them, together with three
other classmates, to weed the grass in the school premises. While thus engaged Maria Teresa Monfort
found a plastic headband, an ornamental object commonly worn by young girls over their hair. Jokingly
she said aloud that she had found an earthworm and, evidently to frighten the Cuadra girl, tossed the
object at her. At that precise moment the latter turned around to face her friend, and the object hit her
right eye. Smarting from the pain, she rubbed the injured part and treated it with some powder. The next
day, July 10, the eye became swollen and it was then that the girl related the incident to her parents,
who thereupon took her to a doctor for treatment. She underwent surgical operation twice, first on July
20 and again on August 4, 1962, and stayed in the hospital for a total of twenty-three days, for all of
which the parents spent the sum of P1,703.75. Despite the medical efforts, however, Maria Teresa
Cuadra completely lost the sight of her right eye.
In the civil suit subsequently instituted by the parents in behalf of their minor daughter against Alfonso
Monfort, Maria Teresa Monfort's father, the defendant was ordered to pay P1,703.00 as actual
damages; P20,000.00 as moral damages; and P2,000.00 as attorney's fees, plus the costs of the suit.
The legal issue posed in this appeal is the liability of a parent for an act of his minor child which causes
damage to another under the specific facts related above and the applicable provisions of the Civil
Code, particularly Articles 2176 and 2180 thereof, which read:
ART. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by provisions of this Chapter.
ART 2180. The obligation imposed by Article 2176 is demandable not only for one's
own acts or omissions, but also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity are responsible for the damages
caused by the minor children who live in their company.
xxx xxx xxx
The responsibility treated of in this Article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage.
The underlying basis of the liability imposed by Article 2176 is the fault or negligence accompanying the
act or the omission, there being no willfulness or intent to cause damage thereby. When the act or
omission is that of one person for whom another is responsible, the latter then becomes himself liable
under Article 2180, in the different cases enumerated therein, such as that of the father or the mother
under the circumstances above quoted. The basis of this vicarious, although primary, liability is, as in
Article 2176, fault or negligence, which is presumed from that which accompanied the causative act or
omission. The presumption is merely prima facie and may therefore be rebutted. This is the clear and
logical inference that may be drawn from the last paragraph of Article 2180, which states "that the
responsibility treated of in this Article shall cease when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to prevent damage."
Since the fact thus required to be proven is a matter of defense, the burden of proof necessarily rests
on the defendant. But what is the exact degree of diligence contemplated, and how does a parent prove
it in connection with a particular act or omission of a minor child, especially when it takes place in his
absence or outside his immediate company? Obviously there can be no meticulously calibrated
measure applicable; and when the law simply refers to "all the diligence of a good father of the family to
prevent damage," it implies a consideration of the attendant circumstances in every individual case, to
determine whether or not by the exercise of such diligence the damage could have been prevented.
In the present case there is nothing from which it may be inferred that the defendant could have
prevented the damage by the observance of due care, or that he was in any way remiss in the exercise
of his parental authority in failing to foresee such damage, or the act which caused it. On the contrary,
his child was at school, where it was his duty to send her and where she was, as he had the right to
expect her to be, under the care and supervision of the teacher. And as far as the act which caused the
injury was concerned, it was an innocent prank not unusual among children at play and which no
parent, however careful, would have any special reason to anticipate much less guard against. Nor did
it reveal any mischievous propensity, or indeed any trait in the child's character which would reflect
unfavorably on her upbringing and for which the blame could be attributed to her parents.
The victim, no doubt, deserves no little commiseration and sympathy for the tragedy that befell her. But
if the defendant is at all obligated to compensate her suffering, the obligation has no legal sanction
enforceable in court, but only the moral compulsion of good conscience.
The decision appealed from is reversed, and the complaint is dismissed, without pronouncement as to
costs.
Reyes, J.B.L., Actg. C.J., Dizon, Zaldivar, Castro, Teehankee, Villamor and Makasiar, JJ., concur

FIRST DIVISION
G.R. No. 141538 March 23, 2004
HERMANA R. CEREZO, petitioner,
vs.
DAVID TUAZON, respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari1 to annul the Resolution2 dated 21 October 1999 of the Court of
Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying the motion
for reconsideration. The Court of Appeals denied the petition for annulment of the Decision3 dated 30
May 1995 rendered by the Regional Trial Court of Angeles City, Branch 56 ("trial court"), in Civil Case
No. 7415. The trial court ordered petitioner Hermana R. Cerezo ("Mrs. Cerezo") to pay respondent
David Tuazon ("Tuazon") actual damages, loss of earnings, moral damages, and costs of suit.
Antecedent Facts
Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number NYA 241
collided with a tricycle bearing plate number TC RV 126 along Captain M. Palo Street, Sta. Ines,
Mabalacat, Pampanga. On 1 October 1993, tricycle driver Tuazon filed a complaint for damages against
Mrs. Cerezo, as owner of the bus line, her husband Attorney Juan Cerezo ("Atty. Cerezo"), and bus
driver Danilo A. Foronda ("Foronda"). The complaint alleged that:
7. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-named
defendant [Foronda], being then the driver and person in charge of the Country Bus with plate
number NYA 241, did then and there willfully, unlawfully, and feloniously operate the said motor
vehicle in a negligent, careless, and imprudent manner without due regard to traffic rules and
regulations, there being a "Slow Down" sign near the scene of the incident, and without taking
the necessary precaution to prevent loss of lives or injuries, his negligence, carelessness and
imprudence resulted to severe damage to the tricycle and serious physical injuries to plaintiff
thus making him unable to walk and becoming disabled, with his thumb and middle finger on
the left hand being cut[.]4
On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial court issued
summons against Atty. Cerezo and Mrs. Cerezo ("the Cerezo spouses") at the Makati address stated in
the complaint. However, the summons was returned unserved on 10 November 1993 as the Cerezo
spouses no longer held office nor resided in Makati. On 18 April 1994, the trial court issued alias
summons against the Cerezo spouses at their address in Barangay Sta. Maria, Camiling, Tarlac. The
alias summons and a copy of the complaint were finally served on 20 April 1994 at the office of Atty.
Cerezo, who was then working as Tarlac Provincial Prosecutor. Atty. Cerezo reacted angrily on learning
of the service of summons upon his person. Atty. Cerezo allegedly told Sheriff William Canlas:
"Punyeta, ano ang gusto mong mangyari? Gusto mong hindi ka makalabas ng buhay dito? Teritoryo ko
ito. Wala ka sa teritoryo mo."5
The records show that the Cerezo spouses participated in the proceedings before the trial court. The
Cerezo spouses filed a comment with motion for bill of particulars dated 29 April 1994 and a reply to
opposition to comment with motion dated 13 June 1994.6 On 1 August 1994, the trial court issued an
order directing the Cerezo spouses to file a comment to the opposition to the bill of particulars. Atty.
Elpidio B. Valera ("Atty. Valera") of Valera and Valera Law Offices appeared on behalf of the Cerezo
spouses. On 29 August 1994, Atty. Valera filed an urgent ex-parte motion praying for the resolution of
Tuazon’s motion to litigate as a pauper and for the issuance of new summons on the Cerezo spouses to
satisfy proper service in accordance with the Rules of Court.7
On 30 August 1994, the trial court issued an order resolving Tuazon’s motion to litigate as a pauper and
the Cerezo spouses’ urgent ex-parte motion. The order reads:
At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently jobless;
that at the time of the filing of this case, his son who is working in Malaysia helps him and
sends him once in a while P300.00 a month, and that he does not have any real property.
Attached to the Motion to Litigate as Pauper are his Affidavit that he is unemployed; a
Certification by the Barangay Captain of his poblacion that his income is not enough for his
family’s subsistence; and a Certification by the Office of the Municipal Assessor that he has no
landholding in the Municipality of Mabalacat, Province of Pampanga.
The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled to
prosecute his complaint in this case as a pauper under existing rules.
On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-Parte Motion
requiring new summons to be served to the defendants. The Court is of the opinion that any
infirmity in the service of the summons to the defendant before plaintiff was allowed to
prosecute his complaint in this case as a pauper has been cured by this Order.
 If within 15 days from receipt of this Order, the defendants do not question on appeal this Exhibit 1 - Sheriff’s return and summons;
Order of this Court, the Court shall proceed to resolve the Motion for Bill of Particulars.8 Exhibit 1-A - Alias summons dated April 20, 1994;
Exhibit 2 - Comment with Motion;
On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for reconsideration. The
trial court denied the motion for reconsideration. Exhibit 3 - Minutes of the hearing held on August 1, 1994;
Exhibit 3-A - Signature of defendant’s counsel;
On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file their answer Exhibit 4 - Minutes of the hearing held on August 30, 1994;
within fifteen days from receipt of the order. The Cerezo spouses did not file an answer. On 27 January Exhibit 4-A - Signature of the defendant’s counsel;
1995, Tuazon filed a motion to declare the Cerezo spouses in default. On 6 February 1995, the trial
Exhibit 5 - Appearance and Urgent Ex-Parte Motion;
court issued an order declaring the Cerezo spouses in default and authorizing Tuazon to present his
evidence. 9 Exhibit 6 - Order dated November 14, 1994;
Exhibit 6-A - Postal certification dated January 13, 1995;
On 30 May 1995, after considering Tuazon’s testimonial and documentary evidence, the trial court ruled Exhibit 7 - Order dated February [illegible];
in Tuazon’s favor. The trial court made no pronouncement on Foronda’s liability because there was no Exhibit 7-A - Court’s return slip addressed to Atty. Elpidio Valera;
service of summons on him. The trial court did not hold Atty. Cerezo liable as Tuazon failed to show that
Exhibit 7-B - Court’s return slip addressed to Spouses Juan and Hermana Cerezo;
Mrs. Cerezo’s business benefited the family, pursuant to Article 121(3) of the Family Code. The trial
court held Mrs. Cerezo solely liable for the damages sustained by Tuazon arising from the negligence of Exhibit 8 - Decision dated May [30], 1995
Mrs. Cerezo’s employee, pursuant to Article 2180 of the Civil Code. The dispositive portion of the trial Exhibit 8-A - Court’s return slip addressed to defendant Hermana Cerezo;
court’s decision reads: Exhibit 8-B - Court’s return slip addressed to defendant’s counsel, Atty. Elpidio Valera;
Exhibit 9 - Order dated September 21, 1995;
WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo to pay
the plaintiff: Exhibit 9-A - Second Page of Exhibit 9;
Exhibit 9-B - Third page of Exhibit 9;
a) For Actual Damages - P69,485.35 Exhibit 9-C - Fourth page of Exhibit 9;
Exhibit 9-D - Court’s return slip addressed to Atty. Elpidio Valera;
1) Expenses for operation and medical Treatment
and
2) Cost of repair of the tricycle
Exhibit 9-E - Court’s return slip addressed to plaintiff’s counsel, Atty. Norman Dick de Guzman.12
b) For loss of earnings - 39,921.00
c) For moral damages - 43,300.00 On 4 March 1998, the trial court issued an order13 denying the petition for relief from judgment. The trial
d) And to pay the cost of the suit. - 20,000.00 court stated that having received the decision on 25 June 1995, the Cerezo spouses should have filed a
notice of appeal instead of resorting to a petition for relief from judgment. The trial court refused to grant
relief from judgment because the Cerezo spouses could have availed of the remedy of appeal.
The docket fees and other expenses in the filing of this suit shall be lien on whatever judgment Moreover, the Cerezo spouses not only failed to prove fraud, accident, mistake or excusable negligence
may be rendered in favor of the plaintiff. by conclusive evidence, they also failed to prove that they had a good and substantial defense. The trial
court noted that the Cerezo spouses failed to appeal because they relied on an expected settlement of
SO ORDERED.10 the case.

Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs. Cerezo filed
before the trial court a petition for relief from judgment on the grounds of "fraud, mistake or excusable
negligence." Testifying before the trial court, both Mrs. Cerezo and Atty. Valera denied receipt of notices
of hearings and of orders of the court. Atty. Valera added that he received no notice before or during the
8 May 1995 elections, "when he was a senatorial candidate for the KBL Party, and very busy, using his
office and residence as Party National Headquarters." Atty. Valera claimed that he was able to read the
decision of the trial court only after Mrs. Cerezo sent him a copy.11
Tuazon did not testify but presented documentary evidence to prove the participation of the Cerezo
spouses in the case. Tuazon presented the following exhibits:
The Cerezo spouses subsequently filed before the Court of Appeals a petition for certiorari under
Section 1 of Rule 65. The petition was docketed as CA-G.R. SP No. 48132.14 The petition questioned
whether the trial court acquired jurisdiction over the case considering there was no service of summons
on Foronda, whom the Cerezo spouses claimed was an indispensable party. In a resolution15 dated 21
January 1999, the Court of Appeals denied the petition for certiorari and affirmed the trial court’s order
denying the petition for relief from judgment. The Court of Appeals declared that the Cerezo spouses’
failure to file an answer was due to their own negligence, considering that they continued to participate
in the proceedings without filing an answer. There was also nothing in the records to show that the
Cerezo spouses actually offered a reasonable settlement to Tuazon. The Court of Appeals also denied
Cerezo spouses’ motion for reconsideration for lack of merit.
The Cerezo spouses filed before this Court a petition for review on certiorari under Rule 45. Atty.
Cerezo himself signed the petition, docketed as G.R. No. 137593. On 13 April 1999, this Court rendered
a resolution denying the petition for review on certiorari for failure to attach an affidavit of service of
copies of the petition to the Court of Appeals and to the adverse parties. Even if the petition complied
with this requirement, the Court would still have denied the petition as the Cerezo spouses failed to
show that the Court of Appeals committed a reversible error. The Court’s resolution was entered in the
Book of Entries and Judgments when it became final and executory on 28 June 1999.16
Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition for
annulment of judgment under Rule 47 with prayer for restraining order. Atty. Valera and Atty. Dionisio S.
Daga ("Atty. Daga") represented Mrs. Cerezo in the petition, docketed as CA-G.R. SP No. 53572.17 The
petition prayed for the annulment of the 30 May 1995 decision of the trial court and for the issuance of a
writ of preliminary injunction enjoining execution of the trial court’s decision pending resolution of the
petition.
The Court of Appeals denied the petition for annulment of judgment in a resolution dated 21 October
1999. The resolution reads in part:
In this case, records show that the petitioner previously filed with the lower court a Petition for
Relief from Judgment on the ground that they were wrongfully declared in default while waiting
for an amicable settlement of the complaint for damages. The court a quo correctly ruled that
such petition is without merit. The defendant spouses admit that during the initial hearing they
appeared before the court and even mentioned the need for an amicable settlement. Thus, the
lower court acquired jurisdiction over the defendant spouses.
Therefore, petitioner having availed of a petition for relief, the remedy of an annulment of
judgment is no longer available. The proper action for the petitioner is to appeal the order of
the lower court denying the petition for relief.
Wherefore, the instant petition could not be given due course and should accordingly be
dismissed.
SO ORDERED.18
On 20 January 2000, the Court of Appeals denied the Cerezo spouses’ motion for reconsideration.19 The
Court of Appeals stated:
A distinction should be made between a court’s jurisdiction over a person and its jurisdiction
over the subject matter of a case. The former is acquired by the proper service of summons or
by the parties’ voluntary appearance; while the latter is conferred by law.
Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas]
P[ambansa] 129 provides that Regional Trial Courts shall exercise exclusive original
jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary
estimation. Thus it was proper for the lower court to decide the instant case for damages.
Unlike jurisdiction over the subject matter of a case which is absolute and conferred by law;
any defects [sic] in the acquisition of jurisdiction over a person (i.e., improper filing of civil
complaint or improper service of summons) may be waived by the voluntary appearance of
parties.
The lower court admits the fact that no summons was served on defendant Foronda. Thus,
jurisdiction over the person of defendant Foronda was not acquired, for which reason he was
not held liable in this case. However, it has been proven that jurisdiction over the other
defendants was validly acquired by the court a quo.
The defendant spouses admit to having appeared in the initial hearings and in the hearing for
plaintiff’s motion to litigate as a pauper. They even mentioned conferences where attempts
were made to reach an amicable settlement with plaintiff. However, the possibility of amicable
settlement is not a good and substantial defense which will warrant the granting of said
petition.
xxx
Assuming arguendo that private respondent failed to reserve his right to institute a separate
action for damages in the criminal action, the petitioner cannot now raise such issue and
question the lower court’s jurisdiction because petitioner and her husband have waived such
right by voluntarily appearing in the civil case for damages. Therefore, the findings and the
decision of the lower court may bind them.
Records show that the petitioner previously filed with the lower court a Petition for Relief from
Judgment on the ground that they were wrongfully declared in default while waiting for an
amicable settlement of the complaint for damages. The court a quo correctly ruled that such
petition is without merit, jurisdiction having been acquired by the voluntary appearance of
defendant spouses.
Once again, it bears stressing that having availed of a petition for relief, the remedy of
annulment of judgment is no longer available.
Based on the foregoing, the motion for reconsideration could not be given due course and is
hereby DENIED.
SO ORDERED.20
The Issues
On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone representing her, filed the present
petition for review on certiorari before this Court. Mrs. Cerezo claims that:
1. In dismissing the Petition for Annulment of Judgment, the Court of Appeals assumes that the
issues raised in the petition for annulment is based on extrinsic fraud related to the denied
petition for relief notwithstanding that the grounds relied upon involves questions of lack of
jurisdiction.
 2. In dismissing the Petition for Annulment, the Court of Appeals disregarded the allegation that
the lower court[’s] findings of negligence against defendant-driver Danilo Foronda [whom] the
lower court did not summon is null and void for want of due process and consequently, such
findings of negligence which is [sic] null and void cannot become the basis of the lower court to
adjudge petitioner-employer liable for civil damages.
3. In dismissing the Petition for Annulment, the Court of Appeals ignored the allegation that
defendant-driver Danilo A. Foronda whose negligence is the main issue is an indispensable
party whose presence is compulsory but [whom] the lower court did not summon.
4. In dismissing the Petition for Annulment, the Court of Appeals ruled that assuming arguendo
that private respondent failed to reserve his right to institute a separate action for damages in
the criminal action, the petitioner cannot now raise such issue and question the lower court’s
jurisdiction because petitioner [has] waived such right by voluntarily appearing in the civil case
for damages notwithstanding that lack of jurisdiction cannot be waived.21
The Court’s Ruling
The petition has no merit. As the issues are interrelated, we shall discuss them jointly.
Remedies Available to a Party Declared in Default
An examination of the records of the entire proceedings shows that three lawyers filed and signed
pleadings on behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty. Cerezo. Despite their
number, Mrs. Cerezo’s counsels failed to avail of the proper remedies. It is either by sheer ignorance or
by malicious manipulation of legal technicalities that they have managed to delay the disposition of the
present case, to the detriment of pauper litigant Tuazon.
Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo spouses in default.
Mrs. Cerezo asserts that she only came to know of the default order on 25 June 1995, when she
received a copy of the decision. On 10 July 1995, Mrs. Cerezo filed before the trial court a petition for
relief from judgment under Rule 38, alleging "fraud, mistake, or excusable negligence" as grounds. On 4
March 1998, the trial court denied Mrs. Cerezo’s petition for relief from judgment. The trial court stated
that Mrs. Cerezo could have availed of appeal as a remedy and that she failed to prove that the
judgment was entered through fraud, accident, mistake, or excusable negligence. Mrs. Cerezo then
filed before the Court of Appeals a petition for certiorari under Section 1 of Rule 65 assailing the denial
of the petition for relief from judgment. On 21 January 1999, the Court of Appeals dismissed Mrs.
Cerezo’s petition. On 24 February 1999, the appellate court denied Mrs. Cerezo’s motion for
reconsideration. On 11 March 1999, Mrs. Cerezo filed before this Court a petition for review
on certiorari under Rule 45, questioning the denial of the petition for relief from judgment. We denied the
petition and our resolution became final and executory on 28 June 1999.
On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs. Cerezo filed
before the Court of Appeals a petition for annulment of the judgment of the trial court under Rule 47.
Meanwhile, on 25 August 1999, the trial court issued over the objection of Mrs. Cerezo an order of
execution of the judgment in Civil Case No. 7415. On 21 October 1999, the Court of Appeals dismissed
the petition for annulment of judgment. On 20 January 2000, the Court of Appeals denied Mrs. Cerezo’s
motion for reconsideration. On 7 February 2000, Mrs. Cerezo filed the present petition for review on
certiorari under Rule 45 challenging the dismissal of her petition for annulment of judgment.
Lina v. Court of Appeals22 enumerates the remedies available to a party declared in default:
a) The defendant in default may, at any time after discovery thereof and before judgment, file
a motion under oath to set aside the order of default on the ground that his failure to
answer was due to fraud, accident, mistake or excusable negligence, and that he has a
meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the default, but
before the same has become final and executory, he may file a motion for new trial under
Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and executory,
he may file a petition for relief under Section 2 [now Section 1] of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the evidence or
to the law, even if no petition to set aside the order of default has been presented by him (Sec.
2, Rule 41). (Emphasis added)
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also available if the
trial court improperly declared a party in default, or even if the trial court properly declared a party in
default, if grave abuse of discretion attended such declaration.23
Mrs. Cerezo admitted that she received a copy of the trial court’s decision on 25 June 1995. Based on
this admission, Mrs. Cerezo had at least three remedies at her disposal: an appeal, a motion for new
trial, or a petition for certiorari.
Mrs. Cerezo could have appealed under Rule 4124 from the default judgment within 15 days from notice
of the judgment. She could have availed of the power of the Court of Appeals to try cases and conduct
hearings, receive evidence, and perform all acts necessary to resolve factual issues raised in cases
falling within its appellate jurisdiction.25
Mrs. Cerezo also had the option to file under Rule 3726 a motion for new trial within the period for taking
an appeal. If the trial court grants a new trial, the original judgment is vacated, and the action will stand
for trial de novo. The recorded evidence taken in the former trial, as far as the same is material and
competent to establish the issues, shall be used at the new trial without retaking the same.27
Mrs. Cerezo also had the alternative of filing under Rule 6528 a petition for certiorari assailing the order
of default within 60 days from notice of the judgment. An order of default is interlocutory, and an
aggrieved party may file an appropriate special civil action under Rule 65.29 In a petition for certiorari,
the appellate court may declare void both the order of default and the judgment of default.
Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the reglementary periods
provided under the Rules of Court. However, Mrs. Cerezo opted to file a petition for relief from
judgment, which is available only in exceptional cases. A petition for relief from judgment should be
filed within the reglementary period of 60 days from knowledge of judgment and six months from entry
of judgment, pursuant to
Rule 38 of the Rules of Civil Procedure.30 Tuason v. Court of Appeals31 explained the nature of a
petition for relief from judgment:
When a party has another remedy available to him, which may either be a motion for new trial
or appeal from an adverse decision of the trial court, and he was not prevented by fraud,
accident, mistake or excusable negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition. Indeed, relief will not be granted to a party who seeks
avoidance from the effects of the judgment when the loss of the remedy at law was due to his
own negligence; otherwise the petition for relief can be used to revive the right to appeal which
has been lost thru inexcusable negligence.
Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented Mrs. Cerezo
from filing an appeal, a motion for new trial or a petition for certiorari. It was error for her to avail of a
petition for relief from judgment.
After our resolution denying Mrs. Cerezo’s petition for relief became final and executory, Mrs. Cerezo, in
her last ditch attempt to evade liability, filed before the Court of Appeals a petition for annulment of the
judgment of the trial court. Annulment is available only on the grounds of extrinsic fraud and lack of
jurisdiction. If based on extrinsic fraud, a party must file the petition within four years from its discovery,
and if based on lack of jurisdiction, before laches or estoppel bars the petition. Extrinsic fraud is not a
valid ground if such fraud was used as a ground, or could have been used as a ground, in a motion for
new trial or petition for relief from judgment.32
Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing the petition for
annulment of judgment. However, a party may avail of the remedy of annulment of judgment under Rule
47 only if the ordinary remedies of new trial, appeal, petition for relief from judgment, or other
appropriate remedies are no longer available through no fault of the party.33 Mrs. Cerezo could have
availed of a new trial or appeal but through her own fault she erroneously availed of the remedy of a
petition for relief, which was denied with finality. Thus, Mrs. Cerezo may no longer avail of the remedy of
annulment.
In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezo’s person. Mrs. Cerezo actively
participated in the proceedings before the trial court, submitting herself to the jurisdiction of the trial
court. The defense of lack of jurisdiction fails in light of her active participation in the trial court
proceedings. Estoppel or laches may also bar lack of jurisdiction as a ground for nullity especially if
raised for the first time on appeal by a party who participated in the proceedings before the trial court,
as what happened in this case.34
For these reasons, the present petition should be dismissed for utter lack of merit. The extraordinary
action to annul a final judgment is restricted to the grounds specified in the rules. The reason for the
restriction is to prevent this extraordinary action from being used by a losing party to make a complete
farce of a duly promulgated decision that has long become final and executory. There would be no end
to litigation if parties who have unsuccessfully availed of any of the appropriate remedies or lost them
through their fault could still bring an action for annulment of judgment.35 Nevertheless, we shall discuss
the issues raised in the present petition to clear any doubt about the correctness of the decision of the
trial court.
Mrs. Cerezo’s Liability and the Trial Court’s Acquisition of Jurisdiction
Mrs. Cerezo contends that the basis of the present petition for annulment is lack of jurisdiction. Mrs.
Cerezo asserts that the trial court could not validly render judgment since it failed to acquire jurisdiction
over Foronda. Mrs. Cerezo points out that there was no service of summons on Foronda. Moreover,
Tuazon failed to reserve his right to institute a separate civil action for damages in the criminal action.
Such contention betrays a faulty foundation. Mrs. Cerezo’s contention proceeds from the point of view
of criminal law and not of civil law, while the basis of the present action of Tuazon is quasi-delict under
the Civil Code, not delict under the Revised Penal Code.
The same negligent act may produce civil liability arising from a delict under Article 103 of the Revised
Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the Civil Code. An
aggrieved party may choose between the two remedies. An action based on a quasi-delict may proceed
independently from the criminal action.36There is, however, a distinction between civil liability arising
from a delict and civil liability arising from a quasi-delict. The choice of remedy, whether to sue for a
delict or a quasi-delict, affects the procedural and jurisdictional issues of the action.37
Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon alleged
that Mrs. Cerezo, "without exercising due care and diligence in the supervision and management of her
employees and buses," hired Foronda as her driver. Tuazon became disabled because of Foronda’s
"recklessness, gross negligence and imprudence," aggravated by Mrs. Cerezo’s "lack of due care and
diligence in the selection and supervision of her employees, particularly Foronda."38
The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article 2180 states in
part:
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.
Contrary to Mrs. Cerezo’s assertion, Foronda is not an indispensable party to the case. An
indispensable party is one whose interest is affected by the court’s action in the litigation, and without
whom no final resolution of the case is possible.39 However, Mrs. Cerezo’s liability as an employer in an
action for a quasi-delict is not only solidary, it is also primary and direct. Foronda is not an indispensable
party to the final resolution of Tuazon’s action for damages against Mrs. Cerezo.
The responsibility of two or more persons who are liable for a quasi-delict is solidary.40 Where there is a
solidary obligation on the part of debtors, as in this case, each debtor is liable for the entire obligation.
Hence, each debtor is liable to pay for the entire obligation in full. There is no merger or renunciation of
rights, but only mutual representation.41 Where the obligation of the parties is solidary, either of the
parties is indispensable, and the other is not even a necessary party because complete relief is
available from either.42 Therefore, jurisdiction over Foronda is not even necessary as Tuazon may
collect damages from Mrs. Cerezo alone.
Moreover, an employer’s liability based on a quasi-delict is primary and direct, while the employer’s
liability based on a delict is merely subsidiary.43 The words "primary and direct," as contrasted with
"subsidiary," refer to the remedy provided by law for enforcing the obligation rather than to the character
and limits of the obligation.44 Although liability under Article 2180 originates from the negligent act of the
employee, the aggrieved party may sue the employer directly. When an employee causes damage, the
law presumes that the employer has himself committed an act of negligence in not preventing or
avoiding the damage. This is the fault that the law condemns. While the employer is civilly liable in a
subsidiary capacity for the employee’s criminal negligence, the employer is also civilly liable directly and
separately for his own civil negligence in failing to exercise due diligence in selecting and supervising
his employee. The idea that the employer’s liability is solely subsidiary is wrong.45
The action can be brought directly against the person responsible (for another), without
including the author of the act. The action against the principal is accessory in the sense that it
implies the existence of a prejudicial act committed by the employee, but it is not subsidiary in
the sense that it can not be instituted till after the judgment against the author of the act or at
least, that it is subsidiary to the principal action; the action for responsibility (of the employer) is
in itself a principal action.46
Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda. The trial
court’s acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of the present case on the
merits.
Interest at the rate of 6% per annum is due on the amount of damages adjudged by the trial court.51 The
6% per annum interest shall commence from 30 May 1995, the date of the decision of the trial court.
Upon finality of this decision, interest at 12% per annum, in lieu of 6% per annum, is due on the amount
of damages adjudged by the trial court until full payment.
WHEREFORE, we DENY the instant petition for review. The Resolution dated 21 October 1999 of the
Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying
the motion for reconsideration, is AFFIRMED with the MODIFICATION that the amount due shall earn
legal interest at 6% per annum computed from 30 May 1995, the date of the trial court’s decision. Upon
finality of this decision, the amount due shall earn interest at 12% per annum, in lieu of 6% per annum,
until full payment.
SO ORDERED.

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

The Cerezo spouses’ contention that summons be served anew on them is untenable in light of their
participation in the trial court proceedings. To uphold the Cerezo spouses’ contention would make a
fetish of a technicality.48Moreover, any irregularity in the service of summons that might have vitiated the
trial court’s jurisdiction over the persons of the Cerezo spouses was deemed waived when the Cerezo
spouses filed a petition for relief from judgment.49

We hold that the trial court had jurisdiction and was competent to decide the case in favor of Tuazon
and against Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs. Cerezo’s contention,
Foronda is not an indispensable party to the present case. It is not even necessary for Tuazon to
reserve the filing of a separate civil action because he opted to file a civil action for damages against
Mrs. Cerezo who is primarily and directly liable for her own civil negligence. The words of Justice Jorge
Bocobo in Barredo v. Garcia still hold true today as much as it did in 1942:

x x x [T]o hold that there is only one way to make defendant’s liability effective, and that is, to
sue the driver and exhaust his (the latter’s) property first, would be tantamount to compelling
the plaintiff to follow a devious and cumbersome method of obtaining relief. True, there is such
a remedy under our laws, but there is also a more expeditious way, which is based on the
primary and direct responsibility of the defendant under article [2180] of the Civil Code. Our
view of the law is more likely to facilitate remedy for civil wrongs, because the procedure
indicated by the defendant is wasteful and productive of delay, it being a matter of common
knowledge that professional drivers of taxis and other similar public conveyances do not have
sufficient means with which to pay damages. Why, then, should the plaintiff be required in all
cases to go through this roundabout, unnecessary, and probably useless procedure? In
construing the laws, courts have endeavored to shorten and facilitate the pathways of right and
justice.50
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-29025 October 4, 1971
Spouses MOISES P. PALISOC and BRIGIDA P. PALISOC, plaintiffs-appellants,
vs.
ANTONIO C. BRILLANTES and TEODOSIO V. VALENTON, owner and President, respectively, of a
school of arts and trades, known under the name and style of "Manila Technical Institute"
(M.I.T.), VIRGILIO L. DAFFON and SANTIAGO M. QUIBULUE, defendants-appellees.
Leovillo C. Agustin for plaintiffs-appellants. .
Honorato S. Reyes for appellee Brillantes, et al. .
Villareal, Almacen Navarra & Amores for appellee Daffon. .
TEEHANKEE, J.:
An appeal in forma pauperis on pure questions of law from a decision of the Court of First Instance of
Manila. .
Plaintiffs-appellants as parents of their sixteen-year old son, Dominador Palisoc, and a student in
automotive mechanics at the Manila Technical Institute, Quezon Boulevard, Manila, had filed on May
19, 1966, the action below for damages arising from the death on March 10, 1966 of their son at the
hands of a fellow student, defendant Virgilio L. Daffon, at the laboratory room of the said Institute. .
Defendants, per the trial court's decision, are: "(T)he defendant Antonio C. Brillantes, at the time when
the incident which gave rise to his action occurred was a member of the Board of Directors of the
institute;1 the defendant Teodosio Valenton, the president thereof; the defendant Santiago M. Quibulue,
instructor of the class to which the deceased belonged; and the defendant Virgilio L. Daffon, a fellow
student of the deceased. At the beginning the Manila Technical Institute was a single proprietorship, but
lately on August 2, 1962, it was duly incorporated."
The facts that led to the tragic death of plaintiffs' son were thus narrated by the trial court: "(T)he
deceased Dominador Palisoc and the defendant Virgilio L. Daffon were classmates, and on the
afternoon of March 10, 1966, between two and three o'clock, they, together with another classmate
Desiderio Cruz were in the laboratory room located on the ground floor. At that time the classes were in
recess. Desiderio Cruz and Virgilio L. Daffon were working on a machine while Dominador Palisoc was
merely looking on at them. Daffon made a remark to the effect that Palisoc was acting like a foreman.
Because of this remark Palisoc slapped slightly Daffon on the face. Daffon, in retaliation, gave Palisoc a
strong flat blow on the face, which was followed by other fist blows on the stomach. Palisoc retreated
apparently to avoid the fist blows, but Daffon followed him and both exchanged blows until Palisoc
stumbled on an engine block which caused him to fall face downward. Palisoc became pale and fainted.
First aid was administered to him but he was not revived, so he was immediately taken to a hospital. He
never regained consciousness; finally he died. The foregoing is the substance of the testimony of
Desiderio Cruz, the lone witness to the incident."
The trial court expressly gave credence to this version of the incident, as testified to by the lone
eyewitness, Desiderio Cruz, a classmate of the protagonists, as that of a disinterested witness who "has
no motive or reason to testify one way or another in favor of any party" and rejected the self-exculpatory
version of defendant Daffon denying that he had inflicted any fist blows on the deceased. .
With the postmortem findings of Dr. Angelo Singian of the Manila Police Department who performed the
autopsy re "Cause of death: shock due to traumatic fracture of theribs (6th and 7th, left, contusion of the
pancreas and stomach with intra-gastric hemorrhage and slight subarachnoid hemorrhage on the
brain," and his testimony that these internal injuries of the deceased were caused "probably by strong
fist blows," the trial court found defendant Daffon liable for the quasi delict under Article 2176 of the Civil
Code.3 It held that "(T)he act, therefore, of the accused Daffon in giving the deceased strong fistblows in
the stomach which ruptured his internal organs and caused his death falls within the purview of this
article of the Code."4
The trial court, however, absolved from liability the three other defendants-officials of the Manila
Technical Institute, in this wise:
... Their liabilities are based on the provisions of Article 2180 of the New Civil Code
which reads:
Art. 2180. ... .
Lastly, teachers or heads of establishments of arts and trades shall
be liable for damages caused by their pupils and students and
apprentices, so long as they remain in their custody.
In the opinion of the Court, this article of the Code is not applicable to the case at bar,
since this contemplates the situation where the control or influence of the teachers
and heads of school establishments over the conduct and actions by the pupil
supersedes those of the parents.
CIVIL LAW: DAMAGES ART 2180. NEW CIVIL CODE
CONSTRUED: — The clause "so long as they remain in their
custody" contained in Article 2180 of the new civil code
contemplated a situation where the pupil lives and boards with the
teacher, such that the control or influence on the pupil supersedes
those of the parents. In those circumstances the control or
influence over the conduct and actions of the pupil as well as the
responsibilities for their sort would pass from the father and mother
to the teachers. (Ciriaco L. Mercado, Petitioner vs. the Court of
 Appeals, Manuel Quisumbing, Jr., et al., respondents, G.R. No. L-
14862, May 30, 1960).5
There is no evidence that the accused Daffon lived and boarded with his teacher or
the other defendant officials of the school. These defendants cannot therefore be
made responsible for the tort of the defendant Daffon.
Judgment was therefore rendered by the trial court as follows:
1. Sentencing the defendant Virgilio L. Daffon to pay the plaintiffs as heirs of the
deceased Dominador Palisoc (a) P6,000.00 for the death of Dominador Palisoc; (b)
P3,375.00 for actual and compensatory expenses; (c) P5,000.00 for moral damages;
(d) P10,000.00 for loss of earning power, considering that the deceased was only
between sixteen and seventeen years, and in good health when he died, and (e)
P2,000.00 for attorney's fee, plus the costs of this action. .
2. Absolving the other defendants. .
3. Dismissing the defendants' counterclaim for lack of merit.
Plaintiffs' appeal raises the principal legal question that under the factual findings of the trial court, which
are now beyond review, the trial court erred in absolving the defendants-school officials instead of
holding them jointly and severally liable as tortfeasors, with defendant Daffon, for the damages awarded
them as a result of their son's death. The Court finds the appeal, in the main, to be meritorious. .
1. The lower court absolved defendants-school officials on the ground that the provisions of Article
2180, Civil Code, which expressly hold "teachers or heads of establishments of arts and trades ... liable
for damages caused by their pupils and students and apprentices, so long as they remain in their
custody," are not applicable to to the case at bar, since "there is no evidence that the accused Daffon
[who inflicted the fatal fistblows]6 lived and boarded with his teacher or the other defendants-officials of
the school. These defendants cannot therefore be made responsible for the tort of the defendant
Daffon."
The lower court based its legal conclusion expressly on the Court's dictum in Mercado vs. Court of
Appeals,7 that "(I)t would seem that the clause "so long as they remain in their custody," contemplates a
situation where the pupil lives and boards with the teacher, such that the control, direction and influence
on the pupil supersedes those of the parents. In these circumstances the control or influence over the
conduct and actions of the pupil would pass from the father and mother to the teacher; and so would the
responsibility for the torts of the pupil. Such a situation does not appear in the case at bar; the pupils
appear to go to school during school hours and go back to their homes with their parents after school is
over." This dictum had been made in rejecting therein petitioner father's contention that his minor son's
school, Lourdes Catholic School at Kanlaon, Quezon City [which was not a party to the case] should be
held responsible, rather than him as father, for the moral damages of P2,000.00 adjudged against him
for the physical injury inflicted by his son on a classmate. [A cut on the right cheek with a piece of razor
which costs only P50.00 by way of medical expenses to treat and cure, since the wound left no scar.]
The moral damages award was after all set aside by the Court on the ground that none of the specific
cases provided in Article 2219, Civil Code, for awarding moral damages had been established,
petitioner's son being only nine years old and not having been shown to have "acted with discernment"
in inflicting the injuries on his classmate. .
The dictum in Mercado was based in turn on another dictum in the earlier case of Exconde vs.
Capuno,8 where the only issue involved as expressly stated in the decision, was whether the therein
defendant-father could be civilly liable for damages resulting from a death caused in a motor vehicle
accident driven unauthorizedly and negligently by his minor son, (which issue was resolved adversely
against the father). Nevertheless, the dictum in such earlier case that "It is true that under the law
abovequoted, teachers or directors of arts and trades are liable for any damage caused by their pupils
or apprentices while they are under their custody, but this provision only applies to an institution of arts
and trades and not to any academic educational institution" was expressly cited and quoted in Mercado.
.
2. The case at bar was instituted directly against the school officials and squarely raises the issue of
liability of teachers and heads of schools under Article 2180, Civil Code, for damages caused by their
pupils and students against fellow students on the school premises. Here, the parents of the student at
fault, defendant Daffon, are not involved, since Daffon was already of age at the time of the tragic
incident. There is no question, either, that the school involved is a non-academic school,9 the Manila
Technical Institute being admittedly a technical vocational and industrial school. .
The Court holds that under the cited codal article, defendants head and teacher of the Manila Technical
Institute (defendants Valenton and Quibulue, respectively) are liable jointly and severally for damages to
plaintiffs-appellants for the death of the latter's minor son at the hands of defendant Daffon at the
school's laboratory room. No liability attaches to defendant Brillantes as a mere member of the school's
board of directors. The school itself cannot be held similarly liable, since it has not been properly
impleaded as party defendant. While plaintiffs sought to so implead it, by impleading improperly
defendant Brillantes, its former single proprietor, the lower court found that it had been incorporated
since August 2, 1962, and therefore the school itself, as thus incorporated, should have been brought in
as party defendant. Plaintiffs failed to do so, notwithstanding that Brillantes and his co-defendants in
their reply to plaintiffs' request for admission had expressly manifested and made of record that
"defendant Antonio C. Brillantes is not the registered owner/head of the "Manila Technical Institute"
which is now a corporation and is not owned by any individual person."10
3. The rationale of such liability of school heads and teachers for the tortious acts of their pupils and
students, so long as they remain in their custody, is that they stand, to a certain extent, as to their pupils
and students, in loco parentis and are called upon to "exercise reasonable supervision over the conduct
of the child."11 This is expressly provided for in Articles 349, 350 and 352 of the Civil Code.12 In the law
of torts, the governing principle is that the protective custody of the school heads and teachers is
mandatorily substituted for that of the parents, and hence, it becomes their obligation as well as that of
the school itself to provide proper supervision of the students' activities during the whole time that they
are at attendance in the school, including recess time, as well as to take the necessary precautions to
protect the students in their custody from dangers and hazards that would reasonably be anticipated,
including injuries that some student themselves may inflict willfully or through negligence on their fellow
students. .
4. As tersely summarized by Mr. Justice J.B.L. Reyes in his dissenting opinion in Exconde, "the basis of
the presumption of negligence of Art. 1903 [now 2180] is some culpa in vigilando that the parents,
teachers, etc. are supposed to have incurred in the exercise of their authority" 13 and "where the parent
places the child under the effective authority of the teacher, the latter, and not the parent, should be the
one answerable for the torts committed while under his custody, for the very reason that the parent is
not supposed to interfere with the discipline of the school nor with the authority and supervision of the
teacher while the child is under instruction." The school itself, likewise, has to respond for the fault or
negligence of its school head and teachers under the same cited article.14
5. The lower court therefore erred in law in absolving defendants-school officials on the ground that they
could be held liable under Article 2180, Civil Code, only if the student who inflicted the fatal fistblows on
his classmate and victim "lived and boarded with his teacher or the other defendants officials of the
school." As stated above, the phrase used in the cited article — "so long as (the students) remain in
their custody" means the protective and supervisory custody that the school and its heads and teachers
exercise over the pupils and students for as long as they are at attendance in the school, including
recess time. There is nothing in the law that requires that for such liability to attach the pupil or student
who commits the tortious act must live and board in the school, as erroneously held by the lower court,
and the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed to have been
set aside by the present decision. .
6. Defendants Valenton and Quibulue as president and teacher-in-charge of the school must therefore
be held jointly and severally liable for the quasi-delict of their co-defendant Daffon in the latter's having
caused the death of his classmate, the deceased Dominador Palisoc. The unfortunate death resulting
from the fight between the protagonists-students could have been avoided, had said defendants but
complied with their duty of providing adequate supervision over the activities of the students in the
school premises to protect their students from harm, whether at the hands of fellow students or other
parties. At any rate, the law holds them liable unless they relieve themselves of such liability, in
compliance with the last paragraph of Article 2180, Civil Code, by "(proving) that they observed all the
diligence of a good father of a family to prevent damage." In the light of the factual findings of the lower
court's decision, said defendants failed to prove such exemption from liability. .
Concepcion, C.J., Villamor and Makasiar, JJ., concur. .
Dizon, J., took no part. .
REYES, J.B.L., J., concurring: .
I concur with the opinion of Mr. Justice Teehankee but would like to clarify that the argument of the
dissenting opinion of the effect that the responsibility of teachers and school officers under Articles 2180
should be limited to pupils who are minors (below the age of majority) is not in accord with the plain text
of the law. Article 2180 of the Civil Code of the Philippines is to the following effect: .
The obligation imposed by article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible. .
The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the minor children who live in their company. .
Guardians are liable for damages caused by the minors or incapacitated persons who
are under their authority and live in their company. .

7. Plaintiffs-appellees' contention that the award of P6,000.00 as indemnity for the death of their son The owners and managers of an establishment or enterprise are likewise responsible
should be increased to P12,000.00 as set by the Court in People vs. Pantoja,15 and observed in all for damages caused by their employees in the service of the branches in which the
death indemnity cases thereafter is well taken. The Court, in Pantoja, after noting the decline in the latter are employed or on the occasion of their functions. .
purchasing power of the Philippine peso, had expressed its "considered opinion that the amount of
award of compensatory damages for death caused by a crime or quasi-delict should now be Employers shall be liable for the damages caused by their employees and household
P12,000.00." The Court thereby adjusted the minimum amount of "compensatory damages for death helpers acting within the scope of their assigned tasks, even though the former are
caused by a crime or quasi-delict" as per Article 2206, Civil Code, from the old stated minimum of not engaged in any business or industry. .
P3,000.00 to P12,000.00, which amount is to be awarded "even though there may have been mitigating
circumstances" pursuant to the express provisions of said codal article. .
The State is responsible in like manner when it acts through a special agent; but not
when the damage has been caused by the official to whom the task done properly
8. Plaintiffs-appellees' other claims on appeal that the lower court should have awarded exemplary pertains, in which case what is provided in article 2176 shall be applicable. .
damages and imposed legal interest on the total damages awarded, besides increasing the award of
attorney's fees all concern matters that are left by law to the discretion of the trial court and the Court
Lastly, teachers or heads of establishments of arts and trades shall be liable for
has not been shown any error or abuse in the exercise of such discretion on the part of the trial
damages caused by their pupils and students or apprentices, so long as they remain
court.16 Decisive here is the touchstone provision of Article 2231, Civil Code, that "In quasi-delicts,
in their custody.
exemplary damages may be granted if the defendant acted with gross negligence." No gross
negligence on the part of defendants was found by the trial court to warrant the imposition of exemplary
damages, as well as of interest and increased attorney's fees, and the Court has not been shown in this The responsibility treated of in this article shall cease when the persons herein
appeal any compelling reason to disturb such finding. . mentioned prove that they observe all the diligence of a good father of a family to
prevent damages.
ACCORDINGLY, the judgment appealed from is modified so as to provide as follows: .
Examination of the article shows that where the responsibility prescribed therein is limited to illegal acts
during minority, the article expressly so provides, as in the case of the parents and of the guardians. It is
1. Sentencing the defendants Virgilio L. Daffon, TeodosioV. Valenton and Santiago M. Quibulue jointly
natural to expect that if the law had intended to similarly restrict the civil responsibility of the other
and severallyto pay plaintiffs as heirs of the deceased Dominador Palisoc (a) P12,000.00 for the death
categories of persons enumerated in the article, it would have expressly so stated. The fact that it has
of Dominador Palisoc; (b) P3,375.00 for actual and compensatory expenses; (c) P5,000.00 for moral,
not done so indicates an intent that the liability be not restricted to the case of persons under age.
damages; (d) P10,000.00 for loss of earning power and (e) P2,000.00 for attorney's fee, plus the costs
Further, it is not without significance that the teachers and heads of scholarly establishments are not
of this action in both instances; 2. absolving defendant Antonio C. Brillantes from the complaint; and 3.
dismissing defendants' counterclaims. .
grouped with parents and guardians but ranged with owners and managers of enterprises, employers
and the state, as to whom no reason is discernible to imply that they should answer only for minors. .

Giorgi, in his well-known "Teoria de las Obligaciones en el Derecho Moderno", Volume 5, page 404, No.
272 (Sp. Ed.), after noting the split among commentators on the point it issue, observes with
considerable cogency that —

272. Ante esta variedad de opiniones, ninguna de las cuales se funds en argumentos
merecedores de seria ponderacion, no es facil tomar un partido. Esto no obstante,
debiendo manisfestar nuestra opinion, nos acercamos a la de los que no estiman
necesaria la menor edad del discipulo o del aprendiz; porque si el aforismo ubi voluit
dixit, ubi noluit tacuit, no es siempre argumento seguro para interpreter la ley, es
infalible cuanto se refiere a una misma disposicion relative a varios casos. Y tal es el
art. 1.153. Lo que haya establecido important poco si, elevandones a los principios
de razon, puede dudarse de la oportunidad de semajante diferencia; porque la
voluntad cierta del legislador prevalece in iure condito a cualquier otra consideracion.
Por otra parte, si bien se considera, no puede parecer extrano o absurdo el suponer
que un discipulo y un aprendiz, aunque mayores de edad, acepten voluntariamente la
entera vigilancia de su preceptor mientras dura la educacion. Ni parece dudoso
desde el momento que los artesanos y los preceptores deben, al par de los padres,
responder civilmente de los daños comitidos por sus discipulos, aun cuando estos
esten faltos de discernimiento.

Similarly, Planiol-Ripert, in their "Droit Civil Pratique," Volume VI, No. 635 (Spanish version), say that —

635. Personas de quien responde. — Si bien la responsibilidad del maestro es

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

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

Barredo, J., concurs.

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-2075 November 29, 1949
MARGARITA AFIALDA, plaintiff-appellant,
vs.
BASILIO HISOLE and FRANCISCO HISOLE, defendants-appellees.
Nicolas P. Nonato for appellant.
Gellada, Mirasol and Ravena for appellees.
REYES, J.:
This is an action for damages arising from injury caused by an animal. The complaint alleges that the
now deceased, Loreto Afialda, was employed by the defendant spouses as caretaker of their carabaos
at a fixed compensation; that while tending the animals he was, on March 21, 1947, gored by one of
them and later died as a consequence of his injuries; that the mishap was due neither to his own fault
nor to force majeure; and that plaintiff is his elder sister and heir depending upon him for support.
Before filing their answer, defendants moved for the dismissal of the complaint for lack of a cause of
action, and the motion having been granted by the lower court, plaintiff has taken this appeal.
Plaintiff seeks to hold defendants liable under article 1905 of the Civil Code, which reads:
The possessor of an animal, or the one who uses the same, is liable for any damages it may
cause, even if such animal should escape from him or stray away.
This liability shall cease only in case, the damage should arise from force majeure or from the
fault of the person who may have suffered it.
The question presented is whether the owner of the animal is liable when damage is caused to its
caretaker.
The lower court took the view that under the above-quoted provision of the Civil Code, the owner of an
animal is answerable only for damages caused to a stranger, and that for damage caused to the
caretaker of the animal the owner would be liable only if he had been negligent or at fault under article
1902 of the same code. Claiming that the lower court was in error, counsel for plaintiff contends that the
article 1905 does not distinguish between damage caused to the caretaker and makes the owner liable
whether or not he has been negligent or at fault. For authority counsel cites the following opinion which
Manresa quotes from a decision of the Spanish Supreme Court:
El articulo 1905 del codigo Civil no consienta otra interpretacion que la que, clara y
evidentemente, se deriva de sus terminos literales, bastando, segun el mismo, que un animal
cause perjuicio para que nasca la responsibilidad del dueno, aun no imputandose a este
ninguna clase de culpa o negligencia, habida,sin duda, cuenta por el lgislador de que tal
concepto de dueno es suficiente para que arrastre las consecuencias favorables o adversas
de esta clase de propiedad, salvo la exception en el mismo contenida. (12 Manresa,
Commentaries on the Spanish CivilCode, 573.)
This opinion, however, appears to have been rendered in a case where an animal caused injury to a
stranger or third person. It is therefore no authority for a case like the present where the person injured
was the caretaker of the animal. The distinction is important. For the statute names
the possessor or user of the animal as the person liable for "any damages it may cause," and this for
the obvious reason that the possessor or user has the custody and control of the animal and is
therefore the one in a position to prevent it from causing damage.
In the present case, the animal was in custody and under the control of the caretaker, who was paid for
his work as such. Obviously, it was the caretaker's business to try to prevent the animal from causing
injury or damage to anyone, including himself. And being injured by the animal under those
circumstances, was one of the risks of the occupation which he had voluntarily assumed and for which
he must take the consequences.
In a decision of the Spanish Supreme Court, cited by Manresa in his Commentaries (Vol. 12, p. 578),
the death of an employee who was bitten by a feline which his master had asked him to take to his
establishment was by said tribunal declared to be "a veritable accident of labor" which should come
under the labor laws rather than under article 1905 of the Civil Code. The present action, however, is
not brought under the Workmen's Compensation Act, there being no allegation that, among other
things, defendant's business, whatever that might be, had a gross income of P20,000. As already
stated, defendant's liability is made to rest on article 1905 of the Civil Code. but action under that article
is not tenable for the reasons already stated. On the other hand, if action is to be based on article 1902
of the Civil Code, it is essential that there be fault or negligence on the part of the defendants as owners
of the animal that caused the damage. But the complaint contains no allegation on those points.
There being no reversible error in the order appealed from, the same is hereby affirmed, but without
costs in view of the financial situation of the appellant.
Moran, C.J., Ozaeta, Paras, Bengzon, Padilla, Tuason, Montemayor and Torres, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 132266 December 21, 1999
CASTILEX INDUSTRIAL CORPORATION, petitioner,
vs.
VICENTE VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU DOCTORS' HOSPITAL,
INC., respondents.
DAVIDE, JR., C.J.:
The pivotal issue in this petition is whether an employer may be held vicariously liable for the death
resulting from the negligent operation by a managerial employee of a company-issued vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was
driving a Honda motorcycle around Fuente Osmeña Rotunda. He was traveling
counter-clockwise, (the normal flow of traffic in a rotunda) but without any protective
helmet or goggles. He was also only carrying a Student's Permit to Drive at the time.
Upon the other hand, Benjamin Abad [was a] manager of Appellant Castilex Industrial
Corporation, registered owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW-794.
On the same date and time, Abad drove the said company car out of a parking lot but
instead of going around the Osmeña rotunda he made a short cut against [the] flow of
the traffic in proceeding to his route to General Maxilom St. or to Belvic St.
In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each
other causing severe injuries to the former. Abad stopped his vehicle and brought
Vasquez to the Southern Islands Hospital and later to the Cebu Doctor's Hospital.
On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was there that
Abad signed an acknowledgment of Responsible Party (Exhibit K) wherein he agreed
to pay whatever hospital bills, professional fees and other incidental charges Vasquez
may incur.
After the police authorities had conducted the investigation of the accident, a Criminal
Case was filed against Abad but which was subsequently dismissed for failure to
prosecute. So, the present action for damages was commenced by Vicente Vasquez,
Jr. and Luisa So Vasquez, parents of the deceased Romeo So Vasquez, against Jose
Benjamin Abad and Castilex Industrial Corporation. In the same action, Cebu Doctor's
Hospital intervened to collect unpaid balance for the medical expense given to
Romeo So Vasquez.1
The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered Jose
Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation (hereafter CASTILEX) to
pay jointly and solidarily (1) Spouses Vasquez, the amounts of P8,000.00 for burial expenses;
P50,000.00 as moral damages; P10,000.00 as attorney's fees; and P778,752.00 for loss of earning
capacity; and (2) Cebu Doctor's Hospital, the sum of P50,927.83 for unpaid medical and hospital bills at
3% monthly interest from 27 July 1989 until fully paid, plus the costs of litigation.2
CASTILEX and ABAD separately appealed the decision.
In its decision3 of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court holding ABAD
and CASTILEX liable but held that the liability of the latter is "only vicarious and not solidary" with the
former. It reduced the award of damages representing loss of earning capacity from P778,752.00 to
P214,156.80; and the interest on the hospital and medical bills, from 3% per month to 12% per
annum from 5 September 1988 until fully paid.
Upon CASTILEX's motion for reconsideration, the Court of Appeals modified its decision by (1) reducing
the award of moral damages from P50,000 to P30,000 in view of the deceased's contributory
negligence; (b) deleting the award of attorney's fees for lack of evidence; and (c) reducing the interest
on hospital and medical bills to 6% per annum from 5 September 1988 until fully paid.4
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1) applying to
the case the fifth paragraph of Article 2180 of the Civil Code, instead of the fourth paragraph thereof; (2)
that as a managerial employee, ABAD was deemed to have been always acting within the scope of his
assigned task even outside office hours because he was using a vehicle issued to him by petitioner;
and (3) ruling that petitioner had the burden to prove that the employee was not acting within the scope
of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on the theory
of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their son's death was caused by the
negligence of petitioner's employee who was driving a vehicle issued by petitioner and who was on his
way home from overtime work for petitioner; and that petitioner is thus liable for the resulting injury and
subsequent death of their son on the basis of the fifth paragraph of Article 2180. Even if the fourth
paragraph of Article 2180 were applied, petitioner cannot escape liability therefor. They moreover argue
that the Court of Appeals erred in reducing the amount of compensatory damages when the award
made by the trial court was borne both by evidence adduced during the trial regarding deceased's
wages and by jurisprudence on life expectancy. Moreover, they point out that the petition is procedurally
not acceptable on the following grounds: (1) lack of an explanation for serving the petition upon the
Court of Appeals by registered mail, as required under Section 11, Rule 13 of the Rules of Civil
Procedure; and (2) lack of a statement of the dates of the expiration of the original reglementary period
and of the filing of the motion for extension of time to file a petition for review.
For its part, respondent Cebu Doctor's Hospital maintains that petitioner CASTILEX is indeed
vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by ABAD, who was
on his way home from taking snacks after doing overtime work for petitioner. Although the incident
occurred when ABAD was not working anymore "the inescapable fact remains that said employee
would not have been situated at such time and place had he not been required by petitioner to do
overtime work." Moreover, since petitioner adopted the evidence adduced by ABAD, it cannot, as the
latter's employer, inveigle itself from the ambit of liability, and is thus estopped by the records of the
case, which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged procedural
lapses in the petition.
Private respondent's contention of petitioner's violation of Section 11 of Rule 13 and Section 4 of Rule
45 of the 1997 Rules of Civil Procedure holds no water.
Sec. 11 of Rule 13 provides:
Sec. 11. Priorities in modes of services and filing. — Whenever practicable, the
service and filing of pleadings and other papers shall be done personally. Except with
respect to papers emanating from the court, a resort to other modes must be
accompanied by a written explanation why the service or filing was not done
personally. A violation of this Rule may be cause to consider the paper as not filed.
The explanation why service of a copy of the petition upon the Court of Appeals was done by registered
mail is found on Page 28 of the petition. Thus, there has been compliance with the aforequoted
provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the same is
unfounded. The material dates required to be stated in the petition are the following: (1) the date of
receipt of the judgment or final order or resolution subject of the petition; (2) the date of filing of a motion
for new trial or reconsideration, if any; and (3) the date of receipt of the notice of the denial of the
motion. Contrary to private respondent's claim, the petition need not indicate the dates of the expiration
of the original reglementary period and the filing of a motion for extension of time to file the petition. At
any rate, aside from the material dates required under Section 4 of Rule 45, petitioner CASTILEX also
stated in the first page of the petition the date it filed the motion for extension of time to file the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said
negligence but claims that it is not vicariously liable for the injuries and subsequent death caused by
ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to
instances where the employer is not engaged in business or industry. Since it is engaged in the
business of manufacturing and selling furniture it is therefore not covered by said provision. Instead, the
fourth paragraph should apply.
Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though the former are
not engaged in any business or industry" found in the fifth paragraph should be interpreted to mean that
it is not necessary for the employer to be engaged in any business or industry to be liable for the
negligence of his employee who is acting within the scope of his assigned task.5
A distinction must be made between the two provisions to determine what is applicable. Both provisions
apply to employers: the fourth paragraph, to owners and managers of an establishment or enterprise;
and the fifth paragraph, to employers in general, whether or not engaged in any business or industry.
The fourth paragraph covers negligent acts of employees committed either in the service of the
branches or on the occasion of their functions, while the fifth paragraph encompasses negligent acts of
employees acting within the scope of their assigned task. The latter is an expansion of the former in
both employer coverage and acts included. Negligent acts of employees, whether or not the employer is
engaged in a business or industry, are covered so long as they were acting within the scope of their
assigned task, even though committed neither in the service of the branches nor on the occasion of
their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which
are beyond their office, title or designation but which, nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a business or
industry such as truck operators6 and banks.7 The Court of Appeals cannot, therefore, be faulted in
applying the said paragraph of Article 2180 of the Civil Code to this case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an
employer is liable for the torts committed by employees within the scope of his assigned tasks. But it is
necessary to establish the employer-employee relationship; once this is done, the plaintiff must show, to
hold the employer liable, that the employee was acting within the scope of his assigned task when the
tort complained of was committed. It is only then that the employer may find it necessary to interpose
the defense of due diligence in the selection and supervision of the employee.8
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of the tort
occurrence. As to whether he was acting within the scope of his assigned task is a question of fact,
which the court a quo and the Court of Appeals resolved in the affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are
entitled to great respect, and even finality at times. This rule is, however, subject to exceptions such as
when the conclusion is grounded on speculations, surmises, or conjectures.9 Such exception obtain in
the present case to warrant review by this Court of the finding of the Court of Appeals that since ABAD
was driving petitioner's vehicle he was acting within the scope of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of his
employment, we shall first take up the other reason invoked by the Court of Appeals in holding petitioner
CASTILEX vicariously liable for ABAD's negligence, i.e., that the petitioner did not present evidence that
ABAD was not acting within the scope of his assigned tasks at the time of the motor vehicle mishap.
Contrary to the ruling of the Court of Appeals, it was not incumbent upon the petitioner to prove the
same. It was enough for petitioner CASTILEX to deny that ABAD was acting within the scope of his
duties; petitioner was not under obligation to prove this negative averment. Ei incumbit probatio qui
dicit, non qui negat (He who asserts, not he who denies, must prove). The Court has consistently
applied the ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of action,
fails to show in a satisfactory manner facts which he bases his claim, the defendant is under no
obligation to prove his exception or defense. 10
Now on the issue of whether the private respondents have sufficiently established that ABAD was acting
within the scope of his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving
a company-issued vehicle, registered under the name of petitioner. He was then leaving the restaurant
where he had some snacks and had a chat with his friends after having done overtime work for the
petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to the problem of
whether at a given moment, an employee is engaged in his employer's business in the operation of a
motor vehicle, so as to fix liability upon the employer because of the employee's action or inaction; but
rather, the result varies with each state of facts. 11
In Filamer Christian Institute v. Intermediate Appellant Court, 12 this Court had the occasion to hold that
acts done within the scope of the employee's assigned tasks includes "any act done by an employee in
furtherance of the interests of the employer or for the account of the employer at the time of the infliction
of the injury or damages."
The court a quo and the Court of Appeals were one in holding that the driving by a manager of a
company-issued vehicle is within the scope of his assigned tasks regardless of the time and
circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the injurious
incident is not of itself sufficient to charge petitioner with liability for the negligent operation of said
vehicle unless it appears that he was operating the vehicle within the course or scope of his
employment.
The following are principles in American Jurisprudence on the employer's liability for the injuries inflicted
by the negligence of an employee in the use of an employer's motor vehicle:
I. Operation of Employer's Motor Vehicle in Going to
or from Meals
It has been held that an employee who uses his employer's vehicle in going from his work to a place
where he intends to eat or in returning to work from a meal is not ordinarily acting within the scope of his
employment in the absence of evidence of some special business benefit to the employer. Evidence
that by using the employer's vehicle to go to and from meals, an employee is enabled to reduce his
time-off and so devote more time to the performance of his duties supports the finding that an employee
is acting within the scope of his employment while so driving the vehicle. 13
II. Operation of Employer's Vehicle in Going to
or from Work
In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of
the employee, and not a part of his services to his employer. Hence, in the absence of some special
benefit to the employer other than the mere performance of the services available at the place where he
is needed, the employee is not acting within the scope of his employment even though he uses his
employer's motor vehicle. 14
The employer may, however, be liable where he derives some special benefit from having the employee
drive home in the employer's vehicle as when the employer benefits from having the employee at work
earlier and, presumably, spending more time at his actual duties. Where the employee's duties require
him to circulate in a general area with no fixed place or hours of work, or to go to and from his home to
various outside places of work, and his employer furnishes him with a vehicle to use in his work, the
courts have frequently applied what has been called the "special errand" or "roving commission" rule,
under which it can be found that the employee continues in the service of his employer until he actually
reaches home. However, even if the employee be deemed to be acting within the scope of his
employment in going to or from work in his employer's vehicle, the employer is not liable for his
negligence where at the time of the accident, the employee has left the direct route to his work or back
home and is pursuing a personal errand of his own.
III. Use of Employer's Vehicle Outside Regular Working Hours
An employer who loans his motor vehicle to an employee for the latter's personal use outside of regular
working hours is generally not liable for the employee's negligent operation of the vehicle during the
period of permissive use, even where the employer contemplates that a regularly assigned motor
vehicle will be used by the employee for personal as well as business purposes and there is some
incidental benefit to the employer. Even where the employee's personal purpose in using the vehicle
has been accomplished and he has started the return trip to his house where the vehicle is normally
kept, it has been held that he has not resumed his employment, and the employer is not liable for the
employee's negligent operation of the vehicle during the return trip. 15
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine
of respondent superior, not on the principle of bonus pater familias as in ours. Whether the fault or
negligence of the employee is conclusive on his employer as in American law or jurisprudence, or
merely gives rise to the presumption juris tantum of negligence on the part of the employer as in ours, it
is indispensable that the employee was acting in his employer's business or within the scope of his
assigned task. 16
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's office, which
was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in Fuente
Osmeña, Cebu City, which is about seven kilometers away from petitioner's place of business. 17 A
witness for the private respondents, a sidewalk vendor, testified that Fuente Osmeña is a "lively place"
even at dawn because Goldie's Restaurant and Back Street were still open and people were drinking
thereat. Moreover, prostitutes, pimps, and drug addicts littered the place. 18
At the Goldie's Restaurant, ABAD took some snacks and had a chat with friends. It was when ABAD
was leaving the restaurant that the incident in question occurred. That same witness for the private
respondents testified that at the time of the vehicular accident, ABAD was with a woman in his car, who
then shouted: "Daddy, Daddy!" 19 This woman could not have been ABAD's daughter, for ABAD was
only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal
purpose not in line with his duties at the time he figured in a vehicular accident. It was then about 2:00
a.m. of 28 August 1988, way beyond the normal working hours. ABAD's working day had ended; his
overtime work had already been completed. His being at a place which, as petitioner put it, was known
as a "haven for prostitutes, pimps, and drug pushers and addicts," had no connection to petitioner's
business; neither had it any relation to his duties as a manager. Rather, using his service vehicle even
for personal purposes was a form of a fringe benefit or one of the perks attached to his position.

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

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

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 188288 January 16, 2012
SPOUSES FERNANDO and LOURDES VILORIA, Petitioners,
vs.
CONTINENTAL AIRLINES, INC.,
DECISION
REYES, J.:
This is a petition for review under Rule 45 of the Rules of Court from the January 30, 2009 Decision1 of
the Special Thirteenth Division of the Court of Appeals (CA) in CA-G.R. CV No. 88586
entitled "Spouses Fernando and Lourdes Viloria v. Continental Airlines, Inc.," the dispositive portion of
which states:
WHEREFORE, the Decision of the Regional Trial Court, Branch 74, dated 03 April 2006, awarding
US$800.00 or its peso equivalent at the time of payment, plus legal rate of interest from 21 July 1997
until fully paid, [₱]100,000.00 as moral damages, [₱]50,000.00 as exemplary damages, [₱]40,000.00 as
attorney’s fees and costs of suit to plaintiffs-appellees is hereby REVERSED and SET ASIDE.
Defendant-appellant’s counterclaim is DENIED.
Costs against plaintiffs-appellees.
SO ORDERED.2
On April 3, 2006, the Regional Trial Court of Antipolo City, Branch 74 (RTC) rendered a Decision, giving
due course to the complaint for sum of money and damages filed by petitioners Fernando Viloria
(Fernando) and Lourdes Viloria (Lourdes), collectively called Spouses Viloria, against respondent
Continental Airlines, Inc. (CAI). As culled from the records, below are the facts giving rise to such
complaint.
On or about July 21, 1997 and while in the United States, Fernando purchased for himself and his wife,
Lourdes, two (2) round trip airline tickets from San Diego, California to Newark, New Jersey on board
Continental Airlines. Fernando purchased the tickets at US$400.00 each from a travel agency called
"Holiday Travel" and was attended to by a certain Margaret Mager (Mager). According to Spouses
Viloria, Fernando agreed to buy the said tickets after Mager informed them that there were no available
seats at Amtrak, an intercity passenger train service provider in the United States. Per the tickets,
Spouses Viloria were scheduled to leave for Newark on August 13, 1997 and return to San Diego on
August 21, 1997.
Subsequently, Fernando requested Mager to reschedule their flight to Newark to an earlier date or
August 6, 1997. Mager informed him that flights to Newark via Continental Airlines were already fully
booked and offered the alternative of a round trip flight via Frontier Air. Since flying with Frontier Air
called for a higher fare of US$526.00 per passenger and would mean traveling by night, Fernando
opted to request for a refund. Mager, however, denied his request as the subject tickets are non-
refundable and the only option that Continental Airlines can offer is the re-issuance of new tickets within
one (1) year from the date the subject tickets were issued. Fernando decided to reserve two (2) seats
with Frontier Air.
As he was having second thoughts on traveling via Frontier Air, Fernando went to the Greyhound
Station where he saw an Amtrak station nearby. Fernando made inquiries and was told that there are
seats available and he can travel on Amtrak anytime and any day he pleased. Fernando then
purchased two (2) tickets for Washington, D.C.
From Amtrak, Fernando went to Holiday Travel and confronted Mager with the Amtrak tickets, telling her
that she had misled them into buying the Continental Airlines tickets by misrepresenting that Amtrak
was already fully booked. Fernando reiterated his demand for a refund but Mager was firm in her
position that the subject tickets are non-refundable.
Upon returning to the Philippines, Fernando sent a letter to CAI on February 11, 1998, demanding a
refund and alleging that Mager had deluded them into purchasing the subject tickets.3
In a letter dated February 24, 1998, Continental Micronesia informed Fernando that his complaint had
been referred to the Customer Refund Services of Continental Airlines at Houston, Texas.4
In a letter dated March 24, 1998, Continental Micronesia denied Fernando’s request for a refund and
advised him that he may take the subject tickets to any Continental ticketing location for the re-issuance
of new tickets within two (2) years from the date they were issued. Continental Micronesia informed
Fernando that the subject tickets may be used as a form of payment for the purchase of another
Continental ticket, albeit with a re-issuance fee.5
On June 17, 1999, Fernando went to Continental’s ticketing office at Ayala Avenue, Makati City to have
the subject tickets replaced by a single round trip ticket to Los Angeles, California under his name.
Therein, Fernando was informed that Lourdes’ ticket was non-transferable, thus, cannot be used for the
purchase of a ticket in his favor. He was also informed that a round trip ticket to Los Angeles was
US$1,867.40 so he would have to pay what will not be covered by the value of his San Diego to Newark
round trip ticket.
In a letter dated June 21, 1999, Fernando demanded for the refund of the subject tickets as he no
longer wished to have them replaced. In addition to the dubious circumstances under which the subject
tickets were issued, Fernando claimed that CAI’s act of charging him with US$1,867.40 for a round trip
ticket to Los Angeles, which other airlines priced at US$856.00, and refusal to allow him to use Lourdes’
ticket, breached its undertaking under its March 24, 1998 letter.6
On September 8, 2000, Spouses Viloria filed a complaint against CAI, praying that CAI be ordered to
refund the money they used in the purchase of the subject tickets with legal interest from July 21, 1997
and to pay ₱1,000,000.00 as moral damages, ₱500,000.00 as exemplary damages and ₱250,000.00
as attorney’s fees.7
CAI interposed the following defenses: (a) Spouses Viloria have no right to ask for a refund as the
subject tickets are non-refundable; (b) Fernando cannot insist on using the ticket in Lourdes’ name for
the purchase of a round trip ticket to Los Angeles since the same is non-transferable; (c) as Mager is
not a CAI employee, CAI is not liable for any of her acts; (d) CAI, its employees and agents did not act
in bad faith as to entitle Spouses Viloria to moral and exemplary damages and attorney’s fees. CAI also
invoked the following clause printed on the subject tickets:
3. To the extent not in conflict with the foregoing carriage and other services performed by each carrier
are subject to: (i) provisions contained in this ticket, (ii) applicable tariffs, (iii) carrier’s conditions of
carriage and related regulations which are made part hereof (and are available on application at the
offices of carrier), except in transportation between a place in the United States or Canada and any
place outside thereof to which tariffs in force in those countries apply.8
According to CAI, one of the conditions attached to their contract of carriage is the non-transferability
and non-refundability of the subject tickets.
The RTC’s Ruling
Following a full-blown trial, the RTC rendered its April 3, 2006 Decision, holding that Spouses Viloria are
entitled to a refund in view of Mager’s misrepresentation in obtaining their consent in the purchase of
the subject tickets.9 The relevant portion of the April 3, 2006 Decision states:
Continental Airlines agent Ms. Mager was in bad faith when she was less candid and diligent in
presenting to plaintiffs spouses their booking options. Plaintiff Fernando clearly wanted to travel via
AMTRAK, but defendant’s agent misled him into purchasing Continental Airlines tickets instead on the
fraudulent misrepresentation that Amtrak was fully booked. In fact, defendant Airline did not specifically
denied (sic) this allegation.
Plainly, plaintiffs spouses, particularly plaintiff Fernando, were tricked into buying Continental Airline
tickets on Ms. Mager’s misleading misrepresentations. Continental Airlines agent Ms. Mager further
relied on and exploited plaintiff Fernando’s need and told him that they must book a flight immediately
or risk not being able to travel at all on the couple’s preferred date. Unfortunately, plaintiffs spouses fell
prey to the airline’s and its agent’s unethical tactics for baiting trusting customers."10
Citing Articles 1868 and 1869 of the Civil Code, the RTC ruled that Mager is CAI’s agent, hence, bound
by her bad faith and misrepresentation. As far as the RTC is concerned, there is no issue as to whether
Mager was CAI’s agent in view of CAI’s implied recognition of her status as such in its March 24, 1998
letter.
The act of a travel agent or agency being involved here, the following are the pertinent New Civil Code
provisions on agency:
Art. 1868. By the contract of agency a person binds himself to render some service or to do something
in representation or on behalf of another, with the consent or authority of the latter.
Art. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of
action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without
authority.
Agency may be oral, unless the law requires a specific form.
As its very name implies, a travel agency binds itself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the latter. This court takes judicial
notice of the common services rendered by travel agencies that represent themselves as such,
specifically the reservation and booking of local and foreign tours as well as the issuance of airline
tickets for a commission or fee.
The services rendered by Ms. Mager of Holiday Travel agency to the plaintiff spouses on July 21, 1997
were no different from those offered in any other travel agency. Defendant airline impliedly if not
expressly acknowledged its principal-agent relationship with Ms. Mager by its offer in the letter dated
March 24, 1998 – an obvious attempt to assuage plaintiffs spouses’ hurt feelings.11
Furthermore, the RTC ruled that CAI acted in bad faith in reneging on its undertaking to replace the
subject tickets within two (2) years from their date of issue when it charged Fernando with the amount of
US$1,867.40 for a round trip ticket to Los Angeles and when it refused to allow Fernando to use
Lourdes’ ticket. Specifically:
Tickets may be reissued for up to two years from the original date of issue. When defendant airline still
charged plaintiffs spouses US$1,867.40 or more than double the then going rate of US$856.00 for the
unused tickets when the same were presented within two (2) years from date of issue, defendant airline
exhibited callous treatment of passengers.12
The Appellate Court’s Ruling
On appeal, the CA reversed the RTC’s April 3, 2006 Decision, holding that CAI cannot be held liable for
Mager’s act in the absence of any proof that a principal-agent relationship existed between CAI and
Holiday Travel. According to the CA, Spouses Viloria, who have the burden of proof to establish the fact
of agency, failed to present evidence demonstrating that Holiday Travel is CAI’s agent. Furthermore,
contrary to Spouses Viloria’s claim, the contractual relationship between Holiday Travel and CAI is not
an agency but that of a sale.
Plaintiffs-appellees assert that Mager was a sub-agent of Holiday Travel who was in turn a ticketing
agent of Holiday Travel who was in turn a ticketing agent of Continental Airlines. Proceeding from this
premise, they contend that Continental Airlines should be held liable for the acts of Mager. The trial
court held the same view.
We do not agree. By the contract of agency, a person binds him/herself to render some service or to do
something in representation or on behalf of another, with the consent or authority of the latter. The
elements of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2)
the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a
representative and not for him/herself; and (4) the agent acts within the scope of his/her authority. As
the basis of agency is representation, there must be, on the part of the principal, an actual intention to
appoint, an intention naturally inferable from the principal’s words or actions. In the same manner, there
must be an intention on the part of the agent to accept the appointment and act upon it. Absent such
mutual intent, there is generally no agency. It is likewise a settled rule that persons dealing with an
assumed agent are bound at their peril, if they would hold the principal liable, to ascertain not only the
fact of agency but also the nature and extent of authority, and in case either is controverted, the burden
of proof is upon them to establish it. Agency is never presumed, neither is it created by the mere use of
the word in a trade or business name. We have perused the evidence and documents so far presented.
We find nothing except bare allegations of plaintiffs-appellees that Mager/Holiday Travel was acting in
behalf of Continental Airlines. From all sides of legal prism, the transaction in issue was simply a
contract of sale, wherein Holiday Travel buys airline tickets from Continental Airlines and then, through
its employees, Mager included, sells it at a premium to clients.13
The CA also ruled that refund is not available to Spouses Viloria as the word "non-refundable" was
clearly printed on the face of the subject tickets, which constitute their contract with CAI. Therefore, the
grant of their prayer for a refund would violate the proscription against impairment of contracts.
Finally, the CA held that CAI did not act in bad faith when they charged Spouses Viloria with the higher
amount of US$1,867.40 for a round trip ticket to Los Angeles. According to the CA, there is no
compulsion for CAI to charge the lower amount of US$856.00, which Spouses Viloria claim to be the
fee charged by other airlines. The matter of fixing the prices for its services is CAI’s prerogative, which
Spouses Viloria cannot intervene. In particular:
It is within the respective rights of persons owning and/or operating business entities to peg the
premium of the services and items which they provide at a price which they deem fit, no matter how
expensive or exhorbitant said price may seem vis-à-vis those of the competing companies. The
Spouses Viloria may not intervene with the business judgment of Continental Airlines.14
The Petitioners’ Case
In this Petition, this Court is being asked to review the findings and conclusions of the CA, as the latter’s
reversal of the RTC’s April 3, 2006 Decision allegedly lacks factual and legal bases. Spouses Viloria
claim that CAI acted in bad faith when it required them to pay a higher amount for a round trip ticket to
Los Angeles considering CAI’s undertaking to re-issue new tickets to them within the period stated in
their March 24, 1998 letter. CAI likewise acted in bad faith when it disallowed Fernando to use Lourdes’
ticket to purchase a round trip to Los Angeles given that there is nothing in Lourdes’ ticket indicating that
it is non-transferable. As a common carrier, it is CAI’s duty to inform its passengers of the terms and
conditions of their contract and passengers cannot be bound by such terms and conditions which they
are not made aware of. Also, the subject contract of carriage is a contract of adhesion; therefore, any
ambiguities should be construed against CAI. Notably, the petitioners are no longer questioning the
validity of the subject contracts and limited its claim for a refund on CAI’s alleged breach of its
undertaking in its March 24, 1998 letter.
The Respondent’s Case
In its Comment, CAI claimed that Spouses Viloria’s allegation of bad faith is negated by its willingness
to issue new tickets to them and to credit the value of the subject tickets against the value of the new
ticket Fernando requested. CAI argued that Spouses Viloria’s sole basis to claim that the price at which
CAI was willing to issue the new tickets is unconscionable is a piece of hearsay evidence – an
advertisement appearing on a newspaper stating that airfares from Manila to Los Angeles or San
Francisco cost US$818.00.15 Also, the advertisement pertains to airfares in September 2000 and not to
airfares prevailing in June 1999, the time when Fernando asked CAI to apply the value of the subject
tickets for the purchase of a new one.16 CAI likewise argued that it did not undertake to protect Spouses
Viloria from any changes or fluctuations in the prices of airline tickets and its only obligation was to
apply the value of the subject tickets to the purchase of the newly issued tickets.
With respect to Spouses Viloria’s claim that they are not aware of CAI’s restrictions on the subject
tickets and that the terms and conditions that are printed on them are ambiguous, CAI denies any
ambiguity and alleged that its representative informed Fernando that the subject tickets are non-
transferable when he applied for the issuance of a new ticket. On the other hand, the word "non-
refundable" clearly appears on the face of the subject tickets.
CAI also denies that it is bound by the acts of Holiday Travel and Mager and that no principal-agency
relationship exists between them. As an independent contractor, Holiday Travel was without capacity to
bind CAI.
Issues
To determine the propriety of disturbing the CA’s January 30, 2009 Decision and whether Spouses
Viloria have the right to the reliefs they prayed for, this Court deems it necessary to resolve the following
issues:
a. Does a principal-agent relationship exist between CAI and Holiday Travel?
b. Assuming that an agency relationship exists between CAI and Holiday Travel, is CAI bound
by the acts of Holiday Travel’s agents and employees such as Mager?
c. Assuming that CAI is bound by the acts of Holiday Travel’s agents and employees, can the
representation of Mager as to unavailability of seats at Amtrak be considered fraudulent as to
vitiate the consent of Spouse Viloria in the purchase of the subject tickets?
d. Is CAI justified in insisting that the subject tickets are non-transferable and non-refundable?
e. Is CAI justified in pegging a different price for the round trip ticket to Los Angeles requested
by Fernando?
f. Alternatively, did CAI act in bad faith or renege its obligation to Spouses Viloria to apply the
value of the subject tickets in the purchase of new ones when it refused to allow Fernando to
use Lourdes’ ticket and in charging a higher price for a round trip ticket to Los Angeles?
This Court’s Ruling
I. A principal-agent relationship exists between CAI and Holiday Travel.
With respect to the first issue, which is a question of fact that would require this Court to review and re-
examine the evidence presented by the parties below, this Court takes exception to the general rule that
the CA’s findings of fact are conclusive upon Us and our jurisdiction is limited to the review of questions
of law. It is well-settled to the point of being axiomatic that this Court is authorized to resolve questions
of fact if confronted with contrasting factual findings of the trial court and appellate court and if the
findings of the CA are contradicted by the evidence on record.17
According to the CA, agency is never presumed and that he who alleges that it exists has the burden of
proof. Spouses Viloria, on whose shoulders such burden rests, presented evidence that fell short of
indubitably demonstrating the existence of such agency.
We disagree. The CA failed to consider undisputed facts, discrediting CAI’s denial that Holiday Travel is
one of its agents. Furthermore, in erroneously characterizing the contractual relationship between CAI
and Holiday Travel as a contract of sale, the CA failed to apply the fundamental civil law principles
governing agency and differentiating it from sale.
In Rallos v. Felix Go Chan & Sons Realty Corporation,18 this Court explained the nature of an agency
and spelled out the essential elements thereof:
Out of the above given principles, sprung the creation and acceptance of the relationship of
agencywhereby one party, called the principal (mandante), authorizes another, called the agent
(mandatario), to act for and in his behalf in transactions with third persons. The essential elements of
agency are: (1) there is consent, express or implied of the parties to establish the relationship; (2) the
object is the execution of a juridical act in relation to a third person; (3) the agent acts as a
representative and not for himself, and (4) the agent acts within the scope of his authority.1avvphi1
Agency is basically personal, representative, and derivative in nature. The authority of the agent to act
emanates from the powers granted to him by his principal; his act is the act of the principal if done
within the scope of the authority. Qui facit per alium facit se. "He who acts through another acts
himself."19
Contrary to the findings of the CA, all the elements of an agency exist in this case. The first and second
elements are present as CAI does not deny that it concluded an agreement with Holiday Travel,
whereby Holiday Travel would enter into contracts of carriage with third persons on CAI’s behalf. The
third element is also present as it is undisputed that Holiday Travel merely acted in a representative
capacity and it is CAI and not Holiday Travel who is bound by the contracts of carriage entered into by
Holiday Travel on its behalf. The fourth element is also present considering that CAI has not made any
allegation that Holiday Travel exceeded the authority that was granted to it. In fact, CAI consistently
maintains the validity of the contracts of carriage that Holiday Travel executed with Spouses Viloria and
that Mager was not guilty of any fraudulent misrepresentation. That CAI admits the authority of Holiday
Travel to enter into contracts of carriage on its behalf is easily discernible from its February 24, 1998
and March 24, 1998 letters, where it impliedly recognized the validity of the contracts entered into by
Holiday Travel with Spouses Viloria. When Fernando informed CAI that it was Holiday Travel who
issued to them the subject tickets, CAI did not deny that Holiday Travel is its authorized agent.
Prior to Spouses Viloria’s filing of a complaint against it, CAI never refuted that it gave Holiday Travel
the power and authority to conclude contracts of carriage on its behalf. As clearly extant from the
records, CAI recognized the validity of the contracts of carriage that Holiday Travel entered into with
Spouses Viloria and considered itself bound with Spouses Viloria by the terms and conditions thereof;
and this constitutes an unequivocal testament to Holiday Travel’s authority to act as its agent. This
Court cannot therefore allow CAI to take an altogether different position and deny that Holiday Travel is
its agent without condoning or giving imprimatur to whatever damage or prejudice that may result from
such denial or retraction to Spouses Viloria, who relied on good faith on CAI’s acts in recognition of
Holiday Travel’s authority. Estoppel is primarily based on the doctrine of good faith and the avoidance of
harm that will befall an innocent party due to its injurious reliance, the failure to apply it in this case
would result in gross travesty of justice.20 Estoppel bars CAI from making such denial.
As categorically provided under Article 1869 of the Civil Code, "[a]gency may be express, or implied
from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency,
knowing that another person is acting on his behalf without authority."
Considering that the fundamental hallmarks of an agency are present, this Court finds it rather peculiar
that the CA had branded the contractual relationship between CAI and Holiday Travel as one of sale.
The distinctions between a sale and an agency are not difficult to discern and this Court, as early as
1970, had already formulated the guidelines that would aid in differentiating the two (2) contracts.
In Commissioner of Internal Revenue v. Constantino,21 this Court extrapolated that the primordial
differentiating consideration between the two (2) contracts is the transfer of ownership or title over the
property subject of the contract. In an agency, the principal retains ownership and control over the
property and the agent merely acts on the principal’s behalf and under his instructions in furtherance of
the objectives for which the agency was established. On the other hand, the contract is clearly a sale if
the parties intended that the delivery of the property will effect a relinquishment of title, control and
ownership in such a way that the recipient may do with the property as he pleases.
Since the company retained ownership of the goods, even as it delivered possession unto the dealer for
resale to customers, the price and terms of which were subject to the company's control, the
relationship between the company and the dealer is one of agency, tested under the following criterion:
"The difficulty in distinguishing between contracts of sale and the creation of an agency to sell has led to
the establishment of rules by the application of which this difficulty may be solved. The decisions say
the transfer of title or agreement to transfer it for a price paid or promised is the essence of sale. If such
transfer puts the transferee in the attitude or position of an owner and makes him liable to the transferor
as a debtor for the agreed price, and not merely as an agent who must account for the proceeds of a
resale, the transaction is a sale; while the essence of an agency to sell is the delivery to an agent, not
as his property, but as the property of the principal, who remains the owner and has the right to control
sales, fix the price, and terms, demand and receive the proceeds less the agent's commission upon
sales made. 1 Mechem on Sales, Sec. 43; 1 Mechem on Agency, Sec. 48; Williston on Sales, 1;
Tiedeman on Sales, 1." (Salisbury v. Brooks, 94 SE 117, 118-119)22
As to how the CA have arrived at the conclusion that the contract between CAI and Holiday Travel is a
sale is certainly confounding, considering that CAI is the one bound by the contracts of carriage
embodied by the tickets being sold by Holiday Travel on its behalf. It is undisputed that CAI and not
Holiday Travel who is the party to the contracts of carriage executed by Holiday Travel with third
persons who desire to travel via Continental Airlines, and this conclusively indicates the existence of a
principal-agent relationship. That the principal is bound by all the obligations contracted by the agent
within the scope of the authority granted to him is clearly provided under Article 1910 of the Civil Code
and this constitutes the very notion of agency.
II. In actions based on quasi-delict, a principal can only be held liable for the tort committed by
its agent’s employees if it has been established by preponderance of evidence that the principal
was also at fault or negligent or that the principal exercise control and supervision over them.
Considering that Holiday Travel is CAI’s agent, does it necessarily follow that CAI is liable for the fault or
negligence of Holiday Travel’s employees? Citing China Air Lines, Ltd. v. Court of Appeals, et al.,23CAI
argues that it cannot be held liable for the actions of the employee of its ticketing agent in the absence
of an employer-employee relationship.
An examination of this Court’s pronouncements in China Air Lines will reveal that an airline company is
not completely exonerated from any liability for the tort committed by its agent’s employees. A prior
determination of the nature of the passenger’s cause of action is necessary. If the passenger’s cause of
action against the airline company is premised on culpa aquiliana or quasi-delict for a tort committed by
the employee of the airline company’s agent, there must be an independent showing that the airline
company was at fault or negligent or has contributed to the negligence or tortuous conduct committed
by the employee of its agent. The mere fact that the employee of the airline company’s agent has
committed a tort is not sufficient to hold the airline company liable. There is no vinculum juris between
the airline company and its agent’s employees and the contractual relationship between the airline
company and its agent does not operate to create a juridical tie between the airline company and its
agent’s employees. Article 2180 of the Civil Code does not make the principal vicariously liable for the
tort committed by its agent’s employees and the principal-agency relationship per se does not make the
principal a party to such tort; hence, the need to prove the principal’s own fault or negligence.
On the other hand, if the passenger’s cause of action for damages against the airline company is based
on contractual breach or culpa contractual, it is not necessary that there be evidence of the airline
company’s fault or negligence. As this Court previously stated in China Air Lines and reiterated in Air
France vs. Gillego,24 "in an action based on a breach of contract of carriage, the aggrieved party does
not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the
existence of the contract and the fact of its non-performance by the carrier."
Spouses Viloria’s cause of action on the basis of Mager’s alleged fraudulent misrepresentation is clearly
one of tort or quasi-delict, there being no pre-existing contractual relationship between them. Therefore,
it was incumbent upon Spouses Viloria to prove that CAI was equally at fault.
However, the records are devoid of any evidence by which CAI’s alleged liability can be substantiated.
Apart from their claim that CAI must be held liable for Mager’s supposed fraud because Holiday Travel
is CAI’s agent, Spouses Viloria did not present evidence that CAI was a party or had contributed to
Mager’s complained act either by instructing or authorizing Holiday Travel and Mager to issue the said
misrepresentation.
It may seem unjust at first glance that CAI would consider Spouses Viloria bound by the terms and
conditions of the subject contracts, which Mager entered into with them on CAI’s behalf, in order to deny
Spouses Viloria’s request for a refund or Fernando’s use of Lourdes’ ticket for the re-issuance of a new
one, and simultaneously claim that they are not bound by Mager’s supposed misrepresentation for
purposes of avoiding Spouses Viloria’s claim for damages and maintaining the validity of the subject
contracts. It may likewise be argued that CAI cannot deny liability as it benefited from Mager’s acts,
which were performed in compliance with Holiday Travel’s obligations as CAI’s agent.
However, a person’s vicarious liability is anchored on his possession of control, whether absolute or
limited, on the tortfeasor. Without such control, there is nothing which could justify extending the liability
to a person other than the one who committed the tort. As this Court explained in Cangco v. Manila
Railroad Co.:25
With respect to extra-contractual obligation arising from negligence, whether of act or omission,
it is competent for the legislature to elect — and our Legislature has so elected — to limit such liability to
cases in which the person upon whom such an obligation is imposed is morally culpable or, on the
contrary, for reasons of public policy, to extend that liability, without regard to the lack of moral
culpability, so as to include responsibility for the negligence of those persons whose acts or
omissions are imputable, by a legal fiction, to others who are in a position to exercise an
absolute or limited control over them. The legislature which adopted our Civil Code has elected to
limit extra-contractual liability — with certain well-defined exceptions — to cases in which moral
culpability can be directly imputed to the persons to be charged. This moral responsibility may consist in
having failed to exercise due care in one's own acts, or in having failed to exercise due care in the
selection and control of one's agent or servants, or in the control of persons who, by reasons of their
status, occupy a position of dependency with respect to the person made liable for their
conduct.26(emphasis supplied)
It is incumbent upon Spouses Viloria to prove that CAI exercised control or supervision over Mager by
preponderant evidence. The existence of control or supervision cannot be presumed and CAI is under
no obligation to prove its denial or nugatory assertion. Citing Belen v. Belen,27 this Court ruled in Jayme
v. Apostol,28 that:
In Belen v. Belen, this Court ruled that it was enough for defendant to deny an alleged employment
relationship. The defendant is under no obligation to prove the negative averment. This Court said:
"It is an old and well-settled rule of the courts that the burden of proving the action is upon the plaintiff,
and that if he fails satisfactorily to show the facts upon which he bases his claim, the defendant is under
no obligation to prove his exceptions. This [rule] is in harmony with the provisions of Section 297 of the
Code of Civil Procedure holding that each party must prove his own affirmative allegations,
etc."29 (citations omitted)
Therefore, without a modicum of evidence that CAI exercised control over Holiday Travel’s employees
or that CAI was equally at fault, no liability can be imposed on CAI for Mager’s supposed
misrepresentation.
III. Even on the assumption that CAI may be held liable for the acts of Mager, still, Spouses
Viloria are not entitled to a refund. Mager’s statement cannot be considered a causal fraud that
would justify the annulment of the subject contracts that would oblige CAI to indemnify Spouses
Viloria and return the money they paid for the subject tickets.
Article 1390, in relation to Article 1391 of the Civil Code, provides that if the consent of the contracting
parties was obtained through fraud, the contract is considered voidable and may be annulled within four
(4) years from the time of the discovery of the fraud. Once a contract is annulled, the parties are obliged
under Article 1398 of the same Code to restore to each other the things subject matter of the contract,
including their fruits and interest.
On the basis of the foregoing and given the allegation of Spouses Viloria that Fernando’s consent to the
subject contracts was supposedly secured by Mager through fraudulent means, it is plainly apparent
that their demand for a refund is tantamount to seeking for an annulment of the subject contracts on the
ground of vitiated consent.
Whether the subject contracts are annullable, this Court is required to determine whether Mager’s
alleged misrepresentation constitutes causal fraud. Similar to the dispute on the existence of an agency,
whether fraud attended the execution of a contract is factual in nature and this Court, as discussed
above, may scrutinize the records if the findings of the CA are contrary to those of the RTC.
Under Article 1338 of the Civil Code, there is fraud when, through insidious words or machinations of
one of the contracting parties, the other is induced to enter into a contract which, without them, he
would not have agreed to. In order that fraud may vitiate consent, it must be the causal (dolo causante),
not merely the incidental (dolo incidente), inducement to the making of the contract.30 In Samson v.
Court of Appeals,31 causal fraud was defined as "a deception employed by one party prior to or
simultaneous to the contract in order to secure the consent of the other."32
Also, fraud must be serious and its existence must be established by clear and convincing evidence. As
ruled by this Court in Sierra v. Hon. Court of Appeals, et al.,33 mere preponderance of evidence is not
adequate:
Fraud must also be discounted, for according to the Civil Code:
Art. 1338. There is fraud when, through insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which without them, he would not have agreed to.
Art. 1344. In order that fraud may make a contract voidable, it should be serious and should not have
been employed by both contracting parties.
To quote Tolentino again, the "misrepresentation constituting the fraud must be established by full, clear,
and convincing evidence, and not merely by a preponderance thereof. The deceit must be serious. The
fraud is serious when it is sufficient to impress, or to lead an ordinarily prudent person into error; that
which cannot deceive a prudent person cannot be a ground for nullity. The circumstances of each case
should be considered, taking into account the personal conditions of the victim."34
After meticulously poring over the records, this Court finds that the fraud alleged by Spouses Viloria has
not been satisfactorily established as causal in nature to warrant the annulment of the subject contracts.
In fact, Spouses Viloria failed to prove by clear and convincing evidence that Mager’s statement was
fraudulent. Specifically, Spouses Viloria failed to prove that (a) there were indeed available seats at
Amtrak for a trip to New Jersey on August 13, 1997 at the time they spoke with Mager on July 21, 1997;
(b) Mager knew about this; and (c) that she purposely informed them otherwise.
This Court finds the only proof of Mager’s alleged fraud, which is Fernando’s testimony that an Amtrak
had assured him of the perennial availability of seats at Amtrak, to be wanting. As CAI correctly pointed
out and as Fernando admitted, it was possible that during the intervening period of three (3) weeks from
the time Fernando purchased the subject tickets to the time he talked to said Amtrak employee, other
passengers may have cancelled their bookings and reservations with Amtrak, making it possible for
Amtrak to accommodate them. Indeed, the existence of fraud cannot be proved by mere speculations
and conjectures. Fraud is never lightly inferred; it is good faith that is. Under the Rules of Court, it is
presumed that "a person is innocent of crime or wrong" and that "private transactions have been fair
and regular."35 Spouses Viloria failed to overcome this presumption.
IV. Assuming the contrary, Spouses Viloria are nevertheless deemed to have ratified the subject
contracts.
Even assuming that Mager’s representation is causal fraud, the subject contracts have been impliedly
ratified when Spouses Viloria decided to exercise their right to use the subject tickets for the purchase
of new ones. Under Article 1392 of the Civil Code, "ratification extinguishes the action to annul a
voidable contract."
Ratification of a voidable contract is defined under Article 1393 of the Civil Code as follows:
Art. 1393. Ratification may be effected expressly or tacitly. It is understood that there is a tacit
ratification if, with knowledge of the reason which renders the contract voidable and such reason having
ceased, the person who has a right to invoke it should execute an act which necessarily implies an
intention to waive his right.
Implied ratification may take diverse forms, such as by silence or acquiescence; by acts showing
approval or adoption of the contract; or by acceptance and retention of benefits flowing therefrom.36
Simultaneous with their demand for a refund on the ground of Fernando’s vitiated consent, Spouses
Viloria likewise asked for a refund based on CAI’s supposed bad faith in reneging on its undertaking to
replace the subject tickets with a round trip ticket from Manila to Los Angeles.
In doing so, Spouses Viloria are actually asking for a rescission of the subject contracts based on
contractual breach. Resolution, the action referred to in Article 1191, is based on the defendant’s breach
of faith, a violation of the reciprocity between the parties37 and in Solar Harvest, Inc. v. Davao
Corrugated Carton Corporation,38 this Court ruled that a claim for a reimbursement in view of the other
party’s failure to comply with his obligations under the contract is one for rescission or resolution.
However, annulment under Article 1390 of the Civil Code and rescission under Article 1191 are two (2)
inconsistent remedies. In resolution, all the elements to make the contract valid are present; in
annulment, one of the essential elements to a formation of a contract, which is consent, is absent. In
resolution, the defect is in the consummation stage of the contract when the parties are in the process
of performing their respective obligations; in annulment, the defect is already present at the time of the
negotiation and perfection stages of the contract. Accordingly, by pursuing the remedy of rescission
under Article 1191, the Vilorias had impliedly admitted the validity of the subject contracts, forfeiting their
right to demand their annulment. A party cannot rely on the contract and claim rights or obligations
under it and at the same time impugn its existence or validity. Indeed, litigants are enjoined from taking
inconsistent positions.39
V. Contracts cannot be rescinded for a slight or casual breach.
CAI cannot insist on the non-transferability of the subject tickets.
Considering that the subject contracts are not annullable on the ground of vitiated consent, the next
question is: "Do Spouses Viloria have the right to rescind the contract on the ground of CAI’s supposed
breach of its undertaking to issue new tickets upon surrender of the subject tickets?"
Article 1191, as presently worded, states:
The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfilment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment,
if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a
period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with articles 1385 and 1388 and the Mortgage Law.
According to Spouses Viloria, CAI acted in bad faith and breached the subject contracts when it refused
to apply the value of Lourdes’ ticket for Fernando’s purchase of a round trip ticket to Los Angeles and in
requiring him to pay an amount higher than the price fixed by other airline companies.
In its March 24, 1998 letter, CAI stated that "non-refundable tickets may be used as a form of payment
toward the purchase of another Continental ticket for $75.00, per ticket, reissue fee ($50.00, per ticket,
for tickets purchased prior to October 30, 1997)."
Clearly, there is nothing in the above-quoted section of CAI’s letter from which the restriction on the
non-transferability of the subject tickets can be inferred. In fact, the words used by CAI in its letter
supports the position of Spouses Viloria, that each of them can use the ticket under their name for the
purchase of new tickets whether for themselves or for some other person.
Moreover, as CAI admitted, it was only when Fernando had expressed his interest to use the subject
tickets for the purchase of a round trip ticket between Manila and Los Angeles that he was informed that
he cannot use the ticket in Lourdes’ name as payment.
Contrary to CAI’s claim, that the subject tickets are non-transferable cannot be implied from a plain
reading of the provision printed on the subject tickets stating that "[t]o the extent not in conflict with the
foregoing carriage and other services performed by each carrier are subject to: (a) provisions contained
in this ticket, x x x (iii) carrier’s conditions of carriage and related regulations which are made part
hereof (and are available on application at the offices of carrier) x x x." As a common carrier whose
business is imbued with public interest, the exercise of extraordinary diligence requires CAI to inform
Spouses Viloria, or all of its passengers for that matter, of all the terms and conditions governing their
contract of carriage. CAI is proscribed from taking advantage of any ambiguity in the contract of
carriage to impute knowledge on its passengers of and demand compliance with a certain condition or
undertaking that is not clearly stipulated. Since the prohibition on transferability is not written on the face
of the subject tickets and CAI failed to inform Spouses Viloria thereof, CAI cannot refuse to apply the
value of Lourdes’ ticket as payment for Fernando’s purchase of a new ticket.
CAI’s refusal to accept Lourdes’ ticket for the purchase of a new ticket for Fernando is only a
casual breach.
Nonetheless, the right to rescind a contract for non-performance of its stipulations is not absolute. The
general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only for
such substantial and fundamental violations as would defeat the very object of the parties in making the
agreement.40 Whether a breach is substantial is largely determined by the attendant circumstances.41
While CAI’s refusal to allow Fernando to use the value of Lourdes’ ticket as payment for the purchase of
a new ticket is unjustified as the non-transferability of the subject tickets was not clearly stipulated, it
cannot, however be considered substantial. The endorsability of the subject tickets is not an essential
part of the underlying contracts and CAI’s failure to comply is not essential to its fulfillment of its
undertaking to issue new tickets upon Spouses Viloria’s surrender of the subject tickets. This Court
takes note of CAI’s willingness to perform its principal obligation and this is to apply the price of the
ticket in Fernando’s name to the price of the round trip ticket between Manila and Los Angeles. CAI was
likewise willing to accept the ticket in Lourdes’ name as full or partial payment as the case may be for
the purchase of any ticket, albeit under her name and for her exclusive use. In other words, CAI’s
willingness to comply with its undertaking under its March 24, 1998 cannot be doubted, albeit tainted
with its erroneous insistence that Lourdes’ ticket is non-transferable.
Moreover, Spouses Viloria’s demand for rescission cannot prosper as CAI cannot be solely faulted for
the fact that their agreement failed to consummate and no new ticket was issued to Fernando. Spouses
Viloria have no right to insist that a single round trip ticket between Manila and Los Angeles should be
priced at around $856.00 and refuse to pay the difference between the price of the subject tickets and
the amount fixed by CAI. The petitioners failed to allege, much less prove, that CAI had obliged itself to
issue to them tickets for any flight anywhere in the world upon their surrender of the subject tickets. In
its March 24, 1998 letter, it was clearly stated that "[n]on-refundable tickets may be used as a form of
payment toward the purchase of another Continental ticket"42 and there is nothing in it suggesting that
CAI had obliged itself to protect Spouses Viloria from any fluctuation in the prices of tickets or that the
surrender of the subject tickets will be considered as full payment for any ticket that the petitioners
intend to buy regardless of actual price and destination. The CA was correct in holding that it is CAI’s
right and exclusive prerogative to fix the prices for its services and it may not be compelled to observe
and maintain the prices of other airline companies.43
The conflict as to the endorsability of the subject tickets is an altogether different matter, which does not
preclude CAI from fixing the price of a round trip ticket between Manila and Los Angeles in an amount it
deems proper and which does not provide Spouses Viloria an excuse not to pay such price, albeit
subject to a reduction coming from the value of the subject tickets. It cannot be denied that Spouses
Viloria had the concomitant obligation to pay whatever is not covered by the value of the subject tickets
whether or not the subject tickets are transferable or not.1avvphi1
There is also no showing that Spouses Viloria were discriminated against in bad faith by being charged
with a higher rate. The only evidence the petitioners presented to prove that the price of a round trip
ticket between Manila and Los Angeles at that time was only $856.00 is a newspaper advertisement for
another airline company, which is inadmissible for being "hearsay evidence, twice removed."
Newspaper clippings are hearsay if they were offered for the purpose of proving the truth of the matter
alleged. As ruled in Feria v. Court of Appeals,:44
[N]ewspaper articles amount to "hearsay evidence, twice removed" and are therefore not only
inadmissible but without any probative value at all whether objected to or not, unless offered for a
purpose other than proving the truth of the matter asserted. In this case, the news article is admissible
only as evidence that such publication does exist with the tenor of the news therein stated.45 (citations
omitted)
The records of this case demonstrate that both parties were equally in default; hence, none of them can
seek judicial redress for the cancellation or resolution of the subject contracts and they are therefore
bound to their respective obligations thereunder. As the 1st sentence of Article 1192 provides:
Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first
infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties
first violated the contract, the same shall be deemed extinguished, and each shall bear his own
damages. (emphasis supplied)
Therefore, CAI’s liability for damages for its refusal to accept Lourdes’ ticket for the purchase of
Fernando’s round trip ticket is offset by Spouses Viloria’s liability for their refusal to pay the amount,
which is not covered by the subject tickets. Moreover, the contract between them remains, hence, CAI
is duty bound to issue new tickets for a destination chosen by Spouses Viloria upon their surrender of
the subject tickets and Spouses Viloria are obliged to pay whatever amount is not covered by the value
of the subject tickets.

This Court made a similar ruling in Central Bank of the Philippines v. Court of Appeals.46 Thus:

Since both parties were in default in the performance of their respective reciprocal obligations, that is,
Island Savings Bank failed to comply with its obligation to furnish the entire loan and Sulpicio M.
Tolentino failed to comply with his obligation to pay his ₱17,000.00 debt within 3 years as stipulated,
they are both liable for damages.

Article 1192 of the Civil Code provides that in case both parties have committed a breach of their
reciprocal obligations, the liability of the first infractor shall be equitably tempered by the courts. WE rule
that the liability of Island Savings Bank for damages in not furnishing the entire loan is offset by the
liability of Sulpicio M. Tolentino for damages, in the form of penalties and surcharges, for not paying his
overdue ₱17,000.00 debt. x x x.47

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

WHEREFORE, premises considered, the instant Petition is DENIED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-25142 March 25, 1975
PHILIPPINE RABBIT BUS LINES, INC. and FELIX PANGALANGAN, plaintiffs-appellants,
vs.
PHIL-AMERICAN FORWARDERS, INC., ARCHIMEDES J. BALINGIT and FERNANDO
PINEDA, defendants-appellees.
Angel A. Sison for plaintiffs-appellants.
Fidel Zosimo U. Canilao for defendants-appellees.
AQUINO, J.:ñé+.£ªwph!1
Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law from the
order of the Court of First Instance of Tarlac, dismissing their complaint against Archimedes J. Balingit.
The dismissal was based on the ground that Balingit as the manager of Phil-American Forwarders, Inc.,
which together with Fernando Pineda and Balingit, was sued for damages in an action based on quasi-
delict or culpa aquiliana, is not the manager of an establishment contemplated in article 2180 of the Civil
Code (Civil Case No. 3865).
In the complaint for damages filed by the bus company and Pangalangan against Phil-American
Forwarders, Inc., Balingit and Pineda, it was alleged that on November 24, 1962, Pineda drove
recklessly a freight truck, owned by Phil-American Forwarders, Inc., along the national highway at Sto.
Tomas, Pampanga. The truck bumped the bus driven by Pangalangan, which was owned by Philippine
Rabbit Bus Lines, Inc. As a result of the bumping, Pangalangan suffered injuries and the bus was
damaged and could not be used for seventy-nine days, thus depriving the company of earnings
amounting to P8,665.51. Balingit was the manager of Phil-American Forwarders, Inc.
Among the defenses interposed by the defendants in their answer was that Balingit was not Pineda's
employer.
Balingit moved that the complaint against him be dismissed on the ground that the bus company and
the bus driver had no cause of action against him. As already stated, the lower court dismissed the
action as to Balingit. The bus company and its driver appealed.
The Civil Code provides:têñ.£îhqwâ£
ART. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.
ART. 2180. The obligation imposed by article 2176 is demandable not only for one's
own acts or omissions, but also for those of persons for whom one is responsible.
xxx xxx xxx
The owners and managers of an establishment or enterprise are likewise responsible
for damages caused by their employees in the service of the branches in which the
latter are employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are
not engaged in any business or industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage. (1903a)
The novel and unprecedented legal issue in this appeal is whether the terms "employers" and "owners
and managers of an establishment or enterprise" (dueños o directores de un establicimiento o
empresa) used in article 2180 of the Civil Code, formerly article 1903 of the old Code, embrace the
manager of a corporation owning a truck, the reckless operation of which allegedly resulted in the
vehicular accident from which the damage arose.
We are of the opinion that those terms do not include the manager of a corporation. It may be gathered
from the context of article 2180 that the term "manager" ("director" in the Spanish version) is used in the
sense of "employer".
Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be fastened on
Balingit as manager of Phil-American Forwarders, Inc., in connection with the vehicular accident already
mentioned because he himself may be regarded as an employee or dependiente of his employer, Phil-
American Forwarders, Inc.
Thus, it was held "que es dependiente, a los efectos de la responsabilidad subsidiaria establecida en el
num 3.0 del (art.) 1903, el director de un periodico explotado por una sociedad, porque cualquiera que
sea su jerarquia y aunque Ileve la direccion de determinadas convicciones politicas no por eso deja de
estar subordinado a la superior autoridad de la Empresa" (Decision of Spanish Supreme Court dated
December 6, 1912 cited in 12 Manresa, Codigo Civil Español 5th Ed. 662; 1913 Enciclopedia Juridica
Española 992).
The bus company and its driver, in their appellants' brief, injected a new factual issue which was not
alleged in their complaint. They argue that Phil- American Forwarders, Inc. is merely a business conduit
of Balingit because out of its capital stock with a par value of P41,200, Balingit and his wife had
subscribed P40,000 and they paid P10,000 on their subscription, while the other incorporators, namely,
Rodolfo Limjuco, Ponciano Caparas and Rafael Suntay paid P250.25 and P25, respectively.

That argument implies that the veil of corporate fiction should be pierced and that Phil-American
Forwarders, Inc. and Balingit and his wife should be treated as one and the same civil personality.

We cannot countenance that argument in this appeal. It was not raised in the lower court. The case has
to be decided on the basis of the pleadings filed in the trial court where it was assumed that Phil-
American Forwarders, Inc. has a personality separate and distinct from that of the Balingit spouses.

The legal issue, which the plaintiffs-appellants can ventilate in this appeal, is one which was raised in
the lower court and which is within the issues framed by the parties (Sec. 18, Rule 46, Rules of Court).

When a party deliberately adopts a certain theory and the case is decided upon that theory in the court
below, he will not be permitted to change his theory on appeal because, to permit him to do so, could be
unfair to the adverse party (2 Moran's Comments on the Rules of Court, 1970 Ed. p. 505).

WHEREFORE, the lower court's order of dismissal is affirmed. Costs against the plaintiffs-appellants.

SO ORDERED.

Fernando (Chairman), Barredo, Antonio and Fernandez, JJ., concur.1äwphï1.ñët

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 1719 January 23, 1907
M. H., RAKES, plaintiff-appellee,
vs.
THE ATLANTIC, GULF AND PACIFIC COMPANY, defendant-appellant.
A. D. Gibbs for appellant.
F. G. Waite, & Thimas Kepner for appellee.
TRACEY, J.:
This is an action for damages. The plaintiff, one of a gang of eight negro laborers in the employment of
the defendant, was at work transporting iron rails from a barge in the harbor to the company's yard near
the malecon in Manila. Plaintiff claims that but one hand car was used in this work. The defendant has
proved that there were two immediately following one another, upon which were piled lengthwise seven
rails, each weighing 560 pounds, so that the ends of the rails lay upon two crosspieces or sills secured
to the cars, but without side pieces or guards to prevent them from slipping off. According to the
testimony of the plaintiff, the men were either in the rear of the car or at its sides. According to that
defendant, some of them were also in front, hauling by a rope. At a certain spot at or near the water's
edge the track sagged, the tie broke, the car either canted or upset, the rails slid off and caught the
plaintiff, breaking his leg, which was afterwards amputated at about the knee.
This first point for the plaintiff to establish was that the accident happened through the negligence of the
defendant. The detailed description by the defendant's witnesses of the construction and quality of the
track proves that if was up to the general stranded of tramways of that character, the foundation
consisting on land of blocks or crosspieces of wood, by 8 inches thick and from 8 to 10 feet long laid, on
the surface of the ground, upon which at a right angle rested stringers of the same thickness, but from
24 to 30 feet in length. On the across the stringers the parallel with the blocks were the ties to which the
tracks were fastened. After the road reached the water's edge, the blocks or crosspieces were replaced
with pilling, capped by timbers extending from one side to the other. The tracks were each about 2 feet
wide and the two inside rails of the parallel tracks about 18 inches apart. It was admitted that there were
no side pieces or guards on the car; that where no ends of the rails of the track met each other and also
where the stringers joined, there were no fish plates. the defendant has not effectually overcome the
plaintiff's proof that the joints between the rails were immediately above the joints between the
underlying stringers.
The cause of the sagging of the tracks and the breaking of the tie, which was the immediate occasion of
the accident, is not clear in the evidence, but is found by the trial court and is admitted in the briefs and
in the argument to have been the dislodging of the crosspiece or piling under the stringer by the water
of the bay raised by a recent typhoon. The superintendent of the company attributed it to the giving way
of the block laid in the sand. No effort was made to repair the injury at the time of the occurrence.
According to plaintiffs witnesses, a depression of the track, varying from one half inch to one inch and a
half, was therafter apparent to the eye, and a fellow workman of the plaintiff swears that the day before
the accident he called the attention of McKenna, the foreman, to it and asked by simply straightening
out the crosspiece, resetting the block under the stringer and renewing the tie, but otherwise leaving the
very same timbers as before. It has not proven that the company inspected the track after the typhoon
or had any proper system of inspection.
In order to charge the defendant with negligence, it was necessary to show a breach of duty on its part
in failing either to properly secure the load on iron to vehicles transporting it, or to skillfully build the
tramway or to maintain it in proper condition, or to vigilantly inspect and repair the roadway as soon as
the depression in it became visible. It is upon the failure of the defendant to repair the weakened track,
after notice of its condition, that the judge below based his judgment.
This case presents many important matters for our decision, and first among them is the standard of
duty which we shall establish in our jurisprudence on the part of employees toward employees.
The lack or the harshness of legal rules on this subject has led many countries to enact designed to put
these relations on a fair basis in the form of compensation or liability laws or the institution of insurance.
In the absence of special legislation we find no difficulty in so applying the general principles of our law
as to work out a just result.
Article 1092 of the Civil Code provides:
Civil obligations, arising from crimes or misdemeanors, shall be governed by the provisions of
the Penal Code.
And article 568 of the latter code provides:
He who shall execute through reckless negligence an act that if done with malice would
constitute a grave crime, shall be punished.
And article 590 provides that the following shall be punished:
4. Those who by simple imprudence or negligence, without committing any infraction of
regulations, shall cause an injury which, had malice intervened, would have constituted a crime
or misdemeanor.
And finally by articles 19 and 20, the liability of owners and employers for the faults of their servants and
representatives is declared to be civil and subsidiary in its character.
It is contented by the defendant, as its first defense to the action, that the necessary conclusion from
these collated laws is that the remedy for injuries through negligence lies only in a criminal action in
which the official criminally responsible must be made primarily liable and his employer held only
subsidiarily to him. According to this theory the plaintiff should have procured the arrest of the
representative of the company accountable for not repairing the tract, and on his prosecution a suitable
fine should have been imposed, payable primarily by him and secondarily by his employer.
This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093 of the Civil
Code makes obligations arising from faults or negligence not punished by the law, subject to the
provisions of Chapter 11 of Title XVI. Section 1902 of that chapter reads:
A person who by an act or omission causes damage to another when there is fault or
negligence shall be obliged to repair the damage so done.
SEC. 1903. The obligation imposed by the preceding article is demandable, not only for
personal acts and omissions, but also for those of the persons for whom they should be
responsible.
The father, and on his death or incapacity, the mother, is liable for the damages caused by the
minors who live with them.
xxx xxx xxx
Owners or directors of an establishment or enterprise are equally liable for the damages
caused by their employees in the service of the branches in which the latter may be employed
or in the performance of their duties.
xxx xxx xxx
The liability referred to in this article shall cease when the persons mentioned therein prove
that they employed all the diligence of a good father of a family to avoid the damages.
As an answer to the argument urged in this particular action it may be sufficient to point out that
nowhere in our general statutes is the employer penalized for failure to provide or maintain safe
appliances for his workmen. His obligation therefore is one "not punished by the law " and falls under
civil rather than criminal jurisprudence. But the answer may be a broader one. We should be reluctant,
under any conditions, to adopt a forced construction of these scientific codes, such as is proposed by
the defendant, that would rob some of these articles of effect, would shut out litigants their will from the
civil courts, would make the assertion of their rights dependent upon the selection for prosecution of the
proper criminal offender, and render recovery doubtful by reason of the strict rules of proof prevailing in
criminal actions. Even if these articles had always stood alone, such a construction would be
unnecessary, but clear light is thrown upon their meaning by the provisions of the Law of Criminal
Procedure of Spain (Ley de Enjuiciamiento Criminal), which, though n ever in actual force in these
Islands, was formerly given a suppletory or explanatory effect. Under article 111 of this law, both classes
of action, civil and criminal, might be prosecuted jointly or separately, but while the penal action was
pending the civil was suspended. According to article 112, the penal action once started, the civil
remedy should be sought therewith, unless it had been waived by the party injured or been expressly
reserved by him for civil proceedings for the future. If the civil action alone was prosecuted, arising out
of a crime that could be enforced by only on private complaint, the penal action thereunder should be
extinguished. These provisions are in harmony with those of articles 23 and 133 of our Penal Code on
the same subject.
An examination of this topic might be carried much further, but the citations of these articles suffices to
show that the civil liability was not intended to be merged in the criminal nor even to be suspended
thereby, except as expressly provided by law. Where an individual is civilly liable for a negligent act or
omission, it is not required that the inured party should seek out a third person criminally liable whose
prosecution must be a condition precedent to the enforcement of the civil right.
Under article 20 of the Penal Code the responsibility of an employer may be regarded as subsidiary in
respect of criminal actions against his employees only while they are process of prosecution, or in so far
as they determinate the existence of the criminal act from which liability arises, and his obligation under
the civil law and its enforcement in the civil courts is not barred thereby unless by election of the injured
person. Inasmuch as no criminal in question, the provisions of the Penal Code can not affect this action.
This construction renders it unnecessary to finally determine here whether this subsidiary civil liability in
penal actions survived the laws that fully regulated it or has been abrogated by the American civil and
criminal procedure now in force in the Philippines.
The difficulty in construing the articles of the code above cited in this case appears from the briefs
before us to have arisen from the interpretation of the words of article 1093, "fault or negligence not
punished by law," as applied to the comprehensive definition of offenses in articles 568 and 590 of the
Penal Code. It has been shown that the liability of an employer arising out of his relation to his
employee who is the offender is not to be regarded as derived from negligence punished by the law,
within the meaning of articles 1092 and 1093. More than this, however, it can not be said to fall within
the class of acts unpunished by the law, the consequences of which are regulated by articles 1902 and
1903 of the Civil Code. The acts to which these articles are applicable are understood to be those and
growing out of preexisting duties of the parties to one another. But were relations already formed give
rise to duties, whether springing from contract or quasi contract, then breaches of those duties are
subject to articles 1101, 1103, and 1104, of the same code. A typical application of the distinction may
be found in the consequences of a railway accident due to defective machinery supplied by the
employer. His liability to his employee would arise out of the contract of employment, that to the
passengers out of the contract for passage. while that to that injured bystander would originate in the
negligent act itself. This distinction is thus clearly set forth by Manresa in his commentary on article
1093.
We are with reference to such obligations, that culpa, or negligence, may be understood in two
difference senses; either as culpa, substantive and independent, which on account of its origin
arises in an obligation between two persons not formerly bound by any other obligation; or as
an incident in the performance of an obligation; or as already existed, which can not be
presumed to exist without the other, and which increases the liability arising from the already
exiting obligation.
Of these two species of culpa the first one mentioned, existing by itself, may be also
considered as a real source of an independent obligation, and, as chapter 2, title 16 of this
book of the code is devoted to it, it is logical to presume that the reference contained in article
1093 is limited thereto and that it does not extend to those provisions relating to the other
species of culpa (negligence), the nature of which we will discuss later. (Vol. 8, p. 29.)
And in his commentary on articles 1102 and 1104 he says that these two species of negligence may be
somewhat inexactly described as contractual and extra-contractual, the letter being the culpa
aquiliana of the Roman law and not entailing so strict an obligation as the former. This terminology is
unreservedly accepted by Sanchez-Roman (Derecho Civil, fourth section, Chapter XI, Article II, No. 12),
and the principle stated is supported be decisions of the supreme court of Spain, among them those of
November 20, 1896 (80 Jurisprudencia Civil, No. 151), and June 27, 1894 (75 Jurisprudencia Civil, No.
182). The contract is one for hire and not one of mandate. (March 10, 1897, 81 Jurisprudencia Civil, No.
107.)
Spanish Jurisprudencia prior to the adoption of the Working Men's Accident Law of January 30, 1900,
throws uncertain light on the relation between master and workman. Moved by the quick industrial
development of their people, the courts of France early applied to the subject the principles common to
the law of both countries, which are lucidly discussed by the leading French commentators.
The original French theory, resting the responsibility of owners of industrial enterprises upon articles
1382, 1383, and 1384 of the Code Napoleon, corresponding in scope to articles 1902 and 1903 of the
Spanish Code, soon yielded to the principle that the true basis is the contractual obligation of the
employer and employee. (See 18 Dalloz, 196, Title Travail, 331.)
Later the hardships resulting from special exemptions inserted in contracts for employment led to the
discovery of a third basis for liability in an article of he French Code making the possessor of any object
answerable for damage done by it while in his charge. Our law having no counterpart of this article,
applicable to every kind of object, we need consider neither the theory growing out of it nor that of
"professional risk" more recently imposed by express legislation, but rather adopting the interpretation
of our Civil Code above given, find a rule for this case in the contractual obligation. This contractual
obligation, implied from the relation and perhaps so inherent in its nature to be invariable by the parties,
binds the employer to provide safe appliances for the use of the employee, thus closely corresponding
to English and American Law. On these principles it was the duty of the defendant to build and to
maintain its track in reasonably sound condition, so as to protect its workingmen from unnecessary
danger. It is plain that in one respect or the other it failed in its duty, otherwise the accident could not
have occurred; consequently the negligence of the defendant is established.
Another contention of the defense is that the injury resulted to the plaintiff as a risk incident to his
employment and, as such, one assumed by him. It is evident that this can not be the case if the
occurrence was due to the failure to repair the track or to duly inspect, it for the employee is not
presumed to have stipulated that the employer might neglect his legal duty. Nor may it be excused upon
the ground that the negligence leading to the accident was that of a fellow-servant of the injured man. It
is not apparent to us that the intervention of a third person can relieve the defendant from the
performance of its duty nor impose upon the plaintiff the consequences of an act or omission not his
own. Sua cuique culpa nocet. This doctrine, known as "the fellow-servant, rule," we are not disposed to
introduce into our jurisprudence. Adopted in England by Lord Abinger in the case of Prescott vs. Fowler
(3 Meeson & Welsby, 1) in 1837, it has since been effectually abrogated by "the Employers' Liability
Acts" and the "Compensation Law." The American States which applied it appear to be gradually getting
rid of it; for instance, the New York State legislature of 1906 did away with it in respect to railroad
companies, and had in hand a scheme for its total abolition. It has never found place in the civil law of
continental Europe. (Dalloz, vol. 39, 1858, Title Responsibilite, 630, and vol. 15, 1895, same title, 804.
Also more recent instances in Fuzier-Herman, Title Responsibilite Civile, 710.)
The French Cour de Cassation clearly laid down the contrary principle in its judgment of June 28, 1841,
in the case of Reygasse, and has since adhered to it.
The most controverted question in the case is that of the negligence of the plaintiff, contributing to the
accident, to what extent it existed in fact and what legal effect is to be given it. In two particulars is he
charged with carelessness:
First. That having noticed the depression in the track he continued his work; and
Second. That he walked on the ends of the ties at the side of the car instead of along the boards, either
before or behind it.
As to the first point, the depression in the track night indicate either a serious or a rival difficulty. There is
nothing in the evidence to show that the plaintiff did or could see the displaced timber underneath the
sleeper. The claim that he must have done so is a conclusion drawn from what is assumed to have
been a probable condition of things not before us, rather than a fair inference from the testimony. While
the method of construction may have been known to the men who had helped build the road, it was
otherwise with the plaintiff who had worked at this job less than two days. A man may easily walk along
a railway without perceiving a displacement of the underlying timbers. The foreman testified that he
knew the state of the track on the day of the accident and that it was then in good condition, and one
Danridge, a witness for the defendant, working on the same job, swore that he never noticed the
depression in the track and never saw any bad place in it. The sagging of the track this plaintiff did
perceive, but that was reported in his hearing to the foreman who neither promised nor refused to repair
it. His lack of caution in continuing at his work after noticing the slight depression of the rail was not of
so gross a nature as to constitute negligence, barring his recovery under the severe American rule. On
this point we accept the conclusion of the trial judge who found as facts that "the plaintiff did not know
the cause of the one rail being lower than then other" and "it does not appear in this case that the
plaintiff knew before the accident occurred that the stringers and rails joined in the same place."
Were we not disposed to agree with these findings they would, nevertheless, be binding upon us,
because not "plainly and manifestly against the weight of evidence," as those words of section 497,
paragraph 3 of the Code of Civil Procedure were interpreted by the Supreme Court of the United States
in the De la Rama case (201 U. S., 303).
In respect of the second charge of negligence against the plaintiff, the judgment below is not so specific.
While the judge remarks that the evidence does not justify the finding that the car was pulled by means
of a rope attached to the front end or to the rails upon it, and further that the circumstances in evidence
make it clear that the persons necessary to operate the car could not walk upon the plank between the
rails and that, therefore, it was necessary for the employees moving it to get hold upon it as best they
could, there is no specific finding upon the instruction given by the defendant to its employees to walk
only upon the planks, nor upon the necessity of the plaintiff putting himself upon the ties at the side in
order to get hold upon the car. Therefore the findings of the judge below leave the conduct of the
plaintiff in walking along the side of the loaded car, upon the open ties, over the depressed track, free to
our inquiry.
While the plaintiff and his witnesses swear that not only were they not forbidden to proceed in this way,
but were expressly directed by the foreman to do so, both the officers of the company and three of the
workmen testify that there was a general prohibition frequently made known to all the gang against
walking by the side of the car, and the foreman swears that he repeated the prohibition before the
starting of this particular load. On this contradiction of proof we think that the preponderance is in favor
of the defendant's contention to the extent of the general order being made known to the workmen. If
so, the disobedience of the plaintiff in placing himself in danger contributed in some degree to the injury
as a proximate, although not as its primary cause. This conclusion presents sharply the question, What
effect is to be given such an act of contributory negligence? Does it defeat a recovery, according to the
American rule, or is it to be taken only in reduction of damages?
While a few of the American States have adopted to a greater or less extent the doctrine of comparative
negligence, allowing a recovery by a plaintiff whose own act contributed to his injury, provided his
negligence was slight as compared with that of the defendant, and some others have accepted the
theory of proportional damages, reducing the award to a plaintiff in proportion to his responsibility for the
accident, yet the overwhelming weight of adjudication establishes the principle in American
jurisprudence that any negligence, however slight, on the part of the person injured which is one of the
causes proximately contributing to his injury, bars his recovery. (English and American Encyclopedia of
law, Titles "Comparative Negligence" and Contributory Negligence.")
In Grant Trunk Railway Company vs. Ives (144 U. S., 408, at page 429) the Supreme Court of the
United States thus authoritatively states the present rule of law:
Although the defendant's' negligence may have been the primary cause of the injury
complained of, yet an action for such injury can not be maintained if the proximate and
immediate cause of the injury can be traced to the want of ordinary care and caution in the
person injured; subject to this qualification, which has grown up in recent years (having been
first enunciated in Davies vs. Mann, 10 M. & W., 546) that the contributory negligence of the
party injured will not defeat the action if it be shown that the defendant might, by the exercise
of reasonable care and prudence, have avoided the consequences of the injured party's
negligence.
There are may cases in the supreme court of Spain in which the defendant was exonerated, but when
analyzed they prove to have been decided either upon the point that he was not negligent or that the
negligence of the plaintiff was the immediate cause of the casualty or that the accident was due
to casus fortuitus. Of the first class in the decision of January 26, 1887 (38 Jurisprudencia Criminal, No.
70), in which a railway employee, standing on a car, was thrown therefrom and killed by the shock
following the backing up of the engine. It was held that the management of the train and engine being in
conformity with proper rules of the company, showed no fault on its part.
Of the second class are the decision of the 15th of January, the 19th of February, and the 7th of March,
1902, stated in Alcubilla's Index of that year; and of the third class the decision of the 4th of June, 1888
(64 Jurisprudencia Civil, No. 1), in which the breaking down of plaintiff's dam by the logs of the
defendant impelled against it by the Tajo River, was held due to a freshet as a fortuitous cause.
The decision of the 7th of March, 1902, on which stress has been laid, rested on two bases, one, that
the defendant was not negligent, because expressly relieved by royal order from the common obligation
imposed by the police law of maintaining a guard at the road crossing; the other, because the act of the
deceased in driving over level ground with unobstructed view in front of a train running at speed, with
the engine whistle blowing was the determining cause of the accident. It is plain that the train was doing
nothing but what it had a right to do and that the only fault lay with the injured man. His negligence was
not contributory, it was sole, and was of such an efficient nature that without it no catastrophe could
have happened.
On the other hand, there are many cases reported in which it seems plain that the plaintiff sustaining
damages was not free from contributory negligence; for instance, the decision of the 14th of December,
1894 (76 Jurisprudencia Civil, No. 134), in which the owner of a building was held liable for not
furnishing protection to workmen engaged in hanging out flags, when the latter must have perceived
beforehand the danger attending the work.
None of those cases define the effect to be given the negligence of a plaintiff which contributed to his
injury as one of its causes, though not the principal one, and we are left to seek the theory of the civil
law in the practice of other countries.
In France in the case of Marquant, August 20, 1879, the cour de cassation held that the carelessness of
the victim did not civilly relieve the person without whose fault the accident could not have happened,
but that the contributory negligence of the injured man had the effect only of reducing the damages. The
same principle was applied in the case of Recullet, November 10, 1888. and that of Laugier of the 11th
of November, 1896. (Fuzier-Herman, Title Responsibilite Cirile, 411, 412.) Of like tenor are citations in
Dalloz (vol. 18, 1806, Title Trail, 363, 364, and vol. 15, 1895, Title Responsibilite, 193, 198).
In the Canadian Province of Quebee, which has retained for the most part the French Civil Law, now
embodied in a code following the Code Napoleon, a practice in accord with that of France is laid down
in many cases collected in the annotations to article 1053 of the code edited by Beauchamps, 1904.
One of these is Luttrell vs. Trottier, reported in La Revue de Jurisprudence, volume 6, page 90, in which
the court of Kings bench, otherwise known as the court of appeals, the highest authority in the Dominion
of Canada on points of French law, held that contributory negligence did not exonerate the defendants
whose fault had been the immediate cause of the accident, but entitled him to a reduction of damages.
Other similar cases in the provincial courts have been overruled by appellate tribunals made up of
common law judges drawn from other provinces, who have preferred to impose uniformally throughout
the Dominion the English theory of contributory negligence. Such decisions throw no light upon the
doctrines of the civil law. Elsewhere we find this practice embodied in legislation; for instance, section 2
of article 2398 of the Code of Portugal reads as follows:
If in the case of damage there was fault or negligence on the part of the person injured or in
the part of some one else, the indemnification shall be reduced in the first case, and in the
second case it shall be appropriated in proportion to such fault or negligence as provided in
paragraphs 1 and 2 of section 2372.
And in article 1304 of the Austrian Code provides that the victim who is partly changeable with the
accident shall stand his damages in proportion to his fault, but when that proportion is incapable of
ascertainment, he shall share the liability equally with the person principally responsible. The principle
of proportional damages appears to be also adopted in article 51 of the Swiss Code. Even in the United
States in admirality jurisdictions, whose principles are derived from the civil law, common fault in cases
of collision have been disposed of not on the ground of contradictor negligence, but on that of equal
loss, the fault of the one part being offset against that of the other. (Ralli vs. Troop, 157 U. S. 386; 97.)
The damage of both being added together and the sum equally divided, a decree is entered in favor of
the vessel sustaining the greater loss against the other for the excess of her damages over one-half of
the aggregate sum. (The Manitoba, 122 U. S., 97)
Exceptional practice appears to prevail in maritime law in other jurisdictions. The Spanish Code of
Commerce, article 827, makes each vessel for its own damage when both are the fault; this provision
restricted to a single class of the maritime accidents, falls for short of a recognition of the principle of
contributory negligence as understood in American Law, with which, indeed, it has little in common. This
is a plain from other articles of the same code; for instance, article 829, referring to articles 826, 827,
and 828, which provides: "In the cases above mentioned the civil action of the owner against the person
liable for the damage is reserved, as well as the criminal liability which may appear."
The rule of the common law, a hard and fast one, not adjustable with respects of the faults of the
parties, appears to have grown out the original method of trial by jury, which rendered difficult a nice
balancing of responsibilities and which demanded an inflexible standard as a safeguard against too
ready symphaty for the injured. It was assumed that an exact measure of several concurring faults was
unattainable.
 The reason why, in cases of mutual concurring negligence, neither party can maintain an
action against the other, is, not the wrong of the one is set off against the wrong of the other; it
that the law can not measure how much of the damage suffered is attributable to the plaintiff's
own fault. If he were allowed to recover, it might be that he would obtain from the other party
compensation for hiss own misconduct. (Heil vs. Glanding, 42 Penn. St. Rep., 493, 499.)

The parties being mutually in fault, there can be no appointment of damages. The law has no
scales to determine in such cases whose wrongdoing weighed most in the compound that
occasioned the mischief. (Railroad vs. Norton, 24 Penn. St. 565, 469.)

Experience with jury trials in negligence cases has brought American courts to review to relax the vigor
of the rule by freely exercising the power of setting aside verdicts deemed excessive, through the
device of granting new trials, unless reduced damages are stipulated for, amounting to a partial revision
of damages by the courts. It appears to us that the control by the court of the subject matter may be
secured on a moral logical basis and its judgment adjusted with greater nicety to the merits of the
litigants through the practice of offsetting their respective responsibilities. In the civil law system the
desirable end is not deemed beyond the capacity of its tribunals.

Whatever may prove to be the doctrine finally adopted in Spain or in other countries under the stress
and counter stress of novel schemers of legislation, we find the theory of damages laid down in the
judgment the most consistent with the history and the principals of our law in these Islands and with its
logical development.

Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered
immediate causes of the accident. The test is simple. Distinction must be between the accident and the
injury, between the event itself, without which there could have been no accident, and those acts of the
victim not entering into it, independent of it, but contributing under review was the displacement of the
crosspiece or the failure to replace it. this produced the event giving occasion for damages — that is,
the shinking of the track and the sliding of the iron rails. To this event, the act of the plaintiff in walking
by the side of the car did not contribute, although it was an element of the damage which came to
himself. Had the crosspiece been out of place wholly or partly thorough his act of omission of duty, the
last would have been one of the determining causes of the event or accident, for which he would have
been responsible. Where he contributes to the principal occurrence, as one of its determining factors,
he can not recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he
may recover the amount that the defendant responsible for the event should pay for such injury, less a
sum deemed a suitable equivalent for his own imprudence.

Accepting, though with some hesitation, the judgment of the trial court, fixing the damage incurred by
the plaintiff at 5,000 pesos, the equivalent of 2,500 dollars, United States money, we deduct therefrom
2,500 pesos, the amount fairly attributable to his negligence, and direct judgment to be entered in favor
of the plaintiff for the resulting sum of 2,500 pesos, with cost of both instances, and ten days hereafter
let the case be remanded to the court below for proper action. So ordered.

Arellano, C.J. Torres and Mapa, JJ., concur.