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Acting on a motion for reconsideration filed by the dela Rosas, the Court of Appeals took into accountthe fact "that the deceased Roberto R. Luna had been engaged in car racing as a sport, havingparticipated in tournaments both here and abroad;" it said that Luna's habit and manner of life should be"one of the factors affecting the value of mortality table in actions for damages;" and, consequently,concluded that Luna could not have lived beyond 43 years. The result was that the 30-year lifeexpectancy of Luna was reduced to 10 years only.

Further on the motion for reconsideration, the Court of Appeals ruled in respect of Luna's annualpersonal expenses:

... . Considering the escalating price of automobile gas which is a key expenditure in Roberto R. Luna'ssocial standing, We should increase that amount to P30,000.00 as the would be personal expenses of thedeceased per annum. (Rollo, p. 33.)

The Court of Appeals then determined the amount of the award thus: P75,000.00 annual gross incomeless P30,000.00 annual personal expenses leaves P45,000.00 multiplied by 10 years of life expectancy andthe product is P450,000.00.

The petitioners contend that the Court of Appeals erred when by its resolution of June 19, 1981, itreduced Luna's life expectancy from 30 to 10 Years and increased his annual personal expenses fromP20,000.00 to P30,000.00. We sustain the petitioners.

The Court of Appeals, in reducing Luna's life expectancy from 30 to 10 years said that his habit andmanner of life should be taken into account, i.e. that he had been engaged in car racing as a sport both

here and abroad - a dangerous and risky activity tending to shorten his life expectancy. That Luna hadengaged in car racing is not based on any evidence on record. That Luna was engaged in go-kart racing isthe correct statement but then go-kart racing cannot be categorized as a dangerous sport for go-kartsare extremely low slung, low powered vehicles, only slightly larger than foot-pedalled four wheeledconveyances. It was error on the part of the Court of Appeals to have disturbed the determination of thetrial court which it had previously affirmed.

Similarly, it was error for the Court of Appeals to reduce the net annual income of the deceased byincreasing his annual personal expenses but without at the same time increasing his annual gross income.It stands to reason that if his annual personal expenses should increase because of the "escalating priceof gas which is a key expenditure in Roberto R. Luna's social standing" [a statement which lackscomplete basis], it would not be unreasonable to suppose that his income would also increaseconsidering the manifold sources thereof.

In short, the Court of Appeals erred in modifying its original decision.

2. Attorney's fees — with or without interest at the legal rate.

The trial court awarded attorney's fees to the petitioners in the sum of P50,000.00. This award wasaffirmed by the Court of Appeals in its decision of May 22, 1979. The resolution of June 19, 1981,reaffirmed the award. The two decisions as well as the resolution do not provide for interest at the legalrate to be tacked to the award.

The petitioners now pray that the award of attorney's fees be with interest at the legal rate from thedate of the filing of the complaint. There is merit in this prayer. The attorney's fees were awarded in theconcept of damages in a quasi-delict case and under the circumstances interest as part thereof may beadjudicated at the discretion of the court. (See Art. 2211, Civil Code.) As with the other damages awarded,the interest should accrue only from the date of the trial court's decision.

The private respondents invoke Elcano vs. Hill, L-24803, May 26,1977; 77 SCRA 98, where it was held thatArticle 2180 of the Civil Code applied to Atty. Marvin Hill notwithstanding the emancipation by marriage

of Reginald Hill, his son but s ince Reginald had attained age, as a matter of equity, the liability of A tty. Hillhad become merely subsidiary to that of his son. It is now said that Luis dela Rosa, is now married and oflegal age and that as a matter of equity the liability of his father should be subsidiary only.

We are unwilling to apply equity instead of strict law in this case because to do so will not serve the endsof justice. Luis dela Rosa is abroad and beyond the reach of Philippine courts. Moreover, he does nothave any property either in the Philippines or elsewhere. In fact his earnings are insufficient to support his

family.

WHEREFORE, the resolution of the Court of Appeals dated June 19, 1981, is hereby set aside; its decisiondated May 22, 1979, is reinstated with the sole modification that the award for attorney's fees shall earninterest at the legal rate from July 5, 1973, the date of the trial court's decision. Costs against the privaterespondents.

MARY ANN RODRIGUEZ vs. Hon. THELMA A. PONFERRADA,

465 scra 338

Settled is the rule that the single act of issuing a bouncing check may give rise to two distinct criminaloffenses: estafa and violation of Batas Pambansa Bilang 22 (BP 22). The Rules of Court allow the offendedparty to intervene via a private prosecutor in each of these two penal proceedings. However, the

recovery of the single civil liability arising from the single act of issuing a bouncing check in

* On official leave.either criminal case bars the recovery of the same civil liability in the other criminal action. While the lawallows two simultaneous civil remedies for the offended party, it authorizes recovery in only one. Inshort, while two crimes arise from a single set of facts, only one civil liability attaches to it.

The Case

Before us is a Petition for Certiorari1 under Rule 65 of the Rules of Court, seeking to reverse the July 27,2002 Order2 of the Regional Court (RTC) of Quezon City (Branch 104) in Criminal Case Nos. Q-01-106256 toQ-01-106259. Also assailed is the August 16, 2002 Order3 of the RTC denying petitioner’s Motion forReconsideration. The first assailed Order is quoted in full as follows:

"For consideration is the opposition of the accused, through counsel, to the formal entry of appearanceof private prosecutor.

"Accused, through counsel, contends that the private prosecutor is barred from appearing before thisCourt as his appearance is limited to the civil aspect which must be presented and asserted in B.P. 22cases pending before the Metropolitan Trial Court of Quezon City.

"The private prosecutor submitted comment stating that the offended party did not manifest withinfifteen (15) days following the filing of the information that the civil liability arising from the crime hasbeen or would be separately prosecuted and that she should therefore be required to pay the legal feespursuant to Section 20 of Rule 141 of the Rules of Court, as amended.

"Considering that the prosecution under B.P. 22 is without prejudice to any liability for violation of anyprovision of the Revised Penal Code (BP 22, Sec. 5), the civil action for the recovery of the civil liabilityarising from the estafa cases pending before this Court is deemed instituted with the criminal action

(Rule 111, Sec. 1 [a]). The offended party may thus intervene by counsel in the prosecution of the offense(Rule 110. Sec. 16).

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"WHEREFORE, the appearance of a private prosecutor shall be allowed upon payment of the legal feesfor these estafa cases pending before this Court pursuant to Section 1 of Rule 141 of the Rules of Court, asamended."4

The Facts

The undisputed facts are narrated by petitioner as follows:

"On 10 December 2001, the Honorable Assistant City Prosecutor Rossana S. Morales-Montojo of Quezon

City Prosecutor’s Office issued her Resolution in I.S. No. 01 -15902, the dispositive portion of which readsas follows:

‘Premises considered, there being PROBABLE CAUSE to charge respondent for ESTAFA under Article 315paragraph 2(d) as amended by PD 818 and for Violation of Batas Pambansa Blg. 22, it is respectfullyrecommended that the attached Information be approved and filed in Court.’

"As a consequence thereof, separate informations were separately filed against herein [p]etitionerbefore proper [c]ourts, for Estafa and [v]iolation of Batas Pambansa Blg. 22.

"Upon payment of the assessed and required docket fees by the [p]rivate [c]omplainant, theinformations for [v]iolation of Batas Pambansa Blg. 22 against herein [p]etitioner were filed and r affled tothe Metropolitan Trial Court of Quezon City, Branch 42, docketed as Criminal Cases Nos. 0108033 to 36.

"On the other hand, the informations for [e]stafa cases against herein [p]etitioner were likewise filed andraffled to the Regional Trial Court of Quezon City, Branch 104, docketed as Criminal Cases Nos. 01 -106256to 59.

"On 17 June 2002, petitioner through counsel filed in open court before the [p]ublic [r]espondent an‘Opposition to the Formal Entry of Appearance of the Private Prosecutor’ dated 14 June 2002.

"The [p]ublic [r]espondent court during the said hearing noted the Formal Entry of Appearance of Atty.Felix R. Solomon as [p]rivate [ p]rosecutor as well as the Opposition filed thereto by herein [p]etitioner. xx x.

"As ordered by the Court, [p]rivate [c]omplainant through counsel filed her C omment to the Oppositionof herein [p]etitioner.

"On 27 June 2 002, the [p]ublic [r]espondent court issued the first assailed Order allowing the appearanceof the [p]rivate [p]rosecutor in the above-entitled criminal cases upon payment of the legal fees pursuantto Section 1 of Rule 141 of the Rules of Court, as amended.

"On 31 July 2002, [ a]ccused through counsel filed a Motion for Reconsideration dated 26 July 2002.

"On 16 August 2002, the [p]ublic [r]espondent court issued the second assailed Order denying the Motionfor Reconsideration of herein [p]etitioner."5

Ruling of the Trial Court

Noting petitioner’s opposition to the private prosecutor’s entry of appearance, the RTC held that the civilaction for the recovery of civil liability arising from the offense charged is deemed instituted, unless theoffended party (1) waives the civil action, (2) reserves the right to institute it separately, or (3) institutesthe civil action prior to the criminal action. Considering that the offended party had paid the

corresponding filing fee for the estafa cases prior to the filing of the BP 22 cases with the MetropolitanTrial Court (MeTC), the RTC allowed the private prosecutor to appear and intervene in the proceedings.

Hence, this Petition.6

Issues

Petitioner raises this sole issue for the Court’s consideration:

"Whether or not a [p]rivate [p]rosecutor can be allowed to intervene and participate in the proceedingsof the above-entitled [e]stafa cases for the purpose of prosecuting the attached civil liability arising fromthe issuance of the checks involved which is also subject mater of the pending B.P. 22 cases."7

The Court’s Ruling

The Petition has no merit.

Sole Issue:

Civil Action in BP 22 Case Not a Bar

to Civil Action in Estafa Case

Petitioner theorizes that the civil action necessarily arising from the criminal case pending before theMTC for violation of BP 22 precludes the institution of the corresponding civil action in the criminal casefor estafa now pending before the RTC. She hinges her theory on the following provisions of Rules 110

and 111 of the Rules of Court:

"SECTION 16. Intervention of the offended party in criminal action. -- Where the civil action for recoveryof civil liability is instituted in the criminal action pursuant to Rule 111, the offended party may interveneby counsel in the prosecution of the offense."

"SECTION 1. Institution of criminal and civil actions. -- (a) When a criminal action is instituted, the civilaction for the recovery of civil liability arising from the offense charged shall be deemed instituted withthe criminal action unless the offended party waives the civil action, reserves the right to institute itseparately or institutes the civil action prior to the criminal action.

"The reservation of the right to institute separately the civil action shall be made before the prosecutionstarts presenting its evidence and under circumstances affording the offended party a reasonableopportunity to make such reservation.

"When the offended party seeks to enforce civil liability against the accused by way of moral, nominal,temperate, or exemplary damages without specifying the amount thereof in the complaint orinformation, the filing fees therefor shall constitute a first lien on the judgment awarding such damages.

x x x x x x x x x

"(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include thecorresponding civil action. No reservation to file such civil action separately shall be allowed.

"Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filingfees based on the amount of the check involved, which shall be considered as the actual damagesclaimed. Where the complaint or information also seeks to r ecover liquidated, moral, nominal, temperateor exemplary damages, the offended party shall pay the filing fees based on the amounts alleged therein.If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the

filing fees based on the amount awarded shall constitute a first lien on the judgment.

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"Where the civil action has been filed separately and trial thereof has not yet commenced, it may beconsolidated with the criminal action upon application with the court trying the latter case. If theapplication is granted, the trial of both actions shall proceed in accordance with section 2 of this Rulegoverning consolidation of the civil and criminal actions."

Based on the foregoing rules, an offended party may intervene in the prosecution of a crime, except inthe following instances: (1) when, from the nature of the crime and the law defining and punishing it, nocivil liability arises in favor of a private offended party; and (2) when, from the nature of the offense, theoffended parties are entitled to civil indemnity, but (a) they waive the right to institute a civil action, (b)expressly reserve the right to do so or (c) the suit has already been instituted. In any of these instances,

the private complainant’s interest in the case disappears and criminal prosecution becomes the solefunction of the public prosecutor.8 None of these exceptions apply to the instant case. Hence, theprivate prosecutor cannot be barred from intervening in the estafa suit.

True, each of the overt acts in these instances may give rise to two criminal liabilities -- one for estafa andanother for violation of BP 22. But every such act of issuing a bouncing check involves only one civilliability for the offended party, who has sustained only a single injury.9 This is the import of Banal v.Tadeo,10 which we quote in part as follows:

"Generally, the basis of civil liability arising from crime is the fundamental postulate of our law that ‘Everyman criminally liable is also civilly liable’ (Art. 100, The Revised Penal Code). Underlying this legal principleis the traditional theory that when a person commits a crime he offends two entities namely (1) thesociety in which he lives in or the political entity called the State whose law he had violated; and (2) theindividual member of that society whose person, right, honor, chastity or property was actually or

directly injured or damaged by the same punishable act or omission. However, this rather broad andgeneral provision is among the most complex and controversial topics in criminal procedure. It can bemisleading in its implications especially where the same act or omission may be treated as a crime in oneinstance and as a tort in another or where the law allows a separate civil action to proceed independentlyof the course of the criminal prosecution with which it is intimately intertwined. Many legal scholars treatas a misconception or fallacy the generally accepted notion that the civil liability actually arises from thecrime when, in the ultimate analysis, it does not. While an act or omission is felonious because it ispunishable by law, it gives rise to civil liability not so much because it is a crime but because it causeddamage to another. Viewing things pragmatically, we can readily see that what gives rise to the civilliability is really the obligation and the moral duty of everyone to repair or make whole the damagecaused to another by reason of his own act or omission, done intentionally or negligently, whether or notthe same be punishable by law. In other words, criminal liability will give rise to civil liability only if thesame felonious act or omission results in damage or injury to another and is the direct and proximatecause thereof. Damage or injury to another is evidently the foundation of the civil action. Such is not thecase in criminal actions for, to be criminally liable, it is enough that the act or omission complained of ispunishable, regardless of whether or not it also causes material damage to another. (See Sangco,Philippine Law on Torts and Damages, 1978, Revised Edition, pp. 246-247)."

Thus, the possible single civil liability arising from the act of issuing a bouncing check can be the subjectof both civil actions deemed instituted with the estafa case and the BP 22 violation prosecution. In thecrimes of both estafa and violation of BP 22, Rule 111 of the Rules of Court expressly allows, evenautomatically in the present case, the institution of a civil action without need of election by the offendedparty. As both remedies are simultaneously available to this party, there can be no forum shopping.11

Hence, this Court cannot agree with what petitioner ultimately espouses. At the present stage, nojudgment on the civil liability has been rendered in either criminal case. There is as yet no call for theoffended party to elect remedies and, after choosing one of them, be considered barred from othersavailable to her.

Election of Remedies

Petitioner is actually raising the doctrine of election of remedies. "In its broad s ense, election of remediesrefers to the choice by a party to an action of one of two or more coexisting remedial rights, whereseveral such rights arise out of the same facts, but the term has been generally limited to a choice by aparty between inconsistent remedial rights, the assertion of one being necessarily repugnant to, or arepudiation of, the other."12 In its more restricted and technical sense, the election of remedies is theadoption of one of two or more coexisting ones, with the effect of precluding a resort to the others.13

The Court further elucidates in Mellon Bank v. Magsino14 as follows:

"As a technical rule of procedure, the purpose of the doctrine of election of remedies is not to prevent

recourse to any remedy, but to prevent double redress for a single wrong.15 It is regarded as anapplication of the law of estoppel, upon the theory that a party cannot, in the assertion of his rightoccupy inconsistent positions which form the basis of his respective remedies. However, when a certainstate of facts under the law entitles a party to alternative remedies, both founded upon the identicalstate of facts, these remedies are not considered inconsistent remedies. In such case, the invocation ofone remedy is not an election which will bar the other, unless the suit upon the remedy first invoked shallreach the stage of final adjudication or unless by the invocation of the remedy first sought to beenforced, the plaintiff shall have gained an advantage thereby or caused detriment or change of situationto the other.16 It must be pointed out that ordinarily, election of remedies is not made until the judicialproceedings has gone to judgment on the merits.17

"Consonant with these rulings, this Court, through Justice J.B.L. Reyes, opined that while some Americanauthorities hold that the mere initiation of proceedings constitutes a binding choice of remedies thatprecludes pursuit of alternative courses, the better rule is that no binding election occurs before a

decision on the merits is had or a detriment to the other party supervenes.18 This is because the principleof election of remedies is discordant with the modern procedural concepts embodied in the Code of CivilProcedure which permits a party to seek inconsistent remedies in his claim for relief without beingrequired to elect between them at the pleading stage of the litigation."19

In the present cases before us, the institution of the civil actions with the estafa cases and the inclusion ofanother set of civil actions with the BP 22 cases are not exactly repugnant or inconsistent with eachother. Nothing in the Rules signifies that the necessary inclusion of a civil action in a criminal case forviolation of the Bouncing Checks Law20 precludes the institution in an estafa case of the correspondingcivil action, even if both offenses relate to the issuance of the s ame check.

The purpose of Section 1(b) of Rule 111 is explained by Justice Florenz D. Regalado (ret.), former chairmanof the committee tasked with the revision of the Rules of Criminal Procedure. He clarified that the specialrule on BP 22 cases was added, because the dockets of the courts were clogged with such litigations;creditors were using the courts as collectors. While ordinarily no filing fees were charged for actualdamages in criminal cases, the rule on the necessary inclusion of a civil action with the payment of filingfees based on the face value of the check involved was laid down to prevent the practice of creditors ofusing the threat of a criminal prosecution to collect on their credit free of charge.21

Clearly, it was not the intent of the special rule to preclude the prosecution of the civil action thatcorresponds to the estafa case, should the latter also be filed. The crimes of estafa and violation of BP 22are different and distinct from each other. There is no identity of offenses involved, for which legaljeopardy in one case may be invoked in the other. The offenses charged in the informations are perfectlydistinct from each other in point of law, however nearly they may be connected in point of fact.22

What Section 1(b) of the Rules of Court prohibits is the reservation to file the corresponding civilaction.1âwphi1 The criminal action shall be deemed to include the corresponding civil action. "[U]nless aseparate civil action has been filed before the institution of the criminal action, no such civil action can beinstituted after the criminal action has been filed as the same has been included therein."23 In the instant

case, the criminal action for estafa was admittedly filed prior to the criminal case for violation of BP 22,with the corresponding filing fees for the inclusion of the corresponding civil action paid accordingly.24

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Furthermore, the fact that the Rules do not allow the reservation of civil actions in BP 22 cases cannotdeprive private complainant of the right to protect her interests in the criminal action for estafa. Nothingin the current law or rules on BP 22 vests the jurisdiction of the corresponding civil case exclusively in thecourt trying the BP 22 criminal case.25

In promulgating the Rules, this Court did not intend to leave the offended parties without any remedy toprotect their interests in estafa cases. Its power to promulgate the Rules of Court is limited in the sensethat rules "shall not diminish, increase or modify substantive rights."26 Private complainant’sintervention in the prosecution of estafa is justified not only for the prosecution of her interests, but also

for the speedy and inexpensive administration of justice as mandated by the Constitution.27

The trial court was, therefore, correct in holding that the private prosecutor may intervene before theRTC in the proceedings for estafa, despite the necessary inclusion of the corresponding civil action in theproceedings for violation of BP 22 pending before the MTC. A recovery by the offended party under oneremedy, however, necessarily bars that under the other. Obviously stemming from the fundamental ruleagainst unjust enrichment,28 this is in essence the rationale for the proscription in our law against doublerecovery for the same act or omission.

WHEREFORE, the Petition is DISMISSED and the assailed Order AFFIRMED. Costs against petitioner.

PERFECTO S. FLORESCA vs. PHILEX MINING CORPORATION

This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII, datedDecember 16, 1968 dismissing petitioners’ complaint for damages on the ground of lack of jurisdiction.Petitioners are the heirs of the deceased employees of Philex Mi ning Corporation (hereinafter referred toas Philex), who, while working at its copper mines underground operations at Tuba, Benguet on June 28,1967, died as a result of the cave-in that buried them in the tunnels of the mine. Specifically, the complaintalleges that Philex, in violation of government rules and regulations, negligently and deliberately failed totake the required precautions for the protection of the lives of its men working underground. Portion ofthe complaint reads:xxx xxx xxx9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with gross and recklessnegligence and imprudence and deliberate failure to take the required precautions for the due protectionof the lives of its men working underground at the time, and in utter violation of the laws and the rulesand regulations duly promulgated by the Government pursuant thereto, allowed great amount of waterand mud to accumulate in an open pit area at the mine above Block 43-S-1 which seeped through andsaturated the 600 ft. column of broken ore and r ock below it, thereby exerting tremendous pressure onthe working spaces at its 4300 level, with the result that, on the said date, at about 4 o’clock in theafternoon, with the collapse of all underground supports due to such enormous pressure, approximately500,000 cubic feet of broken ores rocks, mud and water, accompanied by surface boulders, blastedthrough the tunnels and flowed out and filled in, in a matter of approximately five (5) minutes, theunderground workings, ripped timber supports and carried off materials, machines and equipment whichblocked all avenues of exit, thereby trapping within its tunnels of all its men above referred to, includingthose named in the next preceding paragraph, represented by the plaintiffs herein;10. That out of the 48 mine workers who were then working at defendant PHILEX’s mine on the said date,five (5) were able to escape from the terrifying holocaust; 22 were rescued within the next 7 days; andthe rest, 21 in number, including those referred to in paragraph 7 hereinabove, were left mercilessly totheir fate, notwithstanding the fact that up to then, a great many of them were still alive, entombed inthe tunnels of the mine, but were not rescued due to defendant PHILEX’s decision to abandon rescueoperations, in utter disregard of its bounden legal and moral duties in the premises;

xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and regulations duly promulgated bythe duly constituted authorities as set out by the Special Committee above referred to, in their Report ofinvestigation, pages 7-13, Annex ‘B’ hereof, but also failed completely to provide its men workingunderground the necessary security for the protection of their lives notwithstanding the fact that it hadvast financial resources, it having made, during the year 1966 alone, a total operating income of P38,220,254.00, or net earnings, after taxes of P19,117,394.00, as per its llth Annual Report for the yearended December 31, 1966, and with aggregate assets totalling P 45,794,103.00 as of December 31, 1966;xxx xxx xxx(pp. 42-44, rec.)A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of

petitioners based on an industrial accident are covered by the provisions of the Workmen’sCompensation Act (Act 3428, as amended by RA 772) and that the former Court of First Instance has nojurisdiction over the case. Petitioners filed an opposition dated May 27, 1968 to the said motion to dismissclaiming that the causes of action are not based on the provisions of the Workmen’s Compensation Actbut on the provisions of the Civil Code allowing the award of actual, moral and exemplary damages,particularly:Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, isobliged to pay for the damage done. Such fault or negligence, if there is no pre- existing contractualrelation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-delict.(b) Art. 1173—The fault or negligence of the obligor consists in the omission of that diligence which isrequired by the nature of the obligation and corresponds with the circumstances of the persons, of thetime and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201,paragraph 2 shall apply.

Art. 2201. x x x x x x x x xIn case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damageswhich may be reasonably attributed to the non-performance of the obligation.Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with grossnegligence.After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27, 1968dismissing the case on the ground that it falls within the exclusive jurisdiction of the Workmen’sCompensation Commission. On petitioners’ motion for reconsideration of the said order, respondentJudge, on September 23, 1968, reconsidered and set aside his order of June 27, 1968 and allowed Philexto file an answer to the complaint. Philex moved to reconsider the aforesaid order which was opposed bypetitioners.On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that inaccordance with the established jurisprudence, the Workmen’s Compensation Commission has exclusiveoriginal jurisdiction over damage or compensation claims for work-connected deaths or injuries ofworkmen or employees, irrespective of whether or not the employer was negligent, adding that if theemployer’s negligence results in work-connected deaths or injuries, the employer shall, pursuant toSection 4-A of the Workmen’s Compensation Act, pay additional compensation equal to 50% of thecompensation fixed in the Act.Petitioners thus filed the present petition.In their brief, petitioners raised the following assignment of errors:ITHE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS’ COMPLAINT FOR LACK OFJURISDICTION.IITHE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION BETWEEN CLAIMS FORDAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR COMPENSATION UNDER THE WORKMEN’SCOMPENSATION ACT.AIn the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause of

action since the complaint is based on the provisions of the Civil Code on damages, particularly Articles2176, 2178, 1173, 2201 and 2231, and not on the provisions of the Workmen’s Compensation Act. They point

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the Workmen’s Compensation Act did not contain any provision for an award of actual, moral andexemplary damages. What the Act provided was merely the right of the heirs to claim limitedcompensation for the death in the amount of six thousand (P6,000.00) pesos plus burial expenses of twohundred (P200.00) pesos, and medical expenses when incurred (Sections 8, 12 and 13, Workmen’sCompensation Act), and an additional compensation of only 50% if the complaint alleges failure on thepart of the employer to “install and maintain safety appliances or to take other precautions for theprevention of accident or occupational disease” (Section 4 -A, Ibid.). In the case at bar, the amountsought to be recovered is over and above that which was provided under the Workmen’s CompensationAct and which cannot be granted by the Commission.Moreover, under the Workmen’s Compensation Act, compensation benefits should be paid to an

employee who suffered an accident not due to the facilities or lack of facilities in the industry of hisemployer but caused by factors outside the industrial plant of his employer. Under the Civil Code, theliability of the employer, depends on breach of contract or tort. The Workmen’s Compensation Act wasspecifically enacted to afford protection to the employees or workmen. It is a social legislation designedto give relief to the workman who has been the victim of an accident causing his death or ailment orinjury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).WE now come to the query as to whether or not the injured employee or his heirs in case of death have aright of selection or choice of action between availing themselves of the worker’s right under theWorkmen’s Compensation Act and suing in the regular courts under the Civil Code for higher damages(actual, moral and exemplary) from the employers by virtue of that negligence or fault of the employersor whether they may avail themselves cumulatively of both actions, i.e., collect the limited compensationunder the Workmen’s Compensation Act and sue in addition for damages in the regular courts. In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442, ruled that aninjured worker has a choice of either to recover from the employer the fixed amounts set by the

Workmen’s Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higherdamages but he cannot pursue both courses of action simultaneously.In Pacaña WE said:In the analogous case of Esguerra vs. Munoz Palma, involving the application of Section 6 of theWorkmen’s Compensation Act on the injured workers’ right to sue third - party tortfeasors in the regularcourts, Mr. Justice J.B.L. Reyes, again speaking for the Court, pointed out that the injured worker has thechoice of remedies but cannot pursue both courses of action simultaneously and thus balanced therelative advantage of recourse under the Workmen’s Compensation Act as against an ordinary action.As applied to this case, petitioner Esguerra cannot maintain his action for damages against therespondents (defendants below), because he has elected to seek compensation under the Workmen’sCompensation Law, and his claim (case No. 44549 of the Compensation Commission) was beingprocessed at the time he filed this action in the Court of First Instance. It is argued for petitioner that asthe damages recoverable under the Civil Code are much more extensive than the amounts that may beawarded under the Workmen’s Compensation Act, they should not be deemed incompatible. As alreadyindicated, the injured laborer was initially free to choose either to recover from the employer the fixedamounts set by the Compensation Law or else, to prosecute an ordinary civil action against the tortfeasorfor higher damages. While perhaps not as profitable, the smaller indemnity obtainable by the first courseis balanced by the claimant’s being relieved of the burden of proving the causal connection between thedefendant’s negligence and the resulting injury, and of ha ving to establish the extent of the damagesuffered; issues that are apt to be troublesome to establish satisfactorily. Having staked his fortunes on aparticular remedy, petitioner is precluded from pursuing the alternate course, at least until the prior claimis rejected by the Compensation Commission. Anyway, under the proviso of Section 6 aforequoted, if theemployer Franklin Baker Company recovers, by derivative action against the alleged tortfeasors, a sumgreater than the compensation he may have paid the herein petitioner, the excess accrues to the latter.Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-partytortfeasor, said rule should likewise apply to the employer-tortfeasor.Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been dismissedin the resolution of September 7, 1978 in view of the amicable settlement reached by Philex and the saidheirs.

With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr.,

Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and claims for compensation tothe Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as ofAugust 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments (pp.106-107, rec.). Such allegation was admitted by herein petitioners in their opposition to the motion todismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but they set up the defense that theclaims were filed under the Workmen’s Compensation Act before they learned of the official report of the committee created to investigate the accident which established the criminal negligence andviolation of law by Philex, and which report was forwarded by the Director of Mines to the then ExecutiveSecretary Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.).WE hold that although the other petitioners had received the benefits under the Workmen’s

Compensation Act, such may not preclude them from bringing an action before the regular court becausethey became cognizant of the fact that Philex has been remiss in its contractual obligations with thedeceased miners only after receiving compensation under the Act. Had petitioners been aware of saidviolation of government rules and regulations by Philex, and of its negligence, they would not havesought redress under the Workmen’s Compensation Commission which awarded a lesser amount forcompensation. The choice of the first remedy was based on i gnorance or a mistake of fact, which nullifiesthe choice as it was not an intelligent choice. The case should therefore be r emanded to the lower courtfor further proceedings. However, should the petitioners be successful in their bid before the lowercourt, the payments made under the Workmen’s Compensation Act should be deducted from thedamages that may be decreed in their favor.BContrary to the perception of the dissenting opinion, the Court does not legislate in the instant case. TheCourt merely applies and gives effect to the constitutional guarantees of social justice then secured bySection 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by Sections 6, 7, and 9

of Article 11 of the DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution, asamended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231 and 2232 of the New CivilCode of 1950.To emphasize, the 1935 Constitution declares that:Sec. 5. The promotion of social justice to insure the well-being and economic security of all the peopleshould be the concern of the State (Art. II).Sec. 6. The State shall afford protection to labor, especially to working women, and minors, and shallregulate the relations between landowner and tenant, and between labor and capital in industry and inagriculture. The State may provide for compulsory arbitration (Art. XIV).The 1973 Constitution likewise commands the State to “promote social justice to insure the dignity,welfare, and security of all the people “… regulate the use … and disposition of private property andequitably diffuse property ownership and profits “establish, maintain and ensure adequate social servicesin, the field of education, health, housing, employment, welfare and social security to guarantee theenjoyment by the people of a decent standard of living” (Sections 6 and 7, Art. II, 1973 Constitution); “…afford protection to labor, … and regulate the relations between workers and employers …, and assurethe rights of workers to … just and humane conditions of work” (Sec. 9, Art. II, 1973 Constitution,emphasis supplied).The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of the1973 Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor Code, thus:Art. 3. Declaration of basic policy.—The State shall afford protection to labor, promote full employment,ensure equal work opportunities regardless of sex, race or creed, and regulate the relations betweenworkers and employers. The State shall assure the rights of workers to self-organization, collectivebargaining, security of tenure, and just and humane conditions of work. (emphasis supplied).The aforestated constitutional principles as implemented by the aforementioned articles of the New CivilCode cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor Code.Section 5 of the Workmen’s Compensation Act (before it was amended by R.A. No. 772 on June 20, 1952),predecessor of Article 173 of the New Labor Code, has been superseded by the aforestated provisions ofthe New Civil Code, a subsequent law, which took effect on August 30, 1950, which obey theconstitutional mandates of social justice enhancing as they do the rights of the workers as against their

employers. Article 173 of the New Labor Code seems to diminish the rights of the workers and therefore

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collides with the social justice guarantee of the Constitution and the liberal provisions of the New CivilCode.The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution arestatements of legal principles to be applied and enforced by the courts. Mr. Justice Robert Jackson in thecase of West Virginia State Board of Education vs. Barnette, with characteristic eloquence, enunciated:The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes of politicalcontroversy, to place them beyond the reach of majorities and officials and to establish them as legalprinciples to be applied by the courts. One’s right to life, liberty, and p roperty, to free speech, a freepress, freedom of worship and assembly, and other fundamental rights may not be submitted to vote;they depend on the outcome of no elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis supplied).

In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the NewLabor Code and the Civil Code direct that the doubts should be resolved in favor of the workers andemployees.Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as amended,promulgated on May 1, 1974, but which took effect six months thereafter, provides that “all doubts in theimplementation and interpretation of the provisions of this Code, including its implementing rules andregulations, shall be r esolved in favor of labor” (Art. 2, Labor Code). Article 10 of the New Civil Code states: “In case of doubt in the interpretation or application of laws, it ispresumed that the law-making body intended right and justice to prevail. ” More specifically, Ar ticle 1702 of the New Civil Code likewise directs that. “In case of doubt, all laborlegislation and all labor contracts shall be construed in favor of the safety and decent living of thelaborer.” Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the Workmen’s

Compensation Act provided:Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee byreason of a personal injury entitling him to compensation shall exclude all other rights and remediesaccruing to the employee, his personal representatives, dependents or nearest of kin against theemployer under the Civil Code and other laws, because of said injury (emphasis supplied).Employers contracting laborecsrs in the Philippine Islands for work outside the same may stipulate withsuch laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outsidethe Islands through accidents happening in and during the performance of the duties of the employment;and all service contracts made in the manner prescribed in this section shall be presumed to include suchagreement.Only the second paragraph of Section 5 of the Workmen’s Compensation Act No. 3428, was amended byCommonwealth Act No. 772 on June 20, 1952, thus:Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee byreason of a personal injury entitling him to compensation shall exclude all other rights and remediesaccruing to the employee, his personal representatives, dependents or nearest of kin against theemployer under the Civil Code and other laws, because of said injury.Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate withsuch laborers that the remedies prescribed by this Act shall apply to injuries received outside the Islandthrough accidents happening in and during the performance of the duties of the employment. Suchstipulation shall not prejudice the right of the laborers to the benefits of the Workmen’s CompensationLaw of the place where the accident occurs, should such law be more favorable to them (As amended bysection 5 of Republic Act No. 772).Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions of theNew Civil Code, because said Article 173 provides:Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the State Insurance Fundunder this Title shall be exclusive and in place of all other liabilities of the employer to the employee, hisdependents or anyone otherwise entitled to receive damages on behalf of the employee or hisdependents. The payment of compensation under this Title shall bar the recovery of benefits as providedfor in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one,

as amended, Commonwealth Act Numbered One hundred eighty- six, as amended, Commonwealth ActNumbered Six hundred ten, as amended, Republic Act Numbered Forty-eight hundred Sixty-four, as

amended, and other laws whose benefits are administered by the System during the period of suchpayment for the same disability or death, and conversely (emphasis supplied).As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the RevisedAdministrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610, as amended, R.A.No. 4864, as amended, and all other laws whose benefits are administered by the System (referring tothe GSIS or SSS).Unlike Section 5 of the Workmen’s Compensation Act as aforequoted, Article 173 of the New Labor Codedoes not even remotely, much less expressly, repeal the New Civil Code provisions heretofore quoted.It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence, is notbarred by Article 173 of the New Labor Code. And the damages recoverable under the New Civil Code are

not administered by the System provided for by the New Labor Code, which defines the “System” asreferring to the Government Service Insurance System or the Social Security System (Art. 167 [c], [d] and[e] of the New Labor Code).Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the lawof the land.Article 8 of the New Civil Code provides:Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legalsystem of the Philippines.The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying or interpreting thelaws or the Constitution form part of this jurisdiction’s legal system. These decisions, although inthemselves not laws, constitute evidence of what the laws mean. The application or interpretation placedby the Court upon a law is part of the law as of the date of the enactment of the said law since theCourt’s application or i nterpretation merely establishes the contemporaneous legislative intent that the

construed law purports to carry into effect” (65 SCRA 270, 272-273 [1975]).WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute itself(Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).The aforequoted provisions of Section 5 of the Workmen’s Compensation Act, before and afte r it wasamended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor of thedeceased, ailing or injured employee to the compensation provided for therein. Said Section 5 was notaccorded controlling application by the Supreme Court in the 1970 case of Pacana vs. Cebu AutobusCompany (32 SCRA 442) when WE ruled that an injured worker has a choice of either to recover from theemployer the fixed amount set by the Workmen’s Compensation Act or to prosecute an ordinary civilaction against the tortfeasor for greater damages; but he cannot pursue both courses of actionsimultaneously. Said Pacana case penned by Mr. Justice Teehankee, applied Article 1711 of the Civil Codeas against the Workmen’s Compensation Act, reiterating the 1969 ruling in the case of Valencia vs. ManilaYacht Club (28 SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz Palma (104 Phil. 582),both penned by Justice J.B.L. Reyes. Said Pacana case was concurred in by Justices J.B.L. Reyes, Dizon,Makalintal, Zaldivar, Castro, Fernando and Villamor.Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the firstparagraph of Section 5 of the Workmen’s Compensation Act, as amended, and does not even refer,neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen’s Compensation Act did,with greater reason said Article 173 must be subject to the same interpretation adopted in the cases ofPacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid three (3) cases is faithfulto and advances the social justice guarantees enshrined in both the 1935 and 1973 Constitutions.It should be stressed likewise that there is no similar provision on social justice in the American FederalConstitution, nor in the various state constitutions of the American Union. Consequently, the restrictivenature of the American decisions on the Workmen’s Compensation Act cannot limit the range andcompass of OUR interpretation of our own laws, especially Article 1711 of the New Civil Code, vis-a-visArticle 173 of the New Labor Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of Principles and State Policies ofArticle II of the 1973 Constitution.The dissent seems to subordinate the life of the laborer to the property rights of the employer. The right

to life is guaranteed specifically by the due process clause of the Constitution. To relieve the employerfrom liability for the death of his workers arising from his gross or wanton fault or failure to provide

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safety devices for the protection of his employees or workers against the dangers which are inherent inunderground mining, is to deprive the deceased worker and his heirs of the right to recover indemnity forthe loss of the life of the worker and the consequent loss to his family without due process of law. Thedissent in effect condones and therefore encourages such gross or wanton neglect on the part of theemployer to comply with his legal obligation to provide safety measures for the protection of the life,limb and health of his worker. Even from the moral viewpoint alone, such attitude is un-Christian.It is therefore patent that giving effect to the social justice guarantees of the Constitution, asimplemented by the provisions of the New Civil Code, is not an exercise of the power of law-making, butis rendering obedience to the mandates of the fundamental law and the implementing legislationaforementioned.

The Court, to repeat, is not legislating in the instant case.It is axiomatic that no ordinary statute can override a constitutional provision.The words of Section 5 of the Workmen’s Compensation Act and of Article 173 of the New Labor Codesubvert the rights of the petitioners as surviving heirs of the deceased mining employees. Section 5 of theWorkmen’s Compensation Act and Article 173 of the New Labor Code are retrogressive; because they area throwback to the obsolete laissez-faire doctrine of Adam Smith enunciated in 1776 in his treatise Wealthof Nations (Collier’s Encyclopedia, Vol. 21, p. 93, 1964), which has been discarded soon after the close ofthe 18th century due to the Industrial Revolution that generated the machines and other mechanicaldevices (beginning with Eli Whitney’s cotton gin of 1793 and Robert Fulton’s steamboat of 1807) forproduction and transportation which are dangerous to life, limb and health. The old socio-political-economic philosophy of live-and-let-live is now superdesed by the benign Christian shibboleth of live-and-help others to live. Those who profess to be Christians should not adhere to Cain’s selfish affirmation thathe is not his brother’s keeper. In this our civilization, each one of us is our brother’s keeper. No man is anisland. To assert otherwise is to be as atavistic and ante-deluvian as the 1837 case of Prisley vs. Fowler (3

MN 1,150 reprint 1030) invoked by the dissent, The Prisley case was decided in 1837 during the era ofeconomic royalists and robber barons of America. Only ruthless, unfeeling capitalistics and egoisticreactionaries continue to pay obeisance to such un-Christian doctrine. The Prisley rule humiliates man anddebases him; because the decision derisively refers to the lowly worke r as “servant” and utilizes witharistocratic arrogance “master” for “employer.” It robs man of his inherent dignity and dehumanizeshim. To stress this affront to human dignity, WE only have to restate the quotation from Prisley, thus:“The mere relation of the master and the servant never can imply an obligation on the part of the masterto take more care of the servant than he may reasonably be expected to do himself.” This is the veryselfish doctrine that provoked the American Civil War which generated so much hatred and drew somuch precious blood on American plains and valleys from 1861 to 1864.“Idolatrous reverence” for the letter of the law sacrifices the human being. The spirit of the law insuresman’s survival and ennobles him. In the words of Shakespeare, “the letter of the law killeth; its spiritgiveth life.” CIt is curious that the dissenting opinion clings to the myth that the courts cannot legislate.That myth had been exploded by Article 9 of the New Civil Code, which provides that “No judge or courtshall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. ” Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certaininstances, the court, in the language of Justice Holmes, “do and must legislate” to fill in the gaps in thelaw; because the mind of the legislator, like all human beings, is finite and therefore cannot envisage allpossible cases to which the law may apply Nor has the human mind the infinite capacity to anticipate allsituations.But about two centuries before Article 9 of the New Civil Code, the founding fathers of the AmericanConstitution foresaw and recognized the eventuality that the courts may have to legislate to supply theomissions or to clarify the ambiguities in the American Constitution and the statutes.‘Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies thatthe power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist, ModernLibrary, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede that the court is evenindependent of the Nation itself (A.F.L. vs. American Sash Company, 1949 335 US 538).

Many of the great expounders of the American Constitution likewise share the same view. Chief JusticeMarshall pronounced: “It is emphatically the province and duty of the Judicial department to say what

the law is (Marbury vs. Madison I Cranch 127 1803), which was re-stated by Chief Justice Hughes when hesaid that “the Constitution is what the judge says it is (Address on May 3, 1907, quoted by PresidentFranklin Delano Roosevelt on March 9, 1937). This was reiterated by Justice Cardozo who pronouncedthat “No doubt the limits for the judge are nar rower. He legislates only between gaps. He fills the openspaces in the law. ” (The Nature of the Judicial Process, p. 113). In the language of Chief Justice Harlan F.Stone, “The only limit to the judicial legislation is the restraint of the judge” (U.S. vs. Butler 297 U.S. 1Dissenting Opinion, p. 79), which view is also entertained by Justice Frankfurter and Justice RobertJackson. In the rhetoric of Justice Frankfurter, “the courts breathe life, feeble or strong, into the inertpages of the Constitution and all statute books.” It should be stressed that the liability of the employer under Section 5 of the Workmen’s Compensation

Act or Article 173 of the New Labor Code is limited to death, ailment or injury caused by the nature of thework, without any fault on the part of the employers. It is correctly termed no fault liability. Section 5 ofthe Workmen’s Compensation Act, as amended, or Article 173 of the New Labor Code, does not cover thetortious liability of the employer occasioned by his fault or culpable negligence in failing to provide thesafety devices required by the law for the protection of the life, limb and health of the workers. Undereither Section 5 or Article 173, the employer remains liable to pay compensation benefits to the employeewhose death, ailment or injury is work-connected, even if the employer has faithfully and diligentlyfurnished all the safety measures and contrivances decreed by the law to protect the employee.The written word is no longer the “sovereign talisman.” In the epigrammatic language of Mr. JusticeCardozo, “the law has outgrown its primitive stage of formalism when the precise word was thesovereign talisman, and every slip was fatal” (Wood vs. Duff Gordon 222 NW 88; Cardozo, The Nature ofthe Judicial Process 100). Justice Cardozo warned that: “Sometimes the conservatism of judges hasthreatened for an interval to rob the legislation of its efficacy. … Precedents established in those itemsexert an unhappy influence even now” (citing Pound, Common Law and Legisl ation 21 Harvard Law

Review 383, 387).Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with acautionary undertone: “that judges do and must legislate, but they can do so only interstitially they areconfined fr om molar to molecular motions” (Southern Pacific Company vs. Jensen, 244 US 204 1917). Andin the subsequent case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853), JusticeHolmes pronounced:The great ordinances of the Constitution do not establish and divide fields of black and white. Even themore specific of them are found to terminate in a penumbra shading gradually from one extreme to theother. x x x. When we come to the fundamental distinctions it is still more obvious that they must bereceived with a certain latitude or our government could not go on.To make a rule of conduct applicable to an individual who but for such action would be free from it is tolegislate yet it is what the judges do whenever they determine which of two competing principles ofpolicy shall prevail.xxx xxx xxxIt does not seem to need argument to show that however we may disguise it by veiling words we do notand cannot carry out the distinction between legislative and executive action with mathematicalprecision and divide the branches into waterlight compartments, were it ever so desirable to do so, whichI am far from believing that it is, or that the Constitution requires.True, there are jurists and legal writers who affirm that judges should not legislate, but grudginglyconcede that in certain cases judges do legislate. They criticize the assumption by the courts of such law-making power as dangerous for it may degenerate into Judicial tyranny. They include Blackstone, JeremyBentham, Justice Black, Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, RolfSartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or legal commentators, whoeither deny the power of the courts to legislate in-between gaps of the law, or decry the exercise of suchpower, have not pointed to examples of the exercise by the courts of such law-making authority in theinterpretation and application of the laws in specific cases that gave rise to judicial tyranny or oppressionor that such judicial legislation has not protected public interest or individual welfare, particularly thelowly workers or the underprivileged.On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory enactments

expanding the scope of such provisions to protect human rights. Foremost among them is the doctrine inthe cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372 US 335), Escubedo vs.

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Illinois (378 US 478), which guaranteed the accused under custodial investigation his rights to remainsilent and to counsel and to be informed of such rights as even as it protects him against the use of forceor intimidation to extort confession from him. These rights are not found in the American Bill of Rights.These rights are now institutionalized in Section 20, Article IV of the 1973 Constitution. Only the peace-and-order adherents were critical of the activism of the American Supreme Court led by Chief Justice EarlWarren.Even the definition of Identical offenses for purposes of the double jeopardy provision was developed byAmerican judicial decisions, not by amendment to the Bill of Rights on double jeopardy (see Justice Laurelin People vs. Tarok, 73 Phil. 260 , 261-268). And these judicial decisions have been re-stated in Section 7 ofRule 117 of the 1985 Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the 1964 Revised

Rules of Court. In both provisions, the second offense is the same as the first offense if the secondoffense is an attempt to commit the first or frustration thereof or necessarily includes or is necessarilyincluded in the first offense.The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed byjudicial decisions in the United States and in the Philippines even before people vs. Ylagan (58 Phil. 851-853).Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537) assecuring to the Negroes equal but separate facilities, which doctrine was revoked in the case of Brownvs. Maryland Board of Education (349 US 294), holding that the equal protection clause means that theNegroes are entitled to attend the same schools attended by the whites-equal facilities in the sameschool-which was extended to public parks and public buses.De-segregation, not segregation, is now the governing principle.Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46 Phil.440) by a conservative, capitalistic court to invalidate a law granting maternity leave to working women-

according primacy to property rights over human rights. The case of People vs. Pomar is no longer therule.As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice Holmeshad been railing against the conservatism of Judges perverting the guarantee of due process to protectproperty rights as against human rights or social justice for the working man. The law fixing maximumhours of labor was invalidated. Justice Holmes was vindicated finally in 1936 in the case of West CoastHotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American Supreme Court upheld the rights ofworkers to social justice in the form of guaranteed minimum wage for women and minors, working hoursnot exceeding eight (8) d aily, and maternity leave for women employees.The power of judicial review and the principle of separation of powers as well as the rule on politicalquestions have been evolved and grafted into the American Constitution by judicial decisions (Marburyvs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210-212, 72 L. ed. 852, 853).It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separateconcurring opinion in the case of Coleman vs. Mi ller, supra, affirming the doctrine of political question asbeyond the ambit of judicial review. There is nothing in both the American and Philippine Constitutionsexpressly providing that the power of the courts is limited by the principle of separation of powers andthe doctrine on political questions. There are numerous cases in Philippine jurisprudence applying thedoctrines of separation of powers and political questions and invoking American precedents.Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in theSupreme Court the power to review the validity or constitutionality of any legislative enactment orexecutive act.WHEREFORE, THE TRIAL COURT’S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET ASIDE AND THECASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES BEDECREED IN FAVOR OF HEREIN PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM PURSUANT TOTHE WORKMEN’S COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS.SO ORDERED.

SC Cannot Legislate – Exception

Floresca et al are the heirs of the deceased employees of Philex Mining Corporation (hereinafter referredto as Philex), who, while working at its copper mines underground operations at Tuba, Benguet on June28, 1967, died as a result of the cave-in that buried them in the tunnels of the mine. Specifically, thecomplaint alleges that Philex, in violation of government rules and regulations, negligently anddeliberately failed to take the required precautions for the protection of the lives of its men workingunderground. Floresca et al moved to claim their benefits pursuant to the Workmen’s Compensation Actbefore the Workmen’s Compensation Commission. They also petitioned bef ore the regular courts andsue Philex for additional damages. Philex invoked that they can no longer be sued because the

petitioners have already claimed benefits under the WCA.ISSUE: Whether or not Floresca et al can claim benefits and at the same time sue.HELD: Under the law, Floresca et al could only do either one. If they filed for benefits under the WCA thenthey will be estopped from proceeding with a civil case before the regular courts. Conversely, if they s uedbefore the civil courts then they would also be estopped from claiming benefits under the WCA. The SChowever ruled that Floresca et al are excused from this deficiency due to ignorance of the fact. Had theybeen aware of such then they may have not availed of such a remedy. However, if in case they’ll win inthe lower court whatever award may be granted, the amount given to them under the WCA should bededucted. The SC emphasized that if they would go strictly by the book in this case then the purpose ofthe law may be defeated. Idolatrous reverence for the letter of the law sacrifices the human being. Thespirit of the law insures man’s survival and ennobles him. As Shakespeare said, the letter of the law killethbut its spirit giveth life.

Justice Gutierrez dissenting

No civil suit should prosper after claiming benefits under the WCA. If employers are already liable to paybenefits under the WCA they should not be compelled to bear the cost of damage suits or get insurancefor that purpose. The exclusion provided by the WCA can only be properly removed by the legislatureNOT the SC.

MACARIO TAMARGO, CELSO TAMARGO vs. ca

On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo with anair rifle causing injuries which resulted in her death. Accordingly, a civil complaint for damages was filedwith the Regional Trial Court, Branch 20, Vigan, Ilocos Sur, docketed as Civil Case No. 3457-V, by petitionerMacario Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and Aurelia Tamargo,Jennifer's natural parents against respondent spouses Victor and Clara Bundoc, Adelberto's naturalparents with whom he was living at the time of the tragic incident. In addition to this case for damages, acriminal information or Homicide through Reckless Imprudence was filed [Criminal Case No. 1722-V]against Adelberto Bundoc. Adelberto, however, was acquitted and exempted from criminal liability onthe ground that he bad acted without discernment.

Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had filed a petitionto adopt the minor Adelberto Bundoc in Special Proceedings No. 0373-T before the then Court of FirstInstance of Ilocos Sur. This petition for adoption was grunted on, 18 November 1982, that is, afterAdelberto had shot and killed Jennifer.

In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of theforegoing petition for adoption, claimed that not they, but rather the adopting parents, namely thespouses Sabas and Felisa Rapisura, were indispensable parties to the action since parental authority hadshifted to the adopting parents from the moment the successful petition for adoption was filed.

Petitioners in their Reply contended that since Ad elberto Bundoc was then actually living with his naturalparents, parental authority had not ceased nor been relinquished by the mere filing and granting of a

petition for adoption.

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The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that respondent naturalparents of Adelberto indeed were not indispensable parties to the action.

Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-dayreglementary period, or on 14 December 1987, petitioners filed a motion for reconsideration followed bya supplemental motion for reconsideration on 15 January 1988. It appearing, however, that the motionsfailed to comply with Sections 4 and 5 of Rule 15 of the Revised Rules of Court — that notice of themotion shall be given to all parties concerned at least three (3) days before the hearing of said motion;and that said notice shall state the time and place of hearing — both motions were denied by the trialcourt in an Order dated 18 April 1988. On 28 April 1988, petitioners filed a notice of appeal. In its Order

dated 6 June 1988, the trial court dismissed the notice at appeal, this time ruling that the notice had beenfiled beyond the 15-day reglementary period ending 22 December 1987.

Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning the trialcourt's Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June 1988, The Court ofAppeals dismissed the petition, ruling that petitioners had lost their right to appeal.

In the present Petition for Review, petitioners once again contend that respondent spouses Bundoc arethe indispensable parties to the action for damages caused by the acts of their minor child, AdelbertoBundoc. Resolution of this Petition hinges on the following issues: (1) whether or not petitioners,notwithstanding loss of their right to appeal, may still file the instant Petition; conversely, whether theCourt may still take cognizance of the case even through petitioners' appeal had been filed out of time;and (2) whether or not the effects of adoption, insofar as parental authority is concerned may be givenretroactive effect so as to make the adopting parents the indispensable parties in a damage case filed

against their adopted child, for acts committed by the latter, when actual custody was yet lodged withthe biological parents.

1. It will be recalled that, petitioners' motion (and supplemental motion) for reconsideration filedbefore the trial court, not having complied with the requirements of Section 13, Rule 41, and Section 4,Rule 15, of the Revised Rules of Court, were considered pro forma and hence did not interrupt andsuspend the reglementary period to appeal: the trial court held that the motions, not having contained anotice of time and place of hearing, had become useless pieces of paper which did not interrupt thereglementary period. 1 As in fact repeatedly held by this Court, what is mandatory is the service of themotion on the opposing counsel indicating the time and place of hearing. 2

In view, however, of the nature of the issue raised in the instant. Petition, and in order that substantialjustice may be served, the Court, invoking its right to suspend the application of technical rules toprevent manifest injustice, elects to treat the notice of appeal as having been seasonably filed before thetrial court, and the motion (and supplemental motion) for reconsideration filed by petitioner in the trial

court as having interrupted the reglementary period for appeal. As the Court held in Gregorio v. Court ofAppeals: 3

Dismissal of appeal; purely on technical grounds is frowned upon where the policy of the courts is toencourage hearings of appeal on their merits. The rules of procedure ought not be applied in a very rigidtechnical sense, rules of procedure are used only to help secure not override, substantial justice. if dtechnical and rigid enforcement of the rules is made their aim would be defeated. 4

2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air riflegave rise to a cause of action on quasi-delict against him. As Article 2176 of the Civil Code provides:

Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to payfor the damage done. Such fault or negligence, if there is no pre-existing contractual relation betweenthe parties, is called a quasi-delict . . .

Upon the other hand, the law imposes civil liability upon the father and, in case of his death or incapacity,the mother, for any damages that may be caused by a minor child who lives with them. Article 2180 of theCivil Code reads:

The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but alsofor 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 bythe minor children who live in their company.

The responsibility treated of in this Article shall cease when the person herein mentioned prove that theyobserved all the diligence of a good father of a family to prevent damage. (Emphasis supplied)

This principle of parental liability is a species of what is frequently designated as vicarious liability, or thedoctrine of "imputed negligence" under Anglo-American tort law, where a person is not only liable fortorts committed by himself, but also for torts committed by others with whom he has a certainrelationship and for whom he is responsible. Thus, parental liability is made a natural or logicalconsequence of the duties and responsibilities of parents — their parental authority — which includesthe instructing, controlling and disciplining of the child. 5 The basis for the doctrine of vicarious liabilitywas explained by the Court in Cangco v. Manila Railroad Co. 6 in the following terms:

With respect to extra-contractual obligation arising from negligence, whether of act or omission, it iscompetent for the legislature to elect — and our Legislature has so elected — to limit such liability tocases 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 moralculpability, so as to include responsibility for the negligence of those persons whose acts or omissions areimputable, by a legal fiction, to others who are in a position to exercise an absolute or limited controlover 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 thepersons to be charged. This moral responsibility may consist in having failed to exercise due care in one'sown 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 withrespect to the person made liable for their conduct. 7 (Emphasis Supplied)

The civil liability imposed upon parents for the torts of their minor children living with them, may be seento be based upon the parental authority vested by the Civil Code upon such parents. The civil lawassumes that when an unemancipated child living with its parents commits a tortious acts, the parentswere negligent in the performance of their legal and natural duty closely to supervise the child who is intheir custody and control. Parental liability is, in other words, anchored upon parental authority coupled

with presumed parental dereliction in the discharge of the duties accompanying such authority. Theparental dereliction is, of course, only presumed and the presumption can be overtuned under Article2180 of the Civil Code by proof that the parents had exercised all the diligence of a good father of a familyto prevent the damage.

In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when parentalauthority was still lodged in respondent Bundoc spouses, the natural parents of the minor Adelberto. Itwould thus follow that the natural parents who had then actual custody of the minor Adelberto, are theindispensable parties to the suit for damages.

The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption wasissued by the adoption court in favor of the Rapisura spouses, parental authority was vested in the latteras adopting parents as of the time of the filing of the petition for adoption that is, before Adelberto hadshot Jennifer which an air rifle. The Bundoc spouses contend that they were therefore free of any

parental responsibility for Adelberto's allegedly tortious conduct.

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Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare Code 8 which reads asfollows: Art. 36. Decree of Adoption. — If, after considering the report of the Department ofSocial Welfare or duly licensed child placement agency and the evidence submitted before it, the court issatisfied that the petitioner is qualified to maintain, care for, and educate the child, that the trial custodyperiod has been completed, and that the best interests of the child will be promoted by the adoption, adecree of adoption shall be entered, which shall be effective he date the original petition was filed. Thedecree shall state the name by which the child is thenceforth to be known. (Emphasis supplied)

The Bundoc spouses further argue that the above Article 36 should be read in relation to Article 39 of thesame Code: Art. 39. Effect of Adoption. — The adoption shall:

(2) Dissolve the authority vested in the natural parents, except where the adopter is the spouse of thesurviving natural parent;(Emphasis supplied) and urge that their Parental authority must be deemed tohave been dissolved as of the time the Petition for adoption was filed.

The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability for thetorts of a minor child is the relationship existing between the parents and the minor child living with themand over whom, the law presumes, the parents exercise supervision and control. Article 58 of the Childand Youth Welfare Code, re-enacted this rule:

Article 58 Torts — Parents and guardians are responsible for the damage caused by the child undertheir parental authority in accordance with the civil Code. (Emphasis supplied)

Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that the child,doer of the tortious act, shall have beer in the actual custody of the parents sought to be held liable forthe ensuing damage:

Art. 221. Parents and other persons exercising parental authority shall be civilly liable for the injuriesand damages caused by the acts or omissions of their unemancipated children living in their company andunder their parental authority subject to the appropriate defenses provided by law. (Emphasis supplied)

We do not believe that parental authority is properly regarded as having been retroactively transferred toand vested in the adopting parents, the Rapisura spouses, at the time the air rifle shooting happened. Wedo not consider that retroactive effect may be giver to the decree of adoption so as to impose a liabilityupon the adopting parents accruing at a time when adopting parents had no actual or physically custodyover the adopted child. Retroactive affect may perhaps be given to the granting of the petition foradoption where such is essential to permit the accrual of some benefit or advantage in favor of theadopted child. In the instant case, however, to hold that parental authority had been retroactively lodgedin the Rapisura spouses so as to burden them with liability for a tortious act that they could not have

foreseen and which they could not have prevented (since they were at the time in the United States andhad no physical custody over the child Adelberto) would be unfair and unconscionable. Such a result,moreover, would be inconsistent with the philosophical and policy basis underlying the doctrine ofvicarious liability. Put a little differently, no presumption of parental dereliction on the part of theadopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject to theircontrol at the time the tort was committed.

Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article 35 providesas follows:

Art. 35. Trial Custody. — No petition for adoption shall be finally granted unless and until theadopting parents are given by the courts a supervised trial custody period of at least six months to assesstheir adjustment and emotional readiness for the legal union. During the period of trial custody, parentalauthority shall be vested in the adopting parents. (Emphasis supplied)

Under the above Article 35, parental authority is provisionally vested in the adopting parents during theperiod of trial custody, i.e., before the issuance of a decree of adoption, precisely because the adoptingparents are given actual custody of the child during such trial period. In the instant case, the trial custodyperiod either had not yet begun or bad already been completed at the time of the air r ifle shooting; in anycase, actual custody of Adelberto was then with his natural parents, not the adopting parents.

Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, wereindispensable parties to the suit for damages brought by petitioners, and that the dismissal by the trialcourt of petitioners' complaint, the indispensable parties being already before the court, constitutedgrave abuse of discretion amounting to lack or excess of jurisdiction.

WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE COURSE and theDecision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No. SP-15016 is hereby REVERSEDand SET ASIDE. Petitioners' complaint filed before the trial court is hereby REINSTATED and this case isREMANDED to that court for further proceedings consistent with this Decision. Costs against respondentBundoc spouses. This Decision is immediately executory.

MARIA TERESA Y. CUADRA vs. ALFONSO MONFORT

This is an action for damages based on quasi-delict, decided by the Court of First Instance of NegrosOccidental favorably to the plaintiffs and appealed by the defendant to the Court of Appeals, whichcertified 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 MabiniElementary School in Bacolod City. On July 9, 1962 their teacher assigned them, together with three otherclassmates, to weed the grass in the school premises. While thus engaged Maria T eresa Monfort found aplastic headband, an ornamental object commonly worn by young girls over their hair. Jokingly she saidaloud that she had found an earthworm and, evidently to frighten the Cuadra girl, tossed the object ather. 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, July10, the eye became swollen and it was then that the girl related the incident to her parents, whothereupon took her to a doctor for treatment. She underwent surgical operation twice, first on July 20and again on August 4, 1962, and stayed in the hospital for a total of twenty-three days, for all of whichthe parents spent the sum of P1,703.75. Despite the medical efforts, however, Maria Teresa Cuadracompletely lost the sight of her right eye.

In the civil suit subsequently instituted by the parents in behalf of their minor daughter against AlfonsoMonfort, 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 causesdamage 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, isobliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractualrelation 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 oromissions, 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 minorchildren who live in their company.

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The responsibility treated of in this Article shall cease when the persons herein mentioned prove thatthey 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 theact or the omission, there being no willfulness or intent to cause damage thereby. When the act oromission is that of one person for whom another is responsible, the latter then becomes himself liableunder Article 2180, in the different cases enumerated therein, such as that of the father or the motherunder the circumstances above quoted. The basis of this vicarious, although primary, liability is, as inArticle 2176, fault or negligence, which is presumed from that which accompanied the causative act oromission. 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 theresponsibility treated of in this Article shall cease when the persons herein mentioned prove that theyobserved 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 onthe defendant. But what is the exact degree of diligence contemplated, and how does a parent prove it inconnection with a particular act or omission of a minor child, especially when it takes place in his absenceor outside his immediate company? Obviously there can be no meticulously calibrated measureapplicable; and when the law simply refers to "all the diligence of a good father of the family to preventdamage," it implies a consideration of the attendant circumstances in every individual case, to determinewhether 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 haveprevented the damage by the observance of due care, or that he was in any way remiss in the exercise ofhis parental authority in failing to foresee such damage, or the act which caused it. On the contrary, hischild was at school, where it was his duty to send her and where she was, as he had the right to expecther to be, under the care and supervision of the teacher. And as far as the act which caused the injury wasconcerned, it was an innocent prank not unusual among children at play and which no parent, howevercareful, would have any special reason to anticipate much less guard against. Nor did it reveal anymischievous propensity, or indeed any trait in the child's character which would reflect unfavorably onher 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. Butif the defendant is at all obligated to compensate her suffering, the obligation has no legal sanctionenforceable in court, but only the moral compulsion of good conscience.

The decision appealed from is reversed, and the complaint is dismissed, without pronouncement as tocosts.

AMADORA VS. CA

Like any prospective graduate, Alfredo Amadora was looking forward to the commencement exerciseswhere he would ascend the stage and in the presence of his relatives and friends receive his high schooldiploma. These ceremonies were scheduled on April 16, 1972. As it turned out, though, fate wouldintervene and deny him that awaited experience. On April 13, 1972, while they were in the auditorium oftheir school, the Colegio de San Jose-Recoletos, a classmate, Pablito Damon, fired a gun that mortally hitAlfredo, ending all his expectations and his life as well. The victim was only seventeen years old. 1

Daffon was convicted of homicide thru reckless imprudence . 2 Additionally, the herein petitioners, as thevictim's parents, filed a civil action for damages under Article 2180 of the Civil Code against the Colegio deSan Jose-Recoletos, its rector the high school principal, the dean of boys, and the physics teacher,together with Daffon and two other students, through their respective parents. The complaint againstthe students was later dropped. After trial, the Court of First Instance of Cebu held the remaining

defendants liable to the plaintiffs in the sum of P294,984.00, representing death compensation, loss ofearning capacity, costs of litigation, funeral expenses, moral damages, exemplary damages, and

attorney's fees . 3 On appeal to the respondent court, however, the decision was reversed and all thedefendants were completely absolved . 4

In its decision, which is now the subject of this petition for certiorari under Rule 45 of the Rules of Court,the respondent court found that Article 2180 was not applicable as the Colegio de San Jose-Recoletoswas not a school of arts and trades but an academic institution of learning. It also held that the studentswere not in the custody of the school at the time of the incident as the semester had already ended, thatthere was no clear identification of the fatal gun and that in any event the defendant, had exercised thenecessary diligence in preventing the injury. 5

The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on April 13, 1972,and while in its auditorium was shot to death by Pablito Daffon, a classmate. On the implications andconsequences of these facts, the parties sharply disagree.

The petitioners contend that their son was in the school to show his physics experiment as a prerequisiteto his graduation; hence, he was then under the custody of the private respondents. The privaterespondents submit that Alfredo Amadora had gone to the school only for the purpose of submitting hisphysics report and that he was no longer in their custody because the semester had already ended.

There is also the question of the identity of the gun used which the petitioners consider importantbecause of an earlier incident which they claim underscores the negligence of the school and at least oneof the private respondents. It is not denied by the respondents that on April 7, 1972, Sergio Damaso, Jr.,the dean of boys, confiscated from Jose Gumban an unlicensed pistol but later returned it to him withoutmaking a report to the principal or taking any further action . 6 As Gumban was one of the companions ofDaffon when the latter fired the gun that killed Alfredo, the petitioners contend that this was the samepistol that had been confiscated from Gumban and that their son would not have been killed if it had notbeen returned by Damaso. The respondents say, however, that there is no proof that the gun was thesame firearm that killed Alfredo.

Resolution of all these disagreements will depend on the interpretation of Article 2180 which, as ithappens, is invoked by both parties in support of their conflicting positions. The pertinent part of thisarticle reads as follows:

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by theirpupils and students or apprentices so long as they remain in their custody.

Three cases have so far been decided by the Court in connection with the above-quoted provision, to wit:Exconde v. Capuno 7 Mercado v. Court of Appeals, 8 and Palisoc v. Brillantes. 9 These will be brieflyreviewed in this opinion for a better resolution of the case at bar.

In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a Boy Scout,attended a Rizal Day parade on instructions of the city school supervisor. After the parade, the boyboarded a jeep, took over its wheel and drove it so recklessly that it turned turtle, resulting in the deathof two of its passengers. Dante was found guilty of double homicide with reckless imprudence. In theseparate civil action flied against them, his father was held solidarily liable with him in damages underArticle 1903 (now Article 2180) of the Ci vil Code for the tort committed by the 15-year old boy.

This decision, which was penned by Justice Bautista Angelo on June 29,1957, exculpated the school in anobiter dictum (as it was not a party to the case) on the ground that it was riot a school of arts and trades.Justice J.B.L. Reyes, with whom Justices Sabino Padilla and Alex Reyes concurred, dissented, arguing thatit was the school authorities who should be held liable Liability under this rule, he said, was imposed on(1) teachers in general; and (2) heads of schools of arts and trades in particular. The modifying clause "ofestablishments of arts and trades" should apply only to "heads" and not "teachers."

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Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a classmate with arazor blade during recess time at the Lourdes Catholic School in Quezon City, and the parents of thevictim sued the culprits parents for damages. Through Justice Labrador, the Court declared in anotherobiter (as the school itself had also not been sued that the school was not liable because it was not anestablishment of arts and trades. Moreover, the custody requirement had not been proved as this"contemplates a situation where the student lives and boards with the teacher, such that the control,direction and influences on the pupil supersede those of the parents." Justice J.B.L. Reyes did not takepart but the other members of the court concurred in this decision promulgated on May 30, 1960.

In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a classmate with

fist blows in the laboratory of the Manila Technical Institute. Although the wrongdoer — who wasalready of age — was not boarding in the school, the head thereof and the teacher in charge were heldsolidarily liable with him. The Court declared through Justice Teehankee:

The phrase used in the cited article — "so long as (the students) remain in their custody" — means theprotective and supervisory custody that the school and its heads and teachers exercise over the pupilsand students for as long as they are at attendance in the school, including recess time. There is nothing inthe law that requires that for such liability to attach, the pupil or student who commits the tortious actmust live and board in the school, as erroneously held by the lower court, and the dicta in Mercado (aswell as in Exconde) on which it relied, must now be deemed to have been set aside by the presentdecision.

This decision was concurred in by five other members, 10 including Justice J.B.L. Reyes, who stressed, inanswer to the dissenting opinion, that even students already of age were covered by the provision sincethey were equally in the custody of the school and subject to its discipline. Dissenting with three others,11 Justice Makalintal was for retaining the custody interpretation in Mercado and submitted that the ruleshould apply only to torts committed by students not yet of age as the school would be acting only inloco parentis.

In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde Case butadded that "since the school involved at bar is a non-academic school, the question as to the applicabilityof the cited codal provision to academic institutions will have to await another case wherein it mayproperly be raised."

This is the case.

Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly impleaded and issought to be held liable under Article 2180; and unlike in Palisoc, it is not a school of arts and trades but anacademic institution of learning. The parties herein have also directly raised the question of whether or

not Article 2180 covers even establishments which are technically not schools of arts and trades, and, ifso, when the offending student is supposed to be "in its custody."

After an exhaustive examination of the problem, the Court has come to the conclusion that the provisionin question should apply to all schools, academic as well as non-academic. Where the school is academicrather than technical or vocational in nature, responsibility for the tort committed by the student willattach to the teacher in charge of such student, following the first part of the provision. This is thegeneral rule. In the case of establishments of arts and trades, it is the head thereof, and only he, whoshall be held liable as an exception to the general rule. In other words, teachers in general shall be liablefor the acts of their students except where the school is technical in nature, in which case it is the headthereof who shall be answerable. Following the canon of reddendo singula singulis "teachers" shouldapply to the words "pupils and students" and "heads of establishments of arts and trades" to the word"apprentices."

The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in Exconde where hesaid in part:

I can see no sound reason for limiting Art. 1903 of the Old Civil Code to teachers of arts and trades andnot to academic ones. What substantial difference is there between them insofar as concerns the propersupervision and vice over their pupils? It cannot be seriously contended that an academic teacher isexempt from the duty of watching that his pupils do not commit a tort to the detriment of third Persons,so long as they are in a position to exercise authority and Supervision over the pupil. In my opinion, in thephrase "teachers or heads of establishments of arts and trades" used in Art. 1903 of the old Civil Code,the words "arts and trades" does not qualify "teachers" but only "heads of establishments." The phraseis only an updated version of the equivalent terms "preceptores y artesanos" used in the Italian andFrench Civil Codes.

If, as conceded by all commentators, the basis of the presumption of negligence of Art. 1903 in someculpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of theirauthority, it would seem clear that where the parent places the child under the effective authority of theteacher, the latter, and not the parent, should be the one answerable for the torts committed whileunder his custody, for the very reason/that the parent is not supposed to interfere with the discipline ofthe school nor with the authority and supervision of the teacher while the child is under instruction. Andif there is no authority, there can be no responsibility.

There is really no substantial distinction between the academic and the non-academic schools insofar astorts committed by their students are concerned. The same vigilance is expected from the teacher overthe students under his control and supervision, whatever the nature of the school where he is teaching.The suggestion in the Exconde and Mercado Cases is that the provision would make the teacher or eventhe head of the school of arts and trades liable for an injury caused by any student in its custody but ifthat same tort were committed in an academic school, no liability would attach to the teacher or theschool head. All other circumstances being the same, the teacher or the head of the academic schoolwould be absolved whereas the teacher and the head of the non-academic school would be held liable,and simply because the latter is a school of arts and trades.

The Court cannot see why different degrees of vigilance should be exercised by the school authorities onthe basis only of the nature of their respective schools. There does not seem to be any plausible reasonfor relaxing that vigilance simply because the school is academic in nature and for increasing suchvigilance where the school is non-academic. Notably, the injury subject of liability is caused by the studentand not by the school itself nor is it a result of the operations of the school or its equipment. The injurycontemplated may be caused by any student regardless of the school where he is registered. The teachercertainly should not be able to excuse himself by simply showing that he is teaching in an academicschool where, on the other hand, the head would be held liable if the school were non-academic.

These questions, though, may be asked: If the teacher of the academic school is to be held answerable

for the torts committed by his students, why is it the head of the school only who is held liable where theinjury is caused in a school of arts and trades? And in the case of the academic or non- technical school,why not apply the rule also to the head thereof instead of imposing the liability only on the teacher?

The reason for the disparity can be traced to the fact that historically the head of the school of arts andtrades exercised a closer tutelage over his pupils than the head of the academic school. The old schoolsof arts and trades were engaged in the training of artisans apprenticed to their master who personallyand directly instructed them on the technique and secrets of their craft. The head of the school of artsand trades was such a master and so was personally involved in the task of teaching his students, whousually even boarded with him and so came under his constant control, supervision and influence. Bycontrast, the head of the academic school was not as involved with his students and exercised onlyadministrative duties over the teachers who were the persons directly dealing with the students. Thehead of the academic school had then (as now) only a vicarious relationship with the students.Consequently, while he could not be directly faulted for the acts of the students, the head of the school

of arts and trades, because of his closer ties with them, could be so blamed.

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It is conceded that the distinction no longer obtains at present in view of the expansion of the schools ofarts and trades, the consequent increase in their enrollment, and the corresponding diminution of thedirect and personal contract of their heads with the students. Article 2180, however, remains unchanged.In its present state, the provision must be interpreted by the Court according to its clear and originalmandate until the legislature, taking into account the charges in the situation subject to be regulated,sees fit to enact the necessary amendment.

The other matter to be resolved is the duration of the responsibility of the teacher or the head of theschool of arts and trades over the students. Is such responsibility co-extensive with the period when thestudent is actually undergoing studies during the school term, as contended by the respondents and

impliedly admitted by the petitioners themselves?

From a reading of the provision under examination, it is clear that while the custody requirement, torepeat Palisoc v. Brillantes, does not mean that the student must be boarding with the school authorities,it does signify that the student should be within the control and under the influence of the schoolauthorities at the time of the occurrence of the injury . This does not necessarily mean that such, custodybe co-terminous with the semester, beginning with the start of classes and ending upon the closethereof, and excluding the time before or after such period, such as the period of registration, and in thecase of graduating students, the period before the commencement exercises. In the view of the Court,the student is in the custody of the school authorities as long as he is under the control and influence ofthe school and within its premises, whether the semester has not yet begun or has already ended.

It is too tenuous to argue that the student comes under the discipline of the school only upon the start ofclasses notwithstanding that before that day he has already registered and thus placed himself under itsrules. Neither should such discipline be deemed ended upon the last day of classes notwithstanding thatthere may still be certain requisites to be satisfied for completion of the course, such as submission ofreports, term papers, clearances and the like. During such periods, the student is still subject to thedisciplinary authority of the school and cannot consider himself released altogether from observance ofits rules.

As long as it can be shown that the student is in the school premises in pursuance of a legitimate studentobjective, in the exercise of a legitimate student right, and even in the enjoyment of a legitimate studentright, and even in the enjoyment of a legitimate student privilege, the responsibility of the schoolauthorities over the student continues. Indeed, even if the student should be doing nothing more thanrelaxing in the campus in the company of his classmates and friends and enjoying the ambience andatmosphere of the school, he is still within the custody and subject to the discipline of the schoolauthorities under the provisions of Article 2180.

During all these occasions, it is obviously the teacher-in-charge who must answer for his students' torts,

in practically the same way that the parents are responsible for the child when he is in their custody. Theteacher-in-charge is the one designated by the dean, principal, or other administrative superior toexercise supervision over the pupils in the specific classes or sections to which they are assigned. It is notnecessary that at the time of the injury, the teacher be physically present and in a position to prevent it.Custody does not connote immediate and actual physical control but refers more to the influenceexerted on the child and the discipline instilled in him as a result of such influence. Thus, for the injuriescaused by the student, the teacher and not the parent shag be held responsible if the tort was committedwithin the premises of the school at any time when its authority could be validly exercised over him.

In any event, it should be noted that the liability imposed by this article is supposed to fall directly on theteacher or the head of the school of arts and trades and not on the school itself. If at all, the school,whatever its nature, may be held to answer for the acts of its teachers or even of the head thereof underthe general principle of respondeat superior, but then it may exculpate itself from liability by proof that ithad exercised the diligence of a bonus paterfamilias.

Such defense is, of course, also available to the teacher or the head of the school of arts and tradesdirectly held to answer for the tort committed by the student. As long as the defendant can show that hehad taken the necessary precautions to prevent the injury complained of, he can exonerate himself fromthe liability imposed by Article 2180, which also states that:

The responsibility treated of in this article shall cease when the Persons herein mentioned prove that theyobserved all the diligence of a good father of a family to prevent damages.

In this connection, it should be observed that the teacher will be held liable not only when he is acting inloco parentis for the law does not require that the offending student be of minority age. Unlike the

parent, who wig be liable only if his child is still a minor, the teacher is held answerable by the law for theact of the student under him regardless of the student's age. Thus, in the Palisoc Case, liability attachedto the teacher and the head of the technical school although the wrongdoer was already of age. In thissense, Article 2180 treats the parent more favorably than the teacher.

The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his dissenting opinionin Palisoc that the school may be unduly exposed to liability under this article in view of the increasingactivism among the students that is likely to cause violence and resulting injuries in the school premises.That is a valid fear, to be s ure. Nevertheless, it should be repeated that, under the present ruling, it is notthe school that will be held directly liable. Moreover, the defense of due diligence is available to it in caseit is sought to be held answerable as principal for the acts or omission of its head or the teacher in itsemploy.

The school can show that it exercised proper measures in selecting the head or its teachers and theappropriate supervision over them in the custody and instruction of the pupils pursuant to its rules andregulations for the maintenance of discipline among them. In almost all cases now, in fact, thesemeasures are effected through the assistance of an adequate security force to help the teacher physicallyenforce those rules upon the students. Ms should bolster the claim of the school that it has takenadequate steps to prevent any injury that may be committed by its students.

A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to hold him dir ectlyanswerable for the damage caused by his students as long as they are in the school premises andpresumably under his influence. In this respect, the Court is disposed not to expect from the teacher thesame measure of responsibility imposed on the parent for their influence over the child is not equal indegree. Obviously, the parent can expect more obedience from the child because the latter'sdependence on him is greater than on the teacher. It need not be stressed that such dependenceincludes the child's support and sustenance whereas submission to the teacher's influence, besides beingcoterminous with the period of custody is usually enforced only because of the students' desire to passthe course. The parent can instill more las discipline on the child than the teacher and so should be held

to a greater accountability than the teacher for the tort committed by the child.

And if it is also considered that under the article in question, the teacher or the head of the school of artsand trades is responsible for the damage caused by the student or apprentice even if he is already of age— and therefore less tractable than the minor — then there should all the more be justification to requirefrom the school authorities less accountability as long as they can prove reasonable diligence inpreventing the injury. After all, if the parent himself is no longer liable for the student's acts because hehas reached majority age and so is no longer under the former's control, there is then all the more reasonfor leniency in assessing the teacher's responsibility for the acts of the student.

Applying the foregoing considerations, the Court has arrived at the following conclusions:

1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of Colegiode San Jose-Recoletos notwithstanding that the fourth year classes had formally ended. It was immaterial

if he was in the school auditorium to finish his physics experiment or merely to submit his physics reportfor what is important is that he was there for a legitimate purpose. As previously observed, even the

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mere savoring of the company of his friends in the premises of the school is a legitimate purpose thatwould have also brought him i n the custody of the school authorities.

2. The rector, the high school principal and the dean of boys cannot be held liable because none ofthem was the teacher-in-charge as previously defined. Each of them was exercising only a generalauthority over the student body and not the di rect control and influence exerted by the teacher placed incharge of particular classes or sections and thus immediately involved in its discipline. The evidence of theparties does not disclose who the teacher-in-charge of the offending student was. The mere fact thatAlfredo Amadora had gone to school that day in connection with his physics report did not necessarilymake the physics teacher, respondent Celestino Dicon, the teacher-in-charge of Alfredo's killer.

3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon wasnegligent in enforcing discipline upon Daffon or that he had waived observance of the rules andregulations of the school or condoned their non-observance. His absence when the tragedy happenedcannot be considered against him because he was not supposed or required to report to school on thatday. And while it is true that the offending student was still in the custody of the teacher-in-charge even ifthe latter was physically absent when the tort was committed, it has not been established that it wascaused by his laxness in enforcing discipline upon the student. On the contrary, the private respondentshave proved that they had exercised due diligence, through the enforcement of the school regulations, inmaintaining that discipline.

4. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held liableespecially in view of the unrefuted evidence that he had earlier confiscated an unlicensed gun from oneof the students and returned the same later to him without taking disciplinary action or reporting thematter to higher authorities. While this was clearly negligence on his part, for which he deservessanctions from the school, it does not necessarily link him to the shooting of Amador as it has not beenshown that he confiscated and r eturned pistol was the gun that killed the petitioners' son.

5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable underthe article because only the teacher or the head of the school of arts and trades is made responsible forthe damage caused by the student or apprentice. Neither can it be held to answer for the tort committedby any of the other private respondents for none of them has been found to have been charged with thecustody of the offending student or has been remiss in the discharge of his duties in connection withsuch custody.

In sum, the Court finds under the facts as disclosed by the record and in the light of the principles hereinannounced that none of the respondents is liable for the injury inflicted by Pablito Damon on AlfredoAmadora that resulted in the latter's death at the auditorium of the Colegio de San Jose-Recoletos onApril 13, 1972. While we deeply sympathize with the petitioners over the loss of their son under the tragic

circumstances here related, we nevertheless are unable to extend them the material relief they seek, as abalm to their grief, under the law they have invoked.

PSBA VS. CA

A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the second-floor premises of the Philippine School of Business Administration (PSBA) prompted the parents of thedeceased to file suit in the Regional Trial Court of Manila (Branch 47) presided over by Judge (now Courtof Appeals justice) Regina Ordoñez-Benitez, for damages against the said PSBA and its corporate officers.At the time of his death, Carlitos was enrolled in the third year commerce course at the PSBA. It wasestablished that his assailants were not members of the school's academic community but wereelements from outside the school.

Specifically, the suit impleaded the PSBA and the following school authorities: Juan D. Lim (President),Benjamin P. Paulino (Vice-President), Antonio M. Magtalas (Treasurer/Cashier), Col. Pedro Sacro (Chief of

Security) and a Lt. M. Soriano (Assistant Chief of Security). Substantially, the plaintiffs (now privaterespondents) sought to adjudge them liable for the victim's untimely demise due to their alleged

negligence, recklessness and lack of security precautions, means and methods before, during and afterthe attack on the victim. During the proceedings a quo, Lt. M. Soriano terminated his relationship withthe other petitioners by resigning from his position in the school.

Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since they arepresumably sued under Article 2180 of the Civil Code, the complaint states no cause of action againstthem, as jurisprudence on the subject is to the effect that academic institutions, such as the PSBA, arebeyond the ambit of the r ule in the afore-stated article.

The respondent trial court, however, overruled petitioners' contention and thru an order dated 8

December 1987, denied their motion to dismiss. A subsequent motion for reconsideration was similarlydealt with by an order dated 25 January 1988. Petitioners then assailed the trial court's disposition beforethe respondent appellate court which, in a decision * promulgated on 10 June 1988, affirmed the trialcourt's orders. On 22 August 1988, the respondent appellate court resolved to deny the petitioners'motion for reconsideration. Hence, this petition.

At the outset, it is to be observed that the respondent appellate court primarily anchored its decision onthe law of quasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil Code. 1 Pertinent portions ofthe appellate court's now assailed ruling state:

Article 2180 (formerly Article 1903) of the Civil Code is an adoption from the old Spanish Civil Code. Thecomments of Manresa and learned authorities on its meaning should give way to present day changes.The law is not fixed and flexible (sic); it must be dynamic. In fact, the greatest value and significance oflaw as a rule of conduct in (sic) its flexibility to adopt to changing social conditions and its capacity tomeet the new challenges of progress.

Construed in the light of modern day educational system, Article 2180 cannot be construed in its narrowconcept as held in the old case of Exconde vs. Capuno 2 and Mercado vs. Court of Appeals; 3 hence, theruling in the Palisoc 4 case that it should apply to all kinds of educational institutions, academic orvocational.

At any rate, the law holds the teachers and heads of the school staff liable unless they relieve themselvesof such liability pursuant to the last paragraph of Article 2180 by "proving that they observed all thediligence to prevent damage." This can only be done at a trial on the merits of the case. 5

While we agree with the respondent appellate court that the motion to dismiss the complaint wascorrectly denied and the complaint should be tried on the merits, we do not however agree with thepremises of the appellate court's r uling.

Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in loco parentis. ThisCourt discussed this doctrine in the afore-cited cases of Exconde, Mendoza, Palisoc and, more recently, inAmadora vs. Court of Appeals. 6 In all such cases, it had been stressed that the law (Article 2180) plainlyprovides that the damage should have been caused or inflicted by pupils or students of he educationalinstitution sought to be held liable for the acts of its pupils or students while in its custody. However, thismaterial situation does not exist in the present case for, as earlier indicated, the assailants of Carlitoswere not students of the PSBA, for whose acts the school could be made liable.

However, does the appellate court's failure to consider such material facts mean the exculpation of thepetitioners from liability? It does not necessarily follow.

When an academic institution accepts students for enrollment, there is established a contract betweenthem, resulting in bilateral obligations which both parties are bound to comply with. 7 For its part, theschool undertakes to provide the student with an education that would presumably suffice to equip him

with the necessary tools and skills to pursue higher education or a profession. On the other hand, thestudent covenants to abide by the school's academic requirements and observe its rules and regulations.

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Institutions of learning must also meet the implicit or "built-in" obligation of providing their students withan atmosphere that promotes or assists in attaining its primary undertaking of imparting knowledge.Certainly, no student can absorb the intricacies of physics or higher mathematics or explore the realm ofthe arts and other sciences when bullets are flying or grenades exploding in the air or where there loomsaround the school premises a constant threat to life and limb. Necessarily, the school must ensure thatadequate steps are taken to maintain peace and order within the campus premises and to prevent thebreakdown thereof.

Because the circumstances of the present case evince a contractual relation between the PSBA and

Carlitos Bautista, the rules on quasi-delict do not really govern. 8 A perusal of Article 2176 shows thatobligations arising from quasi-delicts or tort, also known as extra-contractual obligations, arise onlybetween parties not otherwise bound by contract, whether express or implied. However, this impressionhas not prevented this Court from determining the existence of a tort even when there obtains acontract. In Air France vs. Carrascoso (124 Phil. 722), the private respondent was awarded damages for hisunwarranted expulsion from a first-class seat aboard the petitioner airline. It is noted, however, that theCourt referred to the petitioner-airline's liability as one arising from tort, not one arising from a contractof carriage. In effect, Air France is authority for the view that liability from tort may exist even if there is acontract, for the act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248Fed. 231).

This view was not all that revolutionary, for even as early as 1918, this Court was already of a similar mind.In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:

The field of non-contractual obligation is much broader than that of contractual obligation, comprising,as it does, the whole extent of juridical human relations. These two fields, figuratively speaking,concentric; that is to say, the mere fact that a person is bound to another by contract does not relievehim from extra-contractual liability to such person. When such a contractual relation exists the obligormay break the contract under such conditions that the same act which constitutes a breach of thecontract would have constituted the source of an extra-contractual obligation had no contract existedbetween the parties.

Immediately what comes to mind is the chapter of the Civil Code on Human Relations, particularly Article21, which provides:

Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, goodcustom or public policy shall compensate the latter for the damage. (emphasis supplied).

Air France penalized the racist policy of the airline which emboldened the petitioner's employee to

forcibly oust the private respondent to cater to the comfort of a white man who allegedly "had a betterright to the seat." In Austro-American, supra, the public embarrassment caused to the passenger was thejustification for the Circuit Court of Appeals, (Second Circuit), to award damages to the latter. From theforegoing, it can be concluded that should the act which breaches a contract be done in bad faith and beviolative of Article 21, then there is a cause to view the act as constituting a quasi-delict.

In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the contractbetween the school and Bautista had been breached thru the former's negligence in providing propersecurity measures. This would be for the trial court to determine. And, even if there be a finding ofnegligence, the same could give rise generally to a breach of contractual obligation only. Using the test ofCangco, supra, the negligence of the school would not be relevant absent a contract. In fact, thatnegligence becomes material only because of the contractual relation between PSBA and Bautista. Inother words, a contractual relation is a condition sine qua non to the school's liability. The negligence ofthe school cannot exist independently of the contract, unless the negligence occurs under the

circumstances set out in Article 21 of the Civil Code.

This Court is not unmindful of the attendant difficulties posed by the obligation of schools, above-mentioned, for conceptually a school, like a common carrier, cannot be an i nsurer of its students againstall risks. This is specially true in the populous student communities of the so-called "university belt" inManila where there have been reported several incidents ranging from gang wars to other forms ofhooliganism. It would not be equitable to expect of schools to anticipate all types of violent trespassupon their premises, for notwithstanding the security measures installed, the same may still fail againstan individual or group determined to carry out a nefarious deed inside school premises and environs.Should this be the case, the school may still avoid liability by proving that the breach of its contractualobligation to the students was not due to its negligence, here statutorily defined to be the omission ofthat degree of diligence which is required by the nature of the obligation and corresponding to the

circumstances of persons, time and place. 9

As the proceedings a quo have yet to commence on the substance of the private respondents' complaint,the record is bereft of all the material facts. Obviously, at this stage, only the trial court can make such adetermination from the evidence still to unfold.

WHEREFORE, the foregoing premises considered, the petition is DENIED. The court of origin (RTC,Manila, Br. 47) is hereby ordered to continue proceedings consistent with this ruling of the Court. Costsagainst the petitioners.

ST. MARY'S ACADEMY VS. CARPITANOS

The Case; The case is an appeal via certiorari from the decision1 of the Court of Appeals as well as theresolution denying reconsideration, holding petitioner liable for damages arising from an accident thatresulted in the death of a student who had joined a campaign to visit the public schools in Dipolog City tosolicit enrollment.

The Facts; The facts, as found by the Court of Appeals, are as follows:

"Claiming damages for the death of their only son, Sherwin Carpitanos, spouses William Carpitanos andLucia Carpitanos filed on June 9, 1995 a case against James Daniel II and his parents, James Daniel Sr. andGuada Daniel, the vehicle owner, Vivencio Villanueva and St. Mary’s Academy before the Regional TrialCourt of Dipolog City.

"On 20 February 1997, Branch 6 of the Regional Trial Court of Dipolog City rendered its decision thedispositive portion of which reads as follows:

"‘WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in the following manner:

1. Defendant St. Mary’s Academy of Dipolog City, is hereby ordered to pay plaintiffs William Carpitanosand Luisa Carpitanos, the following sums of money:

a. FIFTY THOUSAND PESOS (P50,000.00) indemnity for the loss of life of Sherwin S. Carpitanos;

b. FORTY THOUSAND PESOS (P40,000.00) actual damages incurred by plaintiffs for burial and relatedexpenses;

c. TEN THOUSAND PESOS (P10,000.00) for attorney’s fees;

d. FIVE HUNDRED THOUSAND PESOS (P500,000.00) for moral damages; and to pay costs.

2. Their liability being only s ubsidiary, defendants James Daniel, Sr. and Guada Daniel are hereby ordere d

to pay herein plaintiffs the amount of damages above-stated in the event of insolvency of principalobligor St. Mary’s Academy of Dipolog City;

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3. Defendant James Daniel II, being a minor at the time of the commission of the tort and who was underspecial parental authority of defendant St. Mary’s Academy, is ABSOLVED from paying the above -stateddamages, same being adjudged against defendants St. Mary’s Academy, and subsidiarily, against hisparents;

4. Defendant Vivencio Villanueva is hereby ABSOLVED of any liability. His counterclaim not being in orderas earlier discussed in this decision, is hereby DISMISSED.

IT IS SO ORDERED."’ (Decision, pp. 32-33; Records, pp. 205-206)."

"From the records it appears that from 13 to 20 February 1995, defendant-appellant St. Mary’s Academyof Dipolog City conducted an enrollment drive for the school year 1995-1996. A facet of the enrollmentcampaign was the visitation of schools from where prospective enrollees were studying. As a student ofSt. Mary’s Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, on the fatefulday, Sherwin, along with other high school students were riding in a Mitsubishi jeep owned by defendantVivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The jeep was drivenby James Daniel II then 15 years old and a student of the same school. Allegedly, the latter drove the jeepin a reckless manner and as a result the jeep turned turtle.

"Sherwin Carpitanos died as a result of the injuries he sustained from the accident."2

In due time, petitioner St. Mary’s academy appealed the decision to the Court of Appeals.3

On February 29, 2000, the Court of Appeals promulgated a decision reducing the actual damages toP25,000.00 but otherwise affirming the decision a quo, in toto.4

On February 29, 2000, petitioner St. Mary’s Academy filed a motion for reconsideration of the decision.However, on May 22, 2000, the Court of Appeals denied the motion.5

Hence, this appeal.6

The Issues1) Whether the Court of Appeals erred in holding the petitioner liable for damages for the death ofSherwin Carpitanos.2) Whether the Court of Appeals erred in affirming the award of moral damages against the petitioner.

The Court’s Ruling

We reverse the decision of the Court of Appeals.

The Court of Appeals held petitioner St. Mary’s Academy liable for the death of Sherwin Carpitanos underArticles 2187 and 2198 of the Family Code, pointing out that petitioner was negligent in allowing a minorto drive and in not having a teacher accompany the minor students in the jeep.

Under Article 218 of the Family Code, the following shall have special parental authority over a minor childwhile under their supervision, instruction or custody: (1) the school, its administrators and teachers; or (2)the individual, entity or institution engaged in child care. This special parental authority and responsibilityapplies to all authorized activities, whether inside or outside the premises of the school, entity orinstitution. Thus, such authority and responsibility applies to field trips, excursions and other affairs of thepupils and students outside the school premises whenever authorized by the school or its teachers.9

Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special

parental authority are principally and solidarily liable for damages caused by the acts or omissions of theunemancipated minor while under their supervision, instruction, or custody.10

However, for petitioner to be liable, there must be a finding that the act or omission considered asnegligent was the proximate cause of the injury caused because the negligence must have a causalconnection to the accident.11

"In order that there may be a recovery for an injury, however, it must be shown that the ‘injury for whichrecovery is sought must be the legitimate consequence of the wrong d one; the connection between thenegligence and the injury must be a direct and natural sequence of events, unbroken by interveningefficient causes.’ In other words, the negligence must be the proximate cause of the injury. For,‘negligence, no matter in what it consists, cannot create a right of action unless it is the proximate cause

of the injury complained of.’ And ‘the proximate cause of an injury is that cause, which, in natural andcontinuous sequence, unbroken by any efficient intervening cause, produces the injury, and withoutwhich the result would not have occurred.’"12

In this case, the respondents failed to show that the negligence of petitioner was the proximate cause ofthe death of the victim.

Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was notthe negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steeringwheel guide of the jeep.

In their comment to the petition, respondents Daniel spouses and Villanueva admitted the documentaryexhibits establishing that the cause of the accident was the detachment of the steering wheel guide ofthe jeep. Hence, the cause of the accident was not t he recklessness of James Daniel II but the mechanicaldefect in the jeep of Vivencio Villanueva. Respondents, including the spouses Carpitanos, parents of thedeceased Sherwin Carpitanos, did not dispute the report and testimony of the traffic investigator whostated that the cause of the accident was the detachment of the steering wheel guide that caused thejeep to turn turtle.

Significantly, respondents did not present any evidence to show that the proximate cause of the accidentwas the negligence of the school authorities, or the reckless driving of James Daniel II. Hence, therespondents’ reliance on Article 219 of the Family Code that "those given the authority and responsibilityunder the preceding Article shall be principally and solidarily liable for damages caused by acts oromissions of the unemancipated minor" was unfounded.

Further, there was no evidence that petitioner school allowed the minor James Daniel II to d rive the jeepof respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent Vivencio Villanueva,who had possession and control of the jeep. He was driving the vehicle and he allowed James Daniel II, aminor, to drive the jeep at the time of the accident.

Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanicaldetachment of the steering wheel guide of the jeep, must be pinned on the minor’s parents primarily. Thenegligence of petitioner St. Mary’s Academy was only a remote cause of the accident. Between theremote cause and the injury, there intervened the negligence of the minor’s parents or the detachmentof the steering wheel guide of the jeep.

"The proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken byany efficient intervening cause, produces the injury, and without which the result would not haveoccurred."13

Considering that the negligence of the minor driver or the detachment of the steering wheel guide of thejeep owned by respondent Villanueva was an event over whic h petitioner St. Mary’s Academy had nocontrol, and which was the proximate cause of the accident, petitioner may not be held liable for the

death resulting from such accident.

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Consequently, we find that petitioner likewise cannot be held liable for moral damages in the amount ofP500,000.00 awarded by the trial court and affirmed by the Court of Appeals.

Though incapable of pecuniary computation, moral damages may be recovered if they are the proximateresult of the defendant’s wrongful act or omission.14 In this case, the proximate cause of the accidentwas not attributable to petitioner.

For the reason that petitioner was not directly liable for the accident, the decision of the Court of Appealsordering petitioner to pay death indemnity to respondent Carpitanos must be deleted. Moreover, thegrant of attorney’s fees as part of damages is the exception rather than the rule.15 The power of the

court to award attorney’s fees under Article 2208 of the Civil Code demands factual, legal and equitablejustification.16 Thus, the grant of attorney’s fees against the petitioner is likewise deleted.

Incidentally, there was no question that the registered owner of the vehicle was respondent Villanueva.He never denied and in fact admitted this fact.1âwphi1 We have held that the registered owner of anyvehicle, even if not used for public service, would primarily be responsible to the public or to thirdpersons for injuries caused the latter while the vehicle was being driven on the highways or streets."17Hence, with the overwhelming evidence presented by petitioner and the respondent Daniel spouses thatthe accident occurred because of the detachment of the steering wheel guide of the jeep, it is not theschool, but the registered owner of the vehicle who shall be held responsible for damages for the deathof Sherwin Carpitanos.

The Fallo WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals18 andthat of the trial court.19 The Court remands the case to the trial court for determination of the liability ofdefendants, excluding petitioner St. Mary’s Academy, Dipolog City.

PHILIPPINE RABBIT BUS LINES, INC. VS. PHIL-AMERICAN FORWARDERS, INC.,

Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law from the orderof 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 CivilCode (Civil Case No. 3865).

In the complaint for damages filed by the bus company and Pangalangan against Phil-AmericanForwarders, 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 BusLines, Inc. As a result of the bumping, Pangalangan suffered injuries and the bus was damaged and couldnot 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'semployer.

Balingit moved that the complaint against him be dismissed on the ground that the bus company and thebus driver had no cause of action against him. As already stated, the lower court dismissed the action asto Balingit. The bus company and its driver appealed.

The Civil Code provides:

ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, isobliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractualrelation 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 oromissions, but also for those of persons for whom one is responsible.

The owners and managers of an establishment or enterprise are likewise responsible for damages causedby their employees in the service of the branches in which the latter are employed or on the occasion oftheir functions.

Employers shall be liable for the damages caused by their employees and household helpers acting withinthe scope of their assigned tasks, even though the former are not engaged in any business or industry.

The responsibility treated of in this article shall cease when the persons herein mentioned prove that theyobserved 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 "ownersand managers of an establishment or enterprise" (dueños o directores d e un establicimiento o empresa)used in article 2180 of the Civil Code, formerly article 1903 of the old Code, embrace the manager of acorporation owning a truck, the reckless operation of which allegedly resulted in the vehicular accidentfrom which the damage arose.

We are of the opinion that those terms do not include the manager of a corporation. It may be gatheredfrom the context of article 2180 that the term "manager" ("director" in the Spanish version) is used in thesense of "employer".

Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be fastened onBalingit as manager of Phil-American Forwarders, Inc., in connection with the vehicular accident alreadymentioned 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 elnum 3.0 del (art.) 1903, el director de un periodico explotado por una sociedad, porque cualquiera quesea su jerarquia y aunque Ileve la direccion de determinadas convicciones politicas no por eso deja deestar subordinado a la superior autoridad de la Empresa" (Decision of Spanish Supreme Court datedDecember 6, 1912 cited in 12 Manresa, Codigo Civil Español 5th Ed. 662; 1913 Enciclopedia JuridicaEspañola 992).

The bus company and its driver, in their appellants' brief, injected a new factual issue which was notalleged in their complaint. They argue that Phil- American Forwarders, Inc. is merely a business conduit ofBalingit because out of its capital stock with a par value of P41,200, Balingit and his wife had subscribedP40,000 and they paid P10,000 on their subscription, while the other incorporators, namely, RodolfoLimjuco, 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-AmericanForwarders, 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 hasto 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).

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When a party deliberately adopts a certain theory and the case is decided upon that theory in the courtbelow, he will not be permitted to change his theory on appeal because, to permit him to do so, could beunfair 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.

PHILTRANCO SERVICE ENTERPRISES, INC. VS. ca

The petitioners interposed this appeal by way of a petition for review under Rule 45 of the Rules of Courtfrom the 31 January 1995 Decision of the Court of Appeals in CA-G.R. CV No. 41140 1 affirming the 22

January 1993 2 Decision of Branch 31 of the Regional Trial Court, Calbayog City, in Civil Cas e No. 373, whichordered the petitioners to pay the private respondents damages as a result of a vehicular accident.

Civil Case No. 373 was an action against herein petitioners for damages instituted by the heirs of RamonA. Acuesta, namely, Gregorio O. Acuesta; Julio O. Acuesta; Ramon O. Acuesta, Jr.; Baltazar O. Acuesta;Rufino O. Acuesta; Maximo O. Acuesta; Neri O. Acuesta; Iluminada O. Acuesta; Rosario Acuesta-Sanz; andPamfilo O. Acuesta. Atty. Julio O. Acuesta also appeared as counsel for the plaintiffs (herein privaterespondents). 3 The private respondents alleged that the petitioners were guilty of gross negligence,recklessness, violation of traffic rules and regulations, abandonment of victim, and attempt to escapefrom a crime.

To support their allegations, the private respondents presented eight witnesses. On 10 February 1992,after the cross-examination of the last witness, the private respondents' counsel made a reservation topresent a ninth witness. The case was then set for continuation of the trial on 30 and 31 March 1992.Because of the non-appearance of the petitioners' counsel, the 30 March 1992 hearing was cancelled. Thenext day, private respondents' counsel manifested that he would no longer present the ninth witness. Hethereafter made an oral offer of evidence and rested the case. The trial court summarized privaterespondents' evidence in this wise:

[I]n the early morning of March 24, 1990, about 6:00 o'clock, the victim Ramon A. Acuesta was riding inhis easy rider bicycle (Exhibit "O"), along the Gomez Street of Calbayog City. The Gomez Street is alongthe side of Nijaga Park. On the Magsaysay Blvd., also in Calbayog City, defendant Philtranco ServiceEnterprises, Inc. (Philtranco for brevity) Bus No. 4025 with plate No. EVA-725 driven by defendantRogasiones Manilhig y Dolira was being pushed by some persons in order to start its engine. TheMagsaysay Blvd. runs perpendicular to Gomez St. and the said Philtranco bus 4025 was heading in thegeneral direction of the said Gomez Street. Some of the persons who were pushing the bus were on itsback, while the others were on the sides. As the bus was pushed, its engine started thereby the buscontinued on its running motion and it occurred at the time when Ramon A. Acuesta who was still ridingon his bicycle was directly in front of the said bus. As the engine of the Philtranco bus started abruptly

and suddenly, its running motion was also enhanced by the said functioning engine, thereby the subjectbus bumped on the victim Ramon A. Acuesta who, as a result thereof fell and, thereafter, was run over bythe said bus. The bus did not stop although it had already bumped and ran [sic] over the victim; instead, itproceeded running towards the direction of the Rosales Bridge which is located at one side of the NijagaPark and towards one end of the Gomez St., to which direction the victim was then heading when he wasriding on his bicycle. P/Sgt. Yabao who was then jogging thru the Gomez Street and was heading andmeeting the victim Ramon A. Acuesta as the latter was riding on his bicycle, saw when the Philtranco buswas being pushed by some passengers, when its engine abruptly started and when the said bus bumpedand ran over the victim. He approached the bus driver defendant Manilhig herein and signalled to him tostop, but the latter did not listen. So the police officer jumped i nto the bus and introducing himself to thedriver defendant as policeman, ordered the latter to stop. The said defendant driver stopped thePhiltranco bus near the Nijaga Park and Sgt. Yabao thereafter, told the driver to proceed to the PoliceHeadquarter which was only 100 meters away from Nijaga Park because he was apprehensive that thesaid driver might be harmed by the relatives of the victim who might come to the scene of the accident.

Then Sgt. Yabao cordoned the scene where the vehicular accident occurred and had P/Cpl. BartolomeBagot, the Traffic Investigator, conduct an investigation and make a sketch of the crime scene. Sgt.

Yambao Yabao was only about 20 meters away when he saw the bus of defendant Philtranco bumped[sic] and [sic] ran over the victim. From the place where the victim was actually bumped by the bus, thesaid vehicle still had run to a distance of about 15 meters away. 4

For their part, the petitioners filed an Answer 5 wherein they alleged that petitioner Philtranco exercisedthe diligence of a good father of a family in the selection and supervision of its employees, includingpetitioner Manilhig who had excellent record as a driver and had undergone months of rigid trainingbefore he was hired. Petitioner Manilhig had always been a prudent professional driver, religiouslyobserving traffic rules and regulations. In driving Philtranco's buses, he exercised the diligence of a verycautious person.

As might be expected, the petitioners had a different version of the incident. They alleged that in themorning of 24 March 1990, Manilhig, in preparation for his trip back to Pasay City, warmed up the engineof the bus and made a few rounds within the city proper of Calbayog. While the bus was slowly andmoderately cruising along Gomez Street, the victim, who was biking towards the same direction as thebus, suddenly overtook two tricycles and swerved left to the center of the road. The swerving was abruptand so sudden that even as Manilhig applied the brakes and blew the bus horn, the victim was bumpedfrom behind and run over by the bus. It was neither willful nor deliberate on Manilhig's part to proceedwith the trip after his bus bumped the victim, the truth being that when he looked at his rear-viewwindow, he saw people crowding around the victim, with others running after his bus. Fearing that hemight be mobbed, he moved away from the scene of the accident and intended to report the incident tothe police. After a man boarded his bus and introduced himself as a policeman, Manilhig gave himself upto the custody of the police and reported the accident in question.

The petitioners further claimed that it was the negligence of the victim in overtaking two tricycles,without taking precautions such as seeing first that the road was clear, which caused the death of thevictim. The latter did not even give any signal of his intention to overtake. The petitioners thencounterclaimed for P50,000 as and for attorney's fees; P1 million as moral damages; and P50,000 forlitigation expenses.

However, the petitioners were not able to present their evidence, as they were deemed to have waivedthat right by the failure of their counsel to appear at the scheduled hearings on 30 and 31 March 1992. Thetrial court then issued an Order 6 declaring the case submitted for decision. Motions for thereconsideration of the said Order were both denied.

On 22 January 1992, the trial court handed down a decision ordering the petitioners to jointly andseverally pay the private respondents the following amounts:

1) P55, 615.72 as actual damages;

2) P200,000 as death indemnity for the death of the victim Ramon A. Acuesta;3) P1 million as moral damages;4) P500,000 by way of exemplary damages;5) P50,000 as attorney's fees; and6) the costs of suit. 7

Unsatisfied with the judgment, the petitioners appealed to the Court of Appeals imputing upon the trialcourt the following errors:

(1) in preventing or barring them from presenting their evidence;(2) in finding that petitioner Manilhig was at fault;(3) in not finding that Ramon was the one at fault and his own fault caused, or at least contributed to, hisunfortunate accident;(4) in awarding damages to the private respondents; and

(5) in finding that petitioner Philtranco was solidarily liable with Manilhig for damages. 8

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In its decision of 31 January 1995, the Court of Appeals affirmed the decision of the trial court. It held thatthe petitioners were not denied due process, as they were given an opportunity to present their defense.The records show that they were notified of the assignment of the case for 30 and 31 March 1992. Yet,their counsel did not appear on the said dates. Neither did he file a motion for postponement of thehearings, nor did he appeal from the denial of the motions for reconsideration of the 31 March 1992 Orderof the trial court. The petitioners have thereby waived their right to present evidence. T heir expectationthat they would have to object yet to a formal offer of evidence by the private respondents was"misplaced," for it was within the sound discretion of the court to allow oral offer of evidence.

As to the second and third assigned errors, the respondent court disposed as follows:

. . . We cannot help but accord with the lower court's finding on appellant Manilhig's fault. First, it is notdisputed that the bus driven by appellant Manilhig was being pushed at the time of the unfortunatehappening. It is of common knowledge and experience that when a vehicle is pushed to a jump-start, itsinitial movement is far from slow. Rather, its movement is abrupt and jerky and it takes a while before thevehicle attains normal speed. The lower court had thus enough basis to conclude, as it did, that thebumping of the victim was due to appellant Manilhig's actionable negligence and inattention. Prudenceshould have dictated against jump-starting the bus in a busy section of the city. Militating further againstappellants' posture was the fact that the precarious pushing of subject bus to a jumpstart was donewhere the bus had to take a left turn, thereby making the move too risky to take. The possibility thatpedestrians on Gomez Street, where the bus turned left and the victim was biking, would be unaware ofa vehicle being pushed to a jumpstart, was too obvious to be overlooked. Verily, contrary to their barearguments, there was gross negligence on the part of appellants.

The doctrine of last clear chance theorized upon by appellants, is inapplicable under the premisesbecause the victim, who was bumped from behind, obviously, did not of course anticipate a Philtrancobus being pushed from a perpendicular street.

The respondent court sustained the awards of moral and exemplary damages and of attorney's fees, forthey are warranted under Articles 2206, 2231, and 2208(1), respectively, of the Civil Code. Anent thesolidary liability of petitioner Philtranco, the same finds support in Articles 2180 and 2194 of the said Code.The defense that Philtranco exercised the diligence of a good father of a family in the selection andsupervision of its employees crumbles in the face of the gross negligence of its driver, which caused theuntimely death of the victim.

Their motion for reconsideration having been denied, the petitioners came to us claiming that the Courtof Appeals gravely erred

I. IN HOLDING THAT PETITIONERS WAIVED THEIR RIGHT TO PRESENT THEIR EVIDENCE, AND THAT

PETITIONERS WERE NOT DENIED DUE PROCESS.

II. IN APPLYING ART. 2194, INSTEAD OF ART. 2180, OF THE CIVIL CODE, AND IN HOLDING THATPETITIONER PHILTRANCO CAN NOT INVOKE THE DEFENSE OF DILIGENCE OF A GOOD FATHER OF AFAMILY.

III.. IN AWARDING DAMAGES TO RESPONDENTS AND/OR IN NOT FINDING THE TRIAL COURT'S AWARDOF DAMAGES EXCESSIVE.

We resolved to give due course to the petition and required the parties to submit their respectivememoranda after due consideration of the allegations, issues, and arguments adduced in the petition,the comment thereon by the private r espondents, and the reply to the comment filed by the petitioners.The petitioners filed their memorandum in due time; while the private respondents filed theirs only on 3January 1997, after their counsel was fined in the amount of P1,000 for failure to submit the required

memorandum.

The first imputed error is without merit. The petitioners and their counsel, Atty. Jose Buban, were dulynotified in open court of the order of the trial court of 10 February 1992 setting the case for hearing on 30and 31 March 1992. 9 On both dates neither the petitioners nor their counsel appeared. In his motion forreconsideration, 10 Atty. Buban gave the following reasons for his failure to appear on the said hearings:

1. That when this case was called on March 27, 1992, counsel was very much indisposed due to therigors of a very hectic campaign as he is a candidate for City Councilor of Tacloban; he wanted to leave forCalbayog City, but he was seized with slight fever on the morning of said date; but then, during the lasthearing, counsel was made to understand that plaintiffs would formally offer their exhibits in writing, forwhich reason, counsel for defendants waited for a copy of said formal offer, but counsel did not receive

any copy as counsel for plaintiffs opted to formally offer their exhibits orally i n open court;

2. That counsel for defendants, in good faith believed that he would be given reasonable time withinwhich to comment on the formal offer in writing, only to know that counsel for plaintiffs orally offeredtheir exhibits in open court and that the same were admitted by the Honorable Court; and that when thiscase was called on March 30 and 31, 1992, the undersigned counsel honestly believed that said schedulewould be cancelled, pending on the submission of the comments made by the defendants on the formaloffer; but it was not so, as the exhibits were admitted in open court. 11

In its order of 26 May 1992, the trial court denied the motion, finding it to be "devoid of meritoriousbasis," as Atty. Buban could have filed a motion for postponement. 12 Atty. Buban then filed a motion toreconsider 13 the order of denial, which was likewise denied by the trial court in its order of 12 August1992. 14 Nothing more was done by the petitioners after receipt of the order of 12 August 1992. A perusalof the first and second motions for reconsideration discloses absence of any claim that the petitionershave meritorious defenses. Clearly, therefore, the trial court committed no error in declaring the casesubmitted for decision on the basis of private respondent's evidence.

The second imputed error is without merit either.

Civil Case No. 373 is an action for damages based on quasi-delict 15 under Article 2176 and 2180 of the CivilCode against petitioner Manilhig and his employer, petitioner Philtranco, respectively. These articlespertinently provide:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, isobliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractualrelation 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 oromissions, but also for those of persons for whom one is responsible.

The owners and managers of an establishment or enterprise are likewise responsible for damages causedby their employees in the service of the branches in which the latter are employed or on the occasion oftheir functions.

Employers shall be liable for the damages caused by their employees and household helpers acting withinthe scope of their assigned tasks even though the former are not engaged in any business or industry.

The responsibility treated of in this article shall cease when the persons herein mentioned prove that theyobserved all the diligence of a good father of a family to prevent damage.

We have consistently held that the liability of the registered owner of a public service vehicle, likepetitioner Philtranco, 16 for damages arising from the tortious acts of the driver is primary, direct, andjoint and several or solidary with the driver. 17 As to solidarity, Article 2194 expressly provides:

Art. 2194. The responsibility of two or more persons who are liable for a quasi-delict is solidary.

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Since the employer's liability is primary, direct and solidary, its only recourse if the judgment for damagesis satisfied by it is to recover what it has paid from its employee who committed the fault or negligencewhich gave rise to the action based on quasi-delict. Article 2181 of the Civil Code provides:

Art. 2181. Whoever pays for the damage caused by his dependents or employees may recover fromthe latter what he has paid or delivered in satisfaction of the claim.

There is, however, merit in the third imputed error.

The trial court erroneously fixed the "death indemnity" at P200,000. The private respondents defendedthe award in their Opposition to the Motion for Reconsideration by saying that "[i]n the case of PhilippineAirlines, Inc. vs. Court of Appeals, 185 SCRA 110, our Supreme Court held that the award of damages fordeath is computed on the basis of the life expectancy of the deceased." In that case, the "deathindemnity" was computed by multiplying the victim's gross annual income by his life expectancy, less hisyearly living expenses. Clearly then, the "death indemnity" referred to was the additional indemnity forthe loss of earning capacity mentioned in Article 2206(1) of the Civil Code, and not the basic indemnity fordeath mentioned in the first paragraph thereof. This article provides as follows:

Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least threethousand pesos, even though there may have been mitigating circumstances. In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnityshall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by thecourt, unless the deceased on account of permanent physical disability not caused by the defendant, hadno earning capacity at the time of his death;

(2) If the deceased was obliged to give support according to the provisions of article 291, the recipientwho is not an heir called to the decedent's inheritance by the law of testate or intestate succession, maydemand support from the person causing the death, for a period of not exceeding five years, the exactduration to be fixed by the court;

(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demandmoral damages for mental anguish by reason of the death of the deceased.

We concur with petitioners' view that the trial court intended the award of "P200,000.00 as deathindemnity" not as compensation for loss of earning capacity. Even if the trial court intended the award asindemnity for loss of earning capacity, the same must be struck out for lack of basis. There is no evidenceon the victim's earning capacity and life expectancy.

Only indemnity for death under the opening paragraph of Article 2206 is due, the amount of which hasbeen fixed by current jurisprudence at P50,000. 18

The award of P1 million for moral damages to the heirs of Ramon Acuesta has no sufficient basis and isexcessive and unreasonable. This was based solely on the testimony of one of the heirs, Atty. JulioAcuesta, contained in his "Direct Testimony . . . As Plaintiff, conducted by Himself," 19 to wit:

Q. What was your feeling or reaction as a result of the death of your father Ramon A. Acuesta?

A. We, the family members, have suffered much from wounded feelings, moral shock, mental anguish,sleepless nights, to which we are entitled to moral damages at the reasonable amount of ONE MILLION(P1,000,000.00) PESOS or at the sound discretion of this Hon. Court.

Since the other heirs of the deceased did not take the witness stand, the trial court had no basis for itsaward of moral damages to those who did not testify thereon.

Moral damages are emphatically not intended to enrich a plaintiff at the expense of the defendant. Theyare awarded only to allow the former to obtain means, diversion, or amusements that will serve toalleviate the moral suffering he has undergone due to the defendant's culpable action and must,perforce, be proportional to the suffering inflicted. 20 In light of the circumstances in this case, an awardof P50,000 for moral damages is in order.

The award of P500,000 for exemplary damages is also excessive. In quasi-delicts, exemplary damagesmay be awarded if the party at fault acted with gross negligence. 21 The Court of Appeals found thatthere was gross negligence on the part of petitioner Manilhig. 22 Under Article 2229 of the Civil Code,

exemplary damages are imposed by way of example or correction for the public good, in addition to themoral, temperate, liquidated, or compensatory damages. Considering its purpose, it must be fair andreasonable in every case and should not be awarded to unjustly enrich a prevailing party. In the instantcase, an award of P50,000 for the purpose would be adequate, fair, and reasonable.

Finally, the award of P50,000 for attorney's fees must be r educed. The general rule is that attorney's feescannot be recovered as part of damages because of the policy that no premium should be placed on theright tolitigate. 23 Stated otherwise, the grant of attorney's fees as part of damages is the exception rather thanthe rule, as counsel's fees are not awarded every time a party prevails in a suit. 24 Such attorney's feescan be awarded in the cases enumerated in Article 2208 of the Civil Code, and in all cases it must bereasonable. In the instant case, the counsel for the plaintiffs is himself a co-plaintiff; it is then unlikely thathe demanded from his brothers and sisters P100,000 as attorney's fees as alleged in the complaint andtestified to byhim. 25 He did not present any written contract for his fees. He is, however, entitled to a reasonableamount for attorney's fees, considering that exemplary damages are awarded. Among the instancesmentioned in Article 2208 of the Civil Code when attorney's fees may be recovered is "(1) whenexemplary damages are awarded." Under the circumstances in this case, an award of P25,000 forattorney's fees is reasonable.

The petitioners did not contest the award for actual damages fixed by the trial court. Hence, such awardshall stand.

IN VIEW OF THE FOREGOING, the petition is hereby partly granted and the challenged decision of CA-G.R.CV No. 41140 is AFFIRMED, subject to modifications as to the damages awarded, which are reduced asfollows:

(a) Death indemnity, from P200,000 to P50,000;(b) Moral damages, from P1 million to P50,000;

(c) Exemplary damages, from P500,000 to P50,000; and(d) Attorney's fees, from P50,000 to P25,000.

No pronouncements as to costs in this instance.

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, vs. MARJORIE NAVIDAD

The case before the Court is an appeal from the decision and resolution of the Court of Appeals,promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720, entitled"Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et. al.," which has modifiedthe decision of 11 August 1998 of the Regional Trial Court, Branch 266, Pasig City, exonerating PrudentSecurity Agency (Prudent) from liability and finding Light Rail Transit Authority (LRTA) and RodolfoRoman liable for damages on account of the death of Nicanor Navidad.

On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then drunk,entered the EDSA LRT station after purchasing a "token" (representing payment of the fare). While

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Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard assignedto the area approached Navidad. A misunderstanding or an altercation between the two apparentlyensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight started orwho, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exactmoment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidadwas struck by the moving train, and he was killed instantaneously.

On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with herchildren, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the MetroTransit Organization, Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and Roman

filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent, in itsanswer, denied liability and averred that it had exercised due diligence in the selection and supervision ofits security guards.

The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presentingevidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in hisassigned task. On 11 August 1998, the trial court rendered its decision; it adjudged:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants PrudentSecurity and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs the following:"a) 1) Actual damages of P44,830.00;2) Compensatory damages of P443,520.00;3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;"b) Moral damages of P50,000.00;"c) Attorney’s fees of P20,000; "d) Costs of suit.

"The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit."The compulsory counterclaim of LRTA and Roman are likewise dismissed."1

Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated its nowassailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead,holding the LRTA and Roman jointly and severally liable thusly:

"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants from anyliability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail TransitAuthority (LRTA) are held liable for his death and are hereby directed to pay jointly and severally to theplaintiffs-appellees, the following amounts:a) P44,830.00 as actual damages;

b) P50,000.00 as nominal damages;c) P50,000.00 as moral damages;d) P50,000.00 as indemnity for the death of the deceased; ande) P20,000.00 as and for attorney’s fees."2

The appellate court ratiocinated that while the deceased might not have then as yet boarded the train, acontract of carriage theretofore had already existed when the victim entered the place where passengerswere supposed to be after paying the fare and getting the corresponding token therefor. In exemptingPrudent from liability, the court stressed that there was nothing to link the security agency to the deathof Navidad. It said that Navidad failed to show that Escartin inflicted fist blows upon the victim and theevidence merely established the fact of death of Navidad by reason of his having been hit by the trainowned and managed by the LRTA and operated at the time by Roman. The appellate court faultedpetitioners for their failure to present expert evidence to establish the fact that the application ofemergency brakes could not have stopped the train.

The appellate court denied petitioners’ motion for reconsideration in its resolution of 10 October 2000.

In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz:

"I.THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS OF FACTSBY THE TRIAL COURT

"II.THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS ARE LIABLEFOR THE DEATH OF NICANOR NAVIDAD, JR.

"III.THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO ROMAN IS AN

EMPLOYEE OF LRTA."3

Petitioners would contend that the appellate court ignored the evidence and the factual findings of thetrial court by holding them liable on the basis of a sweeping conclusion that the presumption ofnegligence on the part of a common carrier was not over come. Petitioners would insist that Escartin’sassault upon Navidad, which caused the latter to fall on the tracks, was an act of a stranger that could nothave been foreseen or prevented. The LRTA would add that the appellate court’s conclusion on theexistence of an employer-employee relationship between Roman and LRTA lacked basis because Romanhimself had testified being an employee of Metro Transit and not of the LRTA.

Respondents, supporting the decision of the appellate court, contended that a contract of carriage wasdeemed created from the moment Navidad paid the fare at the LRT s tation and entered the premises ofthe latter, entitling Navidad to all the rights and protection under a contractual relation, and that theappellate court had correctly held LRTA and Roman liable for the death of Navidad in failing to exerciseextraordinary diligence imposed upon a common carrier.

Law and jurisprudence dictate that a common carrier, both from the nature of its business and forreasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety ofpassengers.4 The Civil Code, governing the liability of a common carrier for death of or injury to itspassengers, provides:

"Article 1755. A common carrier is bound to carry the passengers safely as far as human care andforesight can provide, using the utmost diligence of very cautious persons, with a due regard for all thecircumstances.

"Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have beenat fault or to have acted negligently, unless they prove that they observed extraordinary diligence asprescribed in articles 1733 and 1755."

"Article 1759. Common carriers are liable for the death of or injuries to passengers through thenegligence or willful acts of the former’s employees, although such employees may have acted beyondthe scope of their authority or in violation of the orders of the common carriers.

"This liability of the common carriers does not cease upon proof that they exercised all the diligence of agood father of a family in the selection and supervision of their employees."

"Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of thewillful acts or negligence of other passengers or of strangers, if the common carrier’s employees throughthe exercise of the diligence of a good father of a family could have prevented or stopped the act oromission."

The law requires common carriers to carry passengers safely using the utmost diligence of very cautiouspersons with due regard for all circumstances.5 Such duty of a common carrier to provide safety to its

passengers so obligates it not only during the course of the trip but for so long as the passengers arewithin its premises and where they ought to be in pursuance to the contract of carriage.6 The statutory

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provisions render a common carrier liable for death of or injury to passengers (a) through the negligenceor wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or ofstrangers if the common carrier’s employees through the exercise of due diligence could have preventedor stopped the act or omission.7 In case of such death or injury, a carrier is presumed to have been atfault or been negligent, and8 by simple proof of injury, the passenger is relieved of the duty to stillestablish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrierto prove that the injury is due to an unforeseen event or to force majeure.9 In the absence of satisfactoryexplanation by the carrier on how the accident occurred, which petitioners, according to the appellatecourt, have failed to show, the presumption would be that it has been at fault,10 an exception from thegeneral rule that negligence must be proved.11

The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victimarises from the breach of that contract by reason of its failure to exercise the high diligence required ofthe common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier maychoose to hire its own employees or avail itself of the services of an outsider or an independent firm toundertake the task. In either case, the common carrier is not relieved of its responsibilities under thecontract of carriage.

Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisionsof Article 217612 and r elated provisions, in conjunction with Article 2180,13 of the Civil Code. The premise,however, for the employer’s liability is negligence or fault on the part of the employee. Once such fault isestablished, the employer can then be made liable on the basis of the presumption juris tantum that theemployer failed to exercise diligentissimi patris families i n the selection and supervision of its employees.The liability is primary and can only be negated by showing due diligence in the selection and supervisionof the employee, a factual matter that has not been shown. Absent such a showing, one might ask

further, how then must the liability of the common carrier, on the one hand, and an independentcontractor, on the other hand, be described? It would be solidary. A contractual obligation can bebreached by tort and when the same act or omission causes the injury, one resulting in culpa contractualand the other in culpa aquiliana, Article 219414 of the Civil Code can well apply.15 In fine, a liability for tortmay arise even under a contract, where tort is that which breaches the contract.16 Stated differently,when an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no contract existed between the parties, the contract can be said to have beenbreached by tort, thereby allowing the rules on tort to apply.17

Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, thisCourt is concluded by the factual finding of the Court of Appeals that "there is nothing to link (Prudent)to the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has notbeen duly proven x x x." This finding of the appellate court is not without substantial justification in ourown review of the records of the case.

There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act oromission, he must also be absolved from liability. Needless to say, the contractual tie between the LRTand Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be madeliable only for his own fault or negligence.

The award of nominal damages in addition to actual damages is untenable. Nominal damages areadjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant,may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any losssuffered by him.18 It is an established rule that nominal damages cannot co-exist with compensatorydamages.19

WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only inthat (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved from

liability. No costs.

E. MERRITT, vs.GOVERNMENT OF THE PHILIPPINE ISLANDS

This is an appeal by both parties from a judgment of the Court of First Instance of the city of Manila infavor of the plaintiff for the sum of P14,741, together with the costs of the cause.

Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which theplaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2) "in limiting the timewhen plaintiff was entirely disabled to two months and twenty-one days and fixing the damageaccordingly in the sum of P2,666, instead of P6,000 as claimed by plaintiff in his complaint."

The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that thecollision between the plaintiff's motorcycle and the ambulance of the General Hospital was due to thenegligence of the chauffeur; (b) in holding that the Government of the Philippine Islands is liable for thedamages sustained by the plaintiff as a result of the collision, even if it be true that the collision was dueto the negligence of the chauffeur; and (c) in rendering judgment against the defendant for the sum ofP14,741.

The trial court's findings of fact, which are fully supported by the record, are as follows:

It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a motorcycle, wasgoing toward the western part of Calle Padre Faura, passing along the west side thereof at a speed of tento twelve miles an hour, upon crossing Taft Avenue and when he was ten feet from the southwesternintersection of said streets, the General Hospital ambulance, upon reaching said avenue, instead ofturning toward the south, after passing the center thereof, so that it would be on the left side of saidavenue, as is prescribed by the ordinance and the Motor Vehicle Act, turned suddenly and unexpectedly

and long before reaching the center of the street, into the right side of Taft Avenue, without havingsounded any whistle or horn, by which movement it struck the plaintiff, who was already six feet fromthe southwestern point or from the post place there.

By reason of the resulting collision, the plaintiff was so severely injured that, according to Dr. Saleeby,who examined him on the very same day that he was taken to the General Hospital, he was sufferingfrom a depression in the left parietal region, a would in the same place and in the back part of his head,while blood issued from his nose and he was entirely unconscious.

The marks revealed that he had one or more fractures of the skull and that the grey matter and brain washad suffered material injury. At ten o'clock of the night in question, which was the time set forperforming the operation, his pulse was so weak and so irregular that, in his opinion, there was little hopethat he would live. His right leg was broken in such a way that the fracture extended to the outer skin insuch manner that it might be regarded as double and the would be exposed to infection, for which

reason it was of the most serious nature.

At another examination six days before the day of the trial, Dr. Saleeby noticed that the plaintiff's legshowed a contraction of an inch and a half and a curvature that made his leg very weak and painful at thepoint of the fracture. Examination of his head revealed a notable readjustment of the functions of thebrain and nerves. The patient apparently was slightly deaf, had a light weakness in his eyes and in hismental condition. This latter weakness was always noticed when the plaintiff had to do any difficultmental labor, especially when he attempted to use his money for mathematical calculations.

According to the various merchants who testified as witnesses, the plaintiff's mental and physicalcondition prior to the accident was excellent, and that after having received the injuries that have beendiscussed, his physical condition had undergone a noticeable depreciation, for he had lost the agility,energy, and ability that he had constantly displayed before the accident as one of the best constructorsof wooden buildings and he could not now earn even a half of the income that he had secured for his

work because he had lost 50 per cent of his efficiency. As a contractor, he could no longer, as he hadbefore done, climb up ladders and scaffoldings to reach the highest parts of the building.

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As a consequence of the loss the plaintiff suffered in the efficiency of his work as a contractor, he had todissolved the partnership he had formed with the engineer. Wilson, because he was incapacitated frommaking mathematical calculations on account of the condition of his leg and of his mental faculties, andhe had to give up a contract he had for the construction of the Uy Chaco building."

We may say at the outset that we are in full accord with the trial court to the effect that the collisionbetween the plaintiff's motorcycle and the ambulance of the General Hospital was due solely to thenegligence of the chauffeur.

The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff are

(a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the amount allowed for theloss of wages during the time the plaintiff was incapacitated from pursuing his occupation. We findnothing in the record which would justify us in increasing the amount of the first. As to the second, therecord shows, and the trial court so found, that the plaintiff's services as a contractor were worth P1,000per month. The court, however, limited the time to two months and twenty-one days, which the plaintiffwas actually confined in the hospital. In this we think there was error, because it was clearly establishedthat the plaintiff was wholly incapacitated for a period of six months. The mere fact that he remained inthe hospital only two months and twenty-one days while the remainder of the six months was spent inhis home, would not prevent recovery for the whole time. We, therefore, find that the amount ofdamages sustained by the plaintiff, without any fault on his part, is P18,075.

As the negligence which caused the collision is a tort committed by an agent or employee of theGovernment, the inquiry at once arises whether the Government is legally-liable for the damagesresulting therefrom.

Act No. 2457, effective February 3, 1915, reads:

An Act authorizing E. Merritt to bring suit against the Government of the Philippine Islands andauthorizing the Attorney-General of said Islands to appear in said suit.

Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E. Merritt, ofManila, for damages resulting from a collision between his motorcycle and the ambulance of the GeneralHospital on March twenty-fifth, nineteen hundred and thirteen;

Whereas it is not known who is r esponsible for the accident nor is it possible to determine the amount ofdamages, if any, to which the claimant is entitled; and

Whereas the Director of Public Works and the Attorney-General recommended that an Act be passed bythe Legislature authorizing Mr. E. Merritt to bring suit in the courts against the Government, in order that

said questions may be decided: Now, therefore,

By authority of the United States, be it enacted by the Philippine Legislature, that:

SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the city ofManila against the Government of the Philippine Islands i n order to fix the responsibility for the collisionbetween his motorcycle and the ambulance of the General Hospital, and to determine the amount of thedamages, if any, to which Mr. E. Merritt is entitled on account of said collision, and the Attorney-Generalof the Philippine Islands is hereby authorized and directed to appear at the trial on the behalf of theGovernment of said Islands, to defendant said Government at the same.

SEC. 2. This Act shall take effect on its passage.

Enacted, February 3, 1915.

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it alsoconcede its liability to the plaintiff? If only the former, then it cannot be held that the Act created any newcause of action in favor of the plaintiff or extended the defendant's liability to any case not previouslyrecognized.

All admit that the Insular Government (the defendant) cannot be sued by an individual without itsconsent. It is also admitted that the instant case is one against the Government. As the consent of theGovernment to be sued by the plaintiff was entirely voluntary on its part, it is our duty to look carefullyinto the terms of the consent, and render judgment accordingly.

The plaintiff was authorized to bring this action against the Government "in order to fix the responsibilityfor the collision between his motorcycle and the ambulance of the General Hospital and to determine theamount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, . . . ." Thesewere the two questions submitted to the court for determination. The Act was passed "in order that saidquestions may be decided." We have "decided" that the accident was due solely to the negligence of thechauffeur, who was at the time an employee of the defendant, and we have also fixed the amount ofdamages sustained by the plaintiff as a result of the collision. Does the Act authorize us to hold that theGovernment is legally liable for that amount? If not, we must look elsewhere for such authority, if itexists.

The Government of the Philippine Islands having been "modeled after the Federal and StateGovernments in the United States," we may look to the decisions of the high courts of that country foraid in determining the purpose and scope of Act No. 2457.

In the United States the rule that the state is not liable for the torts committed by its officers or agents

whom it employs, except when expressly made so by legislative enactment, is well settled. "TheGovernment," says Justice Story, "does not undertake to guarantee to any person the fidelity of theofficers or agents whom it employs, since that would involve it in all its operations in endlessembarrassments, difficulties and losses, which would be subversive of the public interest." (Claussen vs.City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs. States,20 How., 527; 15 L. Ed., 991.)

In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from the state forpersonal injuries received on account of the negligence of the state officers at the state fair, a stateinstitution created by the legislature for the purpose of improving agricultural and kindred industries; todisseminate information calculated to educate and benefit the industrial classes; and to advance by suchmeans the material interests of the state, being objects similar to those sought by the public schoolsystem. In passing upon the question of the state's liability for the negligent acts of i ts officers or agents,the court said:

No claim arises against any government is favor of an individual, by reason of the misfeasance, laches, orunauthorized exercise of powers by its officers or agents. (Citing Gibbons vs. U. S., 8 Wall., 269; Clodfeltervs. State, 86 N. C., 51, 53; 41 Am. Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Greenvs. State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec. 319.)

As to the scope of legislative enactments permitting individuals to sue the state where the cause ofaction arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:

By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede itsliability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause notpreviously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself to thejurisdiction of the court, subject to its right to interpose any lawful defense.

In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of 1913, whichauthorized the bringing of this suit, read:

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SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit, WaukeshaCounty, Wisconsin, to bring suit in such court or courts and in such form or forms as he may be advisedfor the purpose of settling and determining all controversies which he may now have with the State ofWisconsin, or its duly authorized officers and agents, relative to the mill property of said GeorgeApfelbacher, the fish hatchery of the State of Wisconsin on the Bark River, and the mill property of EvanHumphrey at the lower end of Nagawicka Lake, and relative to the use of the waters of said Bark Riverand Nagawicka Lake, all in the county of Waukesha, Wisconsin.

In determining the scope of this act, the court said:

Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of the statefor the acts of its officers, and that the suit now stands just as it would stand between private parties. It isdifficult to see how the act does, or was intended to do, more than remove the state's immunity fromsuit. It simply gives authority to commence suit for the purpose of settling plaintiff's controversies withthe estate. Nowhere in the act is there a whisper or suggestion that the court or courts in the dispositionof the suit shall depart from well established principles of law, or that the amount of damages is the onlyquestion to be settled. The act opened the door of the court to the plaintiff. It did not pass upon thequestion of liability, but left the suit just where it would be in the absence of the state's immunity fromsuit. If the Legislature had intended to change the rule that obtained in this state so long and to declareliability on the part of the state, it would not have left so important a matter to mere inference, butwould have done so in express terms. (Murdock Grate Co. vs. Commonwealth, 152 Mass., 28; 24 N.E., 854;8 L. R. A., 399.)

In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and considered, are as

follows:

All persons who have, or shall hereafter have, claims on contract or for negligence against the state notallowed by the state board of examiners, are hereby authorized, on the terms and conditions hereincontained, to bring suit thereon against the state in any of the courts of this state of competentjurisdiction, and prosecute the same to final judgment. The rules of practice in civil cases shall apply tosuch suits, except as herein otherwise provided.

And the court said:

This statute has been considered by this court in at least two cases, arising under different facts, and inboth it was held that said statute did not create any liability or cause of action against the state wherenone existed before, but merely gave an additional remedy to enforce such liability as would have existedif the statute had not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs.

State, 121 Cal., 16.)

A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims againstthe commonwealth, whether at law or in equity," with an exception not necessary to be here mentioned.In construing this statute the court, in Murdock Grate Co. vs. Commonwealth (152 Mass., 28), said:

The statute we are discussing disclose no intention to create against the state a new and heretoforeunrecognized class of liabilities, but only an intention to provide a judicial tribunal where well recognizedexisting liabilities can be adjudicated.

In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the statute ofNew York, jurisdiction of claims for damages for injuries in the management of the canals such as theplaintiff had sustained, Chief Justice Ruger remarks: "It must be conceded that the state can be madeliable for injuries arising from the negligence of its agents or servants, only by force of some positive

statute assuming such liability."

It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any causenot previously recognized, we will now examine the substantive law touching the defendant's liability forthe negligent acts of its officers, agents, and employees. Paragraph 5 of article 1903 of the Civil Codereads:

The state is liable in this sense when it acts through a special agent, but not when the damage shouldhave been caused by the official to whom properly it pertained to do the act performed, in which casethe provisions of the preceding article shall be applicable.

The supreme court of Spain in defining the scope of this paragraph said:

That the obligation to indemnify for damages which a third person causes to another by his fault ornegligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on that the person obligated,by his own fault or negligence, takes part in the act or omission of the third party who caused thedamage. It follows therefrom that the state, by virtue of such provisions of law, is not responsible for thedamages suffered by private individuals in consequence of acts performed by its employees in thedischarge of the functions pertaining to their office, because neither fault nor even negligence can bepresumed on the part of the state in the organization of branches of public service and in theappointment of its agents; on the contrary, we must presuppose all foresight humanly possible on itspart in order that each branch of service serves the general weal an that of private persons interested inits operation. Between these latter and the state, therefore, no relations of a private nature governed bythe civil law can arise except in a case where the state acts as a judicial person capable of acquiring rightsand contracting obligations. (Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)

That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of fault or

negligence; and whereas in the first article thereof. No. 1902, where the general principle is laid downthat where a person who by an act or omission causes damage to another through fault or negligence,shall be obliged to repair the damage so done, reference is made to acts or omissions of the persons whodirectly or indirectly cause the damage, the following articles refers to this persons and imposes anidentical obligation upon those who maintain fixed r elations of authority and superiority over the authorsof the damage, because the law presumes that in consequence of such relations the evil caused by theirown fault or negligence is imputable to them. This legal presumption gives way to proof, however,because, as held in the last paragraph of article 1903, responsibility for acts of third persons ceases whenthe persons mentioned in said article prove that they employed all the diligence of a good father of afamily to avoid the damage, and among these persons, called upon to answer in a direct and not asubsidiary manner, are found, in addition to the mother or the father in a proper case, guardians andowners or directors of an establishment or enterprise, the state, but not always, except when it actsthrough the agency of a special agent, doubtless because and only in this case, the fault or negligence,which is the original basis of this kind of objections, must be presumed to lie with the state.

That although in some cases the state might by virtue of the general principle set forth in article 1902respond for all the damage that is occasioned to private parties by orders or resolutions which by fault ornegligence are made by branches of the central administration acting in the name and representation ofthe state itself and as an external expression of its sovereignty in the exercise of its executive powers, yetsaid article is not applicable in the case of damages said to have been occasioned to the petitioners by anexecutive official, acting in the exercise of his powers, in proceedings to enforce the collections of certainproperty taxes owing by the owner of the property which they hold in sublease.

That the responsibility of the state is limited by article 1903 to the case wherein it acts through a specialagent (and a special agent, in the sense in which these words are employed, is one who receives adefinite and fixed order or commission, foreign to the exercise of the duties of his office if he is a specialofficial) so that in representation of the state and being bound to act as an agent thereof, he executesthe trust confided to him. This concept does not apply to any executive agent who is an employee of the

acting administration and who on his own responsibility performs the functions which are inherent in and

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naturally pertain to his office and which are regulated by law and the regulations." (Supreme Court ofSpain, May 18, 1904; 98 Jur. Civ., 389, 390.)

That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in a decision,among others, of the 18th of May, 1904, in a damage case, the responsibility of the state is limited to thatwhich it contracts through a special agent, duly empowered by a definite order or commission to performsome act or charged with some definite purpose which gives rise to the claim, and not where the claim isbased on acts or omissions imputable to a public official charged with some administrative or technicaloffice who can be held to the proper responsibility in the manner laid down by the law of civilresponsibility. Consequently, the trial court in not so deciding and in sentencing the said entity to thepayment of damages, caused by an official of the second class referred to, has by erroneousinterpretation infringed the provisions of articles 1902 and 1903 of the Civil Code. (Supreme Court ofSpain, July 30, 1911; 122 Jur. Ci v., 146.)

It is, therefore, evidence that the State (the Government of the Philippine Islands) is only liable, accordingto the above quoted decisions of the Supreme Court of Spain, for the acts of its agents, officers andemployees when they act as special agents within the meaning of paragraph 5 of article 1903, supra, andthat the chauffeur of the ambulance of the General Hospital was not such an agent.

For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance.Whether the Government intends to make itself legally liable for the amount of damages above set forth,which the plaintiff has sustained by reason of the negligent acts of one of its employees, by legislativeenactment and by appropriating sufficient funds therefor, we are not called upon to determine. Thismatter rests solely with the Legislature and not with the courts.

SPOUSES FONTANILLA VS. HONORABLE INOCENCIO D. MALIAMAN

In its Motion for Reconsideration 1 of the Court's Second Division decision in G.R. No. 55963 and G.R. No.61045, the National Irrigation Administration (NIA, for brevity), through the Solicitor General, maintainsthat, on the strength of Presidential Decree No. 552 (which amended certain provisions of Republic Act3601, the law creating the NIA) and the case of Angat River Irrigation System, et al. vs. Angat RiverWorkers' Union, et al., 102 Phil. 790 "the NIA does not perform solely and primarily proprietary functionsbut is an agency of the government tasked with governmental functions, and is therefore not liable forthe tortious act of its driver Hugo Garcia, who was not its special agent."

Although the majority opinion in the cited case of Angat System declares that the Angat System (like theNIA) exercised a governmental function because the nature of the powers and functions of said agencydoes not show that it was intended to "bring to the Government any special corporate benefit orpecuniary profit," there is a strong dissenting opinion penned by then Associate Justice and later Chief

Justice Roberto Concepcion and concurred in by then Associate Justice J.B.L. Reyes which held thecontrary view that the Angat River System is a government entity exercising proprietary functions. Tobuttress said stand, the former Chief Justice cited some authorities which will be useful in the properresolution of this case.

Quoting from said dissenting opinion which cited McQuillin's The Law of Municipal Corporations, 3rd ed.,Vol. 18, pp. 423424:

In undertaking to supply water at price, municipality is not performing governmental function but isengaged in trade, and is liable first as private company would be for any negligence in laying out of itspipes, in keeping them in repair, or in furnishing potable water through them. Harvard Furniture Co., Inc.vs. City of Cambridge, 320 Mass. 227, 68 N.E. (2d) 684.

Municipality in contracting to provide water supply acts under its proprietary power and not under its

legislative, public or governmental powers. Farmers' State Bank vs. Conrad, 100 Mont. 415,47 P. (2d) 853.

In this connection, the opinion is that irrigation districts in the United States are basically identical to ourirrigation systems under Act No. 2152. Because of such similarity, it is found appropriate to considercertain doctrines from American jurisprudence, which are as follows, to wit:

An irrigation district is a public quasi corporation, organized, however, to conduct a business for theprivate benefit of the owners of land within its limits. They are members of the corporation, control itsaffairs, and alone are benefited by its operations. It is, in the administration of its business, the owner ofits system in a proprietary rather than a public capacity, and must assume and bear the burdens ofproprietary ownership. (Nampa vs. Nampa & M. Irrig. Dist. 19 Idaho, 779,115 Pac. 979)

. . . the plaintiff sought damages for injuries to crops on his land during 1923, 1924, 1925, and 1926, causedby water seeping, percolating, and escaping from the defendant's canal. The defendant contended thatirrigation districts were agencies of the state, and were, therefore, not liable for the negligentconstruction or operation of their canals or ditches. The court, after a careful review of the authoritiesdefining an irrigation district, conceded that such a quasi public corporation possessed somegovernmental powers and exercised some governmental functions, but held that the construction andoperation of its irrigation canals and ditches was a proprietary rather than a governmental function, andhence the district was responsible in damages for the negligent construction or operation of its canalsystem. (69 A.L.R., p. 1233)

It may not be amiss to state at this point that the functions of government have been classified intogovernmental or constituent and proprietary or ministrant. The former involves the exercise ofsovereignty and considered as compulsory; the latter connotes merely the exercise of proprietaryfunctions and thus considered as optional. The Solicitor General argues that the reasons presented byP.D. 552 for the existence of the NIA (the WHEREAS clauses of said decree) indubitably reveal that the

responsibility vested in said agency concerns public welfare and public benefit, and is therefore anexercise of sovereignty. On the contrary, We agree with the former Chief Justice Concepcion in sayingthat the same purpose such as public benefit and public welfare may be found in the operation of certainenterprises (those engaged in the supply of electric power, or in supplying telegraphic, telephonic, andradio communication, or in the production and distribution of prime necessities, etc.) yet it is certain thatthe functions performed by such enterprises are basically proprietary in nature. Thus, as held inHolderbaum vs. Hidalgo County Water Improvement District (297 S.W. 865, aff'd in 11 S.W. [2d] 506) — cited in the di ssenting opinion by Justice Concepcion:

. . . Primarily, a water improvement district is in no better position than a city is when exercising its purelylocal powers and duties. Its general purposes are not essentially public in their nature, but are onlyincidentally so; those purposes may be likened to those of a city which is operating a waterworks system,or an irrigation system. . . . A water improvement district can do nothing, it has and furnishes no facilities,for the administration of the sovereign government. Its officers have no power or authority to exercise

any of the functions of the general government, or to enforce any of the laws of the state or any of itsother subdivisions, or collect taxes other than those assessed by the district. They have no more poweror authority than that of the officers of a private corporation organized for like purposes. As a practicalmatter, the primary objects and purposes of such district are of a purely local nature, for the district iscreated and operated for the sole benefit of its own members, and an analysis of those objects andpurposes discloses that they directly benefit only the landowners who reside within and whose landsform a part of the district, to the exclusion of all other residents therein. It is true, of course, that thestate and the general public are greatly benefited by the proper operation of the district, and to thatextent its objects and accomplishments are public in their nature, but this characteristic is only incidentalto the primary and chief object of the corporation, which is the irrigation of lands forming a part of thedistrict. It is obvious, then, that the purposes and duties of such districts do not come within thedefinition of public rights, purposes, and duties which would entitle the district to the exemption raisedby the common law as a protection to corporations having a purely public purpose and performingessentially public duties.

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Of equal importance is the case of National Waterworks and Sewerage Authority (NAWASA) vs. NWSAConsolidated Unions, 11 SCRA 766, which propounds the thesis that "the NAWASA is not an agencyperforming governmental functions; rather it performs proprietary functions . . . ." The functions ofproviding water supply and sewerage service are regarded as mere optional functions of governmenteven though the service rendered caters to the community as a whole and the goal is for the generalinterest of society. The business of furnishing water supply and sewerage service, as held in the case ofMetropolitan Water District vs. Court of Industrial Relations, et al., 91 Phil. 840, "may for all practicalpurposes be likened to an industry engaged in by coal companies, gas companies, power plants, iceplants, and the like." Withal, it has been enunciated that "although the State may regulate the service andrates of water plants owned and operated by municipalities, such property is not employed forgovernmental purposes and in the ownership and operation thereof the municipality acts in itsproprietary capacity, free from legislative interference." (1 McQuillin, p. 683)

Like the NAWASA, the National Irrigation Administration was not created for purposes of localgovernment. While it may be true that the NIA was essentially a service agency of the government aimedat promoting public interest and public welfare, such fact does not make the NIA essentially and purely a"government-function" corporation. NIA was created for the purpose of "constructing, improving,rehabilitating, and administering all national irrigation systems in the Philippines, including all communaland pump irrigation projects." Certainly, the state and the community as a whole are largely benefited bythe services the agency renders, but these functions are only incidental to the principal aim of theagency, which is the irrigation of lands.

We must not lose sight of the fact that the NIA is a government agency invested with a corporatepersonality separate and distinct from the government, thus is governed by the Corporation Law. Section1 of Republic Act No. 3601 provides:

Sec. 1. Name and Domicile — A body corporate is hereby created which shall be known as the NationalIrrigation Administration. . . . which shall be organized immediately after the approval of this Act. It shallhave its principal seat of business in the City of Manila and shall have representatives in all provinces, forthe proper conduct of its business. (Emphasis for emphasis).

Besides, Section 2, subsection b of P.D. 552 provides that:

(b) To charge and collect from the beneficiaries of the water from all irrigation systems constructed by orunder its administration, such fees or administration charges as may be necessary to cover the cost ofoperation, maintenance and insurance, and to recover the cost of construction within a reasonableperiod of time to the extent consistent with government policy; to recover funds or portions thereofexpended for the construction and/or rehabilitation of communal irrigation systems which funds shallaccrue to a special fund for irrigation development under section 2 hereof;

Unpaid irrigation fees or administration charges shall be preferred liens first, upon the land benefited,and then on the crops raised thereon, which liens shall have preference over all other liens except fortaxes on the land, and such preferred liens shall not be removed until all fees or administration chargesare paid or the property is levied upon and sold by the National Irrigation Administration for thesatisfaction thereof. . . .

The same section also provides that NIA may sue and be sued in court. Thus,

b) . . . Judicial actions for the collection of unpaid irrigation fees or charges, drainage fees or othercharges which the National Irrigation Administration is authorized to impose and collect, shall henceforthbe governed by the provisions of the Rules of Court of the Philippines for similar actions, the provisionsof other laws to the contrary notwithstanding.

(e) . . . .

All actions for the recovery of compensation and damages against the National IrrigationAdministration under paragraphs (1), (2), and (3) hereof, shall be filed with a competent court withinfive (5) years from the date of entry of the land or destruction of the improvements or crops, afterwhich period, the right of possession and/or ownership of the National Irrigation Administration shallbe considered vested and absolute. All other actions for the recovery of compensation and damagesto private property and improvements occasioned by the construction, operation and maintenanceof irrigation facilities and other hydraulic structures under the administration of the NationalIrrigation Administration, which have accrued ten (10) or more years prior to the approval of thisdecree are deemed to have prescribed and are barred forever.

It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of Directors.To quote Section 2, subsection (f):

(f) . . . and to transact such business, as are directly or indirectly necessary, incidental or conducive to theattainment of the above powers and objectives, including the power to establish and maintainsubsidiaries, and in general, to exercise all the powers of a corporation under the Corporation Law,insofar as they are not inconsistent with the provisions of this Act. (Emphasis supplied).

On the basis of the foregoing considerations, We conclude that the National Irrigation Administration is agovernment agency with a juridical personality separate and distinct from the government. It is not amere agency of the government but a corporate body performing proprietary functions. Therefore, itmay be held liable for the damages caused by the negligent act of its driver who was not its special agent.

ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITH FINALITY. Thedecision of this Court in G.R. No. 55963 and G.R. No. 61045 dated December 1, 1989 is hereby AFFIRMED

REPUBLIC OF THE PHILIPPINES VS. PALACIO,

This is a petition for review of the decision of the Court of Appeals (in CA-G.R. No. 30915), dismissing theoriginal action for certiorari and prohibition filed with said Court by herein petitioner Republic of thePhilippines, to restrain the enforcement of a writ of execution (issued by the Court of First Instance ofCamarines Sur in its Civil Case No. 4886) on the trust fund in the account of the Irrigation Service Unitwith the Philippine National Bank.

There is no controversy as to the following facts:

On April 2, 1960, Ildefonso Ortiz instituted in the Court of First Instance of Camarines Sur Civil Case No.4886, against the Handong Irrigation Association, Inc., a corporation with principal place of business inLibmanan, Camarines Sur, and the Irrigation Service Unit, an office or agency under the Department of

Public Works and Communications, to recover possession, with damages, of a 958 square meter-lotlocated in Handong, San Juan, Libmanan, Camarines Sur, which the Irrigation Association allegedlyentered and occupied, at the instance of its co-defendant. For failure to appear and answer thecomplaint, therein defendant Irrigation Service Unit was declared in default.

On June 3, 1960, the Republic of the Philippines, through the Solicitor General, moved for the dis missal ofthe complaint, claiming that defendant Irrigation Service Unit has no juridical personality to sue and besued. By order of June 11, 1960, this motion was denied, on the ground that the said defendant although amere agency of the Republic of the Philippines, is engaged in the private business of selling irrigationpumps and construction materials on installment plan. The Solicitor General's motion for reconsiderationof the aforesaid order was also denied on July 19, 1960. No appeal appears to have been taken.

On January 29, 1962, the Solicitor General was served with copy of the writ of execution issued by thecourt against the defendants in the above-mentioned civil case; and, on February 16, 1962, an order of

garnishment was served by the Sheriff of Manila against the deposits and/or pump irrigation trust fund in

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the account of the Irrigation Service Unit at the Philippine National Bank, Manila, to cover the sum ofP14,874.40.1

On March 8, 1962, the Solicitor General, on behalf of the Republic of the Philippines, filed with the lowercourt an urgent motion to lift the order of garnishment, for the reason that the funds subject matterthereof are public funds and exempt from attachment or execution. Upon denial of this motion, as wellas of the motion for reconsideration of said denial, the Solicitor General commenced the presentcertiorari and prohibition proceeding in the Court of Appeals.1ªvvphi1.nêt

In its decision of August 21, 1962, the appellate court sustained the propriety of the disputedgarnishment-order, and dismissed the Government's petition, on the basis of the finding by the trial courtthat the Irrigation Service Unit, "formerly an office under the Department of Agriculture and NaturalResources created by virtue of a 'Memorandum of Agreement on the Irrigation Pump Program of thePhilippines', signed by the Chairman of the PHILCUSA (now NEC), Chief of the MSA Mission (now AID)and the Secretary of Agriculture and Natural Resources, and presently under the Department of PublicWorks and Communications to which it was transferred", is engaged in a private business of purchaseand sale of irrigation pumps and systems. Consequently, according to the Court of Appeals, and followingthe ruling in the case of National Airports Corporation vs. Teodoro, et al., L-5122, April 30, 1952 (91 Phil.203), by thus engaging in private business, the Government, through the Irrigation Service Unit, hadactually consented to the suit. Hence, the present petition for review filed by the Republic of thePhilippines.

The issue presented by this case is whether or not the pump irrigation trust fund, deposited with thePhilippine National Bank in the account of the Irrigation Service Unit, may be garnished to satisfy amoney-judgment against the latter. This issue in turn calls for a determination of the nature of said trust

fund, i.e., whether it is a fund belonging to the National Government (which was not a party to C ivil CaseNo. 4886), as maintained by herein petitioner, or purely the proceeds of a private venture by thegovernment, as claimed by the respondents.

For a better understanding of the nature, function and operation of the Irrigation Service Unit (ISU)which is necessary for the proper resolution of the issue herein involved, it is worthwhile to recall thatthis office was originally created under the Department of Agriculture and Natural Resources by virtue ofa Memorandum Agreement between the governments of the Philippines and the United States, datedAugust 13, 1952. It was later transferred to the Department of Public Works and Communications as anoffice directly under the Office of the Secretary, "to prosecute to completion the rehabilitation of pumpsystems transferred from the former Irrigation Pump Administration of the Department of Agricultureand Natural Resources,2 including the settlement of the obligations of said administration." Thebudgetary requirements to carry out the objectives of the project were to be financed by withdrawalsfrom the Counterpart Fund-Special Account. (Memorandum Agreement of June, 1954.)

This Counterpart Fund-Special Account referred to above was established in the Central Bank by theGovernment of the Philippines and made up of deposits in pesos commensurate with the indicated dollarcost to the Government of the United States of economic and technical assistance made available to thePhilippines, pursuant to the Bilateral Agreement between the Philippines and the United States of April27, 1951; of deposits accruing to it (Philippine government) from the sale of commodities or servicessupplied under the Agreement or otherwise accruing to it as a result of the import of such commoditiesor service; and of any advance deposits which the Philippine government may make in the SpecialAccount (Sec. 1, paragraphs 2[a], [b] and [c], Annex to Memo. Agreement of April 27, 1951). Later, on thebasis of a supplemental agreement (No. 2, Counterpart Project No. 409 — Pump Irrigation), the PumpIrrigation Trust Fund was established in the Philippine National Bank, to which all authorized releases tothe ISU3 from the Counterpart Fund — Special Account, to finance the peso-cost of the Irrigation PumpProject, were transferred. This is the fund on which the disputed writ of execution for money judgmentrendered against the ISU, is being enforced.

A reading of the records and documents submitted to the Court of Appeals will readily show that thesales of irrigation pumps to farmers by ISU are governed by the terms of the Supplemental AgreementNo. 2 to Counterpart Project No. 409 (signed by r epresentatives of the Philippine and U. S. governments)hereunder copied in full:

C. Disposition of Proceeds from Payments under Contracts of Sale

1. Under the Guiding Principles of the Irrigation Pump Project, pumps are sold to farmers' associationsunder conditional sales contracts. Periodic payments to ISU by each association are required. The totalpayment required under the contract is stated in the contract and is equal to the sum of (a) the landedcost of equipment at the installation site, (b) the cost of installation and construction including surveyand design, (c) the cost of fuel and oil financed for the first crop season, if any, (d) ten per cent of thetotal of a and b to cover the cost of administration, technical assistance furnished by the ISU, inspectionand collection, and (e) the compensating use tax to the Philippine Government. Interest is also payableunder each contract at the rate of six percent per annum on any unpaid balance of the total amount ofthe contract.

2. All principal and interest payments received by the ISU from farmers' associations shall be depositedimmediately in the Trust Fund. The separate account established by the project agreement forCounterpart Project 409, entitled "Irrigation Pump Sales Proceeds Account" is hereby abolished and anydeposits therein will be immediately transferred to the T rust Fund.

3. Whenever the total value of all deposits made to the Trust Fund from contract principal and interestpayments exceeds the value of total releases made to the Trust Fund from the Counterpart Fund-SpecialAccount, these excess deposits shall be transferred from the Trust Fund to the Counter Fund-Special

Account. Such transfers shall be considered as "proceeds of sale" and "advance deposits" as provided inAnnex Section 1, (b) and (c) of the Bilateral Agreement between the Republic of the Philippines and theUnited States of A merica.

It was also provided therein that the payments by the farmers' associations on conditional salesagreements specified in paragraph C-2, above, will be considered i n the preparation, and shall form part,of the ISU annual budget, which will finance the costs of supply and equipment purchases, theinstallation and construction of pump units, and the operating expenses of ISU for which appropriatedfunds are not available. (Para. B-1).

It is clear from the foregoing that the ISU is not only an office in the Government of the Republic of thePhilippines, created to promote a specific economic policy of said government, but also that its activity(of selling irrigation pumps to farmers on installment basis) is not intended to earn profit or financial gainto its operator. The mere fact that interests are being collected on the balance of the unpaid cost of the

purchased pumps does not convert this economic project of the government into a corporate activity. Aspreviously pointed out, the installment payments and interests receivable from the farmers are to beused to replenish the counterpart funds utilized in furtherance of the operation of the project.

Although evidently acknowledging the nature of the Pump Irrigation Trust Fund as a public fund, theCourt of Appeals nevertheless sustained the garnishment order, on the ground that the ISU, by engagingin the private business of purchasing and selling irrigation pumps on installment basis, has waived itsgovernmental immunity and, by implication, consented to the suit.

It is apparent that this decision of the Court of Appeals suffers from the erroneous assumption thatbecause the State has waived its immunity, its property and funds become liable to seizure under thelegal process. This emphatically is not the law (Merritt vs. Insular Government, 34 Phil. 311).

Even though the rule as to immunity of a state from suit is relaxed, the power of the courts ends when

the judgment is rendered. Although the liability of the state has been judicially ascertained, the state is atliberty to determine for itself whether to pay the judgment or not, and execution can not issue on a

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judgment against the state. Such statutes do not authorize a seizure of state property to satisfyjudgments recovered, and only convey implication that the legislature will recognize such judgment asfinal and make provision for the satisfaction thereof. (49 Am. Jur., Sec. 104, pp. 312-320.)

Judgments against a state, in cases where it has consented to be sued, generally operate merely toliquidate and establish plaintiff's claim in the absence of express provision; otherwise they can not beenforced by processes of law; and it is for the legislature to provide for their payment in such manner asit sees fit. (59 C.J. sec. 501, p. 331; 81 C.J.S., sec. 232, p. 1343.)

It needs no stressing that to allow the levying under execution of the ISU funds would amount todiverting them from the purpose originally contemplated by the P.I.U.S. Bilateral Agreement, and wouldamount to a disbursement without any proper appropriation as required by law.

A second infirmity of the decision under appeal originates from its ignoring the fact that the initialcomplaint against the Irrigation Service Unit was that it had induced the Handong Irrigation Association,Inc., to invade and occupy the land of the plaintiff Ildefonso Ortiz. The ISU liability thus arose from tortand not from contract; and it is a well-entrenched rule in this jurisdiction, embodied in Article 2180 of theCivil Code of the Philippines, that the State is liable only for torts caused by its special agents, speciallycommissioned to carry out the acts complained of outside of such agent's regular duties (Merritt vs.Insular Government, supra; Rosete vs. Auditor General, 81 Phil. 453). There being no proof that themaking of the tortious inducement was authorized, neither the State nor its funds can be made liabletherefor.

WHEREFORE, the decision of the Court of Appeals under review is reversed and set aside, and the orderof garnishment issued by the Sheriff of Manila on the Pump Irrigation Trust Fund in the account of the

Irrigation Service Unit, with the Philippine National Bank, is hereby declared null and void. The writ ofpreliminary injunction heretofore issued is made permanent. No costs.

LUIS MA. ARANETA vs. ANTONIO R. DE JOYA

Petition for review of the decision of the Court of Appeals in CA-G.R. 34277-R ordering Luis Ma. Araneta(hereinafter referred to as the petitioner) to indemnify Antonio R. de Joya (hereinafter referred to as therespondent) for one-third of the sum of P5,043.20 which the latter was adjudged to pay the AceAdvertising Agency, Inc., the plaintiff in the recovery suit below.

Sometime in November 1952 the respondent, then general manager of the Ace Advertising, proposed tothe board of directors 1 that an employee, Ricardo Taylor, be sent to the United States to take up specialstudies in television. The board, however, failed to act on the proposal. Nevertheless, in September 1953the respondent sent Taylor abroad. J. Antonio Araneta, a company director, inquired about the trip and

was assured by the respondent that Taylor's expenses would be defrayed not by the company but byother parties. This was thereafter confirmed by the respondent in a memorandum.While abroad, from September 1, 1953 to March 15, 1954, Taylor continued to receive his salaries. Theitems corresponding to his salaries appeared in vouchers prepared upon the orders of, and approved by,the respondent and were included in the semi-monthly payroll checks for the employees of thecorporation. The petitioner signed three of these checks on November 27, December 15 and December29, 1953. The others were signed by either the respondent, or Vicente Araneta (company treasurer) whoput up part of the bill connected with Taylor's trip and also handed him letters for delivery in the UnitedStates. The Ace Advertising disbursed P5,043.20, all told, on account of Taylor's travel and studies.On August 23, 1954 the Ace Advertising filed a complaint with the court of first instance of Manila againstthe respondent for recovery of the total sum disbursed to Taylor, alleging that the trip was made withoutits knowledge, authority or ratification. The respondent, in his answer, denied the charge and claimedthat the trip was nonetheless ratified by the company's board of directors, and that in any event underthe by-laws he had the discretion, as general manager, to authorize the trip which was for the company's

benefit..

A 3rd-party complaint was also filed by the respondent against Vicente Araneta, the petitioner andRicardo Taylor. The respondent proved that Vicente Araneta, as treasurer of the firm, signed a checkrepresenting the company's share of the transportation expense of Taylor to the United States, and thata series of payroll checks from September 15, 1953 to December 31, 1953, inclusive, which included thesalaries of Taylor, was signed by Vicente Araneta and the petitioner who is a vice-president of thecompany. Both Aranetas disowned any personal liability, claiming that they signed the checks in goodfaith as they were approved by the respondent..On April 13, 1964 the trial court rendered judgment ordering the respondent to pay the Ace Advertising"the sum of P5,043.20 with interest at the legal rate from August 23, 1954 until full payment," anddismissing the 3r d-party complaint.

The respondent appealed to the Court of Appeals, which on August 2, 1965, rendered a decision affirmingthe trial court's judgment in favor of the Ace Advertising but reversing the dismissal of the 3rd-partycomplaint. The appellate court found as a fact that Taylor's trip had been neither authorized nor ratifiedby the company.

The appellate court's full statement of its categorical and unequivocal findings of fact on the nature andextent of the participation of the petitioner as well as Vicente Araneta is hereunder quoted:

The evidence not only is clear, but is even not disputed at all by Vicente and Luis Araneta who neither ofthem took the witness stand to refute appellant's evidence, that as to Vicente it was to him thatappellant first broached the subject-matter of sending Taylor to America, that Vicente Araneta evincedunusual interest, and went to the extent of entrusting Taylor with letters for delivery to certain principalsof Gregorio Araneta, Inc. in the United States, and he even signed the check for P105.20 to coverexpenses for his tax clearance, documentary stamps and passport fees, in connection with the trip, on 8

September, 1953, and then on 5 October, 1953, still another check for P868.00 which was half the amountfor his plane ticket; and as to Luis Araneta, it not at all being disputed that when Taylor was already inAmerica, his salaries while abroad were paid on vouchers and checks signed either by him or by Vicente,or by appellant himself; because of all these, the conclusion is forced upon this Court that it could not buthave been but that both Vicente and Luis were informed and gave their approval to Taylor's trip, and tothe payment of his trip expenses and salaries during his absence, from corporate funds; if this was thecase as it was, there can be no question but that they two were also privy to the unauthorizeddisbursement of the corporate moneys jointly with the appellant; what had happened was in truth and infact a venture by them given their stamp of approval; and as it was an unauthorized act of expenditure ofcorporate funds, and it was these three without whose acts the same could not have happened, thejuridical situation was a simple quasi-delict by them committed upon the corporation, for which solidaryliability should have been imposed upon all in the first place, Art. 2194, New Civil Code; and only De Joyahaving been sued and made liable by the corporation, it was the right of the latter to ask that his twojoint tortfeasors be made to shoulder their proportional responsibility. (emphasis supplied)

The basic legal issue is whether the petitioner is guilty of a quasi-delict as held below.

It is our view, and we so hold, that the judgment of the Court of Appeals should be upheld. Thepetitioner's assertion that he signed the questioned payroll checks in good faith has not beensubstantiated, he in particular not having testified or offered testimony to prove such claim. Upon thecontrary, in spite of his being a vice-president and director of the Ace Advertising, the petitionerremained passive, throughout the period of Taylor's stay abroad, concerning the unauthorizeddisbursements of corporate funds for the latter. This plus the fact that he even approved thrice payrollchecks for the payment of Taylor's salary, demonstrate quite distinctly that the petitioner neglected toperform his duties properly, to the damage of the firm of which he was an officer. The fact that he wasoccupying a contractual position at the Ace Advertising is of no moment. The existence of a contractbetween the parties, as has been repeatedly held by this Court, constitutes no bar to the commission of atort by one against the other and the consequent recovery of damages. 2

ACCORDINGLY, the judgment of the Court of Appeals is affirmed, at petitioner's cost

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FELIX LANUZO vs.SY BON PING and SALVADOR MENDOZA

On November 25, 1969, a Complaint for damages was instituted in the Court of First Instance ofCamarines Sur (Civil Case No. 6847) by plaintiff Felix Lanuzo against Sy Bon Ping, the owner and operatorof a freight truck bearing Plate No. T-57266, and his driver, Salvador Mendoza. As alleged therein, atabout five o'clock in the afternoon of July 24, 1969, while Salvador Mendoza was driving the truck alongthe national highway in the Barrio of San Ramon, Nabua, Camarines Sur, and because of his recklessnegligence, we rammed into the residential house and store of plaintiff. As a result, the house and storewere completely razed to the ground causing damage to plaintiff in the total amount of P13,000.00.Plaintiff averred that by reason thereof he became destitute as he lost his means of livelihood from thestore which used to give him a monthly income of P300.00.

The defendants moved to dismiss on the ground that another action, Criminal Case No. 4250 for Damageto Property through Reckless Imprudence, was pending in the Municipal Court of Nabua, Camarines Sur,between the same parties for the same cause. Plaintiff opposed the dismissal stressing that he had madean express reservation in the criminal case to institute a civil action for damages separate and distinctfrom the criminal suit.

The lower Court denied the Motion to Dismiss for lack of merit.

On August 13, 1970, the trial Court rendered a default judgment in plaintiff's favor, the dispositive portionof which reads:

WHEREFORE, judgment is hereby rendered (a) ordering the defendants to pay jointly and severally theamount of P13,000.00 as damages, resulting to the loss of the store including the merchandise for sale

therein, the residential house of mixed materials, furnitures, clothing and households fixtures; (b)ordering the said defendants to pay jointly and severally P300.00 monthly from July 24, 1969 whichrepresents plaintiff's monthly income from his store until the whole amount of P13,000.00 is fully paid;and (c) for attorney's fees an amount equivalent to 20% of the total amount claimed by the plaintiff, plusthe costs of this suit.

Defendants' "Motion for Reconsideration and/or New Trial and To Set Aside Order of Default" wasdenied.

Upon elevation by the defendants of the case to the Court of Appeals (CA-G.R. No. 48399-R) they urgedthat the civil action was prematurely instituted in view of Rule 111, s ection 3, providing in part that "afterthe criminal action has been commenced the civil action cannot be instituted until final judgment hasbeen rendered in the criminal action." Additionally, they contended that even assuming their liability, thelower Court nevertheless committed an error in holding them jointly and severally liable.

On February 20, 1980, the Court of Appeals certified the case to this i nstance on pure questions of law.

We start from the fundamental premise, clearly enunciated as early as the case of Barredo vs. Garcia, etal., 2 that:

A distinction exists between the civil liability arising from a crime and the responsibility for cuasi-delitos orculpa-extracontractual. The same negligent act causing damages may produce civil liability arising from acrime under article 100 of the Revised Penal Code, or create an action for cuasi-delito or culpaextracontractual under articles 1902-1910 of the Civil Code. Plaintiffs were free to choose which remedy toenforce.

Plaintiff's reservation before the Municipal Court in the criminal case of his right to institute a civil actionseparately is quoted hereunder in full:

UNDERSIGNED offended party in the above-entitled case before this Honorable Court respectfullyalleges:

1. That this action which was commenced by the Chief of Police included in the complaint the claim of theundersigned for civil liability;

2. That the undersigned is reserving his right to institute the civil action for damages, docketed as CivilCase No. 6847 of the Court of First Instance of Camarines Sur, against accused herein and his employer;

WHEREFORE, it is respectfully prayed that reservation be made of record therein and that the civil aspectof the above-entitled case be not included herein.

xxx xxx xxx 3

The terms of plaintiff's reservation clearly and unmistakably make out a case for quasi-delict. This is alsoevident from the recitals in plaintiff's Complaint averring the employer-employee relationship betweenthe appellants, alleging that damages to the house and store were caused by the fact that SalvadorMendoza had driven the truck "recklessly, with gross negligence and imprudence, without observance oftraffic rules and regulations and without regard to the safety of persons and property", and praying thatappellants be held jointly and solidarity liable for damages. These are, basically, what should be alleged inactions based on quasi-delict. 4

As it is quite apparent that plaintiff had predicated his present claim for damages on quasi-delict, he is notbarred from proceeding with this independent civil suit. The institution of a criminal action cannot havethe effect of interrupting the civil action based on quasi-delict. 5 And the separate civil action for quasi-

delict may proceed independently and regardless of the result of the criminal case, 6 except that aplaintiff cannot recover damages twice for the same act or commission of the defendant. 7

The civil action referred to in Sections 3(a) and (b) of Rule 111 of the Rules of Court, which should besuspended after the institution of the criminal action, is that arising from delict, and not the civil actionbased on quasi-delict or culpa aquiliana.

We come now to the subject of liability of the appellants herein. For his own negligence in recklesslydriving the truck owned and operated by his employer, the driver, Salvador Mendoza, is primarily liableunder Article 2176 of the Civil Code. On the other hand, the liability of his employer, Sy Bon Ping, is alsoprimary and direct under Article 2180 of the same Code, which explicitly provides:

Employers shall be liable for the damages caused by their employees and household helpers acting withinthe scope of their assigned tasks, even though the former are not engaged in any business or industry.

For failure of the appellant Sy Bon Ping to rebut the legal presumption of his negligence in the selectionand supervision of this employee, 8 he is likewise responsible for the damages caused by the negligentact of his employee (driver) Salvador Mendoza, and his liability is primary and solidary.

... What needs only to be alleged under the aforequoted provision (Article 2180, Civil Code) is that theemployee (driver) has, by his negligence (quasi-delict) caused damage to make the employer, likewise,responsible for the tortious act of the employee, and his liability is, as earlier observed, primary andsolidary 9

But although the employer is solidarity liable with the employee for damages, the employer may demandreimbursement from his employee (driver) for whatever amount the employer will have to pay theoffended party to satisfy the latter's claim. 10

WHEREFORE, the appealed decision is hereby affirmed. Costs against defendants-appellants.

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